Notes to Accounts of Vadilal Enterprises Ltd.

Mar 31, 2018

1. COMPANY OVERVIEW:-

Vadilal Enterprises Limited is a public company domiciled in India and incorporated under the provisions of the Companies Act, 1956. Its shares are listed on Bombay stock exchange in India. The Company is engaged in the marketing and distribution of the ice cream, dairy products,frozen desserts and process food products of the brand “Vadilal” all over India except ice cream, dairy product and frozen desserts in Maharashtra, Goa, Karnataka, Kerala & Andhra Pradesh.The financial statements for the year ended March 31, 2018 were approved and authorised for issue by the Board of Directors on May 28, 2018.

2) Plant & Machinery includes Deep Freeze Machine & Freezers on Wheels given on cancellable operating lease. Gross Block Rs. 3,694.65 Lacs (as at March 31 ,2017. Rs. 3,562.93 lacs,as at April 1 ,2016 , 14,171.52 lacs ) Accumulated Depreciation Rs. 1,635.82 Lacs (as at March 31 ,2017 Rs. 1,100.08 lacs ,as at April 1 ,2016 Rs. 878.64 lacs) Net Carrying Amount Rs. 2,462.85 (as at March 31 ,2017 Rs. 3,292.88 lacs, as at April 1 ,2016 Rs. 3,292.88 lacs)

Notes :

1. The credit period ranges from 30 days to 180 days.

2. Before accepting any new customer, the Company assesses the potential customer''s credit quality and defines credit limits by customer. Limits attributed to customers are reviewed annually. There are no customers who represent more than 5% of the total balance of trade receivable.

3. In determining the allowances for doubtful trade receivables, the Company has used a practical expedient by computing the expected credit loss allowance for trade receivables based on a provision matrix. The provision matrix takes into account historical credit loss experience and is adjusted for forward looking information. The expected credit loss allowance is based on the ageing of the receivables that are due and rates used in the provision matrix.

4. Borrowings are secured by first paripassu charge on stock ,book debts and other chargeable current assets. (Note 22)

5. Refer Note 37 for information about credit risk and market risk of Trade receivables.

b) Rights, Preferences and Restrictions attached to equity shares:

The company has issued only one class of equity shares having par value of Rs. 10 per share. Each holder of equity share is entitled to one vote per share and are entitled to dividend as and when declared. The dividend proposed by the Board of Directors is subject to the approval of shareholders in the ensuing Annual General meeting.

All Shares rank equally with regard to the company''s residual asset after distribution of all preferential amounts.

c) Shares held by holding/ultimate holding company and/or their subsidiaries / associates

The Company does not have any holding/ultimate holding company and/or their subsidiaries / associates.

Notes

a) On October 01, 2016, a dividend of Rs. 0.80 per share (total dividend Rs. 8.31 lacs) was paid to holders of fully paid equity shares. On October 06, 2017, the dividend of Rs. 0.80 per share (total dividend of Rs. 8.31 lacs) was paid to the holders of fully paid equity shares. The total dividend includes dividend distribution tax at applicable rates.

b) The Board of Directors, in its meeting held on May 28th, 2018, have proposed a final dividend of Rs. 0.80 per equity share for the financial year ended March 31, 2018. The proposal is subject to the approval of shareholders at the Annual General Meeting to be held on September, 2018 and if approved would result in a cash outflow of approximately Rs. 8.31 lacs, including dividend distribution tax.

c) Nature and Purpose of reserve

Capital reserve The company has created capital reserve on account of forfeiture of Equity shares.

Securities premium reserve The amount received in excess of face value of the equity shares is recognised in Securities Premium Reserve. This reserve is available for utilization in accordance with the provisions of the Companies Act, 2013. General reserve General reserve is created from time to time by way of transfer of profits from retained earnings for appropriation purposes. General reserve is created by a transfer from one component of equity to another and is not an item of other comprehensive income.

Retained earnings Retained earnings are the profits that the Company has earned till date, less any transfers to general reserve, dividends or other distributions paid to shareholders.

* Each EMI includes interest portion also.

(i) Term Loan from Bank of India is secured by way of first hypothecation charge over movable Plant and Machinery Equipments of the company to be purchased out of term loan availed by company. The Term Loan is also secured on first charge by Equitable Mortgage of Immovable properties of the company situated at 1st Floor of Vadilal House,Shrimali Soceity, Navrangpura, Ahmedabad)

(ii) Term Loan from TATA Capital Services Limited is secured by way of hypothecation charge over movable Plant and Machinery Equipment of the company to be purchased out of term loan availed by company.

(iii) The Term Loans from BOI and TATA Capital service Limited are secured by Corporate Guarantee Vadilal Industries Ltd.

(iv) Vehicle loans from HDFC Bank Limited are secured against hypothecation of specific vehicles of the Company.

