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Directors Report of Vadilal Industries Ltd.

Mar 31, 2015

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

FINANCIAL HIGHLIGHTS: (Rs. in lacs)

Particulars Year ended Previous year 31-3-2015 ended 31-3-2014

(a) Earning before Interest, Tax, Depreciation and Amortization (EBITDA) 4400.33 4202.55

(b) Finance Cost 2573.24 2524.13

(c) Depreciation and amortization expenses 1308.23 1362.12

Less : Recoupment from Revaluation Reserve / Deferred 3.42 1304.81 81.36 1280.76

Government Grant

(d) Profit before Exceptional and Extraordinary Items and Tax 522.28 397.66

(e) Exceptional Items

Long term loans & Advances written off 196.93 135.05

(P.Y. Provision for diminution in the value of Long Term Investments)

(f) Profit before Extraordinary Items and Tax 325.35 262.61

(g) Extraordinary Items 0.00 0.00

(h) Profit before Tax 325.35 262.61 (i) Tax Expenses

(a) Current Tax 58.50 94.09

Less : MAT Credit entitlement (58.50) 0.00 (89.94) 4.15

(b) Deferred Tax charge / (release) 137.16 128.98

(c) Short/(Excess) Provision of Tax of (4.71) (13.07)

earlier years 132.45 120.06

(j) Profit for the year 192.90 142.55

(k) Surplus in the Statement of Profit and Loss:

Balance as per last Financial Statements 453.25 494.79

Profit for the year 192.90 142.55

Less : Appropriations:

(a) Proposed final equity dividend 71.88 71.88 (amount per share Rs. 1.00/- P. Y. amount per share Rs. 1.00/-)

(b) Tax on proposed equity dividend 14.63 12.21

(c) Transferred to General Reserve 161.78 100.00

Total Appropriations 248.29 184.09

Net Surplus in the statement of Profit and Loss 397.86 453.25

STATE OF COMPANY'S AFFAIRS:

The Company has earned revenue from operations (gross) of Rs. 41288.57 lakhs during the year ended on 31st March, 2015 as against Rs. 37170.32 lakhs earned during the previous year ended on 31st March, 2014, giving a rise of 11.08% as compared to previous year. Out of the revenue from operations of Rs. 41288.57 lakhs earned by the Company during the year under review, Rs. 35186.91 lakhs represents sales turnover of Ice-cream & Frozen Desserts, Rs. 5866.16 lakhs represents sales turnover of Processed Food products, Rs. 6.35 lakhs represents the income from Money Changing business and Rs. 229.15 lakhs represents other operating revenues. The Company has also earned other income of Rs.307.86 lakhs during the year under review as against Rs.156.40 lakhs earned during the previous year.

The Company has earned the Profit before Tax of Rs. 325.35 lakhs during the year ended on 31st March, 2015 as compared to Rs. 262.61 lakhs earned during the previous year ended on 31st March, 2014, showing a rise of 23.89%.

The Company has earned net Profit of Rs. 192.90 lakhs for the year ended on 31st March, 2015 after providing Finance Cost and Depreciation and Amortisation expenses and after making Provision for Deferred Tax Charge of Rs. 137.16 lakhs and other adjustments, as compared to Profit of Rs. 142.55 lakhs earned by the Company during the previous year ended on 31st March, 2014.

After adding the Surplus in the Statement of Profit & Loss of Rs. 453.25 lakhs brought forward from the previous year to the profit of Rs. 192.90 lakhs earned by the Company during the year under review, the total amount of Rs. 646.15 lakhs is available for appropriation.

DIVIDEND :

The Directors have recommended dividend of Rs.1.00 per share (@10.00%) on 71,87,830 Equity Shares of Rs.10/- each of the Company for the Financial Year ended on 31st March, 2015, as compared to Dividend of Rs.1.00 per share (@10.00%) declared for the previous Financial Year ended on 31st March, 2014. This will absorb Rs. 71.88 lakhs as against Rs. 71.88 lakhs absorbed in the previous year. The corporate dividend tax payable by the Company on the said dividend will be Rs. 14.63 lakhs as against Rs. 12.21 lakhs in the previous year. If approved, the dividend will be paid without deduction of tax at source to the shareholders.

TRANSFER TO RESERVE :

After making appropriation for Dividend and Dividend Tax, the Company proposes to transfer Rs. 161.78 lakhs to General Reserve and amount of Rs. 397.86 lakhs is proposed to be retained as the Surplus in the Statement of Profit and Loss.

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.

MANAGEMENT DISCUSSION AND ANALYSIS:

Management Discussion and Analysis Report has been enclosed herewith as per Annexure - B and forming part of the Directors' Report.

ADDITIONAL DISCLOSURES:

In line with the requirements of the 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 Related Party Transactions, Employees Benefits, Taxes on Income, Derivative Instruments, Segmental Reporting (in Notes on Consolidated Accounts), Calculation of EPS, Foreign Currency Transactions etc.

QUALITY ASSURANCE AND AWARDS

AWARDS AND CERTIFICATIONS:

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.

ISO 22000:2005 AND ISO 9001:2008 CERTIFICATES

The Company has always made continuous efforts to improve the "OVERALL PRODUCT QUALITY" by following the stringent GMP norms and continuous process innovation. This is the evident of the achievement of FSMS (Food Safety Management System) Certifications i.e. BRC:Issue-6 with Grade "A", ISO-22000:2005 and HALAL for our Processed Food Division (PFD), located at Dharampur, Dist. Valsad, Gujarat.

The PFD Manufacturing facility is also listed in "Two Star Export House" Status by Joint Director General of Foreign Trade, Ministry of Commerce and Industry for export of Processed Foods Products -APEDA.

The Ice Cream plants of the Company located in two locations i.e. Pundhra in Gujarat & Barelly in UP are also certified for ISO-22000:2005, ISO 9001:2008 and BRC : Issue 6 for Food Safety Management System is another feather in the cap of the Company.

FINANCE:

During the year under review, the Company has availed Secured / unsecured loans / Vendor Finance / Bill Discounting, etc.from various Banks, FIs, Various Parties and other companies. During the year company has made regular repayment of Loan & interest and there is no any overdue payment to Banks and FIs. External

Rating Agency CRISIL has reviewed the External Rating of the company i.e. BBB (Negative).

In terms of the provisions of Investor Education and Protection Fund Rules, 2001 (IEPF), during the year under review, the Company has transferred the amount of unpaid and unclaimed Dividend of Rs.165276/- for the year 2005-2006 and Rs.184887/- for the year 2006-2007, to IEPF established by the Central Government under Section 205C(1) of the Companies Act, 1956.

In terms of the provisions of Investor Education and Protection Fund Rules, 2001 (IEPF), during the year under review, the Company has transferred the amount of unclaimed interest on fixed deposit of Rs.39182/- upto 31 -3-2008, to IEPF established by the Central Government under Section 205C(1) of the Companies Act, 1956.

DETAILS OF DEPOSITS:

(a) During the year under review, the Company has accepted Deposits of Rs.495.81 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 751.16

- Deposits from Public accepted before 1-4-2014 536.54

Total 1287.70

(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.

SUBSIDIARY COMPANY:

The Company is having a wholly-owned subsidiary company namely Vadilal Industries (USA) Inc., USA. Except the same, during the year under review, no Company has become or ceased to become subsidiary, joint venture or associate Company. A report on the financial position of the subsidiary and associate 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 - C to the consolidated financial statement and hence not repeated here for the sake of brevity. The Policy for determining material subsidiaries may be accessed on the Company's website viz www.vadilalgroup.com.

Pursuant to the provisions of Section 136 of the Act, separate Audited Accounts in respect of subsidiary company are available at the web-site of the Company viz. www.vadilalgroup.com.

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, the Consolidated Financial Statements of the Company, its wholly-owned Subsidiary Company namely, Vadilal Industries (USA) Inc., Vadilal Cold Storage, a Partnership Firm and Vadilal Forex and Consultancy Services Ltd., an Associate Company, for the year ended on 31st March, 2015 have been attached with the financial statement of the Company. The Audited Consolidated Financial Statements form part of the Annual Report.

CORPORATE GOVERNANCE:

Being a Listed Company, the Company has taken necessary measures to comply with the Listing Agreement with the Stock Exchanges as amended from time to time including Clause 49 regarding Corporate Governance. A separate report on Corporate Governance for the year ended on 31st March, 2015 is attached herewith as a part of this Annual Report viz Annexure - D. A certificate from Statutory Auditors of the Company regarding compliance of Corporate Governance as stipulated under Clause-49 of Listing Agreement is obtained by the Company and annexed to the Corporate Governance 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, not given any guarantee and not 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 - E 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 28.3 to the financial statement which sets out related party disclosures.

