Directors Report of Vadilal Enterprises Ltd.

Mar 31, 2018

The Directors have pleasure in presenting herewith the 33^rd Annual Report together with the Audited Statement of Accounts for the year ended on 31^st March, 2018.

FINANCIAL HIGHLIGHTS :

(Rs. in Lacs)

Sr.	Particulars	Current Year ended on	Previous Year ended
No.		31-03-2018	on 31-03-2017
(a)	Earnings before Interest, Tax, Depreciation and Amortization	1332.68	1155.66
(b)	Finance Cost	(250.00)	(158.09)
(c)	Depreciation & Amortization Expense	(1060.95)	(948.47)
(d)	Profit/(Loss) before Tax	21.73	49.10
(e)	Tax Expense
	- Current Tax	2.39	14.98
	- Deferred Tax Expenses	4.54	5.02
	- Short / (Excess) Provision of Tax of Earlier years	-	13.49
	Total Tax:	6.93	33.49
(f)	Profit/(Loss) for the year	14.80	15.61
(g)	Other Comprehensive income Item that will not be reclassified to Profit & Loss
	- Re-measurement of Defined Benefit Plans	(0.52)	7.79
	- Tax expenses of above items	0.15	(2.41)
	Other Comprehensive income for the year	(0.37)	5.38
(i)	Total Comprehensive income for the year	15.17	10.23

STATE OF COMPANY’S AFFAIRS:

The Company has earned Revenue from Operations of Rs. 54585.94 lacs during the year ended on 31st March, 2018 as against Rs.51794.51 lacs earned during the previous year ended on 31st March, 2017 giving a rise of 5.39% as compared to previous year.

After adding thereto the other income of Rs.309.37 lakhs earned by the Company, the Company has earned total income of Rs.54895.31 lakhs during the year under review. The Company has incurred total expenses of Rs.54873.58 lakhs including Finance cost of Rs.250.00 lakhs and Depreciation and Amortization expenses of Rs.1060.95 lakhs, during the year under review.

The Company has earned profit before Tax of Rs.21.73 lacs during the year under review as compared to Profit Rs.49.10 lacs incurred during the previous year ended on 31st March, 2017. The Company has earned profit for the year of Rs.14.80 lacs during the year ended on 31st March, 2018 after deducting Current Tax of Rs.2.39 lacs and Deferred Tax of Rs.4.54 lacs, as compared to Profit of Rs.15.61 lacs incurred by the Company during the previous year ended on 31st March, 2017.

DIVIDEND:

The Directors have recommended dividend of Rs.0.80/- per share (@ 8.00%) on 8,62,668 Equity Shares of Rs.10/- each of the Company for the financial year ended on 31^st March, 2018 as compared to Rs.0.80/- per share (@ 8.00%) dividend declared in the previous financial year ended on 31^st March, 2017. If approved, the dividend will be paid without deduction of tax at source to the shareholders.

TRANSFER TO RESERVE:

The Company does not propose to transfer any amount to General Reserve during the year under review.

MANAGMENT DISCUSSION & ANALYSIS:

India is the largest producer and marketer of milk. It accounts for over 1/5^th of the global milk production. This provides the ice cream industry with a large volume of raw material to manufacture ice creams. The ice cream market in India is forecast to exhibit a CAGR of 17.03% during 2016-2021. Keeping up with the economy''s quantum growth in recent years, the ice cream market has also set new records. Today, the total organized Indian ice cream market is estimated at approx. Rs.6000 crores.

An ice cream makes everything better, be it an everyday occasion or life''s most precious moments. Vadilal''s range of ice creams and frozen desserts have always fulfilled this promise by making these special moments even more beautiful.

Increasing urbanization, rising disposable incomes and increasing “out of home food” consumption coupled with the ever-increasing availability of various foods in the markets close to residential areas are some of the reasons driving the ice cream industry.

To ensure maximum exposure to the public in terms of marketing, we spend on an optimal mix of above the line (ATL) and bellow the line (BTL) activities. We utilize various communication touch points like TV, Print, Digital, Retail activity, Point of purchase (POP), Point of sales (POS) etc. to get the brand message across. This year, we have a 360-degree marketing and communication plan. As a share of voice, we are the largest marketing investment company.

However, the advertising budgets are skewed more towards television as we have a nationwide reach now. Apart from traditional media platforms, we also enjoy commendable brand presence and preference in the digital space to cater youth and all class or society.

Our consumer engagement initiative, Vadilal Freeze the Moment Contest Calendar launched in 2012 has become a successful annual event and is eagerly awaited by consumers every year.

On the sales promotions front, we constantly engage our trade patrons through various schemes and offers. Vadilal also invests in consumer promotional activities from time to time. As an example, last year we had a “surprise gift” available with every candy of Ice Trooper to delight our young customers.

We have worked on increasing the physical touch points with our consumers and executed it by putting in place a robust network of dealers, FOWs (Freezer On Wheels) and Ice Cream parlours.

The overall vision of the company is to increase the consumption of ice-cream at national level supported fully by appropriate promotion and communication strategies.

FINANCE :

During the year under review, the company has availed / reviewed various secured and unsecured loans from various Banks, FIs. During the year under review, the company has made regular repayment of Loan & interest and there is no any overdue payment to Banks and FIs. Company has maintained external rating from CARE Ratings, they have reviewed and enhanced the external rating of the company from BBB (Negative) to BBB (Stable).”

During the year under review, the Company has transferred Rs.46403/- to Investors'' Education and Protection Fund being the amount of Unpaid/Unclaimed Dividend for the Financial year - 2009-2010.

During the year under review, the Company has transferred the unclaimed interest on Fixed Deposit of Rs.3980/- for the financial year ended on 31st March, 2011 to Investors'' Education and Protection Fund.

DETAILS OF DEPOSITS:

a. During the year under review, the details of deposits accepted by the Company from its Members, after complying with the provisions of Section 73 of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014, are as under :

(Rs. in lakhs)

(a) Amount of existing deposits as at 1st April, 2017			93.77
(b) Amount of deposits accepted or renewed during the year
(i) Secured deposits			0
(ii) Unsecured deposits			25.25
Total (b) :			25.25
(c) Amount of deposits repaid during the year			20.09
(d) Balance of deposits outstanding at the end of the year (a b-c)			98.93

b. During the year under review, the Company has not made any default in repayment of deposits or payment of interest on deposits.

c. The Company has not accepted or renewed any deposit which is not in compliance with the provisions of Chapter - V of the Companies Act, 2013.

CONSOLIDATED FINANCIAL STATEMENTS:

As on 31^st March, 2018, the Company does not have any subsidiary, joint venture or associate Company and hence, the Company is not required to attach the Consolidated Financial Statements alongwith its Financial Statement, in terms of provisions of Section 129(3) read with Schedule - III of the Companies Act, 2013 and Rules made thereunder, and Regulation 34 of the SEBI (Listing Obligation and Disclosure Requirement), 2015 and other applicable Accounting Standards.

SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES:

As on 31^st March, 2018, the Company does not have any subsidiary, joint venture or associate company. Therefore Report on the performance and financial position of each of the subsidiaries, associates and joint venture companies is not require to be given.

During the year under review, none of the companies have become or ceased to be Company''s subsidiaries, associates or joint ventures.

SECRETARIAL STANDARDS

The Directors state that applicable Secretarial Standards, i.e. SS-1 and SS-2, relating to ''Meetings of the Board of Directors'' and ''General Meetings'', respectively, have been duly followed by the Company.

CORPORATE GOVERNANCE:

The provisions related to compliance with Corporate Governance of as mentioned in Regulation 16(2) of Chapter - IV of the SEBI (Listing Obligation and Disclosure Requirement) Regulations, 2015 (“SEBI-LODR”) are not applicable to the Company since the share capital of the company does not exceed Rs. 10.00 Crores and the net-worth of the Company does not exceed Rs.25 Crores, as per the last audited Balance sheet of the Company.

However, being a Listed Company, the Company has always taken necessary measures to adhere to the best governance practices and norms.

DIRECTORS’ RESPONSIBILITY STATEMENT:

To the best of their knowledge and belief and according to the confirmation and explanations obtained by them, your Directors make the following statement in terms of Section 134(3)(C) and 134(5) of the Companies Act, 2013 and confirm :

(a) In the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

(b) The directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit and loss of the company for that period;

(c) The directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

(d) The directors had prepared the annual accounts on a going concern basis;

(e) The directors had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively; and

(f) The directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

PARTICULARS OF LOANS GIVEN, INVESTMENTS MADE, GUARANTEES GIVEN AND SECURITIES PROVIDED:

Particulars of loans given, investments made, guarantees given and securities provided by the Company under Section 186 of the Companies Act, 2013 forms part of the Notes to the financial statements provided in this Annual Report.

EXTRACT OF ANNUAL RETURN:

Extract of Annual Return of the Company as required under Section 92(3) of the Act and Rule - 12 of the Companies (Management and Administration) Rules, 2014, in the prescribed Form - MGT-9, is annexed herewith as Annexure -A to this Report.

CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES:

Information on transactions with related parties pursuant to Section 134(3)(h) of the Act read with Rule 8(2) of the Companies (Accounts) Rules, 2014 are given in Annexure - B in the prescribed Form - AOC-2 and the same forms part of this report. All related party transactions are placed before the Audit Committee of the Company for review and approval.

The Policy on materiality of related party transactions and dealing with related party transactions as approved by the Board may be accessed on the Company''s website viz. www.vadilalgroup.com.

Your Directors draw attention of the members to Note - 41 to the financial statement which sets out related party transactions.

DIRECTORS AND KEY MANAGERIAL PERSONNEL:

As on 31^st March, 2018, the Board of the Company comprises the following Directors :

Sr. No.	Name of the Director	Designation	Category
1.	Mr. Rajesh R. Gandhi	Chairman & Director	Non-executive and Non-Independent
2.	Mr. Devanshu L. Gandhi	Director	Non-executive and Non-Independent
3.	Mrs. Mamta R. Gandhi	Director	Non-executive and Non-Independent
4.	Mr. Jayantilal M. Shah	Director	Independent Director
5.	Mr. Jignesh J. Shah	Director	Independent Director
6.	Mr. Ashish H. Modi	Director	Independent Director
7.	Mr. Preet P. Shah	Director	Independent Director

Pursuant to the provisions of Section 152 of the Companies Act, 2013 and Rules made thereunder, Mr. Devanshu L. Gandhi, Director (DIN: 00010146) of the Company, shall retire by rotation at this Annual General Meeting and being eligible, offer himself for re-appointment. The Members are requested to consider her re-appointment as Director of the Company, for which necessary resolution has been incorporated in the notice of the meeting.

The brief resume/details relating to Mr. Devanshu L. Gandhi is furnished in the Notes to the Notice of the Annual General Meeting.

NUMBER OF BOARD MEETINGS:

Total Eight meetings of the Board of Directors were held during the year i.e. on 10-4-2017, 25-5-2017, 26-8-2017, 14-9-2017, 12-10-2017, 27-11-2017, 2-12-2017 and 13-2-2018 and their attendance is as follows:

Name of Director	Attendance Particulars (Total 8 Board Meetings held during the year)
Mr. Rajesh R. Gandhi	8
Mr. Devanshu L. Gandhi	8
Mrs. Mamta R. Gandhi	8
Mr. Jignesh J. Shah	8
Mr. Jayantilal M. Shah	4
Mr. Ashish H. Modi	6
Mr. Preet P. Shah	7

COMMITTEES OF DIRECTORS:

The details of various committees of Directors constituted under various provisions of Companies Act, 2013 and Rules made thereunder are as follows:

A. AUDIT COMMITTEE :

The Audit Committee comprises the following Director of the Company, as on 31^st March, 2018 namely:

Sr. No.	Name of the Member		Designation	Category
1	Mr. Jignesh J. Shah	-	Chairman	Independent Director
2	Mr. Rajesh R. Gandhi	-	Member	Non-Executive and Non-Independent Director
3	Mr. Devanshu L. Gandhi	-	Member	Non-Executive and Non-Independent Director
4	Mr. Jayantilal M. Shah	-	Member	Independent Director
5	Mr. Preet P. Shah	-	Member	Independent Director

T he constitution of the Audit Committee fulfills the requirements of Section 177 of the Companies Act, 2013 and Rules made thereunder. The members of audit committee are financially literate and having accounting or related financial management expertise.

Mr. Darshan Shah, who is a Company Secretary of the Company, is the Secretary to the Audit Committee.

B. NOMINATION AND REMUNERATION COMMITTEE :

The Nomination and Remuneration Committee of the Company comprises the following Directors of the Company, as on 31st March, 2018 namely:

Sr. No.	Name of the Member		Designation	Category
1	Mr. Jignesh J. Shah	-	Chairman	Independent Director
2	Mr. Devanshu L. Gandhi	-	Member	Non-executive and Non-Independent Director
3	Mr. Preet P. Shah	-	Member	Independent Director

The constitution of Nomination and Remuneration Committee fulfills the requirements of Section 178 of the Companies Act, 2013 and Rules made thereunder.

C. STAKEHOLDERS’ RELATIONSHIP COMMITTEE :

The Stakeholders'' Relationship Committee of the Company comprises the following Directors of the Company, as on 31st March, 2018, namely:

Sr. No.	Name of the Member		Designation	Category
1	Mr. Rajesh R. Gandhi	-	Chairman	Non-Executive and Non-Independent Director
2	Mr. Devanshu L. Gandhi	-	Member	Non-Executive and Non-Independent Director

The constitution of Stakeholders'' Relationship Committee fulfills the requirements of Section 178 of the Companies Act, 2013 and Rules made thereunder.

The Committee, inter alia, approves the transfer of Shares, issue of duplicate Share Certificates, splitting and consolidation of Shares etc. The Committee also looks after redressal of Shareholder''s complaints like transfer of shares, non-receipt of balance sheet, non-receipt of dividends, etc. The Board of Directors has delegated the power of approving transfer of Shares etc. to the Stakeholders'' Relationship Committee.

BOARD PERFORMANCE EVALUATION:

The board of directors has carried out an annual evaluation of its own performance, Board committees and individual directors pursuant to the provisions of the Act.

The performance of the Board was evaluated by the Board on the basis of the criteria such as the Board composition and structure, effectiveness of board processes, information and functioning, etc.

The performance of the committees was evaluated by the board after seeking inputs from the committee members on the basis of the criteria such as the composition of committees, effectiveness of committee meetings, etc.

The Board and the Nomination and Remuneration Committee (“NRC”) reviewed the performance of the individual directors on the basis of the criteria such as the contribution of the individual director to the Board and committee meetings like preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings, etc. In addition, the Chairman was also evaluated on the key aspects of his role.

In a separate meeting of independent Directors, performance of non-independent directors, performance of the board as a whole and performance of the Chairman was evaluated, taking into account the views of executive directors and non-executive directors. The same was discussed in the board meeting that followed the meeting of the independent Directors, at which the performance of the Board, its committees and individual directors was also discussed.

POLICY ON DIRECTORS’ APPOINTMENT AND REMUNERATION:

The Policy on appointment and remuneration of Directors is enclosed with the Directors'' report and marked as Annexure - C.

OTHER POLICIES AS PER THE REQUIREMENT OF COMPANIES ACT, 2013 AND SEBI (LISTING OBLIGATION AND DISCLOSURE REQUIREMENT), 2015

The policies formulated by the Company under various provisions of Companies Act, 2013 and SEBI (Listing Obligation and Disclosure Requirement), 2015 are available on the website of the Company viz : www.vadilalgroup.com.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:

The details of Conservation of Energy and Technology Absorption are not required to provide as the provisions of Section 134(1)(m) are not applicable to the Company due to the nature of the Company''s business operations, being Marketing Company.

There is no any Foreign Exchange Earnings or outgo during the year under review.

INTERNAL FINANCIAL CONTROLS

The Company has in place adequate internal financial controls with reference to financial statements. During the year, such controls were tested and no reportable material weakness in the design or operation were observed.