(v) Equipment Lease and financing transaction for SAP project for Rs. 200 Lacs availed by company from IBM India Pvt, Ltd. is guranteed by some of the Directors and group company.

(vi) Refer Note 39 for information about liquidity risk.

(vii) Amount stated in current maturity is disclosed under the head of “Other Current Financial Liabilities” (Note-24)

(i) Working Capital facilitites from Bank of India is secured by way of first hypothecation charge over stock, book debts and other chargeable current assets. It is also secured on first charge by way of Equitable mortgage of the immovable properties of the company situated at 1st Floor, “Vadilal house”, Shrimali Society, Navrangpura, Ahmedabad

(ii) Working Capital facilitites from Bank of India is secured by Corporate Guarantee Vadilal Industries Ltd.

Note on MSMED:

Information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the Company. This has been relied upon by the Auditor.

*The Company has taken various residential, office and godown premises under operating lease or leave and license agreements. These are generally not non-cancellable and range between 11 months to 36 months under leave and license or longer for other leases and are renewable by mutual consent on mutually agreeable terms. The company has given refundable interest free security deposits under certain agreements.

The company''s weighted average tax rates for the year ended March 31, 2018 and March 31, 2017 were 30.9 % and 30.9% respectively.

Future Cash Outflow in respect of (b) above are determined only on receipt of judgements/decisions pending at various forums/ authorities.

Note : 3

During the year, a Company Petition (being Company Petition No. 42 of 2017) has been filed against the Company, before the National Company Law Tribunal, Ahmedabad (“NCLT”), under Sections 241 and 242 of the Companies Act, 2013. In connection to the said Company Petition No. 42 of 2017, the Petitioners and some of the parties to the petition are seeking to arrive at an amicable resolution of matter.

Note : 4 Segment Information :

The company is primarily engaged in the business segment of “Food Products” which is Ice cream/ Frozen Dessert/ Process Food/ Flavoured Milk and Dairy Products. Information reported to and evaluated regularly by the Chief Operating Decision Maker (CODM) for the purposes of resource allocation and assessing performance focuses on the business as a whole and accordingly, in the context of Operating Segment as defined under the Indian Accounting Standard 108, there is single reportable segment.

Note : 5 Financial Instruments

1. Capital Management

The Company manages its capital so as to safeguard its ability to continue as a going concern and to optimise returns to shareholders. The Capital structure of the company is based on management''s judgment of its strategic and day-to-day needs with a focus on total equity to maintain investor, creditors and market confidence and to sustain future development and growth of its business.

The management and the Board of Directors monitors the return on capital as well as the level of dividends to shareholders. The company may take appropriate steps in order to maintain, or if necessary adjust, its capital structure.

The capital structure of the Company consists of net debt (borrowings as detailed in notes 19 and 22 off set by cash and bank balances) and total equity of the Company.

The company''s risk management committee reviews the risk capital structure of the company on semi annual basis. As part of this review the company considers the cost of capital and the risk associated with each class of capital.

i) Debt is defined as long-term borrowings, short-term borrowings and current maturities of long term borrowings (excluding financial guarantee contracts and contingent considerations) as described in notes 19 and 22.

2 Financial risk management

The Company''s financial liabilities comprise mainly of borrowings, trade payables and other financial liabilities. The Company''s financial assets comprise mainly of investments, cash and cash equivalents, other balances with banks, loans, trade receivables and other financial assets. The Company''s business activities are exposed to a variety of financial risks, namely liquidity risk, market risks and credit risks. The company''s senior management has the overall responsibility for establishing and governing the company''s risk management framework. The company has constituted a Risk management committee, which is responsible for developing and monitoring the company''s risk management policies. The company''s risk management policies are established to identify and analyse the risks faced by the company, to set and monitor appropriate risk limits and controls, periodically review the changes in market conditions and reflect the changes in the policy accordingly. The key risks and mitigating actions are also placed before the Audit Committee of the company.

A) Management of Market Risk

The company''s size and operations result in it being exposed to the following market risks that arise from its use of financial instruments:

- Interest rate risk

The above risks may affect the company''s income and expenses, or the value of its financial instruments. The company''s exposure to and management of these risks are explained below:

Interest rate risk

Interest rate risk is the risk that the fair value of future cash flows of the financial instruments will fluctuate because of changes in market interest rates. In order to optimize the Company''s position with regards to interest income and interest expenses and to manage the interest rate risk, treasury performs a comprehensive corporate interest rate risk management by balancing the proportion of fixed rate and floating rate financial instruments in its total portfolio.

According to the Company interest rate risk exposure is only for floating rate borrowings. For floating rate liabilities, the analysis is prepared assuming that the amount of the liability outstanding at the end of the reporting period was outstanding for the whole year. A 100 basis point increase or decrease is used when reporting interest rate risk internally to key management personnel and represents management''s assessment of the reasonably possible change in interest rates.