DIRECTORS AND KEY MANAGERIAL PERSONNEL:

During the period of this report, Mr. CM. Maniar ceased to be the Director of the Company with effect from 29th June, 2014 due to his sad demise. He was an Independent Director of the Company. Mr. C. M. Maniar was one of the senior members on the Board of the Company. He was also a member of the erstwhile Remuneration Committee of the Directors of the Company. The Directors placed on record the valuable services and guidance provided by Mr. C. M. Maniar during his tenure as a Director of the Company and also as a member of the erstwhile Remuneration Committee of the Directors of the Company.

During the period of this report, Mr. Rajesh K. Pandya has resigned from the office of the Director of the Company with effect from 1st April, 2015. He was an Independent Director of the Company. He was also a member of Audit Committee and the Nomination and Remuneration Committee of the Directors of the Company. The Directors placed on record the valuable services and guidance provided by Mr. Rajesh K. Pandya during his tenure as a Director of the Company and also as a member of the Audit Committee and the Nomination and Remuneration Committee of the Directors of the Company.

Pursuant to the provisions of Section 152 of the Companies Act, 2013 and Rules made thereunder, Mr. Devanshu L. Gandhi, Managing Director 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. Devanshu L. 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.

Pursuant to the provisions of Section 149(1) and 152 1 of the Companies Act, 2013 and Rules made thereunder and revised Clause -49 of the Listing Agreement with Stock Exchanges and on the recommendation of the Nomination and Remuneration Committee, the Company proposes to appoint Mrs. Deval D. 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 152 1 of the Companies Act, 2013 and Rules made thereunder and revised Clause -49 of the Listing Agreement with Stock Exchanges and on the recommendation of the Nomination and Remuneration Committee, the Company proposes to appoint Mr. Kalpit 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 his candidature for appointment as a Director of the Company. Mr. Kalpit R. Gandhi has also been appointed as a Chief Financial Officer (CFO) of the Company, to be considered as Key Managerial Personnel under Section 203 of the Companies Act, 2013 w.e.f. 1st June, 2014.

Pursuant to the provisions of Section 149 and 152 1of the Companies Act, 2013 and Rules made thereunder and revised Clause-49 of the Listing Agreement with Stock Exchanges and on the recommendation of the Nomination and Remuneration Committee, the Company proposes to appoint Mr. Malay R. Mahadevia and Mr.

Chetan M. Tamboli, 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 (Five) consecutive years up to the conclusion of the 36th Annual General Meeting of the Company in the calendar year 2020.

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.

The Company has received declarations from all the Independent Directors of the Company in terms of Section 149 of the Act and Clause - 49 of the Listing Agreement, confirming that they meet the criteria of independence as prescribed both under the Act and Clause 49 of the Listing Agreement with the Stock Exchanges.

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 and the corporate governance requirements as prescribed by Securities and Exchange Board of India ("SEBI") under Clause 49 of the Listing Agreements ("Clause 49").

The performance of the Board and committees were 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 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, their constitution, terms of reference and other details are provided in the Corporate Governance Report annexed with the Directors' Report.

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 Clause - 49 of the Listing Agreement, 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 - F.

NUMBER OF BOARD MEETINGS :

During the year under review, six Meetings of Board of Directors were held the details of which are mentioned in the Corporate Governance Report annexed with the Directors' Report.

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

As required under Section 134(1 )(m) of the Companies Act, 2013 and Rules made thereunder, details relating to Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo are given in the Annexure - G attached herewith and forming part of the Directors' Report.

RISK MANAGEMENT:

The Company is exposed to various business risks from time to time. Risk management involves handling appropriately risks that are likely to harm an organization. There are various types of risks associated with conducting business of the Company. The ultimate goal of risk management is the preservation of physical and human assets of the organization for successful continuation of its operations.

In view of the same and in terms of requirements of the Clause-49 of Listing Agreement with Stock Exchanges regarding Corporate Governance, the Board of Directors had, at its meeting held on 31st January, 2006, approved the risk assessment and minimization procedure adopted by the Company in relation to its business.

The Board periodically reviews the risk assessment and minimization procedure in relation to the business of the Company.

CORPORATE SOCIAL RESPONSIBILITY:

In terms of provisions of Section 135 of the Companies Act, 2013 and Rules made thereunder, a committee of the Directors of the Company has been constituted as Corporate Social Responsibility Committee. The Corporate Social Responsibility Committee has formulated a policy on the Corporate Social Responsibility measures to be undertaken by the Company as specified in Schedule VII to the Companies Act, 2013.

The Company was required to spend Rs. 16.15 lakhs towards Corporate Social Responsibility. In view of the same, the Corporate Social Responsibility Committee of the Company has recommended the following activities to be undertaken by the Company:

1. Approx. Rs. 6.00 laks to be spent to recharge water in the bore wells in the Pundhra Village and nearby villages upto 10 kms from Pundhra Village, to improve the water supply in those village and to improve environmental sustainability;

2. Balance Amount to be used towards providing education and vocational training to the farmers in the nearby villages of Dharampur village to enable them to effectively utilize the pesticides and residues in order to improve the quality of crops and to improve realization value of crops.

The Corporate Social Responsibility Policy is available on the Company's web-site viz. www.vadilalgroup.com.

However, due to shortage of manpower and resources required in the respective activity, the Company could not spend towards Corporate Social Responsibility measures during the year - 2014-2015. The Directors ensure that the Company will spend sufficient amount towards Corporate Social measures in the next financial year.

The Annual Report on CSR activities is annexed herewith marked as Annexure - H.

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. 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 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.

AUDITORS' REPORT OF THE COMPANY:

The following clarification has been made by the Directors in respect of the observation made by the Auditors in CARO report for the year ended on 31st March, 2015 :-

1. Regarding observation under Para (i)(b) of the Report, it is clarified that the company has prepared a policy for physical verification of fixed assets. The same will be done once in three years for each plant starting from Financial Year - 2015-16.

2. Regarding observation under Para (vii) (a) of the Report, it is clarified that the matter is pending with the department.

3. Regarding observation on Note no 27.3 of the standalone financial statement, it is clarified that pursuant to Section 74(1) of the Companies Act, 2013, the company was required to repay the amount of deposits accepted before 31st March, 2014 along with interest thereon, if any, within 1 year from such commencement or from the date on which such payment are due whichever is earlier. The company has repaid all the deposits which are due up to 31-03.2015. Moreover, for the deposits which remain undue as on 31- 03-2015, the company had filled the petition under Section 74(2) of the Companies Act, 2013 for making repayment of outstanding deposits with interest thereon, as and when due.

However, pursuant to the clarification issued by Ministry of Corporate Affairs vide General Circular No. 9/ 2015 dated 18th June, 2015, the Company can make repayment of its outstanding deposits accepted before 1-4-2014, in accordance with the terms and conditions for which the said deposits had been accepted i.e. as and when due and not before 31-03-2015.

4. Regarding observation on Note No. 27.6 (III) of the standalone financial statements, it is clarified that the trade receivables of Rs 356.69 lacs are outstanding at the year end from the wholly owned subsidiary are, in the opinion of the Board, realisable/ recoverable.

5. Regarding observation on Note No. 27.14 of the standalone financial statements, it is clarified that on the basis of the projection for future profit, the company projects to pay normal income tax within the specified period. Based on this assumption, the company has taken MAT Credit of Rs. 58.50 Lacs (P.Y. Rs. 89.94 Lacs) and deducted from tax provision made during the year and shown as MAT credit entitlement of total amounting to Rs. 551.85 Lacs as on 31.3.2015 (P.Y. Rs. 493.35 Lacs).

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, Ahmedabad 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 - I to this Report.

The following clarifications have been made by the Directors in respect of the observations made by the Secretarial Auditors in the Secretarial Audit Report for the year ended on 31st March, 2015:-

i. There were certain disputed statutory dues relating to taxes and duties not deposited by the company including disputed Food Safety penalty imposed by Nayab Nirnayak Adhikari under Food Safety and Standards Act relating to the year 2013-14 which have been shown in contingent liabilities at Note No. 27 against which appeals have been filed by the Company.

ii. In respect of qualification for not spending amount towards CSR expenditure during the year under review, necessary clarification has been provided in this Directors' Report under "Corporate Social Responsibility" section.

iii. The Company had preferred a petition before Company Law Board, Western Region Bench u/s 74 of the Companies Act, 2013 for repayment of Public Deposits accepted prior to applicability of the Companies Act, 2013, as and when due i.e. till the date of its actual maturity period of the deposits which were falling beyond 31st March, 2015. Necessary clarification has been provided in this Directors' Report under "Auditors' Report of the Company" section.