Assurance on the effectiveness of internal financial controls is obtained through management reviews, control selfassessment, continuous monitoring by functional experts as well as testing of the internal financial control systems by the internal auditors during the course of their audits. We believe that these systems provide reasonable assurance that our internal financial controls are designed effectively and are operating as intended.

AUDITORS:

Under the provisions of Section 139 of the Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014, it is mandatory to rotate the Statutory Auditors on completion of the maximum term permitted under the said section. In line with the requirements of Companies Act, 2013, Deloitee Haskins & Sells LLP, Chartered Accounts, Firm Registration No. 117366W/W 100018)(“Deloitee”) was appointed as Statutory Auditors of the Company for a period of five consecutive years i.e. to hold office from the conclusion of the 32^nd Annual General Meeting till the conclusion of the 37^th Annual General Meeting of the Company to be held in the year 2022, subject to ratification of their appointment by the Members at every Annual General Meeting or as may be necessitated by the Act from time to time.

However, Section 40 of the Companies (Amendment) Act, 2017 which came into force w.e.f. 7^th May, 2018, has omitted the requirement of rectification of the appointment of Statutory Auditors at every Annual General Meeting.

AUDITORS’ REPORT OF THE COMPANY:

The Auditors'' Report on the Annual Accounts of the Company for the year ended on 31^st March, 2018 does not contain any qualification / reservation / observation.

SECRETARIAL AUDITOR:

Section 204 of the Companies Act, 2013 inter alia requires every listed company to annex with its Board Report a Secretarial Audit Report given by a Company Secretary in practice in the prescribed form. The Board has appointed M/s SPAN & Co., Company Secretaries LLP, to conduct Secretarial Audit for the financial year - 2017-2018. The Secretarial Audit Report for the financial year ended March 31, 2018 is annexed herewith marked as Annexure - D to this Report. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.

COST AUDIT:

The maintenance of cost records has not been specified by Central Government under section 148(1) of the Companies Act, 2013 for the business categories in which Company operates accordingly such accounts and records are not maintained.

PARTICULARS OF EMPLOYEES:

The Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are enclosed with this report as Annexure - E.

The Statement of particulars of employees under Section 197(12) read with Rule 5 (2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel), Rules, 2014 is not required to be provided, since during the financial year under review, no employee of the Company except the Managing Directors, was in receipt of remuneration in excess of the limits set out in the said rules.

MATERIAL INFORMATION:

During the period under review, a Company Petition (being Company Petition No. 43 of 2017) has been filed against the Company, before the National Company Law Tribunal, Ahmedabad ("NCLT"), under Sections 241 and 242 of the Companies Act, 2013. In connection to the said Company Petition No. 43 of 2017, the Petitioners and some of the parties to the petition are seeking to arrive at an amicable resolution of matter. The matter was lastly heard by the Hon''ble NCLT on 27-07-2018.

GENERAL:

- During the year under review, there was no change in the nature of business of the Company and there is no material change and/or commitments, affecting the financial position of the Company, during the period from 31st March, 2018 till the date of this report.

- During the year under review, there was no significant and/or material order passed by any regulators or courts or tribunals impacting the going concern status and company''s operations in future.

- The Company does not provide any loan or other financial arrangement to its employees or Directors or Key Managerial Personnel for purchase of its own shares and hence, the disclosure under Section 67(3)(c) of the Companies Act, 2013 does not require.

- During the year under review, no Director or Managing Director of the Company has received any remuneration or commission from subsidiary of the Company in terms of provisions of Section 197(14) of the Companies Act, 2013.

- The disclosure in terms of Rule - 4 of Companies (Share Capital and Debenture) Rules, 2014 is not provided, as the Company does not have any equity shares with differential voting rights.

- The Company has zero tolerance towards sexual harassment at the workplace and has adopted a policy on prevention, prohibition and redressal of sexual harassment at workplace in line with the provisions of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules made thereunder.

- The trademark “Vadilal” and its associated trademarks are owned by Vadilal International Pvt. Ltd. The Company is a licensee of the said Trademarks.

INSURANCE:

All insurable interests of the Company including buildings, plant and machinery, furniture & fixtures and other insurable interest are adequately insured.

TRADE RELATIONS:

The Board desires to place on record its appreciation of the support and co-operation that your Company received from Distributors, Dealers, Stockiest, C&F Agents, Retailers and all others associated with your Company. It will be your Company''s continued endeavor to build and nurture strong links with the trade, based on mutuality, respect and co-operation and consistent with the consumer interest.

ACKNOWLEDGEMENT:

The Directors place on record the appreciation and gratitude for the co-operation and assistance extended by various departments of the Union Government, State Government, Bankers and Financial Institutions.

The Directors also place on record their appreciation of dedicated and sincere services of the employees of the Company at all levels.

The Company will make every effort to meet the aspirations of its Shareholders and wish to sincerely thank them for their whole hearted co-operation and support at all times.

By Order of the Board of Directors

For VADILAL ENTERPRISES LTD.

RAJESH R. GANDHI DEVANSHU L. GANDHI

CHAIRMAN & DIRECTOR DIRECTOR

DIN : 00009879 DIN : 00010146

Date : 11th August, 2018

Place : Ahmedabad.

---

Mar 31, 2016

To,

The members,

VADILAL ENTERPRISES LIMITED

Ahmedabad.

The Directors have pleasure in presenting herewith the 31^st Annual Report together with the Audited Statement of Accounts for the year ended on 31^st March, 2016.

FINANCIAL HIGHLIGHTS :

FINANCIAL RESULTS (Rs.in Lacs)

Sr. No.	Particulars	Year ended 31-03-2016	Year ended 31-03-2015
(a)	Earnings before Interest, Tax, Depreciation and Amortization	904.96	759.94
(b)	Finance Cost	92.76	118.88
(c)	Depreciation & Amortization Expense	783.25	640.18
(d)	Profit before Tax	28.95	0.88
(e)	Tax Expense — Current Tax	27.49	9.35
	Less : MAT Credit Entitlement	0.00	9.35
	— Deferred Tax (Reversed)	27.49 (15.48)	0.00 0.28
	— Income Tax written off / (written back) of earlier years	4.32	0.00
	Total Tax:	16.33	0.28
(f)	Profit for the year	12.62	0.60
(g)	Surplus in the statement of Profit & Loss: Balance brought forward from the last year	0.00	0.00
	Add: Profit/(Loss) after tax for the year	12.62	0.60
	Add: Amount transferred from General Reserve	0.00	7.70
	Less : Appropriation — Proposed Equity Dividend (amount per share Re. 0.80, previous year Re. 0.80)	6.90	6.90
	— Tax on proposed Equity Dividend	1.40	1.40
	— Transfer to General Reserve	0.00	0.00
	Net Surplus in the statement of Profit and Loss	4.31	0.00

STATE OF COMPANY’S AFFAIRS :

The Company has earned Revenue from Operations of Rs. 48826.66 lacs during the year ended on 31st March, 2016 as against Rs. 41846.23 lacs earned during the previous year ended on 31st March, 2015, giving a rise of 16.68% as compared to previous year.

The Company has earned the Earnings before Interest, Tax, Depreciation and Amortization (EBITDA) of Rs. 904.96 lacs during the year ended on 31st March, 2016 as compared to Rs. 759.94 lacs earned during the previous year ended on 31st March, 2015 showing a rise of 19.55%. The Company has incurred Finance Cost of Rs. 92.76 lacs and provided for Depreciation and Amortization expenses of Rs. 783.25 lacs for the year ended on 31st March, 2016.

The Company has earned profit before Tax of Rs. 28.95 lacs during the year under review as compared to Rs. 0.88 lacs incurred during the previous year ended on 31st March, 2015. The Company has earned profit for the year of Rs. 12.62 lacs during the year ended on 31st March, 2016 after providing Finance Cost and Depreciation and Amortization expenses and after releasing Deferred Tax of Rs. 15.48 lacs and other adjustments, as compared to profit of Rs. 0.60 lacs earned by the Company during the previous year ended on 31st March, 2015.

DIVIDEND:

The Directors have recommended dividend of Rs. 0.80/- per share (@ 8.00%) on 8,62,668 Equity Shares of Rs. 10/- each of the Company for the financial year ended on 31^st March, 2016 as compared to Rs. 0.80/- per share (@ 8.00%) dividend declared in the previous financial year ended on 31^st March, 2015. This will absorb Rs. 6.90 lacs as against Rs. 6.90 lacs absorbed in the previous year. The corporate dividend tax payable by the Company on the said dividend will be Rs.1.40 lacs as compared to Rs. 1.40 lacs paid during the previous year. If approved, the dividend will be paid without deduction of tax at source to the shareholders.

TRANSFER TO RESERVE :

The Company does not propose to transfer any amount to General Reserve due to inadequacy of profit.

EXTRACT OF ANNUAL RETURN:

Extract of Annual Return of the Company as required under Section 92(3) of the Act and Rule - 12 of the Companies (Management and Administration) Rules, 2014, in the prescribed Form - MGT-9, is annexed herewith as Annexure - A, to this Report.

OPERATIONS - MARKETING FOCUS:

Ice-cream Division :

Industry Structure & Development, Business Overview & Sustainable Growth Opportunities:

India is the world''s largest milk producer with an estimated annual production of more than 100 million tons of ice cream per year. Keeping up with the economy''s quantum growth in recent years, the ice cream market has also set new records. The total Indian ice cream market is estimated at approx. Rs. 6000 crores with the organized sector estimated at Rs. 3500 crores. An ice cream makes everything better; be it an everyday occasion or life''s most precious moments. Our range of ice creams and frozen desserts have always fulfilled this promise by making these special moments even more beautiful. Our communication and positioning is now focusing on Millennials, making sure that we become ‘The Best Part of Everyday''. Increasing urbanization, rising disposable incomes and increasing ‘out of home'' food consumption coupled with the ever increasing availability of various foods in the markets close to residential areas are some of the reasons driving the ice cream segment.

The structure of the industry and the ongoing transformation offers ample and more opportunities for organized players to invest and grow. Vadilal''s Ice Cream division has shown sustainable annual growth consistently and aims to maintain it further in the years to come.

Since inception, we have been committed towards delivering the best quality products at affordable prices to every customer. We are constantly working towards improving our products in terms of their nutritional profile and benefits.

Developments

The biggest development in 2016 has been the appointment of a brand ambassador for Vadilal Ice Creams. Parineeti Chopra has been chosen as the young new face of Vadilal Ice Creams and is all set to take the company to new heights of success. Taking forward our tradition of introducing innovative products year on year, we have launched Badabite Select, rich chocolate bar covered with premium dark Belgian chocolate. Butterscotch flavor in Flingo, Indulge flavors in Party Pack, namely, Berry cake, Shahikalakand and Mango Choco as well as Cyclone in the Ice Trooper range.

Our new campaign for Badabite, Flingo & Gourmet with Parineeti Chopra has received a great response and high brand recall. Our Ice Trooper advertisement has also become very popular amongst children.

Along with newly launched flavours, our existing flavours and sub brands like Badabite, Flingo, Ice Trooper, Frootful Juicees & Gourmet Tubs continue to show substantial movement in the market. The challenge of sustaining the innovation trend has been met by introducing new variants in these brands regularly.

As multinational ice cream brands enter India, it has become imperative for us to reinvent our strategy to consolidate our leadership. We have always endeavored to offer innovative products to the consumers and are proud of the fact that there are many products which have been introduced by us in the Indian market that have gone ahead to become regular products for all ice cream manufacturers.

The overall consumer awareness and size of the premium ice cream segment has increased with the entry of international brands in India. Following these developments, we have also launched many variants in the premium segment like ice cream bars, ice cream sandwiches, ice cream cakes, etc. under the brand name Artisan.

With an upgrade in production technology, it has become more feasible for us to offer premium and innovative products in the market. Our Ice Trooper range, launched in 2012, continues to lead the kids segment and has become a favorite across India.

Vadilal has started exclusive parlors in two formats: Scoop Shop and Hangout. These formats offer a contemporary trendy range of Premium Ice Creams and Concoctions in a very chic ambiance. The purpose of launching these two formats is to present the brand in a very contemporary and modern way. It is in line with our efforts towards shifting the brands focus from mass to mass premium.

AWARDS WON BY VADILAL YEAR BY YEAR:

Vadilal has won 27 awards over 4 consecutive years: 2008 to 2011 at ''The Great Indian Ice Cream Contest'' organized by the Indian Dairy Association. The various categories for awards were: The Best in Class (3): Chocolate Frozen Dessert, Standard Chocolate Ice Cream, Rose Coconut Shell (Innovation - Novelty) Gold Medal (4): Standard Chocolate Ice Cream, Chocolate Frozen Dessert, Vanilla Frozen Dessert and Rose Coconut Shell (Innovation - Novelty), Bronze Medal (1) Natural Orange (Premium without Inclusion). Best in Class in Kids category - Joker Ice Trooper, Gold in Kids category - Joker Face Ice Trooper, Silver in Vanilla Frozen Dessert. Bronze in Vanilla Ice Cream - Happinezz Vanilla Ice cream. Bronze in Premium -Pista Happinezz Ice Cream garnished with Green Pista.

Vadilal Ice Creams has been voted as the “Most Trusted Ice Cream Brand in India” as per the The Brand Trust Report - 2013. The Economic Times Survey ranked us among the “Top 20 Food and Beverages” brands in India.

FUTURE STRATEGY:

Looking at the trends from the recent past, we foresee fast growth in the traditional “out of home food” category like ice creams and frozen desserts. However, along with the increasing demand for convenience, the continuing need for value as a trend is also growing. We plan to continue with the strategy of consolidating our presence in the high end premium segment. Earlier Vadilal was only focused on offering mass segment products. However, we have been able to increase our share in the premium segment as well and it has helped the overall growth.

Distribution definitely plays a key role in the success of our business. The Company is planning to increase our reach in the existing market in terms of consolidating our presence in Cash and Carry format as well as the Modern Retail segment. The logistics of ice cream, being a cold chain product, are complex and the Company is continuously expanding its cold chain distribution network through refrigerated vehicles and deep freezers.

The Company is working on increasing the physical touch points with our consumers with an ever-increasing network of dealers, FOWs (Freezer On Wheels), POWs (Parlour On Wheels) and Ice Cream parlous.

Along with various ATL campaigns, the Company also plans various BTL activities to enhance consumer experience with Vadilal. The Company plans to organize innovative cross promotional activities to enhance the brand engagement with the consumers and use the digital space actively as well for the same. The Company also plans to increase the branding activity at retail level.

Marketing

To ensure maximum exposure to the public in terms of marketing, we spend on an optimum mix of ATL and BTL activities. We utilize various communication touch points like Retail, Outdoor, Print, TV, Internet, Social Media etc. to get the brand message across. This year, we have a 360 degree marketing plan. However, the advertising budgets are skewed more towards television as we have a nationwide reach now. Apart from traditional media platforms, we also enjoy commendable brand presence and preference in the digital space.

Our consumer engagement initiative, ‘Vadilal Freeze the Moment Contest'' Calendar, launched in 2012, has become a successful annual event and is eagerly awaited by consumers every year.

On the sales promotions front, we constantly engage our trade patrons through various schemes and offers. Vadilal also invests in consumer promotional activities from time to time. As an example, last year we had a “surprise gift” available with each candy of Ice Trooper to delight our young customer which we have continued this year as well.

PROCESSED FOOD DIVISION:

Today the world''s market is all about convenience. Beyond the basic needs and necessities, luxury has now become synonymous with convenience and ease of operation. ‘Quick and easy'' is the new market mantra, and one area where this behavioral evolution has turned out to be a boon is the Convenience Foods market.

The frozen foods segment has been the segment that has catered the most to these altering lifestyle needs. Garden-picked fresh and as delicious as home-cooked food, with qualities like longer shelf life and made with advanced technological expertise, the Frozen Foods category is making positive strides towards representing a more attractive and relevant proposition to a wider range of consumers today.

Vadilal Quick Treat, one of the country''s leading processed food brand, has adopted a very organized approach towards attaining the market leadership. Launching new products, strengthening existing product verticals through product extensions, thoughtful and insightful consumer oriented market communications are few steps that have given the brand a strong hold on the distribution channel and the market itself. Collaborations with strong regional distribution companies across the world, consistent delivery of quality products remains the agenda of the company.