Exposure to interest rate risk

Interest rate sensitivity

A change of 100 bps in interest rates would have following Impact on profit before tax.

B) Management of Credit Risk

Credit risk arises from the possibility that the counter party may not be able to settle their obligations as agreed. To manage this, the Company periodically assesses financial reliability of customers, taking into account the financial condition, current economic trends, and analysis of historical bad debts and ageing of accounts receivable. Individual risk limits are set accordingly.

The company considers the probability of default upon initial recognition of asset and whether there has been a significant increase in credit risk on an ongoing basis through out each reporting period. To assess whether there is a significant increase in credit risk, the company compares the risk of default occurring on asset as at the reporting date with the risk of default as at the date of initial recognition. It considers reasonable and supportive forwarding-looking information such as:

1. Actual or expected significant adverse changes in business.

2. Actual or expected significant changes in the operating results of the counterparty.

3. Financial or economic conditions that are expected to cause a significant change to the counterparty''s ability to meet its obligations.

4. Significant increase in credit risk on other financial instruments of the same counterparty.

5. Significant changes in the value of the collateral supporting the obligation or in the quality of the third-party guarantees or credit enhancements.

The Company measures the expected credit loss of trade receivables and loan from individual customers based on historical trend, industry practices and the business environment in which the entity operates. Loss rates are based on actual credit loss experience and past trends. Based on the historical data, loss on collection of receivable is not material hence no additional provision considered.

The Ageing analysis of Account receivables has been considered from the date the invoice falls due.

No Significant changes in estimation techniques or assumptions were made during the year

C) Management of Liquidity Risk

Liquidity risk is the risk that the company will face in meeting its obligation associated with its financial liabilities. The Company''s approach in managing liquidity is to ensure that it will have sufficient funds to meet its liabilities when they are due without incurring unacceptable losses. In doing this management considers both normal and stressed conditions.

Ultimate responsibility for liquidity risk management rests with the board of directors, which has established an appropriate liquidity risk management framework for the management of the Group''s short-term, medium-term and long term funding and liquidity managment requirments. The Group manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuosly monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities.

The following table shows the maturity analysis of the company''s financial liabilities based on the contractually agreed undiscounted cash flows along with its carrying value as at the Balance sheet date.

Note : 1) Transaction of Purchase / Sales and outstanding of Trade Payables / Receivable are inclusive of Taxes.

Note : 2) The trademark “Vadilal” and its associated trademarks are owned by Vadilal International Pvt. Ltd. The Company is a licensee of the said Trademarks.

* Key Managerial Personnel and Relatives of Promoters who are under the employment of the Company are entitled to pos employment benefits and other long term employee benefits recognised as per Ind AS 19 - ''Employee Benefits'' in the financia statements. Post-employment gratuity benefits of Key Managerial Personnel has not been included in (e) above.

Note : 6 EMPLOYEE BENEFITS:

1. Post Employment Benefit Plans as per Indian Accounting Standard 19:

Defined Contribution Plan:

The company makes provident fund (PF) contributions to defined contribution benefit plans for eligible employees. Under thi scheme the company is required to contribute a specified percentage of the payroll costs to fund the benefits. The contribution; specified under the law are paid to the government authorities (PF commissioner).

Amount towards Defined Contribution Plan have been recognized under “Contribution to Provident and Other funds” in Note 32 Rs. 74.97 Lacs (Previous Year: Rs. 60.93 Lacs).

Defined Benefit Plan:

The Company has defined benefit plans for gratuity to eligible employees, contributions for which are made to Life Insurance Corporation of India, who invests the funds as per IRDA guidelines. The details of these defined benefit plans recognised in the financial statements are as under:

Gratuity is a defined benefit plan and company is exposed to the Following Risks:

Interest rate risk: A fall in the discount rate which is linked to the G.Sec. Rate will increase the present value of the liability requiring higher provision. A fall in the discount rate generally increases the mark to market value of the assets depending on the duration of asset.

Salary Risk: The present value of the defined benefit plan liability is calculated by reference to the future salaries of members. As such, an increase in the salary of the members more than assumed level will increase the plan''s liability.

Investment Risk: The present value of the defined benefit plan liability is calculated using a discount rate which is determined by reference to market yields at the end of the reporting period on government bonds. If the return on plan asset is below this rate, it will create a plan deficit. Currently, for the plan in India, it has a relatively balanced mix of investments in government securities, and other debt instruments.

Asset Liability Matching Risk: The plan faces the ALM risk as to the matching cash flow. Since the plan is invested in lines of Rule 101 of Income Tax Rules, 1962, this generally reduces ALM risk.

Mortality risk: Since the benefits under the plan is not payable for life time and payable till retirement age only, plan does not have any longevity risk.