INSURANCE:

All insurable interests of the Company including buildings, plant and machinery, furniture & fixtures 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 BSE Limited (BSE) and the National Stock Exchange of India Limited (NSE).

The Company confirms that it has paid Annual Listing Fees due to the BSE Limited and National Stock Exchange of India Limited upto the Financial Year -2015-2016.

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 - J.

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.

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.

- 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.

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 DEVANSHU L. GANDHI

Chairman and Managing Director Managing Director

Date : 13th August,2015

Place : Ahmedabad


Mar 31, 2014

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, 2014.

REVENUE FROM OPERATIONS

The Company has earned the Revenue from Operations (Net) of Rs 36361.51 lacs and Other Income of Rs 156.40 Lacs during the year ended on 31st March, 2014 as against Rs 32113.54 Lacs and RS 720.78 lacs respectively earned during the previous year ended on 31st March, 2013.

FINANCIAL RESULTS:

(Rs in lacs) Particulars Year ended Previous year 31-3-2014 ended 31-3-2013

(a) Earning before Interest, Tax, 4202.55 4490.11 Depreciation and Amortization (EBITDA) (b) Finance Cost 2524.13 2481.63 (c) Depreciation and amortization 1362.12 1152.03 expenses Less : Recoupment from Revaluation 81.36 1280.76 53.53 1098.50 Reserve / Deferred Government Grant (d) Profit before Exceptional and 397.66 909.98 Extraordinary Items and Tax (e) Exceptional ItemsProvision for 135.05 0.00 diminution in the value of Long Term Investments (f) Profit before Extraordinary Items and Tax 262.61 909.98 (g) Extraordinary Items 0.00 0.00 (h) Profit before Tax 262.61 909.98 (i) Tax Expenses (a) Current (MAT Tax) 94.09 178.06 Less : MAT Credit entitlement (89.94) 4.15 (99.98) 78.08 (b) Deferred Tax charge/(release) 128.98 196.20 (c) Short/(Excess) Provision of (13.07) 38.28 Tax/Deferred Tax of earlier 120.06 312.56 years (Net) (j) Profit for the year 142.55 597.42 (k) Surplus in the Statement of Profit and Loss: Balance as per last Financial Statements 494.79 323.51 Profit for the year 142.55 597.42 Less : Appropriations: (a) Proposed final equity dividend (amount per share Rs 1.00/- P. Y. amount per share Rs. 1.50/-) 71.88 107.82 (b) Tax on proposed equity dividend 12.21 18.32 (c) Transferred to General Reserve 100.00 300.00 Total Appropriations 184.09 426.14 Net Surplus in the Statement of Profit 453.25 494.79 and Loss

DIVIDEND :

The Directors have recommended dividend of Rs. 1.00 per share (@10.00%) on 71,87,830 Equity Shares of Rs. 10/- each of the Company for the Financial Year ended on 31st March, 2014, as compared to Dividend of Rs. 1.50 per share (@15.00%) declared for the previous Financial Year ended on 31st March, 2013. This will absorb Rs. 71.88 lacs as against Rs. 107.82 lacs absorbed in the previous year. The corporate dividend tax payable by the Company on the said dividend will be Rs. 12.22 lacs as against Rs. 18.32 lacs in the previous year. If approved, the dividend will be paid without deduction of tax at source to the shareholders.

MANAGEMENT DISCUSSION AND ANALYSIS:

Management Discussion and Analysis Report has been enclosed herewith as per Annexure "A" and forming part of the Directors'' Report.

ADDITIONAL DISCLOSURES:

In line with the requirements of the 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 Related Party Transactions, Employees Benefits, Taxes on Income, Derivative Instruments, Segmental Reporting (in Notes on Consolidated Accounts), Calculation of EPS, Foreign Currency Transactions etc.

QUALITY ASSURANCE AND AWARDS AWARDS AND CERTIFICATIONS:

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, we have 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 us among the "Top 20 Food" brands in India.

ISO 22000:2005 AND ISO 9001:2008 CERTIFICATES

The Company has always made continuous efforts to improve the "OVERALL PRODUCT QUALITY" by following the stringent GMP norms and continuous process innovation. This is the evident of the achievement of FSMS (Food Safety Management System) Certifications i.e. BRC:Issue-6 with Grade "A", ISO-22000:2005 and HALAL for our Processed Food Division (PFD), located at Dharampur, Dist. Valsad, Gujarat.

The PFD Manufacturing facility is also listed in "Two Star Export House" Status by Joint Director General of Foreign Trade, Ministry of Commerce and Industry for export of Processed Foods Products -APEDA.

The Ice Cream plants of the Company located in two locations i.e. Pundhra in Gujarat & Barelly in UP are also certified for ISO-22000:2005 and BRC : Issue 6 for Food Safety Management System is another feather in the cap of the Company.

FINANCE:

During the year under review, the Company has availed the Term Loans from various Term Lenders towards financing the expansion-cum-modernization of its existing manufacturing units as well as for working capital margin. The Company has also availed enhanced working capital facilities from Banks. The company has also availed Short Term Loan from Banks, FIs, various Parties and other Companies. During the year Company has made regular repayment of Loan & interest and there is no any overdue payment to Banks and FIs. The Company has reduced the finance cost by reducing the Rate of Interest. Further CRISIL has reviewed the External Rating of the Company i.e. BBB (Negative).

In terms of the provisions of Investor Education and Protection Fund Rules, 2001 (IEPF), during the year under review, the Company has transferred the amount of unclaimed fixed deposit of Rs. 46000/- and unclaimed interest on fixed deposit of Rs. 34716/- upto 31-3-2007, to IEPF established by the Central Government under Section 205C(1) of the Companies Act, 1956.

FIXED DEPOSITS:

The Company has no overdue deposits outstanding other than those unclaimed deposits of Rs. 22.14 lacs as on 31st March, 2014. The Company has mobilised Fixed Deposit of Rs. 1088.42 lacs during the year ended on 31st March, 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. 1748.52 lacs.

SUBSIDIARY COMPANY:

The Company has incorporated a wholly-owned subsidiary company namely Vadilal Industries (USA) Inc., USA. However, pursuant to the provisions of Section 212 of the Companies Act, 1956 read with the General Circular No. 2/2011 dated 8th February, 2011 issued by Ministry of Corporate Affairs, granting general exemption under Section 212(8) of the Companies Act, 1956, the Annual Accounts and other related details of Vadilal Industries (USA) Inc., including the Statement under Section 212(1)(e), for the year ended on 31-3-2014, are not attached with the Balance Sheet of the Company. However, the financial information of the said Subsidiary Company has been included in the notes to the Consolidated Accounts attached herewith.

However, the Company undertakes that the Reviewed/Audited Financial Statements of Vadilal Industries (USA) Inc. for the year ended on 31-3-2014, alongwith reports of Directors and Independent Accountant thereon shall be made available to shareholders and a hard copy of the same shall be provided to the shareholders, on their written request. The said Reviewed/Audited Financial Statements of Vadilal Industries (USA) Inc. for the year ended on 31-3-2014, alongwith reports of Directors and Independent Accountant thereon including Statement under Section 212(1)(e) shall also be available for inspection by any shareholder of the Company, at the Share Department of the Company on any working days except Saturdays, during usual working hours, upto the date of Annual General Meeting.

CONSOLIDATED FINANCIAL STATEMENTS:

As stipulated by Clause-32 of Listing Agreement with Stock Exchanges, Consolidated Financial Statements of the Company, its wholly-owned Subsidiary Company namely, Vadilal Industries (USA) Inc., Vadilal Cold Storage, a Partnership Firm and Vadilal Forex and Consultancy Services Ltd., an Associate Company, for the year ended on 31st March, 2014 have been prepared by the Company in accordance with the requirements of Accounting Standard - 21 "Consolidated Financial Statements" and Accounting Standard 23 "Accounting for investments in Associates" issued by the Institute of Chartered Accountants of India and prescribed under Section 211(3C) of the Companies Act, 1956. The Audited Consolidated Financial Statements form part of the Annual Report.

CORPORATE GOVERNANCE:

Being a Listed Company, the Company has taken necessary measures to comply with the Listing Agreement with the Stock Exchanges as amended from time to time including Clause 49 regarding Corporate Governance. A separate report on Corporate Governance for the year ended on 31st March, 2014 is attached herewith as a part of this Annual Report. A certificate from Statutory Auditors of the Company regarding compliance of Corporate Governance as stipulated under Clause-49 of Listing Agreement is obtained by the Company and annexed to the Corporate Governance 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 217(2AA) of the Companies Act, 1956 and confirm :

a) 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;

b) 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;

c) 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;

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

INSURANCE:

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

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

As required under Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in Report of Board of Directors) Rules, 1988, details relating to Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo are given in the Annexure -"B" attached herewith and forming part of the Directors'' 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 Bombay Stock Exchange Limited (BSE) and the National Stock Exchange of India Limited (NSE).