Vadilal Quick Treat, has focused on increasing the product offerings. While it has one of the biggest ‘IQF vegetables'' range, the brand has now launched a range of potato based snacks as well. Additionally, fruits as a part of product portfolio have also seen some new offerings like guava slices, Jaamun, and Pomegranate kernels.

FINANCE :

During the year under review, the company has availed / reviewed various secured and unsecured loans from various Banks, FIs. During the year under review, the company has made regular repayment of Loan & interest and there is no any overdue payment to Banks and FIs. Company has maintained external rating from CRISIL Limited & CARE Ratings, they have reviewed the external rating of the company i.e. BBB (Negative).”

During the year under review, the Company has transferred the unclaimed interest on Fixed Deposit of Rs. 1905/- for the financial year ended on 31st March, 2009 to Investors'' Education and Protection Fund.

DETAILS OF DEPOSITS:

a. During the year under review, the details of deposit accepted by the company from its member, after complying with the provisions of Section 73 of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014, are as under :

(Rs. in lakhs)

(a) Amount of existing deposits as at 1st April, 2015 : 8.14

(b) Amount of deposits accepted or renewed during the year

(i) Secured deposits : 0.00

(ii) Unsecured deposits : 74.58

Total (b) : : 74.58

(c) Amount of deposits repaid during the year : 2.75

(d) Balance of deposits outstanding at the end Iof the year (a b-c) : 79.97

b. As on 31^st March, 2016, no deposits was remained unpaid or unclaimed by the Company.

c. During the year under review, the Company has not made any default in repayment of deposits or payment of interest on deposits.

d. The Company has not accepted or renewed any deposit which is not in compliance with the provisions of Chapter - V of the Companies Act, 2013.

CONSOLIDATED FINANCIAL STATEMENTS:

Pursuant to the requirements of Section 129(3) read with Schedule - III of the Companies Act, 2013 and Rules made there under, and Regulation 34 of the SEBI (Listing Obligation and Disclosure Requirement), 2015 and other applicable Accounting Standards, the Consolidated Financial Statements of the Company, Vadilal Forex and Consultancy Services Ltd., and Majestic Farm House Limited an Associate Companies, for the year ended on 31^st March, 2016 have been attached with the financial statement of the Company. The Audited Consolidated Financial Statements form part of the Annual Report.

ASSOCIATE COMPANIES :

A report on the financial position of associate companies as per first proviso to sub-section(3) of Section 129 of the Companies Act, 2013 and Rules made there under in the prescribed Form - AOC-1 is provided as Annexure - B to the consolidated financial statement and hence not repeated here for the sake of brevity.

DIRECTORS’ RESPONSIBILITY STATEMENT:

To the best of their knowledge and belief and according to the confirmation and explanations obtained by them, your Directors make the following statement in terms of Section 134(3)(C) and 134(5) of the Companies Act, 2013 and confirm :

(a) In the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

(b) The directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit and loss of the company for that period;

(c) The directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

(d) The directors had prepared the annual accounts on a going concern basis;

(e) The directors had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively; and

(f) The directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

PARTICULARS OF LOANS GIVEN, INVESTMENTS MADE, GUARANTEES GIVEN AND SECURITIES PROVIDED: Particulars of loans given, investments made, guarantees given and securities provided by the Company under Section 186 of the Companies Act, 2013 are not provided as during the year under review, the Company has not given any loan nor made any investment nor given any guarantee nor provided any security to any person.

CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES:

Information on transactions with related parties pursuant to Section 134(3)(h) of the Act read with Rule 8(2) of the Companies (Accounts) Rules, 2014 are given in Annexure - C in the prescribed Form - AOC-2 and the same forms part of this report. All related party transactions are placed before the Audit Committee of the Company for review and approval.

The Policy on materiality of related party transactions and dealing with related party transactions as approved by the Board may be accessed on the Company''s website viz. www.vadilalgroup.com.

Your Directors draw attention of the members to Note 32 to the financial statement which sets out related party disclosures.

DIRECTORS AND KEY MANAGERIAL PERSONNEL:

Pursuant to the provisions of Section 152 of the Companies Act, 2013 and Rules made there under, Mr. Rajesh R. Gandhi, Managing Director (DIN: 00009879) of the Company, shall retire by rotation at this Annual General Meeting and being eligible, offer himself for re-appointment. The retiring by rotation of Mr. Rajesh R. Gandhi, as aforesaid and his re-appointment shall not be termed as discontinuation in his office as Managing Director of the Company. The Members are requested to consider his re-appointment as Director of the Company, for which necessary resolution has been incorporated in the notice of the meeting.

During the year in review the erstwhile Company Secretary and Compliance Officer Mrs. Ruchita V. Gurjar has been resigned from the Company from the From 10^th February, 2016 in place of her; Company has appointed Mr. Darshan D. Shah as a Company Secretary and Compliance Officer of the Company from 11^th March, 2016 .

The brief resume/details relating to the said Directors, who are to be re-appointed/appointed are furnished in the Notes to the Notice of the Annual General Meeting.

BOARD EVALUATION :

The board of directors has carried out an annual evaluation of its own performance, Board committees and individual directors pursuant to the provisions of the Act.

The performance of the Board was evaluated by the Board on the basis of the criteria such as the Board composition and structure, effectiveness of board processes, information and functioning, etc.

The performance of the committees was evaluated by the board after seeking inputs from the committee members on the basis of the criteria such as the composition of committees, effectiveness of committee meetings, etc.

The Board and the Nomination and Remuneration Committee (“NRC”) reviewed the performance of the individual directors on the basis of the criteria such as the contribution of the individual director to the Board and committee meetings like preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings, etc. In addition, the Chairman was also evaluated on the key aspects of his role.

In a separate meeting of independent Directors, performance of non-independent directors, performance of the board as a whole and performance of the Chairman was evaluated, taking into account the views of executive directors and non-executive directors. The same was discussed in the board meeting that followed the meeting of the independent Directors, at which the performance of the Board, its committees and individual directors was also discussed.

COMMITTEES OF DIRECTORS :

The details of various committees of Directors constituted under various provisions of Companies Act, 2013 and Rules made there under, are as under :

A. AUDIT COMMITTEE :

The Audit Committee comprises the following Director of the Company, as on 31^st March, 2016 namely:

Sr. No.	Name of the Member	Designation	Category
1	Mr. Jayantilal M. Shah	- Chairman	Independent Director
2	Mr. Devanshu L. Gandhi	- Member	Non-Executive and Non-Independent Director
3	Mr. Preet P. Shah	- Member	Independent Director

The constitution of the Audit Committee fulfills the requirements of Section 177 of the Companies Act, 2013 and Rules made thereunder. The members of audit committee are financially literate and having accounting or related financial management expertise.

Mr. Darshan Shah, who is a Company Secretary of the Company, is the Secretary to the Audit Committee.

B. NOMINATION AND REMUNERATION COMMITTEE :

The Nomination and Remuneration Committee comprises the following Directors of the Company, as on 31 st March, 2016 namely:

Sr. No.	Name of the Member	Designation	Category
1	Mr. Jignesh J. Shah	- Chairman	Independent Director
2	Mr. Devanshu L. Gandhi	- Member	Non-executive and Non-Independent Director
3	Mr. Preet P. Shah	- Member	Independent Director

The constitution of Nomination and Remuneration Committee fulfills the requirements of Section 178 of the Companies Act, 2013 and Rules made there under.

C. STAKEHOLDERS’ RELATIONSHIP COMMITTEE :

The erstwhile Share Transfer Committee of the Directors of the Company was re-constituted and re-nomenclature as a Stakeholders’ Relationship Committee, at the meeting of Board of Directors held on 29^th May, 2014, pursuant to the provisions of Section 178 of the Companies Act, 2013 and Rules made there under.

The Stakeholders'' Relationship Committee comprises the following Directors of the Company, as on 31st March, 2016, namely:

Sr. No.	Name of the Member	Designation	Category
1	Mr. Rajesh R. Gandhi	- Chairman	Non-Executive and Non-Independent Director
2	Mr. Devanshu L. Gandhi	- Member	Non-Executive and Non-Independent Director

The constitution of Stakeholders'' Relationship Committee fulfills the requirements of Section 178 of the Companies Act, 2013 and Rules made there under.

The Committee, inter alia, approves the transfer of Shares, issue of duplicate Share Certificates, splitting and consolidation of Shares etc. The Committee also looks after redressal of Shareholder''s complaints like transfer of shares, non-receipt of balance sheet, non-receipt of dividends, etc. The Board of Directors has delegated the power of approving transfer of Shares etc. to the Stakeholders'' Relationship Committee.

POLICY ON DIRECTORS’ APPOINTMENT AND REMUNERATION:

The Nomination and Remuneration Committee has at its meeting held on 29^th May, 2014 recommended to the Board a policy on appointment and remuneration of Directors of the Company in terms of the provisions of Section 178 of the Companies Act, 2013 and Rules made there under, which was approved by the Board of Directors, at its meeting held on 29^th May, 2014. The Policy on appointment and remuneration of Directors is enclosed with the Directors'' report and marked as “Annexure-D”.

OTHER POLICIES AND MESURESES AS PER THE REQUIREMENT OF SEBI (LISTING OBLIGATION AND DISCLOSURE REQUIREMENT), 2015

The Securities Exchange Board of India has notified SEBI (Listing Obligation and Disclosure Requirement), 2015 on 2^nd September, 2015 under which Company needs to formulate several policies and need to take certain measures for the purpose of effective Corporate Governance.

List of Policies formulated and approved by the Board of Director is as follows:

1. Policy on Related Party Transaction

2. Policy on determining Material Subsidiary

3. Whistle Blower Policy

All of the above policy and measures are prepared on the line of Companies Act, 2013 as amended and SEBI (Listing Obligation and Disclosure Requirement), 2015 which is subject to amendment as per applicable law from time to time. The said policies are available at Company''s web-site viz. http://vadilalgroup.com/

NUMBER OF BOARD MEETINGS :

During the year under review, five Meetings of Board of Directors were held on 01 -06-2015, 13-08-2015, 09-11-2015, 02-022016 and 11-02-2016.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:

The details of Conservation of Energy and Technology Absorption are not required to provide as the provisions of Section 134(1 )(m) are not applicable to the Company due to the nature of the Company''s business operations, being Marketing Company.

There is no any Foreign Exchange Earnings or outgo during the year under review.

INTERNAL FINANCIAL CONTROLS

The Company has in place adequate internal financial controls with reference to financial statements. During the year, such controls were tested and no reportable material weakness in the design or operation were observed.

AUDITORS:

Section 139(2) of the Companies Act, 2013 (effective 1^st April, 2014), mandates that a listed company or such other prescribed classes of companies shall not appoint or re-appoint an audit firm as Statutory Auditors for more than two terms of five consecutive years each.

Further, the companies as aforesaid, whose Statutory Auditors has held office for a period of ten years or more are required to comply with these provisions, within three years from the date of commencement of these provisions i.e. 1^st April, 2014. For this purpose, the term of the audit firm before the commencement of these provisions shall be taken into account for calculating the period of ten consecutive years.

Our auditors, M/s. Kantilal Patel & Co., Chartered Accountants, Ahmedabad are holding the office as Statutory Auditors for more than ten years. Hence, they can only be re-appointed for a period up to three years i.e. up to Financial Year- 2016-2017.

The Audit Committee and the Board of Directors recommend the re-appointment of M/s. Kantilal Patel & Co., Chartered Accountants, Ahmedabad as Statutory Auditors of the Company to hold office from the conclusion of this Annual General Meeting till the conclusion of the next Annual General Meeting of the Company.

The Company has received a certificate from the said Auditors under Section 139 of the Companies Act, 2013 to the effect that their appointment, if made, would be within the prescribed limits under Section 139 of the Act and they are not disqualified under the Act. The Members are requested to consider their appointment as Statutory Auditors of the Company to hold office from the conclusion of this Annual General Meeting till the conclusion of the next Annual General Meeting of the Company. AUDITORS’ REPORT OF THE COMPANY:

The Auditors'' Report on the Annual Accounts of the Company for the year ended on 31^st March, 2016 does not contain any qualification / reservation / observation.

SECRETARIAL AUDITOR:

Section 204 of the Companies Act, 2013 inter alia requires every listed companies to annex with its Board Report a Secretarial Audit Report given by a Company Secretary in practice in the prescribed form. The Board has appointed M/s SPANJ Associates, Practicing Company Secretaries, to conduct Secretarial Audit for the financial year 2015-16. The Secretarial Audit Report for the financial year ended March 31, 2016 is annexed herewith marked as Annexure - E to this Report. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.

The following clarification has been made by the Directors in respect of the observation made by the Secretarial Auditors in the Secretarial Audit Report for the year ended on 31^st March, 2016 :-

i. In respect of observation of late approving financial results for the year ended on 31 -03-2015, it is clarified by the Board that the Company has implemented the Company has implemented SAP Project during the year - 2014-2015 and the SAP system was not able to generate authenticated report related to financial results. Hence, the Company was not able to approve the Audited Financial Results within the statutory time limit.

LISTING AGREEMENT WITH STOCK EXCHANGES:

Pursuant to the provisions of Listing Agreement with the Stock Exchanges, the Company declares that the Equity Shares of the Company are listed on the BSE Limited (BSE).

The Company confirms that it has paid Annual Listing Fees due to the BSE Limited up to the Financial Year -2015-2016.

DEPOSITORY SYSTEM:

Your Company has established electronic connectivity with the Depositories, NSDL and CDSL. In view of the numerous advantages offered by the Depository system, members are requested to avail of the facility of dematerialization of the Company''s shares on NSDL and CDSL as aforesaid.

The ISIN number allotted to the Company is INE693D01018.

PARTICULARS OF EMPLOYEES:

The Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are enclosed with this report as Annexure - F.

The Statement of particulars of employees under Section 197(12) read with Rule 5 (2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel), Rules, 2014 is not provided with as, during the financial year under review, no employee of the Company including Managing Directors was in receipt of remuneration in excess of the limits set out in the said rules.

GENERAL:

- During the year under review, there was no change in the nature of business of the Company and there is no material change and/or commitments, affecting the financial position of the Company, during the period from 31st March, 2016 till the date of this report.

- During the year under review, there was no significant and/or material order passed by any regulators or courts or tribunals impacting the going concern status and company''s operations in future.

- The Company does not provide any loan or other financial arrangement to its employees or Directors or Key Managerial Personnel for purchase of its own shares and hence, the disclosure under Section 67(3)(c) of the Companies Act, 2013 does not require.

- During the year under review, no Director or Managing Director of the Company has received any remuneration or commission from subsidiary of the Company in terms of provisions of Section 197(14) of the Companies Act, 2013.

- The disclosure in terms of Rule - 4 of Companies (Share Capital and Debenture) Rules, 2014 is not provided, as the Company does not have any equity shares with differential voting rights.

- The Company has zero tolerance towards sexual harassment at the workplace and has adopted a policy on prevention, prohibition and redressal of sexual harassment at workplace in line with the provisions of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules made there under.

INSURANCE:

All insurable interests of the Company including buildings, plant and machinery, furniture & fixtures and other insurable interest are adequately insured.

TRADE RELATIONS :

The Board desires to place on record its appreciation of the support and co-operation that your Company received from Distributors, Dealers, Stockiest, C&F Agents, Retailers and all others associated with your Company. It will be your Company''s continued endeavor to build and nurture strong links with the trade, based on mutuality, respect and co-operation and consistent with the consumer interest.

ACKNOWLEDGEMENT:

The Directors place on record the appreciation and gratitude for the co-operation and assistance extended by various departments of the Union Government, State Government, Bankers and Financial Institutions.

The Directors also place on record their appreciation of dedicated and sincere services of the employees of the Company at all levels.

The Company will make every effort to meet the aspirations of its Shareholders and wish to sincerely thank them for their whole hearted co-operation and support at all times.