Concentration Risk: Plan is having a concentration risk as all the assets are invested with the insurance company and a default will wipe out all the assets. Although probability of this is very less as insurance companies have to follow regulatory guidelines.

E Investment details of plan assets:

To fund the obligations under the gratuity plan, Contributions are made to Life Insurance Corporation of India, who invests the funds as per IRDA guidelines.

G Sensitivity analysis:

Significant actuarial assumptions for the determination of the defined benefit obligation are discount rate, expected salary increase and mortality. The sensitivity analysis below have been determined based on reasonably possible changes of the respective assumptions occurring at the end of the reporting period, while holding all other assumptions constant.

The sensitivity analysis above have been determined based on reasonably possible changes of the respective assumptions occurring at the end of the reporting period and may not be representative of the actual change. It is based on a change in the key assumption while holding all other assumptions constant. When calculating the sensitivity analysis, the present value of projected defined benefit obligation has been calculated using Projected Unit Credit Method at the end of the reporting period. The methods and types of assumptions used in preparing the sensitivity analysis did not change compared with the previous period.

H The principal assumptions used for the purpose of actuarial valuation were as follows :

With the objective of presenting the plan assets and plan liabilities of the defined benefits plans at their fair value on the balance sheet, assumptions under Ind AS 19 are set by reference to market conditions at the valuation date.

The significant actuarial assumptions were as follows:

1. Other long term employee benefits :

Compensated absences

The liability towards compensated absences (leave encashment) for the year ended March 31, 2018 based on actuarial valuation carried out by using Projected Unit Credit Method is Rs. 109.21 Lacs. (As at march 31, 2017 : Rs. 73.62 Lacs)

Note : 7 First-time Ind-AS adoption reconciliation Transition to Ind As - Reconciliation

The following reconciliations provide a quantification of the effect of significant differences arising from the transition from previous GAAP to Ind AS as required under Ind AS 101:

1. Reconciliation of Balance Sheet as at April 1, 2016 (Transition Date) and March 31, 2017

2. Reconciliation of Profit for the year ended March 31, 2017

3. Reconciliation of Equity as at April 1, 2016 and as at March 31, 2017

4. Reconciliation of Total Comprehensive Income for the year ended March 31, 2017

5. Adjustments to Statement of Cash flow

6. Notes on reconciliation

8 Adjustments to Statement of Cash Flows for the year ended 31st March, 2017

The Ind AS adjustments are either non cash adjustments or are regrouping among the cash flows from operating, investing and financing activities. Consequently, Ind AS adoption has no impact on the net cash flow for the year ended March 31, 2016 as compared with the previous GAAP.

9. Notes on Reconciliation

(a) Under previous GAAP, investments in equity instruments were classified as Long term Investments. Long term investments were carried at cost less diminution in value for other than temporary decline in value of such investments. Under Ind AS 109, Investment in equity instruments of companies other than subsidiaries, joint ventures & associates are classified as FVTPL. On transition to Ind AS, these financial assets have been measured at fair value which is higher/lower than cost as per previous GAAP.

(b) Under Ind AS, security deposit given against operating lease are presented at fair value by discounting it taking lease contract Period and the differential amount has been treated as advance rentals/advance royalty to be amortised as rent/ royalty over the lease period.

(c) Under previous GAAP, dividend recommended by board of directors on equity shares for the reporting period while approving financial statement, subject to its approval by members in general meeting, was being recognised in the financial statements as a liability. Under Ind AS, such dividends are recognised as liability when declared by the members in a general meeting.

(d) Under previous GAAP, actuarial gains and losses were recognised in the statement of profit and loss. Under Ind AS, the actuarial gains and losses form part of re-measurement of net defined benefit liability / asset which is recognised in other comprehensive income in the respective periods. However, the same does not result in difference in equity or total comprehensive income.

(e) Under previous GAAP, upfront fees paid to the lenders is charged to statement of profit and loss as and when incurred. However, Ind AS - 109 “Financial instruments” requires long term debt to be recognised at amortised cost and upfront fees are charged on the basis of effective interest rate method.

(f) Consequent to adoption of Ind AS from April 1, 2016, deferred tax at applicable rates has been recognised on effect of Ind AS adoption and transition on retained earnings as at April 1, 2016 and on impact on profit for the year ended March 31,2017 for the adjustment carried out in the statement of profit and loss.

Note : 10 Standards issued but not yet effective

Appendix B to Ind AS 21, Foreign currency transactions and advance consideration

On March 28, 2018, Ministry of Corporate Affairs (“”MCA””) has notified the Companies (Indian Accounting Standards) Amendment Rules, 2018 containing Appendix B to Ind AS 21, Foreign currency transactions and advance consideration which clarifies the date of the transaction for the purpose of determining the exchange rate to use on initial recognition of the related asset, expense or income, when an entity has received or paid advance consideration in a foreign currency.