The Company confirms that it has paid Annual Listing Fees due to the Bombay Stock Exchange Ltd. and National Stock Exchange of India Ltd. upto the Financial Year - 2014-2015.

PARTICULARS OF EMPLOYEES:

During the financial year under review, no employees of the Company including Managing Directors were in receipt of remuneration of Rs. 5,00,000/- per month or more or in aggregate Rs. 60,00,000/- per annum or more. Hence, the statement of particulars of employees under Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 need not to be given.

DIRECTORS:

During the period of this report, Mr. C.M. Maniar ceased to be the Director of the Company with effect from 29th June, 2014 due to his sad demise. He was an Independent Director of the Company. Mr. C.M. Maniar was one of the senior members on the Board of the Company. He was also a member of the Remuneration Committee of the Directors of the Company. The Directors placed on record the valuable services and guidance provided by Mr. C. M. Maniar during his tenure as a Director of the Company and also as a member of the Remuneration Committee of the Directors of the Company.

Pursuant to the provisions of Section 152 of the Companies Act, 2013 and Rules made thereunder, Mr. Rajesh R. Gandhi, Managing Director 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.

Pursuant to the provisions of Section 149 and 152 1of 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. Kshitish M. Shah, Mr. Rohit J. Patel and Mr. Rajesh K. Pandya, 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 their candidature for appointment as Independent Directors of the Company. The aforesaid Independent Directors, if appointed, shall hold office for a term of 2 (two) consecutive years upto the conclusion of the 32nd Annual General Meeting of the Company in the calendar year 2016.

Due to implementation of new Companies Act, 2013 w.e.f. 1st April, 2014, the Company is required to pass a fresh Special Resolution of the shareholders of the Company in confirmation and supersession of the earlier Resolutions passed, under the provisions of Section 196 and Schedule - V of the Companies Act, 2013 (New Act) and Rules made thereunder, for re-appointment of Mr. Rajesh R. Gandhi and Mr. Devanshu L. Gandhi, as Managing Directors of the Company for a further period of 5 years w.e.f. 1st April, 2014 and payment of remuneration for a period of 3 years w.e.f. 1st April, 2014, without approval of the Central Government.

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.

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 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 following clarification has been made by the Directors in respect of the observation as Emphasis of Matter made by the Auditors in CARO report for the year ended on 31st March, 2014 :-

1. Regarding observation on Note 27.3 (a), the Board clarifies that for the year 2013-14, though a formal policy is not pronounced by the distribution agency i.e. APEDA, (Agricultural and Processed Food Products Export Development Authority), the company has accounted transport subsidy of Rs.80 Lacs, based on anticipation of pronouncement of such policy considering announcements by government from time to time and such benefit being made available in past years. Such income is deducted from freight expense.

2. Regarding observation on Note 27.6, the Board clarifies that Company has given advances to overseas subsidiary company for Rs.196.93 Lacs by way of loans for the purpose of initial development and long term growth. In view of long term involvement and expected increase in business of subsidiary, the company considers that the exposure will be fully realisable.

3. Regarding observation on Note 27.14, the Board clarifies that on the basis of the projection for future profit, the company project, to pay normal income tax within the specified period. Based on this assumption, the company has taken MAT Credit of Rs. 89.94 lacs (P.Y. Rs. 99.98 lacs) and deducted from tax provision made during the year and shown as MAT credit entitlement of total amounting to Rs. 493.35 lacs as on 31-3-14 (P.Y. Rs. 403.41 lacs).

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

Date : 14th August, 2014. RAJESH R. GANDHI DEVANSHU L. GANDHI Place: Ahmedabad CHAIRMAN & MANAGING DIRECTOR MANAGING DIRECTOR


Mar 31, 2013

To , The Members of VADILAL INDUSTRIES 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, 2013.

REVENUE FROM OPERATIONS

The Company has earned the Revenue from Operations (Net) of R 32020.59 lacs and Other Income of R 813.72 Lacs during the year ended on 31st March, 2013 as against R 28222.46 Lacs and R 288.80 lacs respectively earned during the previous year ended on 31st March, 2012.

FINANCIAL RESULTS:

(Rs. in lacs)

Particulars Year ended Previous year 31-3-2013 ended 31-3-2012

(a) Earning before Interest, Tax, Depreciation and Amortization (EBITDA) 4490.11 3881.91

(b) Finance Cost 2481.63 1989.32

(c) Depreciation and amortization expenses 1152.03 952.39

Less : Recoupment from Revaluation 53.53 20.73

Reserve / Deferred Government Grant 1098.50 931.66

(d) Profit before Exceptional and Extraordinary Items and Tax 909.98 960.93

(e) Exceptional Items 0.00 0.00

(f) Profit before Extraordinary Items and Tax 909.98 960.93

(g) Extraordinary Items 0.00 0.00

(h) Profit before Tax 909.98 960.93

(i) Tax Expenses

(a) Current (MAT Tax) 178.06 189.73

Less : MAT Credit entitlement (99.98) 78.08 (175.43) 14.30

(b) Deferred Tax charge / (release) 196.20 311.71

(c) Short/(Excess) Provision of Tax / Deferred Tax 38.28 9.68

of earlier years (Net) 312.56 335.69

(j) Profit/(Loss) for the period 597.42 625.24

(k) Surplus in the Statement of Profit and Loss:

Balance as per last Financial Statements 323.51 323.58

Profit for the year 597.42 625.24

Less : Appropriations:

(a) Proposed final equity dividend (amount per share

Rs.1.50/- P. Y. amount per share Rs.1.50/-) 107.82 107.82

(b) Tax on proposed equity dividend 18.32 17.49

(c) Transferred to General Reserve 300.00 500.00

Total Appropriations 426.14 625.31

Net Surplus in the statement of Profit and Loss: 494.79 323.51



DIVIDEND :

The Directors have recommended dividend of R 1.50 per share (@15.00%) on 71,87,830 Equity Shares of R 10/- each of the Company for the Financial Year ended on 31st March, 2013. The Company declared R 1.50 per share (@15.00%) dividend for the previous Financial Year ended on 31st March, 2012. This will absorb R 107.82 lacs as against R 107.82 lacs absorbed in the previous year. The corporate dividend tax payable by the Company on the said dividend will be R 18.32 lacs as against R 17.49 lacs in the previous year. If approved, the dividend will be paid without deduction of tax at source to the shareholders.

MANAGEMENT DISCUSSION AND ANALYSIS:

Management Discussion and Analysis Report has been enclosed herewith as per Annexure "A" and forming part of the Directors'' Report.

ADDITIONAL DISCLOSURES:

In line with the requirements of the 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 Related Party Transactions, Employees Benefits, Taxes on Income, Derivative Instruments, Segmental Reporting (in Notes on Consolidated Accounts), Calculation of EPS, Foreign Currency Transactions etc.

QUALITY ASSURANCE AND AWARDS

AWARDS AND CERTIFICATIONS:

Vadilal has won 22 awards over 3 consecutive years : 2008 , 2009 and 2010 at ''The Great Indian Ice Cream Contest" organised 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 2013, the Company has been voted as the "Most Trusted Ice-cream brand in India" as per the Brand Trust Report-2013. Also, the Economic Times Survey ranked us among the "Top 20 Food" brands in India.

ISO 22000:2005 AND ISO 9001:2008 CERTIFICATES

The Company has always made continuous efforts to improve the "OVERALL PRODUCT QUALITY" by following the stringent GMP norms and continuous process innovation. This is the evident of the achievement of FSMS (Food Safety Management System) Certifications i.e. BRC:Issue-6 with Grade "A", ISO-22000:2005 and HALAL for our Processed Food Division (PFD), located at Dharampur, Dist. Valsad, Gujarat.

The PFD Manufacturing facility is also listed in "Two Star Export House" Status by Joint Director General of Foreign Trade, Ministry of Commerce and Industry for export of Processed Foods Products -APEDA.

The Ice Cream plants of the Company located in two locations i.e. Pundhra in Gujarat & Barelly in UP are also certified for ISO-22000:2005 and BRC : Issue 6 for Food Safety Management System is another feather in the cap of the Company.

FINANCE:

During the year under review, the Company has availed the Term Loans from various Term Lenders towards part financing the expansion-cum-modernization of its existing manufacturing units. The Company has also availed Enhanced working capital facilities from Banks. The Company has also availed Short Term Loan from Banks, FIs, various Parties and other Companies. During the year, the Company has made regular repayment of Loan & interest and there is no any overdue payment to Banks and FIs. The Company has reduced the Finance cost by reducing the Rate of Interest.