By Order of the Board of Directors

RAJESH R. GANDHI

Date : 8^th August, 2016 Chairman

Place : Ahmedabad DIN : 00009879

---

Mar 31, 2015

Dear Members,

The Directors have pleasure in presenting herewith the 30th Annual Report together with the Audited Statement of Accounts for the year ended on 31st March, 2015.

FINANCIAL HIGHLIGHTS : (Rs. in Lacs)

Sr. Particulars Year ended Year ended No. 31-03-2015 31-03-2014

(a) Earning before Interest, Tax, Depreciation and Amortization 759.94 601.44

(b) Finance Cost 118.88 148.57

(c) Depreciation & Amortization Expense 640.18 540.13

(d) Profit/(Loss) before Tax 0.88 (87.26)

(e) Tax Expense

— Current Tax (MAT Tax) 9.35 0.00

Less : MAT Credit Entitlement (9.35) 0.00

0.00 0.00

— Deferred Tax charge / (release) 0.28 (17.81)

— Income Tax written off / (written back) of earlier years 0.00 (8.90)

Total Tax: 0.28 (26.71)

(f) Profit/(Loss) for the year 0.60 (60.55)

(i) Surplus in the statement of Profit & Loss:

Balance brought forward from the last year 0.00 66.23

Add: Profit/(Loss) after tax for the year 0.60 (60.55)

Add: Amount transferred from General Reserve for proposed dividend 7.70 2.39

Less : Appropriation

— Proposed Equity Dividend (amount per share Rs. 0.80, previous year Rs. 0.80) 6.90 6.90

— Tax on proposed Equity Dividend 1.40 1.17

Net Surplus / (Deficit) in the statement of Profit and Loss: 0.00 0.00

STATE OF COMPANY'S AFFAIRS:

The Company has earned Revenue from Operations of Rs. 41846.23 lacs during the year ended on 31st March, 2015 as against Rs. 36654.09 lacs earned during the previous year ended on 31st March, 2014, giving a rise of 14.17% as compared to previous year.

The Company has earned the Earnings before Interest, Tax, Depreciation and Amortisation (EBITDA) of Rs. 759.94 lacs during the year ended on 31st March, 2015 as compared to Rs. 601.44 lacs earned during the previous year ended on 31st March, 2014, showing a rise of 26.35%. The Company has incurred Finance Cost of Rs. 118.88 lacs and provided for Depreciation and Amortisation expenses of Rs. 640.18 lacs for the year ended on 31st March, 2015. The Company has earned profit before Tax of Rs. 0.88 lacs during the year under review as compared to loss Rs. 87.26 lacs incurred during the previous year ended on 31st March, 2014. The Company has earned profit for the year of Rs. 0.60 lacs during the year ended on 31st March, 2015 after providing Finance Cost and Depreciation and Amortisation expenses and after making Provision for Deferred Tax of Rs. 0.28 lacs and other adjustments, as compared to loss of Rs. 60.55 lacs incurred by the Company during the previous year ended on 31st March, 2014.

DIVIDEND:

The Directors have recommended dividend of Rs. 0.80/- per share (@ 8.00%) on 8,62,668 Equity Shares of Rs.10/- each of the Company for the financial year ended on 31st March, 2015 as compared to Rs. 0.80/- per share (@ 8.00%) dividend declared in the previous financial year ended on 31st March, 2014. This will absorb Rs. 6.90 lacs as against Rs. 6.90 lacs absorbed in the previous year. The corporate dividend tax payable by the Company on the said dividend will be Rs. 1.40 lacs as compared to Rs. 1.17 lacs paid during the previous year. If approved, the dividend will be paid without deduction of tax at source to the shareholders.

TRANSFER TO RESERVE:

The Company does not propose to transfer any amount to general reserve due to Inadequecy of Profit. EXTRACT OF ANNUAL RETURN:

Extract of Annual Return of the Company as required under Section 92(3) of the Act and Rule - 12 of the Companies (Management and Administration) Rules, 2014, in the prescribed Form - MGT-9, is annexed herewith as Annexure - I, to this Report.

OPERATIONS - MARKETING FOCUS:

ICE-CREAM DIVISION:

INDUSTRY STRUCTURE & DEVELOPMENT, BUSINESS OVERVIEW & SUSTAINABLE GROWTH OPPORTUNITIES:

Indian Ice-cream market is estimated to be around Rs. 6000 crores with the organized sector estimated at Rs. 3500 Crores. Increasing urbanization, rising disposable incomes and increasing "out of home food" consumption coupled with the ever increasing availability of various foods in the markets close to residential areas are some of the reasons driving the ice cream segment.

The Company works to deliver the best tasting products and continuously improve ice-cream range for nutritional profile and benefits. Since the inception, the Company has been committed towards delivering the best quality products at affordable prices conveniently within reach of the consumers.

To ensure maximum exposure to the public in terms of marketing, we spend on an optimum mix of ATL and BTL activities. We utilize various communication touch points like Retail, Outdoor, Print, TV, Internet, etc. to get the brand message across. This year, we have a 360 degree marketing plan. However, the advertising budgets are skewed more towards television as we have a nationwide reach now. Apart from traditional media platforms, we also enjoy commendable brand presence and preference in the digital space.

Our consumer engagement initiative, Vadilal Freeze the Moment Contest Calendar launched in 2012 has become a successful annual event and is eagerly awaited by consumers every year.

This year, Vadilal launched the Ice Trooper Treasure Hunt Contest with the objective of offering its young customers a chance to win exciting prizes. A new commercial promoting the contest was aired on all major television channels throughout the summer season. A huge amount of customers from across the nation participated in the contest. On the sales promotions front, we constantly engage our trade patrons through various schemes and offers. Vadilal also invests in consumer promotional activities from time to time. As an example, last year we had a "surprise gift" available with each candy of Ice Trooper to delight our young customers.

AWARDS WON BY VADILAL YEAR BY YEAR:

Vadilal has won 27 awards over 4 consecutive years: 2008 to 2011 at 'The Great Indian Ice Cream Contest' organized by the Indian Dairy Association. The various categories for awards were: The Best in Class (3): Chocolate Frozen Dessert, Standard Chocolate Ice Cream, Rose Coconut Shell (Innovation - Novelty) Gold Medal (4): Standard Chocolate Ice Cream, Chocolate Frozen Dessert, Vanilla Frozen Dessert and Rose Coconut Shell (Innovation - Novelty), Bronze Medal (1) Natural Orange (Premium without Inclusion). Best in Class in Kids category - Joker Ice Trooper, Gold in Kids category - Joker Face Ice Trooper, Silver in Vanilla Frozen Dessert. Bronze in Vanilla Ice Cream

- Happinezz Vanilla Ice cream. Bronze in Premium - Pista Happinezz Ice Cream garnished with Green Pista.

Vadilal Ice Creams has been voted as the "Most Trusted Ice Cream Brand in India" as per the The Brand Trust Report

- 2013. The Economic Times Survey ranked us among the "Top 20 Food and Beverages" brands in India.

FUTURE STRATEGY:

Distribution definitely plays a key role in the success of our business. The Company is planning to increase our reach in the existing market in terms of consolidating our presence in Cash and Carry format as well as the Modern Retail segment. The logistics of ice cream, being a cold chain product, are complex and the Company is continuously expanding its cold chain distribution network through refrigerated vehicles and deep freezers.

The Company is working on increasing the physical touch points with our consumers with an ever-increasing network of dealers, FOWs (Freezer On Wheels), POWs (Parlour On Wheels) and Ice Cream parlours.

Along with various ATL campaigns, the Company also plans various BTL activities to enhance consumer experience with Vadilal. The Company plans to organize innovative cross promotional activities to enhance the brand engagement with the consumers and use the digital space actively as well for the same. The Company also plans to increase the branding activity at retail level.

Processed Food Division - Domestic:

Vadilal Quick Treat, one of the country's leading processed food brand, has adopted a very organized approach towards attaining the market leadership. Launching new products, strengthening existing product verticals through product extensions, thoughtful and insightful consumer oriented market communications are few steps that have given the brand a strong hold on the distribution channel and the market itself. Collaborations with strong regional distribution companies across the world, consistent delivery of quality products remains the agenda of the company. With introduction of dairy range - Paneer Cubes & block, Ghee, the brand is all set to explore the newer opportunities in the market.

The brand will be soon taking the legacy of Vadilal Ice Creams to the world under the brand 'Vadilal Quick Treat'. With this the brand is excited and sure to grab a bigger shelf share in the stores across the globe. As the time goes, the brand will be putting at least 15 flavours of Ice Creams into the market to quench the 'Sweet Tooth' craving of the consumers.

FINANCE :

During the year under review, the company is enjoying existing Working Capital Facility & Term Loan Facility from various Banks / Financial Institutions. During the year under review, the company has made regular repayment of Loan & interest and there is no any overdue payment to Banks and Financial Institutions.

During the year under review, the Company has transferred the unclaimed interest on Fixed Deposit of Rs.15000/- for the financial year ended on 31st March, 2008 to Investors' Education and Protection Fund. During the year under review, the Company has transferred the amount of unpaid and unclaimed Dividend of Rs. 34284/- for the year 2006- 2007 to Investors' Education and Protection Fund.

DETAILS OF DEPOSITS:

a. During the year under review, the Company has accepted Deposits of Rs. 8.14 lakhs from its Members, after complying with the provisions of Section 73 of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014.

b. The details of deposits that remained unpaid or unclaimed by the Company as on 31st March, 2015 are as under:

Rs. in lakhs

* Deposits from Members/Shareholders : 8.14

* Deposits from Public accepted before 1-4-2014 : 0.00

Total : 8.14

c. During the year under review, the Company has not made any default in repayment of deposits or payment of interest on deposits.

d. The Company has not accepted or renewed any deposit which is not in compliance with the provisions of Chapter - V of the Companies Act, 2013.

CONSOLIDATED FINANCIAL STATEMENTS:

Pursuant to the requirements of Section 129(3) read with Schedule - III of the Companies Act, 2013 and Rules made thereunder, revised Clause 32 of Listing Agreement with the Stock Exchanges and applicable Accounting Standards and pursuant to exemption granted pursuant to General Circular No. G.S.R. 723(E) dated 14th October, 2014 issued by Ministry of Corporate Affairs, the Company is not required to attach Consolidated Financial Statements for the year ended on 31st March, 2015, as the Company does not have any subsidiary company.

ASSOCIATE COMPANIES :

A report on the financial position of associate companies as per first proviso to sub-section(3) of Section 129 of the Companies Act, 2013 and rules made thereunder in the prescribed Form-AOC 1 is provided as Annexure-II to the Directors' Report.

DIRECTORS' RESPONSIBILITY STATEMENT:

To the best of their knowledge and belief and according to the confirmation and explanations obtained by them, your Directors make the following statement in terms of Section 134(3)(C) and 134(5) of the Companies Act, 2013 and confirm :

(a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

(b) the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit and loss of the company for that period;

(c) the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

(d) the directors had prepared the annual accounts on a going concern basis;

(e) the directors had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively; and

(f) the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

PARTICULARS OF LOANS GIVEN, INVESTMENTS MADE, GUARANTEES GIVEN AND SECURITIES PROVIDED:

Particulars of loans given, investments made, guarantees given and securities provided by the Company under Section 186 of the Companies Act, 2013 are not provided as during the year under review, the company has not given any loan, nor made any investment nor given any guarantee nor provided any security to any person.

CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES:

Information on transactions with related parties pursuant to Section 134(3)(h) of the Act read with Rule 8(2) of the Companies (Accounts) Rules, 2014 are given in Annexure - III in the prescribed Form - AOC-2 and the same forms part of this report. All related party transactions are placed before the Audit Committee of the Company for review and approval.

The Policy on materiality of related party transactions and dealing with related party transactions as approved by the Board may be accessed on the Company's website viz. www.vadilalgroup.com.

Your Directors draw attention of the members to Note 28.2 to the financial statement which sets out related party disclosures.

DIRECTORS AND KEY MANAGERIAL PERSONNEL:

During the period of this report, Mrs. Niranjana A. Kapadia has resigned from the office of the Director of the Company with effect from 1st April, 2015. She was an Independent Director of the Company. The Directors placed on record the valuable services and guidance provided by Mrs. Niranjana A. Kapadia during her tenure as a Director of the Company.

Pursuant to the provisions of Section 152 of the Companies Act, 2013 and Rules made thereunder, Mr. Devanshu L. Gandhi, Director of the Company, shall retire by rotation at this Annual General Meeting and being eligible, offer himself for re-appointment. The Members are requested to consider his re-appointment as Director of the Company, for which necessary resolution has been incorporated in the notice of the meeting.

Pursuant to the provisions of Section 149(1) and 152 1 of the Companies Act, 2013 and Rules made thereunder and on the recommendation of the Nomination and Remuneration Committee, the Company proposes to appoint Mrs. Mamta R. Gandhi, who was appointed as an Additional Director at the Board Meeting held on 31-03-2015, as a Director of the Company, designated as Non-executive and Non-Independent Director, liable to retire by rotation. The Company has received requisite notice in writing from a Member proposing her candidature for appointment as a Director of the Company.

Pursuant to the provisions of Section 149 and 152 1 of the Companies Act, 2013 and Rules made thereunder and on the recommendation of the Nomination and Remuneration Committee, the Company proposes to appoint Mr. Jignesh J. Shah, Mr. Ashish H. Modi and Mr. Preet P. Shah, who were appointed as Additional Directors at the Board Meeting held on 31-03-2015, as Independent Directors of the Company, not liable to retire by rotation. The Company has received requisite notices in writing from a Member proposing their candidature for appointment as a Director of the Company. The aforesaid Independent Directors, if appointed, shall hold office for a term of 5 consecutive years up to the conclusion of the 35th Annual General Meeting of the Company in the calendar year 2020.

The Company has received declarations from all the Independent Directors of the Company in terms of Section 149 of the Act, confirming that they meet the criteria of independence as prescribed under the Act.

BOARD EVALUATION :

The board of directors has carried out an annual evaluation of its own performance, Board committees and individual directors pursuant to the provisions of the Act.

The performance of the Board was evaluated by the Board on the basis of the criteria such as the Board composition and structure, effectiveness of board processes, information and functioning, etc.

The performance of the committees was evaluated by the board after seeking inputs from the committee members on the basis of the criteria such as the composition of committees, effectiveness of committee meetings, etc. The Board and the Nomination and Remuneration Committee ("NRC") reviewed the performance of the individual directors on the basis of the criteria such as the contribution of the individual director to the Board and committee meetings like preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings, etc. In addition, the Chairman was also evaluated on the key aspects of his role.

In a separate meeting of independent Directors, performance of non-independent directors, performance of the board as a whole and performance of the Chairman was evaluated, taking into account the views of executive directors and non-executive directors. The same was discussed in the board meeting that followed the meeting of the independent Directors, at which the performance of the Board, its committees and individual directors was also discussed.

COMMITTEES OF DIRECTORS :

The details of various committees of Directors constituted under various provisions of Companies Act, 2013 and Rules made thereunder, are as under :

A. AUDIT COMMITTEE :

As on 31-03-2015, there were 3 members of Audit Committee as under :-

Sr. No. Name of the Member Designation Category

1 Mr. Jayantilal M. Shah Chairman Independent Director

2 Mr. Devanshu L. Gandhi Member Non-Executive and Non- Independent Director

3 Mr. Preet P. Shah# Member Independent Director

# Appointed as a Member of the Audit Committee w.e.f. 31st March, 2015.

Mrs. Niranjana A. Kapadia ceased to be a Member of the Audit Committee w.e.f. 31st March, 2015.

The constitution of the Audit Committee fulfills the requirements of Section 177 of the Companies Act, 2013 and Rules made thereunder. The members of audit committee are financially literate and having accounting or related financial management expertise.

Mrs. Ruchita Gurjar, who is a Company Secretary of the Company, is the Secretary to the Audit Committee.