The amendment will come into force from 1 April 2018. The Company is evaluating the requirement of the amendment and the impact on the financial statements. The effect on adoption of Ind AS 21 is expected to be insignificant.”

Ind AS 115 - Revenue from contracts with customers

The Ministry of Corporate Affairs (MCA), on March 28, 2018, notified Ind AS 115, Revenue from Contracts with Customers as part of the Companies (Indian Accounting Standards) Amendment Rules, 2018. The new standard is effective for accounting periods beginning on or after April 1, 2018. The Company is evaluating the disclosure requirements of the amendments and its effect on the financial statements.

Note : 11. Previous years'' figures have been regrouped and rearranged wherever necessary to make them comply with IND AS.

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Mar 31, 2016

1. Term Loan from Bank of India is secured on 1st charge by hypothecation on (i) movable assets of the Company such as Deep Freeze Machines, Refrigerated vehicles, FOW, Push Carts, Tricycles, etc., (ii) stocks of the Company, such as Ice-cream, Mango Pulp, Mango Juice, Frozen Fruits and Vegetables, (iii) Book Debts and Receivables of the Company. The Term Loan is also secured on 2nd charge by hypothecation on specific equipments and machineries financed by Tata Capital Financial Services Limited. The Term Loan is also secured on 1st charge by equitable mortgage by simple deposit of Title Deeds in respect of immovable properties of the Company i.e. 1 st Floor of Vadilal House situated at Shrimali Society, Navrangpura, Ahmedabad.

2. Term Loan from Tata Capital Financial Services Limited is secured on 2nd charge by hypothecation on (i) movable assets of the Company such as Deep Freeze Machines, Refrigerated vehicles, FOW, Push Carts, Tricycles, etc., (ii) stocks of the Company, such as Ice-cream, Mango Pulp, Mango Juice, Frozen Fruits and Vegetables, (iii) Book Debts and Receivables of the Company. The Term Loan is also secured on 1 st charge by hypothecation on specific equipments and machineries financed by Tata Capital Financial Services Limited. The Term Loan is also secured on 2nd charge by equitable mortgage by simple deposit of Title Deeds in respect of immovable properties of the Company i.e. 1st Floor of Vadilal House situated at Shrimali Society, Navrangpura, Ahmedabad.

3. Car Loans from HDFC Bank Limited are secured against Hypothecation of specific vehicles of the Company.

4. Equipment lease and financing transactions for SAP project forRs.2 crores availed by the Company from IBM India Pvt. Ltd., Bangalore is guaranteed by some of the Directors and Group Company.

5. Vehicles amounting to Rs.35.39 lacs (P.Y. Rs.35.39 lacs) are held in the Name of Directors of the company.

6. Gross Block ofRs.8631.04 lacs (P.Y.Rs.7294.90 lacs) and Depreciation up to 31 -03-16 ofRs.4162.02 lacs (P.Y. Rs.3871.52 lacs) include amount ofRs.1282.75 lacs (P.Y.Rs.1258.01 lacs) which represents Fixed Assets fully depreciated and Net Block value of respective fixed assets is Rs.NIL (P.Y.Rs.NIL).Deduction in Gross Block and in Depreciation include written off Deep Freeze Machine & Freezers on Wheels amounting to Rs.440.80 lacs and Rs.391.23 lacs respectively.

7. Plant & Machinery includes Deep Freeze Machine & Freezers on Wheels given on cancellable operating lease. Gross .....Rs.4171.52 lacs (P.Y. Rs.3025.46 lacs) Accumulated Depreciation Rs.878.64 lacs (P.Y.Rs.838.74 lacs) Net Carrying AmountRs.3292.88 lacs (P.Y. Rs.2186.72 lacs)

8. Pursuant to the enactment of Companies Act 2013, the company has applied the estimated useful lives as specified in Schedule II ,except in respect of certain assets as disclosed in Accounting Policy on Depreciation, Amortization. Accordingly the unamortized carrying value is being depreciated/amortized over the revised/remaining useful lives. The written down value of Fixed Assets whose live have expired as at 1 st April 2014 have been adjusted net of deferred tax, in the opening balance of General Reserve amounting to Rs.NIL (P.Y. Rs.52.40 lacs)

9. Deep Freeze Machine & Freezers on Wheels purchased & returned back to the Vendor during the year ofRs.2.90 Lacs is shown Net off in addition of Plant & Machineries during the year ofRs.1837.30 Lacs.

10. Certain balances of receivables, payables, loans and advances and deposits from dealers/distributors are subject to confirmation. Any adjustments, if required, would be made at the time of reconciliation/settlement of the Accounts.