In terms of the provisions of Investor Education and Protection Fund Rules, 2001 (IEPF), during the year under review, the Company has transferred the amount of unclaimed fixed deposit of R 15,000/- and unclaimed interest on fixed deposit of R 17,389/- upto 31-3-2006, to IEPF established by the Central Government under Section 205C(1) of the Companies Act, 1956. During the year under review, the Company has also transferred unclaimed Dividend of R 96,307/- for the year 2004-2005, to IEPF established by the Central Government under Section 205C(1) of the Companies Act, 1956.

FIXED DEPOSITS:

The Company has no overdue deposits outstanding other than those unclaimed deposits of R 30.21 lacs as on 31st March, 2013. As on date of this Report, deposits aggregating R 14.68 lacs thereof have been claimed and either paid or renewed. The Company has mobilised Fixed Deposit of R 1063.98 lacs during the year ended on 31st March, 2013, 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, 2013 stood at R 1617.17 lacs.

SUBSIDIARY COMPANY:

The Company has incorporated a wholly-owned subsidiary company namely Vadilal Industries (USA) Inc., in the State of New Jersey in USA during the year – 2009-2010. However, pursuant to the provisions of Section 212 of the Companies Act, 1956 read with the General Circular No. 2/2011 dated 8th February, 2011 issued by Ministry of Corporate Affairs, granting general exemption under Section 212(8) of the Companies Act, 1956, the Annual Accounts and other related details of Vadilal Industries (USA) Inc., including the Statement under Section 212(1)(e), for the year ended on 31-3-2013, are not attached with the Balance Sheet of the Company. However, the financial information of the said Subsidiary Company has been included in the notes to the Consolidated Accounts attached herewith.

However, the Company undertakes that the Reviewed/Audited Financial Statements of Vadilal Industries (USA) Inc. for the year ended on 31-3-2013, alongwith reports of Directors and Independent Accountant thereon shall be made available to shareholders and a hard copy of the same shall be provided to the shareholders, on their written request. The said Reviewed/Audited Financial Statements of Vadilal Industries (USA) Inc. for the year ended on 31-3-2013, alongwith reports of Directors and Independent Accountant thereon including Statement under Section 212(1)(e) shall also be available for inspection by any shareholder of the Company, at the Share Department of the Company on any working days except Saturdays between 2.00 p.m. to 4.00 p.m. upto the date of Annual General Meeting.

CONSOLIDATED FINANCIAL STATEMENTS:

As stipulated by Clause-32 of Listing Agreement with Stock Exchanges, Consolidated Financial Statements of the Company, its wholly-owned Subsidiary Company namely, Vadilal Industries (USA) Inc., Vadilal Cold Storage, a Partnership Firm and Vadilal Forex and Consultancy Services Ltd., an Associated Company, for the year ended on 31st March, 2013 have been prepared by the Company in accordance with the requirements of Accounting Standard - 21 "Consolidated Financial Statements" and Accounting Standard 23 "Accounting for investments in Associates" issued by the Institute of Chartered Accountants of India and prescribed under Section 211(3C) of the Companies Act, 1956. The Audited Consolidated Financial Statements form part of the Annual Report.

CORPORATE GOVERNANCE:

Being a Listed Company, the Company has taken necessary measures to comply with the Listing Agreement with the Stock Exchanges as amended from time to time including revised Clause 49 regarding Corporate Governance. A separate report on Corporate Governance for the year ended on 31st March, 2013 is attached herewith as a part of this Annual Report. A certificate from Statutory Auditors of the Company regarding compliance of Corporate Governance as stipulated under the revised Clause-49 of Listing Agreement is obtained by the Company and annexed to the Corporate Governance Report.

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 :

a) 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;

b) 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, 2013 and of the profit or loss of the Company for that year;

c) 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;

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

INSURANCE:

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

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

As required under Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in Report of Board of Directors) Rules, 1988, details relating to Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo are given in the Annexure -"B" attached herewith and forming part of the Directors'' 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 Bombay Stock Exchange Limited (BSE) and the National Stock Exchange of India Limited (NSE). The Company''s shares were also listed at the Ahmedabad Stock Exchange Limited (ASE) till 30th July, 2012.

The Equity Shares of the Company are admitted to dealings on the National Stock Exchange of India Limited (NSE) on Capital Market Segment vide a Circular of NSE bearing Ref. No. NSE/LIST/C/2011/0587 dated 13- 06-2011 and a letter of NSE bearing Ref. No. NSE/LIST/ 167762-A dated 13th June, 2011. The Trading on Capital Segment of the NSE was commenced from 15-06-2011. The designated Security Code for the purpose of dealings at NSE is VADILALIND-EQ.

The Company confirms that it has paid Annual Listing Fees due to the Bombay Stock Exchange Ltd. and National Stock Exchange of India Ltd. upto the Financial Year – 2013-2014.

DELISTING AT AHMEDABAD STOCK EXCHANGE LIMITED:

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 71,87,830 Equity Shares of Rs. 10/- each of the Company from the Ahmedabad Stock Exchange Limited. On application of the Company, the Ahmedabad Stock Exchange Limited has, vide a letter dated 31st July, 2012 approved the delisting of the aforesaid Equity Shares of the Company 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 the Bombay Stock Exchange Limited and National Stock Exchange of India Limited, which are having nation wide terminals.

PARTICULARS OF EMPLOYEES:

During the financial year under review, no employee of the Company including Managing Directors was in receipt of remuneration in aggregate of Rs. 5,00,000/- per month or more or Rs. 60,00,000/- per annum or more. Hence, the statement of particulars of employees under Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 need not to be given.

DIRECTORS:

Pursuant to the provisions of Section 255 and 256 of the Companies Act, 1956 and Articles of Association of the Company, Mr. C. M. Maniar and Mr. Rohit J. Patel, Directors of the Company, shall retire by rotation at this Annual General Meeting, and being eligible, offer themselves for re-appointment. The 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. The brief resume/details relating to the said Directors, who are to be re-appointed are furnished in the Notes to the Notice of the Annual General Meeting.

Pursuant to the provisions of Section 255 and 256 of the Companies Act, 1956 and Articles of Association of the Company, Mr. Virendra R. Gandhi, Vice-chairman and Managing Director, Mr. Rajesh R. Gandhi and Mr. Devanshu L. Gandhi, Managing Directors of the Company, shall also retire by rotation as Directors at this Annual General Meeting, and being eligible, offer themselves for re-appointment. The 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. The brief resume/details relating to the said Directors, who are to be re-appointed are furnished in the Notes to the Notice of the Annual General Meeting.

Mr. Rajesh R. Gandhi and Mr. Devanshu L. Gandhi, who have been associated with the Company since its inception and looking after day-to-day affairs of the Company, have been re-appointed as Managing Directors of the Company for further period of 5 years w.e.f. 1st April, 2014 with payment of remuneration for a period of 3 years w.e.f. 1st April, 2014. Necessary resolutions have been incorporated in the Notice of the Meeting seeking Members approval for the same. The brief resume / details relating to the said Managing Directors who are to be re-appointed as Managing Directors are furnished in the Notes to the Notice of Annual General Meeting.

During the year under review, Mr. Ramchandra R. Gandhi ceased to be a Director and Chairman of the Company w.e.f. 3rd November, 2012 due to ill health. Mr. Ramchandra R. Gandhi was promoter and non- executive Director of the Company and Chairman of the Board of Directors of the Company. Considering the association of Mr. Ramchandra R. Gandhi as a co-founder with entire Vadilal Group since its inception and contributions made by him in the growth and development of the Group, Mr. Ramchandra R. Gandhi has been designated as "Chairman Emeritus" w.e.f. 3rd November, 2012.

CORPORATE SOCIAL RESPONSIBILITY

The Company daily provides Ice-cream to the patients of M. P. Shah Cancer Hospital, the Gujarat Cancer and Research Institute, New Civil Hospital Compound, Asarwa, Ahmedabad.

AUDITORS:

M/s. Kantilal Patel & Co., Chartered Accountants, Ahmedabad, holds office as Statutory Auditors of the Company until the conclusion of this Annual General Meeting and as recommended by Audit Committee, the Board recommends their appointment, as Statutory Auditors of the Company, for the Financial Year – 2013-2014 and to hold office from the conclusion of the ensuing 29th 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 224(1B) of the Companies Act, 1956 to the effect that their appointment, if made, would be within the prescribed limits under Section 224(1B) of the Act. The Members are requested to consider their appointment as Statutory Auditors of the Company for the Financial Year – 2013-2014, at a remuneration to be decided by the Board of Directors.