B. NOMINATION AND REMUNERATION COMMITTEE :

The erstwhile Remuneration Committee of the Directors of the Company was re-constituted and re-nomenclature as a Nomination and Remuneration Committee, at the meeting of Board of Directors held on 29th May, 2014, pursuant to the provisions of Section 178 of the Companies Act, 2013 and Rules made thereunder. The Nomination and Remuneration Committee comprises the following Directors of the Company, as on 31st March, 2015, namely:

Sr. No. Name of the Member Designation Category

1 Mr. Jayantilal M. Shah Chairman Independent Director

2 Mr. Devanshu L. Gandhi Member Non-executive and Non- Independent Director

3 Mrs. Niranjana A. Kapadia# Member Independent Director

# Ceased to be a Director and Member of the Nomination and Remuneration Committee w.e.f. 1st April, 2015. The Nomination and Remuneration Committee was re-constituted by the Board at their meeting held on 1st June, 2015 as under :

Sr. No. Name of the Member Designation Category

1 Mr. Jignesh J. Shah Chairman Independent Director

2 Mr. Devanshu L. Gandhi Member Non-executive and Non- Independent Director

3 Mr. Preet P. Shah Member Independent Director

The constitution of Nomination and Remuneration Committee fulfills the requirements of Section 178 of the Companies Act, 2013 and Rules made thereunder.

C. STAKEHOLDERS' RELATIONSHIP COMMITTEE :

The erstwhile Share Transfer Committee of the Directors of the Company was re-constituted and re-nomenclature as a Stakeholders' Relationship Committee, at the meeting of Board of Directors held on 29th May, 2014, pursuant to the provisions of Section 178 of the Companies Act, 2013 and Rules made thereunder. The Stakeholders' Relationship Committee comprises the following Directors of the Company, as on 31st March, 2015, namely:

Sr. No. Name of the Member Designation Category

1 Mr. Rajesh R. Gandhi Chairman Non-Executive and Non- Independent Director

2 Mr. Devanshu L. Gandhi Member Non-Executive and Non- Independent Director

The constitution of Stakeholders' Relationship Committee fulfills the requirements of Section 178 of the Companies Act, 2013 and Rules made thereunder.

The Committee, inter alia, approves the transfer of Shares, issue of duplicate Share Certificates, splitting and consolidation of Shares etc. The Committee also looks after redressal of Shareholder's complaints like transfer of shares, non-receipt of balance sheet, non-receipt of dividends, etc. The Board of Directors has delegated the power of approving transfer of Shares etc. to the Stakeholders' Relationship Committee.

POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION:

The Nomination and Remuneration Committee has at its meeting held on 29th May, 2014 recommended to the Board a policy on appointment and remuneration of Directors of the Company in terms of the provisions of Section 178 of the Companies Act, 2013 and Rules made thereunder, which was approved by the Board of Directors, at its meeting held on 29th May, 2014. The Policy on appointment and remuneration of Directors is enclosed with the Directors' report and marked as "Annexure - IV".

NUMBER OF BOARD MEETINGS :

During the year under review, six Meetings of Board of Directors were held on 29-05-2014 (Original and Adjourned), 14-08-2014, 21-10-2014, 15-11-2014, 17-02-2015 and 31-03-2015.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:

The details of Conservation of Energy and Technology Absorption are not required to provide as the provisions of Section 134(1)(m) are not applicable to the Company due to the nature of the Company's business operations, being Marketing Company.

There is no any Foreign Exchange Earnings during the year under review. However, there was Foreign Exchange outgo of Rs. 1.87 lacs during the year under review.

INTERNAL FINANCIAL CONTROLS

The Company has in place adequate internal financial controls with reference to financial statements. During the year, such controls were tested and no reportable material weakness in the design or operation were observed.

AUDITORS:

Section 139(2) of the Companies Act, 2013 (effective 1st April, 2014), mandates that a listed company or such other prescribed classes of companies shall not appoint or re-appoint an audit firm as Statutory Auditors for more than two terms of five consecutive years each.

Further, the companies as aforesaid, whose Statutory Auditors has held office for a period of ten years or more are required to comply with these provisions, within three years from the date of commencement of these provisions i.e. 1st April, 2014. For this purpose, the term of the audit firm before the commencement of these provisions shall be taken into account for calculating the period of ten consecutive years.

Our auditors, M/s. Kantilal Patel & Co., Chartered Accountants, Ahmedabad are holding the office as Statutory Auditors for more than ten years. Hence, they can only be re-appointed for a period up to three years i.e. up to Financial Year- 2016-2017.

The Audit Committee and the Board of Directors recommend the re-appointment of M/s. Kantilal Patel & Co., Chartered Accountants, Ahmedabad as Statutory Auditors of the Company for the financial year 2015-2016 to hold office from the conclusion of this Annual General Meeting till the conclusion of the next Annual General Meeting of the Company. The Company has received a certificate from the said Auditors under Section 139 of the Companies Act, 2013 to the effect that their appointment, if made, would be within the prescribed limits under Section 139 of the Act and they are not disqualified under the Act. The Members are requested to consider their appointment as Statutory Auditors of the Company to hold office from the conclusion of this Annual General Meeting till the conclusion of the next Annual General Meeting of the Company.

SECRETARIAL AUDITOR:

Section 204 of the Companies Act, 2013 inter alia requires every listed companies to annex with its Board Report a Secretarial Audit Report given by a Company Secretary in practice in the prescribed form. The Board has appointed M/s SPANJ Associates, Practicing Company Secretaries, to conduct Secretarial Audit for the financial year 2014- 15. The Secretarial Audit Report for the financial year ended March 31, 2015 is annexed herewith marked as Annexure - V to this Report.

LISTING AGREEMENT WITH STOCK EXCHANGES:

Pursuant to the provisions of Listing Agreement with the Stock Exchanges, the Company declares that the Equity Shares of the Company are listed on the BSE Limited (BSE) (Scrip Code - 519152).

The Company confirms that it has paid Annual Listing Fees due to the BSE Limited upto the Financial Year -2015- 2016.

DEPOSITORY SYSTEM:

Your Company has established electronic connectivity with the Depositories, NSDL and CDSL. In view of the numerous advantages offered by the Depository system, members are requested to avail of the facility of dematerialisation of the Company's shares on NSDL and CDSL as aforesaid.

The ISIN number allotted to the Company is INE693D01018.

PARTICULARS OF EMPLOYEES:

The Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are enclosed with this report as Annexure - VI.

The Statement of particulars of employees under Section 197(12) read with Rule 5 (2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel), Rules, 2014 is not provided with as, during the financial year under review, no employee of the Company was in receipt of remuneration in excess of the limits set out in the said rules.

WHISTLE BLOWER POLICY / VIGIL MECHANISM:

The Company has a Vigil mechanism and Whistle blower policy under which the employees are free to report any act of serious misconduct or wrongful activity being occurred or suspected to occur within the organization, to his immediate HOD or the HR Head or directly to the concern Managing Director of the Company, as he may desire. No employee of the Company is denied access to the Audit Committee. The vigil mechanism/whisle blower policy is also available on the web-site of the Company viz. www.vadilalgroup.com.

GENERAL:

* During the year under review, there was no change in the nature of business of the Company and there is no material change and/or commitments, affecting the financial position of the Company, during the period from 31st March, 2015 till the date of this report.

* During the year under review, there was no significant and/or material order passed by any regulators or courts or tribunals impacting the going concern status and company's operations in future.

* The Company does not provide any loan or other financial arrangement to its employees or Directors or Key Managerial Personnel for purchase of its own shares and hence, the disclosure under Section 67(3)(c) of the Companies Act, 2013 does not require.

* The disclosure in terms of Rule - 4 of Companies (Share Capital and Debenture) Rules, 2014 is not provided, as the Company does not have any equity shares with differential voting rights.

* The Company has zero tolerance towards sexual harassment at the workplace and has adopted a policy on prevention, prohibition and redressal of sexual harassment at workplace in line with the provisions of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules made thereunder.

INSURANCE:

All insurable interests of the Company including buildings, plant and machinery, furniture & fixtures and other insurable interest are adequately insured.

TRADE RELATIONS :

The Board desires to place on record its appreciation of the support and co-operation that your Company received from Distributors, Dealers, Stockiest, C&F Agents, Retailers and all others associated with your Company. It will be your Company's continued endeavor to build and nurture strong links with the trade, based on mutuality, respect and co-operation and consistent with the consumer interest.

ACKNOWLEDGEMENT:

The Directors place on record the appreciation and gratitude for the co-operation and assistance extended by various departments of the Union Government, State Government, Bankers and Financial Institutions.

The Directors also place on record their appreciation of dedicated and sincere services of the employees of the Company at all levels.

The Company will make every effort to meet the aspirations of its Shareholders and wish to sincerely thank them for their whole hearted co-operation and support at all times.

Date : 13th August, 2015. By Order of the Board of Directors Place : Ahmedabad. RAJESH R. GANDHI CHAIRMAN

DEVANSHU L. GANDHI DIRECTOR

---

Mar 31, 2014

The members,

VADILAL ENTERPRISES LIMITED

Ahmedabad.

The Directors have pleasure in presenting herewith the 29th Annual Report together with the Audited Statement of Accounts for the year ended on 31st March, 2014.

FINANCIAL RESULTS (Rs in Lacs)

Sr. Particulars Year ended Year ended No. 31-03-2014 31-03-2013

(a) Earning before Interest, Tax, Depreciation and Amortization 601.44 586.41

(b) Finance Cost 148.57 119.01

(c) Depreciation & Amortization Expense 540.13 459.90

(Net off Depreciation '' 4.09 lacs (P.Y. '' Nil) excess provided in earlier year)

(d) Profit/(Loss) before Tax (87.26) 7.50

(e) Tax Expense

— Current Tax 0.00 22.24

— Deferred Tax (Reversed) (17.81) (19.83)

— Income Tax written off / (written back) of (8.90) (2.11) earlier years

Total Tax: (26.71) 0.30

(f) Profit/(Loss) for the year (60.55) 7.20

(i) Surplus in the statement of Profit & Loss:

Balance brought forward from the last year 66.23 76.14

Add: Profit/(Loss) after tax for the year (60.55) 7.20

Add: Amount transferred from General Reserve 2.39 0.00

Less : Appropriation

— Proposed Equity Dividend (amount per share Re. 0.80, previous year Rs. 1.20) 6.90 10.35

— Tax on proposed Equity Dividend 1.17 1.76

— Transfer to General Reserve 0.00 5.00

0.00 66.23

TURNOVER & PROFITS

Inspite of stiff competition in the market particularly in Ice-Cream business during the year under review, your Company has earned Revenue from Operations (Net) of Rs. 36654.09 lacs as compared to Revenue from Operations (Net) of Rs. 33738.07 lacs achieved during the previous year ended on 31st March, 2013.

Your Company has earned the earnings before interest, tax, depreciation and amortization of Rs. 601.44 lacs as compared to Rs. 586.41 lacs earned during the previous year ended on 31st March, 2013. Your Company has incurred loss of Rs. 60.55 lacs during the year under review as compared to profit of Rs. 7.20 lacs earned during the previous year ended on 31st March, 2013.

DIVIDEND:

The Directors have recommended dividend of Rs. 0.80/- per share (@ 8.00%) on 8,62,668 Equity Shares of Rs.10/- each of the Company for the financial year ended on 31st March, 2014 as compared to 12.00% dividend declared in the previous financial year ended on 31st March, 2013. This will absorb Rs. 6.90 lacs. The corporate dividend tax payable by the Company on the said dividend will be Rs.1.17 lacs. If approved, the dividend will be paid without deduction of tax at source to the shareholders.

OPERATIONS - MARKETING FOCUS:

ICE-CREAM DIVISION:

INDUSTRY STRUCTURE & DEVELOPMENT, BUSINESS OVERVIEW & SUSTAINABLE GROWTH OPPORTUNITIES:

Milk and milk based products are a part of staple diet in India. Indian Ice-cream market is estimated to be around Rs 4000 crores out of which over 40 percent belongs to the organized sector, growing at 20% YoY. There are about big and medium, 7000 ice-cream companies in India and innumerable small and seasonal companies doing business. India is also one of the fastest growing countries in ice-cream production and consumption.

Increasing urbanization, rising disposable incomes and increasing "out of home food" consumption coupled with the ever increasing food variety available in the markets closer to home; are some of the reasons fueling the Ice-cream segment. The Company works to deliver the best tasting products and continuously improve ice-cream range for nutritional profile and benefits. Since the inception, the Company has been committed towards delivering the best quality products at affordable prices conveniently within reach of the consumers.

Apart from the retail chain of ice-cream under the Happinezz brand name, Vadilal has also started exclusive parlors in two formats: Scoop Shop and Hangout. These formats offer a contemporary trendy range of Premium Ice-creams and Concoctions in a very chic ambience. The purpose of launching these two formats is to present the brand in a very contemporary and modern way. It is in line with our efforts towards shifting the brands epicenter from Mass to mass premium.

In terms of marketing, the Company ensures maximum reach through an optimum mix of ATL and BTL activities. The Company utilize various communication touch points like Retail, Outdoor, Print, TV, Internet, etc to get the brand message across. This year also the Company has a 360 degree marketing plan. However, the advertising budgets are more skewed towards television as Vadilal has a nation wide reach now. In terms of the consumer engagement initiative, Vadilal Freeze the Moment contest Calendar launched in 2012 has become a successful annual event: eagerly awaited by consumers. Apart from traditional mediums, the Company is also enjoying commendable brand presence and preference in the Digital world also. Since the brand enjoys unprecedent trust since 1906, the Company ensures that the evolution of brand personality does not tamper the core personality traits. And even though the brand adopts modern look as per the changing times and the taste of consumers, the brand integrity is intact.

In terms of sales promotions, the Company is constantly engaging trade patrons through various schemes. And the Company also do consumer promotional activities from time to time. Just to give an example, last year, the Company had a "surprise gift" available with each candy of Ice Trooper which is delighting young customers now also.

AWARDS WON BY VADILAL YEAR BY YEAR:

Vadilal has won 22 awards over 3 consecutive years : 2008 , 2009 & 2010 at ''The Great Indian Ice Cream Contest" organized by the Indian Dairy Association. Various categories for awards were: The Best in Class (3): Chocolate Frozen Dessert, Standard Chocolate Ice Cream, Rose Coconut Shell (Innovation - Novelty) Gold Medal (4) : Standard Chocolate Ice Cream, Chocolate Frozen Dessert, Vanilla Frozen Dessert and Rose Coconut Shell (Innovation - Novelty), Bronze Medal (1) Natural Orange (Premium without Inclusion). In the same contest held in 2013 , Vadilal won 5 awards. So the total tally of Awards won is now 27 in 4 years of contest.

Best in Class in Kids category - Joker Ice Trooper, Gold in Kids category - Joker Ice Trooper, Silver in Vanilla Frozen Dessert - Vanilla Frozen Dessert. Bronze in Vanilla Ice cream - Happinezz Vanilla Ice cream. Bronze in Premium - Pista Happinezz Ice cream garnished with Green Pista.

In 2013, Vadilal has been voted as the "Most Trusted Ice cream brand in India" as per the The Brand Trust Report-2013. Also, the Economic Times Survey ranked Vadilal among the "Top 20 Food" brands in India.

FUTURE STRATEGY:

The Company aims to increase the per capita consumption of Ice-creams in India through various initiatives in product development, marketing, distribution and trade promotions.

As the Indian market place evolves, the Company too plans to enhance the Vadilal Ice-cream experience through its parlor chain of Vadilal Hangouts and Vadilal Scoop Shops. The Company would increase the customistaion level and also foray into the Online Market space. Further, the Company would consolidate its brand positioning in the "premium" and "super premium" segment. The Company plans to increase its share in the "Premium" ice-cream segment to 30% in the coming year.

Processed Food Division - Domestic:

"Vadilal Quick Treat" brand is moving in a very organized manner with initial focused objective of increasing the awareness and distribution in the domestic market. The opening of newer markets is a simultaneous process, while increasing the awareness and consumption in the existing market is the priority. In India, frozen food market is still at the nascent stage. Consumers are still apprehensive about consuming frozen food. They have health, usage of preservative, and storage related perceptions that act as hurdles to the growth of the category.