11. Based on the information available with the company, there are no suppliers who are registered under the Micro, Small & Medium Enterprises Development Act, 2006 as at 31st March 2016. Hence, the information required under the Micro, Small & Medium Enterprises Development Act, 2006 is not disclosed. This is relied upon by Auditors.

12. REMUNERATION TO CHAIRMAN & MANAGING DIRECTOR

Salaries, wages, allowances, Bonus etc includesRs.NIL towards managerial remuneration.

13. The company provides retirement benefits in the form of Provident Fund, Gratuity and Leave Encashment. Provident Fund contributions made to “Government Administrated Provident Fund” are treated as defined contribution plan since the company has no further obligations beyond its monthly contributions. Gratuity is treated as defined benefit plan, and is administrated by making contributions to Group Gratuity Scheme of Life Insurance Corporation of India. Leave encashment is considered as defined benefit plans is administrated by making contributions to the Group Leave Encashment Scheme of Life Insurance Corporation of India and sick leave is considered as defined benefit plan and it remains unfunded.

14. Related Party Transactions as per Accounting Standard 18:

15. Name of related party and description of relationship with whom transactions taken place.

16. Group of Individuals having significant influence over the company & relatives of such individuals.

17. Rajesh R. Gandhi

18. Devanshu L. Gandhi

19. Nija K. Gandhi

20. Director’s Sitting fees is shown separately in accounts.

21. Figures in bracket relates to previous year.

22. Transaction of Purchase / Sales are shown net of VAT/CST and Outstanding of Trade Payables / Receivable are inclusive of VAT / CST

23. Segment information as per Accounting Standard 17:

Segment Reporting as defined in Accounting Standard 17 is not applicable as the company’s primary segment is food products which is Ice Cream/Frozen Dessert, Process Food, Flavored Milk & Dairy Products which mainly have similar risk & return. Similarly, as the company sells its products in India there are no reportable geographical Segments.

24. Operating Leases as per Accounting Standard 19:

25. The Company has taken various residential, office and godown premises under operating lease or leave and license agreements. These are generally not non-cancellable and range between 11 months to 36 months under leave and license or longer for other leases and are renewable by mutual consent on mutually agreeable terms. The company has given refundable interest free security deposits under certain agreements.

26. Lease payments are recognized as expense in the Statement of Profit & Loss under “Other Expenses” in Note 25.

27. Earning per share as per Accounting Standard 20:

28. The amount used as the numerator in calculating basic and diluted earnings per share is the net profit for the year disclosed in the Statement of profit & loss.

29. The weighted average number of equity shares used as the denominator in calculating both basic & diluted earnings per share is 8,62,668 (P.Y.8,62,668).

30. Previous year’s figures have been regrouped wherever necessary to make them comparable with figures of the current year.

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Mar 31, 2015

Note No.1.

Company Information

Vadilal Enterprise Limited is a public company domiciled in India and incorporated under the provisions of the Companies Act, 1956. Its shares are listed on Bombay stock exchange in India. The Company is engaged in the marketing and distribution of the Ice cream and frozen deaserts and Process food products of the brand "Vadilal" all over India except Ice cream and frozen desserts in Maharashtra, Goa, Karnataka, Kerala & Andhra Pradesh.

Note No.2

Terms/rights attached to equity shares

The company has only one class of equity shares having a par value of Rs.10 per share. Each holder of equity share is entitled to one vote per share. The company declares & pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of shareholders in the ensuing Annual General meeting. During the year ended 31 March 2015,the amount of per share dividend recognized as distributions to equity shareholders was Rs. 0.80 (P.Y.Rs.0.80)

In the event of liquidation of the company,the holders of equity shares will be entitled to receive remaining assets of the company,after distribution of all preferential amounts. The distribution will be distributed in the number of equity shares held by the shareholders.

The company does not have any holding company.

The company has not issued any bonus shares,or shares for consideration other than cash or bought back equity shares during the year or for the period of five years immediately preceding the date of balance sheet.

Note No.3

(i) (Secured on 1st charge by hypothecation on (i) movable assets of the company such as Deep Freeze Machines, Refrigerated Vehicles,FOW, Push Carts,Tricycles etc.(ii) stocks of the company, such as Ice-Cream, Mango Pulp, Mango Juice, Frozen Fruits & Vegetables (iii) Book Debts and Receivables of the company. Also secured on 2nd charge by hypothecation on specific equipments and machineries financed by Tata Capital Financial Services Ltd.)

(Also Secured on 1st charge by Equitable Mortgage by simple deposit of Title Deeds in respect of immovable properties of the company I.e.First Floor of Vadilal House situated at Shrimali Soc.,Navrangpura, Ahmedabad) (Guaranteed by some of the Directors & group Company)

(ii) Car loans are secured against hypothication of specific vehicles of the Company.