AUDITORS'' REPORT (EMPHASIS OF MATTER) OF THE COMPANY:

The following clarification has been made by the Directors in respect of the observation (Emphasis of matter) made by the Auditors in their report for the year ended on 31st March, 2013 :- 1. Regarding observation on Note 27.3 (a), the Board clarifies that for the year 2012-13, though a formal policy is not pronounced by the distribution agency i.e. APEDA, (Agricultural and Processed Food Products Export Development Authority), the company has accounted transport subsidy of R 57 Lacs, based on anticipation of pronouncement of such policy considering announcements by government from time to time and such benefit being made available in past years. Such income is deducted from freight expense.

2. Regarding observation on Note 27.6, the Board clarifies that Company has made investment in equity of overseas subsidiary company for R 11.74 Lacs and by way of loans of R 125.58 Lacs for the purpose of initial development and long term growth. In view of long term involvement and expected increase in business of subsidiary, the company is of the view that there is no decline other than temporary in the value of investment and that advances given will be fully realisable.

COST AUDITORS:

The Ministry of Corporate Affairs has, vide a notification no. G.S.R. 429(E) dated 3rd June, 2011, notified the General Cost Accounting Records Rules, 2011, which has made it mandatory for the Company to maintain cost records on regular basis in such manner so as to make it possible to calculate per unit cost of production of its products.

Further, the Ministry of Corporate Affairs has, by an industry specific Cost Audit Order dated 24th January, 2012 ordered audit of Cost Records under Section 233(B) of the Company''s Act, 1956 for "Packaged Food Products". Accordingly, the Company has appointed Mr. Vinod Himmatlal Shah, Cost Accountant, Ahmedabad, having Membership No. 889 as Cost Auditor of the Company, to audit the Cost records maintained by the Company, for the Financial Year – 2013-2014. The appointment of Mr. Vinod Himmatlal Shah as a Cost Auditor of the Company for the Financial Year – 2013-2014 has been approved by the Central Government.

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

Date : 14th August, 2013. RAJESH R. GANDHI DEVANSHU L. GANDHI

Place : Ahmedabad MANAGING DIRECTOR MANAGING DIRECTOR


Mar 31, 2012

To The Members of VADILAL INDUSTRIES LIMITED

The Directors have pleasure in presenting herewith the 28th Annual Report together with the Audited Statement of Accounts for the year ended on 31st March, 2012.

REVENUE FROM OPERATIONS

The Company has earned the Revenue from Operations (net) of Rs.28222.46 lacs and Other Income of Rs.288.80 Lacs during the year ended on 31st March, 2012 as against Rs. 23617.93 Lacs and Rs.359.10 lacs respectively earned during the previous year ended on 31st March, 2011.

FINANCIAL RESULTS:

(Rs. in lacs)

Particulars Year ended Previous year 31-3-2012 ended 31-3-2011

(a) Earning before Interest, Tax, Depreciation and Amortization (EBITDA) 3881.91 2738.65

(b) Finance Cost 1989.32 1203.21

(c) Depreciation and amortization expenses 952.39 823.06

Less : Recoupment from Revaluation 20.73 23.77

Reserve / Deferred Government Grant 931.66 799.29

(d) Profit before Exceptional and Extraordinary Items and Tax 960.93 736.15

(e) Exceptional Items 0.00 0.21

(f) Profit before Extraordinary Items and Tax 960.93 735.94

(g) Extraordinary Items 0.00 0.00

(h) Profit before Tax 960.93 735.94

(i) Tax Expenses

(a) Current (MAT Tax) 189.73 141.93

Less : MAT Credit Entitlement (175.43) (128.00)

14.30 13.93

(b) Deferred Tax charge / (release) 311.71 233.51

(c) (Short)/Excess Provision of Tax/ Deferred Tax (9.68) 19.67

335.69 227.77

(j) Profit/(Loss) for the period 625.24 508.17

(k) Surplus in the Statement of Profit and Loss:

Balance as per last Financial Statements 323.58 340.72

Profit for the year 625.24 508.17

Less : Appropriations:

(a) Proposed final equity dividend (amount per share Rs. 1.50/- P. Y amount per share Rs.1.50/-) 107.82 107.82

(b- Tax on proposed equity dividend 17.49 17.49

(c) Transferred to General Reserve 500.00 400.00

Total Appropriations 625.31 525.31

Net Surplus/(Deficit) in the Statement of Profit and Loss 323.51 323.58

DIVIDEND :

The Directors have recommended dividend of Rs.1.50 per share (@15.00%) on 71,87,830 Equity Shares of Rs. 10/- each of the Company for the Financial Year ended on 31st March, 2012. The Company declared Rs.1.50 per share (@15.00%) dividend for the previous Financial Year ended on 31st March, 2011. This will absorb Rs.107.82 lacs as against Rs.107.82 lacs absorbed in the previous year. The corporate dividend tax payable by the Company on the said dividend will be Rs.17.49 lacs as against Rs.17.49 lacs in the previous year. If approved, the dividend will be paid without deduction of tax at source to the shareholders.

MANAGEMENT DISCUSSION AND ANALYSIS:

Management Discussion and Analysis Report has been enclosed herewith as per Annexure "A" and forming part of the Directors' Report.

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 Related Party Transactions, Employees Benefits, Taxes on Income, Derivative Instruments, Segmental Reporting (in Notes on Consolidated Accounts), Calculation of EPS, Foreign Currency Transactions etc.

QUALITY ASSURANCE AND AWARDS

ISO 22000:2005 AND ISO 9001:2008 CERTIFICATES

The Company has always made continuous efforts to improve the process of manufacturing and to achieve Foods safety, quality and efficiency in each of its operations. This is evident from the achievement of BRC - Food Certification by Intertek Moody (Mumbai), HALAL from HALAL, India, ISO 22000 : 2005 certified by INDOCERT accredited to National Accreditation Board for Certification Bodies (NABCB, QCI, India) towards Food Safety Management System and ISO 9001:2008 Certification from ISOQAR, (U.K.) towards Quality Management System for its Processed Food Division, situated at Dharampur, Dist. Valsad, Gujarat.

Also, in the list, is the Two Star Export House Status by Joint Director General of Foreign Trade, Ministry of Commerce and Industry for export of Processed Foods Products (APEDA).

The BRC - Food and ISO 22000:2005 Certification from Bureau Veritas, Mumbai for its ice-cream plant at Pundhra in the State of Gujarat and Bareilly in the State of Uttar Pradesh for Management System is another feather in the cap of the Company.

FINANCE:

During the year under review, the Company has availed the Term Loans from various Term Lenders towards part financing the expansion-cum-modernization of its existing manufacturing units. The Company has also availed during the year under review, various short term loans from Banks and other Companies, which have been duly repaid by the Company. The Company has also converted part of its existing Term Loans into Foreign Currency Loan (FCNRB) to save interest cost.

In terms of the provisions of Investor Education and Protection Fund Rules, 2001 (IEPF), during the year under review, the Company has transferred the amount of unclaimed fixed deposit of Rs.2,48,000/- and unclaimed interest on fixed deposit of Rs.17,883/- upto 31-3-2004, to IEPF established by the Central Government under Section 205C(1) of the Companies Act, 1956.

FIXED DEPOSITS:

The Company has no overdue deposits outstanding other than those unclaimed deposits of Rs.26.19 lacs as on 31st March, 2012. As on date of this Report, deposits aggregating Rs. 13.85 lacs thereof have been claimed and either paid or renewed. The Company has mobilised Fixed Deposit of Rs. 911.90 lacs during the year ended on 31st March, 2012, after complying with the provisions of Section 58 A 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. 1396.70 lacs.

SUBSIDIARY COMPANY:

The Company has incorporated a wholly-owned subsidiary company namely Vadilal Industries (USA) Inc., in the State of New Jersey in USA during the year - 2009-2010. However, pursuant to the provisions of Section 212 of the Companies Act, 1956 read with the General Circular No. 2/2011 dated 8th February, 2011 issued by Ministry of Corporate Affairs, granting general exemption under Section 212(8) of the Companies Act, 1956, the Annual Accounts and other related details of Vadilal Industries (USA) Inc., including the Statement under Section 212(1)(e), for the year ended on 31-3-2012, are not attached with the Balance Sheet of the Company. However, the financial information of the said Subsidiary Company has been included in the Notes to the Consolidated Accounts attached herewith.

However, the Company undertakes that the Reviewed/Audited Financial Statements of Vadilal Industries (USA) Inc. for the year ended on 31-3-2012, alongwith reports of Directors and Independent Accountant thereon shall be made available to shareholders and a hard copy of the same shall be provided to the shareholders, on their written request. The said Reviewed/Audited Financial Statements of Vadilal Industries (USA) Inc. for the year ended on 31-3-2012, alongwith reports of Directors and Independent Accountant thereon including Statement under Section 212(1)(e) shall also be available for inspection by any shareholder of the Company, at the Share Department of the Company on any working days except Saturdays between 2.00 p.m. to 4.00 p.m. upto the date of Annual General Meeting.