However, the brand has been able to find a successful footing in Gujarat with its Processed Foods products like mango pulp, IQF green peas, sweet corn and other vegetables. With its frozen range of IQF vegetables and Ready -to-Eat (RTE) and Ready-to- Serve (RTS) products, Vadilal has been operational in the states of Rajasthan and Maharashtra besides Gujarat. In the year, it has started distribution in Delhi, Uttar Pradesh and Madhya Pradesh. This is in addition to increased penetration in Maharashtra. The next phase includes Punjab and few places in south India. With the increased awareness about frozen food the brand aspire to be present at every nook and corner of the county.

FINANCE :

During the year under review, M/s. Tata Capital Financial Services Ltd. has disbursed balance amount of Rs. 172.12 Lacs towards purchase of Deep Freeze Machines. The Company is also enjoying existing Working Capital Facility & Term Loan Facility from Bank of India with aggregate limit of Rs.10.72 Crores. During the year under review, the company has made regular repayment of Loan & interest and there is no any overdue payment to Banks and FIs.

In terms of the provisions of Investor Education and Protection Fund Rules, 2001 (IEPF), the Company has transferred the unclaimed interest on Fixed Deposit of Rs.687/- for the financial year ended on 31st March, 2007 to IEPF established by the Government of India under Section 205C(1) of the Companies Act, 1956.

FIXED DEPOSITS :

The Company has no overdue deposits outstanding other than those unclaimed of Rs.1.50 lacs as on 31st March, 2014. The Company has accepted fixed deposits of Rs. 66.54 lacs from the Public and Rs. 23.62 lacs from the Shareholders during the year 2013-2014, after complying with the provisions of Section 58A of the Companies Act, 1956 read with the Companies (Acceptance of Deposits) Rules, 1975 as amended. After repaying the maturities during the year, the total fixed deposits as on 31st March, 2014 stood at Rs.163.09 lacs.

DIRECTORS'' RESPONSIBILITY STATEMENT :

To the best of their knowledge and belief and according to the confirmation and explanations obtained by them, your Directors make the following statement in terms of Section 217(2AA) of the Companies Act, 1956 and confirm :

1. that in the preparation of Annual Accounts, the applicable accounting standards have been followed and that no material departures have been made from the same;

2. that they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year 31st March, 2014 and of the profit or loss of the Company for that year;

3. that they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

4. that they have prepared the Annual Accounts on a going concern basis.

ADDITIONAL DISCLOSURES :

In line with the requirements of Listing Agreement with the Stock Exchanges and the Accounting Standards of the Institute of Chartered Accountants of India, your Company has made additional disclosures in the Notes on Accounts for the year under review in respect of Employees Benefit, Foreign Currency Transaction, Related Party Transactions, Taxes on Income and Expenses, Calculation of EPS, etc.

DEPOSITORY SYSTEM:

Your Company has established electronic connectivity with the Depositories, NSDL and CDSL. In view of the numerous advantages offered by the Depository system, members are requested to avail of the facility of dematerialisation of the Company''s shares on NSDL and CDSL as aforesaid.

The ISIN number allotted to the Company is INE693D01018.

INSURANCE :

All insurable interests of the Company including inventories, plant and machinery, vehicles and other insurable interest are adequately insured.

LISTING AGREEMENT WITH STOCK EXCHANGES :

Pursuant to the provisions of Listing Agreement with the Stock Exchanges, the Company declares that the Equity Shares of the Company are listed at the Bombay Stock Exchange Limited.

The Company confirms that it has paid Annual Listing Fees due to the Bombay Stock Exchange Limited upto the Financial Year 2014-2015.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:

Particulars relating to Conservation of Energy and Technology Absorption are not given, as it appears that the Companies (Disclosure of particulars in report of Board of Directors) Rules, 1988 is not applicable to the Company due to the nature of the Company''s business operations, being Marketing Company.

There is no any Foreign Exchange Earnings during the year under review. However, there was Foreign Exchange outgo of Rs. 0.15 lacs during the year under review.

DIRECTORS :

Pursuant to the provisions of Section 152 of the Companies Act, 2013 and Rules made thereunder, Mr. Rajesh R. Gandhi, Director of the Company, shall retire by rotation at this Annual General Meeting and being eligible, offers himself for re- appointment. The Members are requested to consider his re-appointment as a Director of the Company, for which necessary resolution has been incorporated in the notice of the meeting.

Pursuant to the provisions of Section 149 and 152 1 of the Companies Act, 2013 and Rules made thereunder and revised Clause-49 of the Listing Agreement with Stock Exchanges, the Company proposes to appoint Mr. Jayantilal M. Shah and Mrs. Niranjana A. Kapadia, as Directors of the Company designated as Independent Directors, not liable to retire by rotation. The Company has received requisite notices in writing from Members proposing the candidature of Mr. Jayantilal M. Shah and Mrs. Niranjana A. Kapadia for appointment as Independent Directors of the Company. The aforesaid Independent Directors, if appointed, shall hold office for a term of 5 (five) consecutive years upto the conclusion of the 34th Annual General Meeting of the Company in the calendar year 2019.

PARTICULARS OF EMPLOYEES :

Provisions of Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 as amended are not applicable to the Company, since none of the employees of the Company, including Managing Director, was in receipt of total remuneration of Rs.60,00,000/- p.a. or Rs.5,00,000/- p.m. during the year under review.

AUDITORS :

Section 139(2) of the Companies Act, 2013 (effective 1st April, 2014), mandates that a listed company or such other prescribed classes of companies shall not appoint or re-appoint an audit firm as Statutory Auditors for more than two terms of five consecutive years each.

Further, the companies as aforesaid, whose Statutory Auditors has held office for a period of ten years or more are required to comply with these provisions, within three years from the date of commencement of these provisions i.e. 1st April, 2014. For this purpose, the term of the audit firm before the commencement of these provisions shall be taken into account for calculating the period of ten consecutive years.

Our auditors, M/s. Kantilal Patel & Co., Chartered Accountants, Ahmedabad are holding the office as Statutory Auditors for more than ten years. Hence, they can only be re-appointed for a period up to three years i.e. up to FY 2016-2017. The Board of Directors recommend the re-appointment of M/s. Kantilal Patel & Co., Chartered Accountants, Ahmedabad as Statutory Auditors of the Company to hold office from the conclusion of this Annual General Meeting till the conclusion of the next Annual General Meeting of the Company.

The Company has received a certificate from the said Auditors under Section 139 of the Companies Act, 2013 to the effect that their appointment, if made, would be within the prescribed limits under Section 139 of the Act and they are not disqualified under the Act. The Members are requested to consider their appointment as Statutory Auditors of the Company to hold office from the conclusion of this Annual General Meeting till the conclusion of the next Annual General Meeting of the Company.

TRADE RELATIONS :

The Board desires to place on record its appreciation of the support and co-operation that your Company received from Distributors, Dealers, Stockiest, C&F Agents, Retailers and all others associated with your Company. It will be your Company''s continued endeavor to build and nurture strong links with the trade, based on mutuality, respect and co- operation and consistent with the consumer interest.

ACKNOWLEDGMENTS :

The Board wishes to place on record its gratitude for the co-operation and assistance extended by various departments of the Union Government, State Government, Bankers and Financial Institutions.

The Board of Directors is overwhelmed with dedicated and sincere services of the employees of the Company at all levels. The Company would make every effort to meet the aspirations of its Shareholders and wish to sincerely thank the Shareholders for their whole hearted co-operation and support at all times.

By Order of the Board of Directors RAJESH R. GANDHI Chairman

DEVANSHU L. GANDHI Director Date : 14th August, 2014 Place : Ahmedabad

---

Mar 31, 2012

To, The members of VADILAL ENTERPRISES LIMITED Ahmedabad.

The Directors have pleasure in presenting herewith the 27th Annual Report together with the Audited Statement of Accounts for the year ended on 31st March, 2012.

FINANCIAL RESULTS

(Rs. in Lacs)

Sr. Particulars Year ended Year ended No. 31-03-2012 31-03-2011

(a) Earning before Interest, Tax, Depreciation and Amortization 582.50 532.67

(b) Finance Cost 101.20 55.54

(c) Depreciation & Amortization Expense 369.82 350.55

(d) Profit before Exceptional item and Tax 111.48 126.58

(e) Exceptional Items (24.23) 0.00

(f) Profit before Tax 135.71 126.58

(g) Tax Expense

- Current Tax 61.40 85.50

- Deferred Tax (23.37) (34.72)

- Income Tax written off / (written back) 2.04 (7.12)

Total Tax: 40.07 43.66

(h) Profit for the year 95.64 82.92

(i) Surplus in the statement of Profit & Loss:

Balance brought forward from the last year 74.19 68.30

Add : Profit after tax for the year 95.64 82.92

Less : Appropriation

- Proposed Equity Dividend (amount per share Rs.1.20) 10.35 10.35

- Tax on proposed Equity Dividend 1.68 1.68

- Transfer to General Reserve 81.66 65.00

Net Surplus in the statement of Profit and Loss: 76.14 74.19

TURNOVER & PROFITS

Inspite of stiff competition in the market particularly in Ice-Cream business during the year under review, your Company has earned revenue from operations (Net) of Rs. 29377.31 lacs as compared to revenue from operations (Net) of Rs.24512.32 lacs earned during the previous year ended on 31st March, 2011.

Your Company has earned the earnings before interest, tax, depreciation and amortization of Rs.582.50 lacs as compared to Rs. 532.67 lacs earned during the previous year ended on 31st March, 2011. Your Company has earned the profit of Rs. 95.64 lacs during the year under review as compared to profit of Rs.82.92 lacs earned during the previous year ended on 31st March, 2011.

DIVIDEND:

The Directors have recommended dividend of Rs.1.20/- per share (@12.00%) on 8,62,668 Equity Shares of Rs. 10/- each of the Company for the financial year ended on 31st March, 2012 as compared to 12.00% dividend declared in the previous financial year ended on 31st March, 2011. This will absorb Rs.10.35 lacs. The corporate dividend tax payable by the Company on the said dividend will be Rs.1.68 lacs.

If approved, the dividend will be paid without deduction of tax at source to those shareholders whose names appear in the Register of Members of the Company as on 13th September, 2012.

OPERATIONS - MARKETING FOCUS: ICE-CREAM DIVISION:

INDUSTRY STRUCTURE & DEVELOPMENT, BUSINESS OVERVIEW & SUSTAINABLE GROWTH OPPORTUNITIES:

India is the largest milk producer in the world with an estimated annual production of more than 100 million tons of ice- creams per year. Considering Indian economy's quantum growth in recent years, ice-cream market is also zooming at new horizons. Total Indian Market size is estimated approx. Rs.2500 crores, with the organized sector market estimated at Rs.2000 crores. There is a huge untapped potential of specialized Ice-cream outlets at malls and other public flow areas-major city points where people used to visit very frequently. The franchisee based parlors' concept is also getting tremendous response.

The industry structure and ongoing transformation offers opportunities for organized players to invest and grow. Vadilal Ice- cream division has shown a sustainable annual growth consistently.

The Company has undertaken an aggressive campaign on all fronts to increase the over-all market share as well as capture a larger pie of the premium ice- cream market. New mega brands, installation of latest state-of-the-art machines, aggressive advertising and significant expansion in production facilities will combine to make the Company an even stronger force to reckon with in the domestic ice-cream market.

After a lot of research and strategic thinking, the company embarked on the journey to create a completely new range of products to delight its most important consumer segment : KIDS. Vadilal has launched a myriad range of products in delightful shapes, colors and flavors under the umbrella brand of 'Ice Trooper'.

In terms of ice cream scoops, Vadilal recently launched flavours like Praline N Creme, Golden Ribbon, Silk Chocolate, Kiwi Queen, Chocolate Peanut, Pina Lemon and Mango Marvel to give Indian consumers a feel of the international ice cream eating experience. Golden Ribbon, Silk Chocolate and Praline N Creme are also available in the Gourmet tub range. In take-home category, the company recently introduced 2 litre party packs to cater to the bulk demand with regard to the home consumption category.

The company has been dominating market because of its strong brand identity, good product quality, timely supply and extensive reach. A major success factor has been its ability to cater to different market segments through multiple product ranges.

AWARDS WON BY VADILAL YEAR BY YEAR:

Vadilal has won 22 awards over last 3 consecutive years at 'The Great Indian Ice Cream Contest" organised by the Indian Dairy Association. Like past 2 years, in 2010 also awards galore for Vadilal Ice-creams with 8 awards by esteemed IDA. Various categories for awards were: The Best in Class (3): Chocolate Frozen Dessert, Standard Chocolate Ice Cream, Rose Coconut Shell (Innovation - Novelty) Gold Medal (4) : Standard Chocolate Ice Cream, Chocolate Frozen Dessert, Vanilla Frozen Dessert and Rose Coconut Shell (Innovation - Novelty), Bronze Medal (1) Natural Orange (Premium without Inclusion).

FUTURE STRATEGY:

The Company primarily focuses on increasing the ice cream consumption by continuously offering novel products at affordable rates. The Company is committed in eliminating the barriers for availability of ice cream with focused distribution & franchising new Happinezz parlors across India.

For that purpose, the Company will continue with its market expansion and penetration plans. The Company will be consolidating its strong foothold in the market by reaching out to new territories as well as increasing the retail density as well. The addition of imported extrusion machines has created the Company's stronger hold in market.

The company has a very strong distribution network of Retailers, Stock Keeping Units, Distributors, C&F Agents and Vehicles, for delivery of ice-creams. The company plans to focus more on the exclusive ice-cream boutiques "Happinezz Parlors". Here, the Company achieved good success with various formats of Shops, Open & Close Kiosks. Through the kiosk format the Company plans to increase Happinezz presence strongly in modern retail. Also, the Company plans to continue with the strategy of doubling the number of Happinezz parlors year on year.

The overall vision of the company is to increase the consumption of ice-cream at national level supported fully by appropriate promotion and market communication strategies. Here, the basic focus has been in brand building coupled with quality products & services. This year, the Company has launched mega brand Ice Trooper. Last years Vadilal made a strong foray into the premium and youth segment. This year, the company strengthened its presence among most important consumer segmement: kids.In future, the Company wants to consolidate the same with more variants and flavors.

Processed Food Division - Domestic:

The year 2011 -2012 was another successful year for the company's processed food division - domestic. The division has established its existence in new territories like Uttar Pradesh & Chhattisgarh. The division has also introduced new products like Frozen Spring Roll, Wraps, and Garlic Clove. The division is also keen to establish itself well in other territories of India.

By appointing many new distributors, Vadilal has extended its market reach with its strong supply chain network. Moreover, this year Vadilal aggressively entered into many big format Modern Trade stores to showcase presence at every hyper, super markets and cash & carry stores.

Vadilal's participation in exhibition & PR activities at right time catches the eyeballs of many shoppers & helped to increase brand recall value. Furthermore, strategic marketing, branding & PR activities would be carried out to get a hold on market like participation in national level exhibition, ATL and BTL activities.

Transfer of Forex Advisory Division :

The Forex Advisory Division of the Company, comprising Forex Advisory and Exposure Management Services, LME Based Metal and Bullion Advisory Services, was transferred, on a going concern basis, by way of slump sale, alongwith all its

Assets, Liabilities, Employees and others, to Vadilal Forex and Consultancy Services Limited (formerly known as Vadilal Happinezz Parlour Limited), w.e.f. 1st April, 2012.

The proposal for the aforesaid transfer of the Forex Advisory Division of the Company, was approved by the shareholders of the Company, by passing an Ordinary Resolution under Section 293(1)(a) read with Section 192A of the Companies Act, 1956, on 14th October, 2011, by way of a Postal Ballot process pursuant to the provisions of the Companies (Passing of the Resolution by Postal Ballot) Rules, 2011.

For this purpose, a Deed of Assignment for transferring the aforesaid Forex Advisory Division of the Company has been duly executed between the Company and Vadilal Forex and Consultancy Services Limited, on 31st March, 2012.

FINANCE :

During the year under review, the Company has availed Short Term Loan of Rs. 3.00 Crores from Bank of India, Ahmedabad Mid Corporate Branch, for the purpose of purchase of Deep Freeze Machines, Freezer on Wheels etc. The Company is already availing Working Capital facilities and Term Loan from Bank of India.