(iii) (Guaranteed by some of the Directors and a group company)

(iv) (Secured on 2nd charge by hypothecation on (i) movable assets of the company such as Deep Freeze Machines, Refrigerated vehicles,FOW, Pushcarts,Tricycles etc. (ii) stocks of the company, such as Ice-Cream, Mango Pulp, Mango Juice,Frozen Fruits & Vegetables,(iii) Book Debts and Receivables of the Company. Also secured on 1st charge by hypothecation on specific equipments and machineries financed by Tata Capital Financial Services Ltd.

Note No.4

CONTINGENT LIABILITIES NOT PROVIDED FOR :

As on As on 31-03-2015 31-03-2014 (Rs. In Lacs) (Rs. In Lacs)

(a) Estimated amount of Contracts remaining to be executed on Capital account and not provided For. (net of advances) 1524.46 758.20

(b) Claims against the Company not acknowledged as debt / against which appeal has been filed.

(i) Sales Tax 124.82 63.38

(ii) Others 35.20 35.21

(iii) Income Tax 57.46 08.89

(c) Guarantees given by the company against Term Loans given to company 800.00 800.00

in which Directors are interested Outstanding against this as at 31.03.2015 85.75 200.03

Note : Future Cash outflows in respect of 27.1 (b) above depends on ultimate settlement / conclusions with the relevant authorities.

Note No. 5

Certain balances of receivables, payables, loans and advances and deposits from dealers/distributors are subject to confirmation. Any adjustments,if required, would be made at the time of reconciliation/settlement of the Accounts.

Note No. 6

Based on the information available with the company, there are no suppliers who are registered under the Micro, Small & Medium Enterprises Development Act, 2006 as at 31st March 2015. Hence, the informations required under the Mirco, Small & Medium Enterprises Development Act, 2006 is not disclosed. This is relied upon by Auditors.

Note No. 7

REMUNERATION TO CHAIRMAN & MANAGING DIRECTOR:

Salaries,Wages, Allowances, Bonus etc. includes Rs. Nil towards managerial remuneration.

Note No. 8

MAT CREDIT ENTITLEMENT:

On the basis of projection for future profit, the company project, to pay normal income tax within specified period. Based on this assumption the company has taken MAT Credit of Rs. 9.35 Lacs (P.Y. NIL) and deducted from tax provision made during the year and shown as MAT credit entitlement of total amounting to Rs. 9.35 Lacs as on 31.03.2015 (P.Y. Rs. NIL)

Note No. 9

Disclosure under Accounting Standards

Note No. 10

Disclosure as per Accounting Standard 15 (Revised) Employee Benefits:

(i) Defined Contribution Plans:

Amount of Rs. 64.91/- Lacs (P.Y. Rs. 60.43/-Lacs) is recognised as expenses and included in Employee Benefit Expenses" (Note 24) in the statement of Profit and Loss.

(ii) Defined Benefit Plans:

i) The company provides retirement benefits in the form of Provident Fund, Gratuity and Leave Encashment. Provident Fund contributions made to "Government Administrated Provident Fund" are treated as defined contribution plan since the company has no further obligations beyond its monthly contributions. Gratuity is treated as defined benefit plan, and is administrated by making contributions to Group Gratuity Scheme of Life Insurance Corporation of India. Leave encashment is considered as defined benefit plans is administrated by making contributions to the Group Leave Encashment Scheme of Life Insurance Corporation of India and sick leave is considered as defined benefit plan and it remains unfunded.

Note No. 11

Related Party Transactions as per Accounting Standard 18:

A) Name of related party and description of relationship with whom transactions taken place.

1) Group of Individuals having significant influence over the company & relatives of such individuals.

a) Devanshu L. Gandhi

b) Rajesh R. Gandhi

c) Virendra R. Gandhi

d) Nija K.Gandhi

e) Ashtha R. Gandhi

2) Enterprises owned or significantly influenced by group of individuals or their relatives who have significant influence over the company.

a) Vadilal Industries Ltd.

b) Vadilal Soda Fountain.

c) Vadilal International Pvt Ltd.

d) Vadilal Forex Consultancy Services Ltd.

e) Vadilal Marketing Private Ltd.

f) Valiant Construction Pvt. Ltd.

Note No. 12

Segment information as per Accounting Standard 17:

Segment Reporting as defined in Accounting Standard 17 is not applicable since revenue of segment of other trading operations in food products does not exceed 10% of total revenue. Similarly as company sells its products in India there are no reportable geographical Segments.

Note No. 13

Operating Leases as per Accounting Standard 19:

(a) The Company has taken various residential, office and godown premises under operating lease or leave and license agreements. These are generally not non-cancellable and range between 11 months to 36 months under leave and license or longer for other leases and are renewable by mutual consent on mutually agreable terms. The company has given refundable interest free security deposits under certain agreements.