CONSOLIDATED FINANCIAL STATEMENTS:

As stipulated by Clause 32 of Listing Agreement with Stock Exchanges, Consolidated Financial Statements of the Company, its wholly-owned Subsidiary Company namely, Vadilal Industries (USA) Inc. and Vadilal Cold Storage, a Partnership Firm, for the year ended on 31st March, 2012 have been prepared by the Company in accordance with the requirements of Accounting Standard - 21 "Consolidated Financial Statements" and Accounting Standard 23 "Accounting for investments in Associates" issued by the Institute of Chartered Accountants of India and prescribed under Section 211(3C) of the Companies Act, 1956. The Audited Consolidated Financial Statements form part of the Annual Report.

CORPORATE GOVERNANCE:

Being a Listed Company, the Company has taken necessary measures to comply with the Listing Agreement with the Stock Exchanges as amended from time to time including revised Clause 49 regarding Corporate Governance. A separate report on Corporate Governance for the year ended on 31st March, 2012 is attached herewith as a part of this Annual Report. A certificate from Statutory Auditors of the Company regarding compliance of Corporate Governance as stipulated under the revised Clause 49 of Listing Agreement is obtained by the Company and annexed to the Corporate Governance Report.

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 :

a) 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;

b) 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;

c) 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;

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

INSURANCE:

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

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

As required under Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in Report of Board of Directors) Rules, 1988, details relating to Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo are given in the Annexure -"B" attached herewith and forming part of the Directors' 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 Bombay Stock Exchange Limited (BSE) and National Stock Exchange of India Limited (NSE). The Company's shares were also listed at Ahmedabad Stock Exchange Limited (ASE) till 30th July, 2012.

The Equity Shares of the Company are admitted to dealings on the National Stock Exchange of India Limited (NSE) on Capital Market Segment vide a Circular of NSE bearing Ref. No. NSE/LIST/C/2011/0587 dated 13-06-2011 and a letter of NSE bearing Ref. No. NSE/LIST/ 167762-A dated 13th June, 2011. The Trading on Capital Segment of the NSE was commenced from 15-06-2011. The designated Security Code for the purpose of dealings at NSE is VADILALIND-EQ.

The Company confirms that it has paid Annual Listing Fees due to the Bombay Stock Exchange Ltd., National Stock Exchange of India Ltd. and Ahmedabad Stock Exchange Ltd. upto the Financial Year - 2012-2013

DELISTING AT AHMEDABAD STOCK EXCHANGE LIMITED:

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 7187830 Equity Shares of Rs. 10/- each of the Company from the Ahmedabad Stock Exchange Limited. On application of the Company, the Ahmedabad Stock Exchange Limited has, vide a letter dated 31st July, 2012 approved the delisting of the aforesaid Equity Shares of the Company 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 the Bombay Stock Exchange Limited and National Stock Exchange of India Limited, which are having nation wide terminals.

PARTICULARS OF EMPLOYEES:

During the financial year under review, no employee of the Company including Managing Directors was in receipt of remuneration in aggregate of Rs. 5,00,000/- per month or more or Rs. 60,00,000/- per annum or more. Hence, the statement of particulars of employees under Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 need not to be given.

DIRECTORS:

Pursuant to the provisions of Section 255 and 256 of the Companies Act, 1956 and Articles of Association of the Company, Mr. Kshitish M. Shah and Mr. Rajesh K. Pandya, Directors of the Company, shall retire by rotation at this Annual General Meeting, and being eligible, offer themselves for re-appointment. The 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. The brief resume/details relating to the said Directors, who are to be re-appointed are furnished in the Notes to the Notice of the Annual General Meeting.

CORPORATE SOCIAL RESPONSIBILITY

The Company daily provides Ice-cream to the patients of M. P. Shah Cancer Hospital, the Gujarat Cancer and Research Institute, New Civil Hospital Compound, Asarwa, Ahmedabad.

AUDITORS:

M/s. Kantilal Patel & Co., Chartered Accountants, Ahmedabad, holds office as Statutory Auditors of the Company until the conclusion of this Annual General Meeting and as recommended by Audit Committee, the Board recommends their appointment, as Statutory Auditors of the Company, for the Financial Year - 2012-2013 and to hold office from the conclusion of the ensuing 28th 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 224(1 B) of the Companies Act, 1956 to the effect that their appointment, if made, would be within the prescribed limits under Section 224(1 B) of the Act. The Members are requested to consider their appointment as Statutory Auditors of the Company for the Financial Year - 2012-2013, at a remuneration to be decided by the Board of Directors.

AUDITORS' REPORT OF THE COMPANY:

The following clarification has been made by the Directors in respect of the observation made by the Auditors in CARO report for the year ended on 31st March, 2012:-

1. The Company has not paid sales tax overdue for more than six months to the extent of Rs.17.00 lacs due to pending litigation / legal cases. The Company has obtained a stay against the said litigation.

COST AUDITORS:

The Ministry of Corporate Affairs has, vide a notification no. G.S.R. 429(E) dated 3rd June, 2011, notified the General Cost Accounting Records Rules, 2011, which has made it mandatory for the Company to maintain cost records on regular basis in such manner so as to make it possible to calculate per unit cost of production of its products.

Further, the Ministry of Corporate Affairs has, by an industry specific Cost Audit Order dated 24th January, 2012 ordered audit of Cost Records under Section 233(B) of the Companies Act, 1956 for "Packaged Food Products". Accordingly, the Company has appointed Mr. Vinod Himmatlal Shah, Cost Accountant, Ahmedabad, having Membership No. 889 as Cost Auditor of the Company, to audit the Cost records maintained by the Company, for the Financial Year - 2012-2013. The appointment of Mr. Vinod Himmatlal Shah as a Cost Auditor of the Company for the Financial Year - 2012-2013 has been approved by the Central Government.

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

Date : 13th August, 2012. RAJESH R. GANDHI DEVANSHU L. GANDHI

Place: Ahmedabad MANAGING DIRECTOR MANAGING DIRECTOR


Mar 31, 2010

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, 2010. INCOME FROM OPERATIONS

The Company earned the total income from operations of Rs.18,889.88 Lacs during the year ended on 31st March, 2010 as against Rs.14,790.90 Lacs earned during the previous year ended on 31st March, 2009.

FINANCIAL RESULTS: (Rs. In lacs)

Particulars Year ended Previous year 31-3-2010 ended 31-3-2009

(a) Profit for the year before

Depreciation and Financial Expenses 2076.07 1434.95

(b) Less: Depreciation 564.97* 483.22

Financial Expenses (Net) 631.90 1196.87 749.22 1232.44

(c) Profit before Exceptional & Prior Year items 879.20 202.51

(d) Prior Years Adjustments (Net) (0.05) 17.11

(e) Profit before tax 879.15 219.62

(f) Provision for Tax (Refer Note I of Schedule 22)

- Current Tax 327.00 0.00

- Current (MAT Tax) 0.00 23.40

Less : MAT credit entitlement 0.00 (9.20)

" 0.00 14.20

- Deferred Tax charge/(release) (28.49) 72.00

- Fringe Benefit Tax 0.00 14.50

- (Short) / Excess Provision of Tax /

Deferred Tax of earlier years (Net) (5.47) (10.24)

(g) Net Profit after Tax 575.17 108.68

(h) Profit Brought Forward 286.28 283.51

Amount available for appropriation 861.45 392.19

Appropriation:-

- Proposed Dividend 107.82 86.25

- Tax on Proposed Dividend 17.91 14.66

- General Reserve 395.00 5.00

- Balance carried to Balance Sheet 340.72 286.28

Total 861.45 392.19

DIVIDEND:

The Directors have recommended dividend of Re.1.50 per share (®15.00%) on 71,87,830 Equity Shares of

Rs.10/- each of the Company for the Financial Year ended on 31st March, 2010. The Company declared Re.1.20 per share (@12%) dividend on 71,87,830 Equity Shares of Rs.10/- each for the previous Financial Year ended on 31st

March, 2009. This will absorb Rs. 107.82 lacs as against Rs.86.25 lacs absorbed in the previous year. The corporate dividend tax payable by the Company on the said dividend will be Rs.17.91 lacs as against Rs.14.66 lacs in the previous year. If approved, the dividend will be paid without deduction of tax at source to the shareholders.

MANAGEMENT DISCUSSION AND ANALYSIS:

Management Discussion and Analysis Report has been enclosed herewith as per Annexure "A" and forming part of the Directors Report.

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 Related Party Transactions, Employees Benefits, Taxes on Income and

Expenses, Derivative Instruments, Segmental Reporting (in Notes on Consolidated Accounts), Calculation of EPS, etc.