In terms of the provisions of Investor Education and Protection Fund Rules, 2001 (IEPF), the Company has transferred the unclaimed interest on Fixed Deposit of Rs. 452/- for the financial year ended on 31st March, 2005 to the Investor Education and Protection Fund established by the Government of India under Section 205C(1) of the Companies Act, 1956.

FIXED DEPOSITS :

The Company has no overdue deposits outstanding other than those unclaimed of Rs.8.29 lacs as on 31st March, 2012. Out of the said unclaimed deposits, as on date of this report, the deposits aggregating Rs. 0.09 lacs thereof have been claimed and either paid or renewed. The Company has accepted fixed deposits of Rs. 76.06 lacs from the Public and Rs. 3.25 lacs from the Shareholders during the year - 2011 -2012, after complying with the provisions of Section 58A of the Companies Act, 1956 read with the Companies (Acceptance of Deposits) Rules, 1975 as amended. After repaying the maturities during the year, the total fixed deposits as on 31st March, 2012 stood at Rs. 117.21 lacs.

RESPONSIBILITY STATEMENT :

To the best of their knowledge and belief and according to the confirmation and explanations obtained by them, your Directors make the following statement in terms of Section 217(2AA) of the Companies Act, 1956 and confirm :

1. that in the preparation of Annual Accounts, the applicable accounting standards have been followed and that no material departures have been made from the same;

2. that they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year 31st March, 2012 and of the profit or loss of the Company for that year;

3. that they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

4. that they have prepared the Annual Accounts on a going concern basis.

ADDITIONAL DISCLOSURES :

In line with the requirements of Listing Agreement with the Stock Exchanges and the Accounting Standards of the Institute of Chartered Accountants of India, your Company has made additional disclosures in the Notes on Accounts for the year under review in respect of Employees Benefit, Foreign Currency Transaction, Related Party Transactions, Taxes on Income, Calculation of EPS, etc.

DEPOSITORY SYSTEM:

Your Company has established electronic connectivity with the Depositories, NSDL and CDSL. In view of the numerous advantages offered by the Depository system, members are requested to avail the facility of dematerialisation of the Company's shares on NSDL and CDSL as aforesaid.

The ISIN number allotted to the Company is INE693D01018.

INSURANCE :

All insurable interests of the Company including inventories, plant and machinery, vehicles and other insurable interest are adequately insured.

LISTING AGREEMENT WITH STOCK EXCHANGES

Pursuant to the provisions of Listing Agreement with the Stock Exchanges, the Company declares that the Equity Shares of the Company are listed on the Bombay Stock Exchange Limited. The company's shares were also listed at the Ahmedbad Stock Exchange Ltd. till 30th July, 2012.

The Company confirms that it has paid Annual Listing Fees due to the above Stock Exchanges upto the Financial Year - 2012-2013.

DELISTING AT AHMEDBAD STOCK EXCHANGE LTD.

Considering the negligible volume of trading at Ahmedabad Stock Exchange Limited, the Board of Directors has, at its meeting held on 30th May, 2012 approved to voluntarily delist total 862668 Equity Shares of Rs. 10/- each of the Company from the Ahmedabad Stock Exchange Limited. On applicaion of the Company the Ahmedabad Stock Exchange Limited has, vide its letter dated 31st July, 2012 approved the delisting of the aforesaid equity shares from the exchange and the said shares has been removed from the list of the exchange w.e.f 31st July, 2012. However, the equity shares of the Company shall continue to be listed at Bombay Stock Exchange Limited, which is having nation wide terminal.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO.

Particulars relating to Conservation of Energy and Technology Absorption are not given, as it appears that the Companies (Disclosure of particulars in report of Board of Directors) Rules, 1988 is not applicable to the Company due to the nature of the Company's business operations, being Marketing Company.

There is no Foreign Exchange Earnings during the year under review. However, there was Foreign Exchange outgo of Rs. 2.86 lacs during the year under review.

DIRECTORS

Pursuant to the provisions of the Companies Act, 1956 and Articles of Association of the Company, Mr. Rajesh R. Gandhi and Mr. Devanshu L. Gandhi, Directors of the Company, shall retire by rotation at the ensuing Annual General Meeting, and being eligible, offer themselves for re-appointment. Members are requested to consider their re-appointment as Directors of the Company, for which necessary resolutions have been incorporated in the Notice of the meeting.

PARTICULARS OF EMPLOYEES

Provisions of Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 as amended are not applicable to the Company, since none of the employees of the Company, including Managing Director, was in receipt of total remuneration of Rs. 60,00,000/- p.a. or Rs. 5,00,000/- p.m. during the year under review.

AUDITORS

M/s. Kantilal Patel & Co., Chartered Accountants, Ahmedabad (Registration No. 104744W) hold office as Statutory Auditors of the Company until the conclusion of this Annual General Meeting and the Board recommends their re-appointment till the conclusion of the next Annual General Meeting. The Company has received a certificate from Auditors under Section 224(1) of the Companies Act, 1956 to the effect that their re-appointment, if made, would be within the prescribed limits under Section 224(1 B) of the Act. Members are requested to consider their re-appointment as Statutory Auditors of the Company for the current year at a remuneration to be decided by the Board of Directors.

TRADE RELATIONS

The Board desires to place on record its appreciation of the support and co-operation that your Company received from Distributors, Dealers, Stockiest, C&F Agents, Retailers and all others associated with your Company. It will be your Company's continued endeavor to build and nurture strong links with the trade, based on mutuality, respect and co- operation and consistent with the consumer interest.

ACKNOWLEDGMENTS

The Board wishes to place on record its gratitude for the co-operation and assistance extended by various departments of the Union Government, State Government, Bankers and Financial Institutions.

The Board of Directors is overwhelmed with dedicated and sincere services of the employees of the Company at all levels.

The Company would make every effort to meet the aspirations of its Shareholders and wish to sincerely thank the Shareholders for their whole hearted co-operation and support at all times.

By Order of the Board of Directors

RAJESH R. GANDHI

Director

DEVANSHU L. GANDHI

Director

Date : 13th August, 2012

Place : Ahmedabad

---

Mar 31, 2011

The members,

VADILAL ENTERPRISES LIMITED

Ahmedabad.

The Directors have pleasure in presenting herewith the 26th Annual Report together with the Audited Statement of Accounts for the year ended on 31st March, 2011.

FINANCIAL RESULTS

(Rs in Lacs)

Sr. Particulars Year ended Year ended

No. 31-03-2011 31-03-2010

(a) Profit for the year before

Depreciation and Financial Expenses 444.00 495.08

(b) Less: Depreciation 350.55 368.56

Financial Expenses (net) (33.13) 317.42 (0.03)368.53

(c) Profit before tax and Exceptional items 126.58 126.55

(d) Provision for Tax

- Current Tax 85.50 120.00

— Deferred Tax [Net (Credit)/Charge] (34.72) (64.95)

— Short/(Excess) Provision of Income Tax/Fringe Benefit

Tax of earlier years written off (written back) (7.12) 5.09

(e) Net Profit after Tax 82.92 66.41

(f) Balance brought forward 68.30 63.96

Amount available for Appropriation 151.22 130.37

APPROPRIATION:

— Proposed Dividend 10.35 10.35

— Dividend Tax thereon 1.68 1.72

— Transfer to General Reserve 65.00 50.00

— Balance Profit carried to Balance Sheet 74.19 68.30 151.22 130.37

TURNOVER & PROFITS

Inspite of stiff competition in the market particularly in Ice-Cream business during the year under review, your Company has achieved sales turnover of Rs. 24443.87 lacs as compared to sales turnover of Rs. 19861.59 lacs achieved during the previous year ended on 31st March, 2010.

Your Company has earned the Gross Profit of Rs. 444.00 lacs as compared to Rs. 495.08 lacs earned during the previous year ended on 31st March, 2010. Your Company has earned the Net Profit after Tax of Rs. 82.92 lacs during the year under review as compared to Net Profit after Tax of Rs. 66.41 lacs earned during the previous year ended on 31st March, 2010.

DIVIDEND:

The Directors have recommended dividend of Rs. 1.20/- per share (@12.00%) on 8,62,668 Equity Shares of Rs.10/- each of the Company for the financial year ended on 31st March, 2011 as compared to 12.00% dividend declared in the previous financial year ended on 31st March, 2010. This will absorb Rs.10.35 lacs. The corporate dividend tax payable by the Company on the said dividend will be Rs. 1.68 lacs.

If approved, the dividend will be paid without deduction of tax at source to those shareholders whose names appear in the Register of Members of the Company as on 13th September, 2011.

OPERATIONS - MARKETING FOCUS:

ICE-CREAM DIVISION:

INDUSTRY STRUCTURE & DEVELOPMENT, BUSINESS OVERVIEW & SUSTAINABLE GROWTH OPPORTUNITIES:

India, being the largest milk producer in the world with an estimated annual production of more than 100 million tons of ice-creams per year. Considering Indian economy's quantum growth in recent years, ice-cream market is also zooming at new horizons. Total Indian Market size is estimated approx. Rs.2500 crores, with the organized sector market estimated at Rs.1500 crores. There is a huge untapped potential of specialized Ice-cream outlets at malls and other public flow areas-major city points where people used to visit very frequently. The franchisee based parlors' concept is getting tremendous response.

The industry structure and ongoing transformation offers opportunities for organized players to invest and grow. Vadilal Ice-cream division showing a sustainable growth year to year.

The Company has undertaken an aggressive campaign on all fronts to increase the over-all market share as well as capture a larger pie of the premium ice-cream market. New mega brands, installation of latest state-of-the-art machines, aggressive advertising and significant expansion in production facilities will combine to make the Company an even stronger force to reckon with in the domestic ice-cream market.

Vadilal's aim is to launch international quality products at pocket-friendly prices. Badabite and Flingo, the newly introduced products, have a very youth oriented brand personality whereas Gourmet is targeted more towards the young family segment. The Company is also very aggressively targeting the youth with a number of new TV commercials. The focus of the Company will be on increasing sales of the impulse category.

Vadilal has been dominating market because of its strong brand identity, good product quality, timely supply and extensive reach. A major success factor has been its ability to cater to different market segments through multiple product ranges. Vadilal has the largest range of ice-creams in the country with 150 plus flavours and they are sold in a variety of more than 250 packs and forms. The range includes cones, candies, bars, ice-lollies, small cups, big cups, family packs and economy packs. It offers something for all tastes, preferences and budgets.

AWARDS WON BY VADILAL YEAR BY YEAR:

Vadilal has won 22 awards over last 3 consecutive years at "The Great Indian Ice Cream Contest" organised by the Indian Dairy Association. Like past 2 years, in 2010 also awards galore for Vadilal Ice-creams with 8 awards by esteemed IDA. Various categories for awards were: The Best in Class (3): Chocolate Frozen Dessert, Standard Chocolate Ice Cream, Rose Coconut Shell (Innovation – Novelty) Gold Medal (4) : Standard Chocolate Ice Cream, Chocolate Frozen Dessert, Vanilla Frozen Dessert and Rose Coconut Shell (Innovation – Novelty), Bronze Medal (1) Natural Orange (Premium without Inclusion).

FUTURE STRATEGY:

The Company primarily focuses on increasing the ice-cream consumption by continuously offering novel products at affordable rates. The Company is committed in eliminating the barriers for availability of ice-cream with focused distribution & franchising new Happinezz parlors across India.

Vadilal has a very strong distribution network of Retailers, Stock Keeping Units, Distributors, C & F Agents and Vehicles, for delivery of ice-creams. Through franchisee route, Vadilal has set up "Happinezz" retail outlets for selling ice-creams and new ones are coming every month.

Significant increase in the point of sales outlets, offering new products, increasing the Company's present in the interiors of the State, intensive advertising campaign, setting up more of its "Happinezz" parlours and making special offers are some of the ways through which the company is implementing its aggressive marketing strategy.

The overall vision of the company is to increase the consumption of ice-cream at national level supported fully by appropriate promotion and market communication strategies. Here, the basic focus has been in brand building coupled with quality products & services. This year, the Company has launched megabrands like Badabite, Flingo & Gourmet which made consumers get a feel of International ice-cream eating experience. Thereby the Company has carved a niche for ourselves in the premium high end & youth segment. In future, the Company wants to consolidate the same with more variants and flavors.

Processed Food Division – Domestic:

The year 2010-2011 was another successful year for the company's processed food division – domestic. The division has established its existence in new territories like Uttar Pradesh & Haryana. The division has also introduced new products like Frozen Lilva Kachori, Patra and Garlic Butter Naan. The division is also keen to establish itself well in other territories of India.

Forex Division – Forex Advisory and Exposure Management Service, LME Base Metal and Bullion Advisory Service:

The Division in its 15th year of operations has achieved few milestones to count few : 1) Only such service provider on all India basis having ISO certification. 2) Live and on line information of currencies movements of all major world traded currencies on spot and forward value on the website – www.vadilalmarkets.com which has been described by many as complete FOREX kiosks. 3) The Division has largest member subscribers in Gujarat and evenly spreading member subscribers fold outside the State. 4) The Division has recently started preparation of FOREX Risk Management Policy for the largest corporate level companies in terms of one of the requirement of RBI. 5) The Division has Franchisee arrangements at Rajkot, Mumbai, Pune and Kolkata and during the year planning to add few more places. 6) The Division has Channel Partnership arrangement established with Pune base IT company for their web base pricing solution, viz., IONPOT. Forex Division of the Company has received ISO 9001:2008 Certificate towards Quality Management System for its Forex Advisory Services.

FINANCE :

During the year under review, the Company has availed additional Term Loan of Rs.3.50 Crores from Bank of India, for the purpose of purchase of Deep Freeze Machines, Freezer on Wheels etc. The Company is already availing Working Capital facilities from Bank of India.

In terms of the provisions of Investor Education and Protection Fund Rules, 2001 (IEPF), the Company has transferred the unclaimed dividend amount of Rs. 19,744/- declared for the financial year ended on 31st March, 2003 to the Investor Education and Protection Fund established by the Government of India under Section 205C(1) of the Companies Act, 1956.

FIXED DEPOSITS :

The Company has no overdue deposits outstanding other than those unclaimed of Rs.1.10 lacs as on 31st March, 2011. As on date of this report, the deposits aggregating Rs. 0.15 lacs thereof have been claimed and either paid or renewed. The Company has accepted fixed deposits of Rs. 61.32 lacs from the Public and the Shareholders during the year - 2010-2011, after complying with the provisions of Section 58A of the Companies Act, 1956 read with the Companies (Acceptance of Deposits) Rules, 1975 as amended. After repaying the maturities during the year, the total fixed deposits as on 31st March, 2011 stood at Rs.90.59 lacs. RESPONSIBILITY STATEMENT :

To the best of their knowledge and belief and according to the confirmation and explanations obtained by them, your Directors make the following statement in terms of Section 217(2AA) of the Companies Act, 1956 and confirm :

1. that in the preparation of Annual Accounts, the applicable accounting standards have been followed and that no material departures have been made from the same;

2. that they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year 31st March, 2011 and of the profit or loss of the Company for that year;

3. that they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

4. that they have prepared the Annual Accounts on a going concern basis.

ADDITIONAL DISCLOSURES :

In line with the requirements of Listing Agreement with the Stock Exchanges and the Accounting Standards of the Institute of Chartered Accountants of India, your Company has made additional disclosures in the Notes on Accounts for the year under review in respect of Employees Benefit, Foreign Currency Transaction, Related Party Transactions, Taxes on Income and Expenses, Calculation of EPS, etc.

DEPOSITORY SYSTEM:

Your Company has established electronic connectivity with the Depositories, NSDL and CDSL. In view of the numerous advantages offered by the Depository system, members are requested to avail of the facility of dematerialisation of the Company's shares on NSDL and CDSL as aforesaid. The ISIN number allotted to the Company is INE693D01018.

INSURANCE :

All insurable interests of the Company including inventories, plant and machinery, vehicles and other insurable interest are adequately insured.