QUALITY ASSURANCE AND SYSTEMS

ISO 22000:2005 AND ISO 9001:2000 CERTIFICATES

The Company has always made continuous efforts to improve the process of manufacturing and to achieve quality and efficiency in each of its operations. This is evident from the award of ISO 9001:2000 to the Company conferred upon by Nemko AS, Certification Department, towards Quality Management System for its Processed Food Division situated at Dharampur, Dist. Valsad, Gujarat. The Company has also received award of ISO 22000:2005 from Nemko

AS, Certification Department, towards Food Safety Management System for the said Processed Food Division. The

Company has already been awarded Two Star Export House Status by Joint Director General of Foreign Trade,

Ministry of Commerce and Industry for export of Processed Foods Products.

The Company has also obtained ISO 22000:2005 Certification from Bureau Veritas, Mumbai for its ice-cream plant at Pundhra in the State of Gujarat and Bareilly in the State of Uttar Pradesh for Management System.

The Company has received, for 2 years in a row i.e. in the year 2008 & 2009, 7 awards in both the years in the Great

Indian Ice-Cream Contest organised by Indian Dairy Association (IDA).

FINANCE:

During the year under review, the Company has availed part of additional Term Loans sanctioned by Bank of Baroda, State Bank of India and Exim Bank towards part financing the expansion-cum-modernization of its existing manufacturing units. During the year under review, Rupee Term Loan as availed by the Company from BOB and SBI have been converted into Foreign Currency Loan (FCNRB).

The Company has repaid Working Capital Demand Loan to IDBI Bank Ltd. and the same has been renewed towards part of total Working Capital Facilities. The Company has also availed for the said purpose Working Capital Demand

Loan of from Exim Bank. The Company has also availed the enhanced Working Capital Facilities from IDBI Bank Ltd., a Consortium Bank. The Company has also fully repaid the Working Capital facilities of Rs. 400 lacs availed from

South Indian Bank Ltd. (SIB), a Consortium Bank, for which, the charge has been duly satisfied by way of modification.

The Company has duly repaid during the year under review the unsecured Short Term Loan availed by the Company last year from Development Credit Bank Ltd. (DCB). The Company has again received the unsecured Short Term

Loan from DCB during the year under review and partly repaid to DCB. The Company has also availed Buyers Credit Facility from IDBI Bank Ltd.

In terms of the provisions of Investor Education and Protection Fund Rules, 2001 (IEPF), during the year under review, the Company has transferred the unclaimed Principal amount of fixed deposit of Rs. 2,560/- and interest on fixed deposit of Rs. 40,000/- upto 31-3-2002, to IEPF established by the Central Government under Section 205C(1) of the Companies Act, 1956.

FIXED DEPOSITS:

The Company has no overdue deposits outstanding other than those unclaimed deposits of Rs. 23.61 lacs as on 31st March, 2010. As on date of this Report, deposits aggregating Rs. 12.33 lacs thereof have been claimed and either paid or renewed. The Company has mobilised Fixed Deposit of Rs. 588.57 lacs during the year ended on 31st March, 2010, after complying with the provisions of Section 58 A 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. 996.41 lacs.

SUBSIDIARY COMPANY:

The Company has incorporated a wholly-owned subsidiary company namely Vadilal Industries (USA) Inc., in the State of New Jersey in USA during the year under review. As required under Section 212 of the Companies Act, 1956, the

Reviewed Financial Statements (Unaudited) of Vadilal Industries (USA) Inc. for the period from 11-8-2009 (date of inception) to 31-3-2010, alongwith reports of Directors and Auditors thereon, for the year ended on 31st March, 2010 are annexed herewith. The statement under Section 212(1)(e) of the Companies Act, 1956 relating to the said Subsidiary Company is also annexed herewith.

CONSOLIDATED FINANCIAL STATEMENTS:

As stipulated by Clause 32 of Listing Agreement with Stock Exchanges, Consolidated Financial Statements of the

Company, its subsidiary company namely, Vadilal Industries (USA) Inc. and Vadilal Cold Storage, a Partnership Firm, for the year ended on 31st March, 2010 have been prepared by the Company in accordance with the requirements of Accounting Standard - 21 "Consolidated Financial Statements and Accounting Standard 23 "Accounting for investments in Associates" issued by the Institute of Chartered Accountants of India. The Audited Consolidated

Financial Statements form part of the Annual Report.

During the year under review, Vadilal Chemicals Ltd. ceased to be an Associate of the Company due to disinvestment of entire holding by the Company. As such, the financial statement of Vadilal Chemicals Ltd. has not been included in the Consolidated Financial Statements for the year 2009-2010.

CORPORATE GOVERNANCE:

Being a Listed Company, the Company has taken necessary measures to comply with the Listing Agreement with the Stock Exchanges including revised Clause 49 regarding Corporate Governance. A separate report on Corporate Governance for the year ended on 31st March, 2010 is attached herewith as a part of this Annual Report. A certificate from Statutory Auditors of the Company regarding compliance of Corporate Governance as stipulated under the revised Clause 49 of Listing Agreement is obtained by the Company and annexed to the Corporate Governance Report.

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(2 A A) of the Companies Act, 1956 and confirm :

a) 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;

b) 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;

c) 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;

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

INSURANCE:

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

CONSERVATION OF ENERGY , TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND

OUTGO:

As required under Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in Report of Board of Directors) Rules, 1988, details relating to Conservation of Energy, Technology Absorption and

Foreign Exchange Earnings and Outgo are given in the Annexure -"B" attached hereto and forming part of the Directors 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 Bombay Stock Exchange Limited and Ahmedabad Stock Exchange Limited.

The Company confirms that it has paid Annual Listing Fees due to the Bombay Stock Exchange Ltd. and Ahmedabad

Stock Exchange Ltd. upto the Financial Year - 2010-2011.

PARTICULARS OF EMPLOYEES:

The statement of particulars of employees providing information as per Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 form part of this report. However, as per provisions of Section 219(1)(b)(iv) of the Companies Act, 1956, the Annual Report excluding this statement is being sent to all members. Any member interested in obtaining a copy of this statement may write to the Company Secretary at the Registered Office of the Company.

DIRECTORS:

Pursuant to the provisions of Section 255 and 256 of the Companies Act, 1956 and Articles of Association of the Company, Mr. Chaitan M. Maniar and Mr. Kshitish M. Shah, Directors of the Company, shall retire by rotation at this Annual General Meeting, and being eligible, offer themselves for re-appointment. The 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. The brief resume/details relating to the said Directors, who are to be re-appointed are furnished in the Notes to the Notice of the Annual General Meeting.

Mr. Virendra R. Gandhi has been appointed as a Managing Director of the Company, designated as Vice- Chairman and Managing Director, for a period of 5 years with effect from 1st June, 2010, without payment of any remuneration to him. Necessary resolution has been incorporated in the Notice of the Annual General Meeting seeking Members approval for appointment of Mr. Virendra R. Gandhi, as a Managing Director of the Company, designated as Vice- Chairman and Managing Director. The brief resume / details relating to the Mr. Virendra R. Gandhi is furnished in the Notes to the Notice of the Annual General Meeting.

CORPORATE SOCIAL RESPONSIBILITY

The Company daily provides Ice-cream to the patients of M.P. Shah Cancer Hospital, the Gujarat Cancer and Research Institute, New Civil Hospital Compound, Asarwa, Ahmedabad. Under "Yuva Unstoppable" programme organised by an Institution, the employees of the Company attended Municipal Schools in Ahmedabad and helped the students in learning english. The Company had organised blood donation camp in 2009 in association with PRATHMA Blood Bank. The employees of the Company had contributed 33 bottles.

AUDITORS:

M/s. Kantilal Patel & Co., Chartered Accountants, Ahmedabad, holds office as Statutory Auditors of the Company until the conclusion of this Annual General Meeting and as recommended by Audit Committee, the Board recommends their appointment, as Statutory Auditors of the Company, for the Financial Year - 2010-2011 and to hold office from the conclusion of the ensuing 26th 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 224(1 B) of the Companies Act, 1956 to the effect that their appointment, if made, would be within the prescribed limits under Section 224(1 B) of the Act. The Members are requested to consider their appointment as Statutory Auditors of the Company for the Financial Year - 2010-2011, at a remuneration to be decided by the Board of Directors.

AUDITORS REPORT OF THE COMPANY:

The following clarifications have been made by the Directors in respect of the observations made by the Auditors in

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 ended on 31-3-2010 due to inadvertence.

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

3. The company has not paid sales tax overdue for more than six months due to pending litigation / legal cases. The company has obtained a stay against the said litigation.

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

Date : 10th August, 2010. Ramchandra R. Gandhi

Place : Ahmedabad Chairman



 
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