LISTING AGREEMENT WITH STOCK EXCHANGES

Pursuant to the provisions of Listing Agreement with the Stock Exchanges, the Company declares that the Equity Shares of the Company are listed on the Bombay Stock Exchange Limited and Ahmedabad Stock Exchange Limited. The Company confirms that it has paid Annual Listing Fees due to the above Stock Exchanges upto the Financial Year - 2011-2012.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO.

Particulars relating to Conservation of Energy and Technology Absorption are not given, as it appears that the Companies (Disclosure of particulars in report of Board of Directors) Rules, 1988 is not applicable to the Company due to the nature of the Company's business operations, being Marketing Company.

There is no any Foreign Exchange Earnings during the year under review. However, there was Foreign Exchange outgo of Rs. 1.68 lacs during the year under review.

DIRECTORS

Pursuant to the provisions of the Companies Act, 1956 and Articles of Association of the Company, Mr. Jayantilal M. Shah and Mr. Laxmiprasad C. Amin, Directors of the Company, shall retire by rotation at the ensuing Annual General Meeting, and being eligible, offer themselves for re-appointment. Members are requested to consider their re- appointment as Directors of the Company, for which necessary resolutions have been incorporated in the Notice of the meeting.

PARTICULARS OF EMPLOYEES

Provisions of Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 as amended are not applicable to the Company, since none of the employees of the Company, including Managing Director, was in receipt of total remuneration of Rs. 24,00,000/- p.a. or Rs. 2,00,000/- p.m. during the year under review.

AUDITORS

M/s. Kantilal Patel & Co., Chartered Accountants, Ahmedabad (Registration No. 104744W) hold office as Statutory Auditors of the Company until the conclusion of this Annual General Meeting and the Board recommends their re- appointment till the conclusion of the next Annual General Meeting. The Company has received a certificate from Auditors under Section 224(1) of the Companies Act, 1956 to the effect that their re-appointment, if made, would be within the prescribed limits under Section 224(1B) of the Act. Members are requested to consider their re-appointment as Statutory Auditors of the Company for the current year at a remuneration to be decided by the Board of Directors.

TRADE RELATIONS

The Board desires to place on record its appreciation of the support and co-operation that your Company received from Distributors, Dealers, Stockiest, C&F Agents, Retailers and all others associated with your Company. It will be your Company's continued endeavor to build and nurture strong links with the trade, based on mutuality, respect and co-operation and consistent with the consumer interest.

ACKNOWLEDGMENTS

The Board wishes to place on record its gratitude for the co-operation and assistance extended by various departments of the Union Government, State Government, Bankers and Financial Institutions. The Board of Directors is overwhelmed with dedicated and sincere services of the employees of the Company at all Levels.

The Company would make every effort to meet the aspirations of its Shareholders and wish to sincerely thank the Shareholders for their whole hearted co-operation and support at all times.

By Order of the Board of Directors

Date : 18th July, 2011 RAMCHANDRA R. GANDHI

Place : Ahmedabad Chairman & Managing Director

---

Mar 31, 2010

The Directors have pleasure in presenting herewith the 25th Annual Report together with the Audited Statement of Accounts for the year ended on 31st March, 2010.

FINANCIAL RESULTS

(Rs. in Lacs)

Sr. Particulars Year ended Year ended

No. 31-3-2010 31-3-2009

(a) Profit for the year before Depreciation and Financial Expenses 495.08 481.86

(b) Less: Depreciation 368.56 410.88

Financial Expenses (Net) (0.03) 368.53 19.49 430.37

(c) Profit before tax and

Exceptional items 126.55 51.49

(d) Provision for Tax

— Current Tax 120.00 74.25

— Deferred Tax

[Net (Credit)/Charge] (64.95) (55.77)

— Fringe Benefit Tax 0.00 31.00

— Short/(Excess) Provision

of Income Tax/Fringe Benefit

Tax of earlier years written off

(written back) 5.09 (7.76)

(e) Net Profit after Tax 66.41 977

(f) Balance brought forward 63.96 64.37

Amount available for Appropriation 130.37 74.14

APPROPRIATION:

— Proposed Dividend 10.35 8.70

— Dividend Tax thereon 1.72 1.48

— Transfer to General Reserve 50.00 0.00

— Balance Profit carried to

Balance Sheet 68.30 63.96

130.37 74.14

TURNOVER & PROFITS

Inspite of stiff competition in the market particularly in Ice-Cream business during the year under review, your Company has achieved sales turnover of Rs. 19861.59 lacs as compared to sales turnover of Rs. 15664.22 lacs achieved during the previous year ended on 31st March, 2009.

Your Company has earned the Gross Profit of Rs. 495.08 lacs as compared to Rs. 481.86 lacs earned during the previous year ended on 31st March, 2009. Your Company has earned the Net Profit after Tax of Rs. 66.41 lacs during the year under review as compared to Net Profit after Tax of Rs. 9.77 lacs earned during the previous year ended on 31" March, 2009.

FORFEITURE OF EQUITY SHARES

The Board of Directors has, at its meeting held on 19th January, 2010 forfeited total 7480 Equity Shares of Rs.10/- each of the Company, in respect of which the Share Allotment Money have remained unpaid inspite of several reminders by the Company. The paid-up Share Capital of the Company has thus been reduced from Rs. 87,01,480/- divided into 8,70,148 Equity Shares to Rs. 86,26,680/- divided into 8,62,668 Equity Shares of Rs. 10/- each.

DIVIDEND

The Directors have recommended dividend of Re. 1.20 per share (@12%) on 8,62,668 Equity Shares of Rs.10/- each of the Company (after forfeiture of 7480 Equity Shares of Rs. 10/- each) for the financial year ended on 31st March, 2010 as compared to 10% declared in the previous financial year ended on 31st March, 2009. This will absorb Rs. 10.35 lacs. The corporate dividend tax payable by the Company on the said dividend will be Rs. 1.72 lacs. If approved, the dividend will be paid without deduction of tax at source to the shareholders.

OPERATIONS - MARKETING FOCUS

Ice-cream Division

Industry Structure & Development, Business Overview & Sustainable Growth Opportunities.

India being the largest milk producer in the world with estimated production of about more than 100 million tons of ice-cream per year. Considering Indian economys quantum growth in recent years, ice-cream market is also zooming at new horizons. Total Indian market size including organized and unorganized is estimated approximately Rs.3000 Cr., out of which organized sector contributes more than half. There is a huge untapped potential of specialized Ice-cream outlets at malls and other public flow areas - major city points where people used to visit very frequently. The franchisee based parlours concept is getting tremendous response. Another motivating factor for the industry is overall development of tier II, tier III towns & cities where average household per capita income is as encouraging as urban consumers.

Todays consumer is more materialistic, having more money to spend and there is vast portfolio of ice-cream flavours available in market offer a consumer plethora of optiors at hand to choose. Moreover the innovative modern ice-cream retail outlets alluring them to rush there and consume ice-cream.

The industry structure and ongoing transformation offers opportunities for organized players to invest and grow. Vadilal Ice-cream division showing a sustainable growth year to year, which has been triggered by increasing demand for newer varieties & change in consumer preferences which has been catered by novel products & providing value added products to the consumers. There is considerable increase in demand for impulses & novelties and a completely new segment of catering & institutional customers from where a large chunk of revenues would be generated. Exclusively designed Ice cream parlours we called it HAPPINEZZ PARLOUR which is also a key focus area for major ice-cream industry players.

Future Strategy

Vadilal primarily focuses on increasing the ice-cream consumption by continuously offering novel products at affordable rates. We are committed in eliminating the barriers for availability of ice-cream with focused distribution & franchising new Happinezz parlors across India.

For availability of ice-cream, we have the largest fleet of Refrigerated Vehicles in India, backed by the strong Distribution Network comprising of C&F Agents, distributors and retail dealers. Distribution network is

continuously being improved by appointing new C&F Agents, Distributors and Dealers. Delivering growth through proper investment and infrastructure is our commitment to the stakeholders. Vadilal clearly dominated the market of Gujarat, Rajasthan, Uttar Pradesh, Uttaranchal and Haryana. Also the regional competitors often feel our presence in Delhi, West Bengal, Orissa, Bihar, Jharkhand, Madhya Pradesh, Chhattisgarh, Chandigarh, Punjab, Himachal Pradesh, and Jammu.

Vadilal believe to serve consumers with innovative & value added products consistently.

The overall vision of the company to increase the consumption of ice-cream at national level supported fully by appropriate promotion and market communication strategies. Here the basic focus has been in brand building coupled with quality products & services. This year we have planned to release new brand specific TV commercials, which are already telecasted in all major national channels & childrens channels. We are among the front-runners and maximum spender on Paper advertisement all over India. This spending actually surpasses the annual advertising budget of some of the regional players. Processed Food Division - Domestic

The year 2009-10 was one more successful year for the Companys Processed Food Division - Domestic Market. The division has initiated its operation in new territories like Uttar Pradesh & Haryana. In the same year, Processed Food Division has introduced new products like Frozen Lilva Kachori & Patra.

In the next year, the division is also keen to establish itself well in territories like Delhi, Orissa and Bihar.

Forex Division - Forex Advisory and Exposure Management Service LME Base Metal and Bullion Advisory Service

The Division in its 15th year of operations has achieved few milestones to count few : 1) Only such service provider on all India basis having ISO certification. 2) Live and on line information of currencies movements of all major world traded currencies on spot and forward value on the website - www.vadilalmarkets.com which has been described by many as complete FOREX kiosks. 3) The Division has largest member subscribers in Gujarat and evenly spreading member subscribers fold outside the State. 4) The Division has recently started preparation of FOREX Risk Management Policy for the largest corporate level companies in terms of one of the requirement of RBI. 5) The Division has Franchisee arrangements at Rajkot, Mumbai, Pune and Kolkata and during the year planning to add few more places. 6) The Division has Channel Partnership arrangement established with Pune base IT company for their web base pricing solution, viz., IONPOT. Forex Division of the Company has received ISO 9001:2008 Certificate towards Quality Management System for its Forex Advisory Services. FINANCE

During the year under review, part of total Rupee Term Loan availed by the Company from Bank of India, Ahmedabad Corporate Banking Branch has been converted into Foreign Currency Loan repayable in US Dollars. During the year under review, the Company has

fully re-paid the Term Loans availed from IDBI Bank Ltd.

In terms of the provisions of Investor Education and Protection Fund Rules, 2001 (IEPF), the Company has transferred the unclaimed dividend amount of Rs.32,343/- declared for the financial year ended on 31st March, 2002 (remain unclaimed for 7 years) to the Investor Education and Protection Fund established by the Government of India under Section 205C(1) of the Companies Act, 1956.

FIXED DEPOSITS

The Company has no overdue deposits outstanding other than those unclaimed of Rs. 1.75 lacs as on 31" March, 2010. As on date of this report, the deposits aggregating Rs. 0.55 lacs thereof have been claimed and either paid or renewed. The Company has accepted fixed deposits of Rs. 49.52 lacs from the Public and the Shareholders during the year - 2009-2010, after complying with the provisions of Section 58A of the Companies Act, 1956 read with the Companies (Acceptance of Deposits) Rules, 1975 as amended. After repaying the maturities during the year, the total fixed deposits as on 31st March, 2010 stood at Rs. 79.72 lacs.

RESPONSIBILITY STATEMENT

To the best of their knowledge and belief and according to the confirmation and explanations obtained by them, your Directors make the following statement in terms of Section 217(2AA) of the Companies Act, 1956 and confirm :

1. that in the preparation of Annual Accounts, the applicable accounting standards have been followed and that no material departures have been made from the same;

2. that they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year 31st March, 2010 and of the profit or loss of the Company for that year;

3. that they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

4. that they have prepared the Annual Accounts on a going concern basis.

ADDITIONAL DISCLOSURES

In line with the requirements of Listing Agreement with the Stock Exchanges and the Accounting Standards of the Institute of Chartered Accountants of India, your Company has made additional disclosures in the Notes on Accounts for the year under review in respect of Employees Benefit, Foreign Currency Transaction, Related Party Transactions, Taxes on Income and Expenses, Calculation of EPS, etc.

DEPOSITORY SYSTEM

Your Company has established electronic connectivity with the Depositories, NSDL and CDSL. In view of the numerous advantages offered by the Depository system, members are requested to avail of the facility of

dematerialisation of the Companys shares on NSDL and CDSL as aforesaid.

The ISIN number allotted to the Company is INE693D01018.

INSURANCE

All insurable interests of the Company including inventories, building, plant and machinery, vehicles and other insurable interest are adequately insured.

LISTING AGREEMENT WITH STOCK EXCHANGES

Pursuant to the provisions of Listing Agreement with the Stock Exchanges, the Company declares that the Equity Shares of the Company are listed on the Bombay Stock Exchange Limited and Ahmedabad Stock Exchange

Limited.

The Company confirms that it has paid Annual Listing Fees due to the above Stock Exchanges upto the Financial Year - 2010-2011.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO.

Particulars relating to Conservation of Energy and Technology Absorption are not given, as it appears that the Companies (Disclosure of particulars in report of Board of Directors) Rules, 1988 is not applicable to the Company due to the nature of the Companys business operations, being Marketing Company.

There is no any Foreign Exchange Earnings during the year under review. However, there was Foreign Exchange outgo of Rs. 3.53 lacs during the year under review.

DIRECTORS

Pursuant to the provisions of the Companies Act, 1956 and Articles of Association of the Company, Mr. Virendra R. Gandhi and Mr. Devanshu L. Gandhi, Directors of the Company, shall retire by rotation at the ensuing Annual General Meeting, and being eligible, offer themselves for re-appointment. Members are requested to consider their re-appointment as Directors of the Company, for which necessary resolutions have been incorporated in the Notice of the meeting.

As the members are aware, Mr. Ramchandra R. Gandhi, Chairman of the Company, has been re-appointed as a Managing Director of the Company for a further period of 5 years with effect from 1" October, 2009 with payment of remuneration, perquisites, allowances and commission, duly approved by the members at the previous Annual General Meeting held on 29th September, 2009.

PARTICULARS OF EMPLOYEES

Provisions of Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 as amended are not applicable to the Company, since none of the employees of the Company, including Managing Director, was in receipt of total remuneration of Rs. 24,00,000/- p.a. or Rs. 2,00,000/- p.m. during the year under review.

AUDITORS

M/s. Kantilal Patel & Co., Chartered Accountants, Ahmedabad, hold office as Statutory Auditors of the Company until the conclusion of this Annual General Meeting and the Board recommends their re-appointment till the conclusion of the next Annual General Meeting. The

Company has received a certificate from Auditors under Section 224(1) of the Companies Act, 1956 to the effect that their re-appointment, if made, would be within the prescribed limits under Section 224(1 B) of the Act. Members are requested to consider their re-appointment as Statutory Auditors of the Company for the current year at a remuneration to be decided by the Board of Directors.

AUDITORS REPORT

The following clarification has been made by the Directors in respect of observations made by the Auditors in their CARO Report for the year ended on 31st March, 2010 :

1. There was a slight short fall in maintaining liquid assets during the financial year under review due to inadvertance.

2. Advance Income Tax which remains outstanding for a period of more than 6 months from the date it became payable has been subsequently paid by the Company.

TRADE RELATIONS

The Board desires to place on record its appreciation of the support and co-operation that your Company received from Distributors, Dealers, Stockiest, C&F Agents, Retailers and all others associated with your Company. It will be your Companys continued endeavor to build and nurture strong links with the trade, based on mutuality, respect and co-operation and consistent with the consumer interest.

ACKNOWLEDGMENTS

The Board wishes to place on record its gratitude for the co-operation and assistance extended by various departments of the Union Government, State Government, Bankers and Financial Institutions.

The Board of Directors is overwhelmed with dedicated and sincere services of the employees of the Company at all levels.

The Company would make every effort to meet the aspirations of its Shareholders and wish to sincerely thank the Shareholders for their whole hearted co- operation and support at all times.

By Order of the Board of Directors

RAMCHANDRA R. GANDHI

Chairman & Managing Director

Date : 10th August, 2010

Place : Ahmedabad