(b) Lease payments are recognised as expense in the Statement of Profit & Loss under "Other Expenses" in Note 25"

Note No. 14

Earning per share as per Accounting Standard 20:

a) The amount used as the numerator in calculating basic and diluted earnings per share is the net profit for the year disclosed in the Statement of profit & loss.

b) The weigthed average number of equity shares used as the denominator in calculating both basic & diluted Rs. 8,62,668 (P.Y. Rs. 8,62,668).

Note No. 15

Previous year's figures have been regrouped wherever necessary to make them comparable with figures of the current year.

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Mar 31, 2014

Terms/rights attached to equity shares

The company has only one class of equity shares having a par value of Rs.10 per share. Each holder of equity share is entitled to one vote per share. The company declares & pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of shareholders in the ensuing Annual General meeting.

During the year ended 31 March 2014, the amount of per share dividend recognized as distributions to equity shareholders was Rs.0.80 (P.Y.Rs. 1.2)

In the event of liquidation of the company,the holders of equity shares will be entitled to receive remaining assets of the company,after distribution of all preferential amounts. The distribution will be distributed in the number of equity shares held by the shareholders.

The company does not have any holding company.

The company has not issued any bonus shares,or shares for consideration other than cash or bought back equity shares during the year or for the period of five years immediately preceding the date of balance sheet.

Details of shareholders holding more than 5 % shares in the company.

As per records of the company,including its register of shareholders/members and other declarations received from shareholders regarding beneficial interest, the above shareholding represents both legal and beneficial ownership of shares.

* Each EMI includes interest portion also.

(i) (Secured on 1st charge by hypothecation on movable assets of the company such as Deep Freeze Machines, Refrigerator Vehicles,FOW, Push Carts,Tricycles etc. and also secured on 2nd charge by hypothecation on current assets of the company namely;stock such as Ice-Cream,Mango Pulp,Mango Juice,Frozen ,Fruits & Vegetables etc.) (Also Secured by Equitable Mortgage by simple deposit of Title Deeds in respect of immovable property of the company I.e. First Floor of Vadilal House situated at Shrimali Soc.,Navrangpura, Ahmedabad)

(Guaranteed by some of the Directors and a group company )

(ii) Car loans are secured against hypothication of specific vehicles of the Company.

(iii) (Guaranteed by some of the Directors and a group company )

(iv) (1st and exclusive charge of equipments purchased/to be purchased out of TCFSL Fund.)

(Guaranteed by some of the Directors and a group company )

As on As on 31-03-2014 31-03-2013 (Rs In Lacs) (Rs In Lacs)

(a) Estimated amount of Contracts remaining to be executed on Capital account and not provided For. (net of advances) 758.20 184.25

(b) Claims against the Company not acknowledged as debt / against which appeal has been filed.

(i) Sales Tax 63.38 63.38

(ii) Others 35.21 20.29

(iii) Income Tax 8.89 12.87

(c) Guarantees given by the company against Term Loans given to company in which Directors are interested 800.00 800.00

Outstanding against this as at 31.03.2014 200.03 314.31

Note : Future Cash outflows in respect of 27.1 (b) above depends on ultimate settlement/conclusions with the relevant authorities.

1.2. Certain balances of receivables, payables, loans and advances and deposits from dealers/distributors are subject to confirmation.Any adjustments,if required, would be made at the time of reconciliation/settlement of the Accounts.

1.3. Based on the information available with the company, there are no suppliers who are registered under the Micro, Small & Medium Enterprises Development Act, 2006 as at 31st March 2014. Hence, the informations required under the Mirco, Small & Medium Enterprises Development Act, 2006 is not disclosed. This is relied upon by Auditors.

1.4 Short Term Loans & Advances includes Loan of Rs.1272.79 Lacs given to party and Other Current Assets includes interest receivable Rs.133.46 lacs on account of interest income accounted during the year on said loan, where confirmation of the party is pending. Subsequent to the year end, pursuant to the agreement, the company has assigned the abovementioned both outstanding amount by way of assignment to a third Party, with all rights, and the same amounts have been paid by the assignee.

1.5.REMUNERATION TO CHAIRMAN & MANAGING DIRECTOR:

Salaries,Wages, Allowances, Bonus etc.includes Rs.Nil towards managerial remuneration as under :-

As the future liability for Gratuity and leave encashment is provided on acturial basis for the company as a whole,the amount pertaning to directors is not ascertainable and not included above.

2.1 Disclosure as per Accounting Standard 15 (Revised) Employee Benefits:

(i) Defined Contribution Plans:

Amount of Rs.60.43/- Lacs (P.Y. Rs.55.51/- Lacs) is recognised as expenses and included in Employee Benefit Expenses" (Note 24) in the statement of Profit and Loss.

(ii) Defined Benefit Plans:

(a) Changes in present value of defined benefit obligation :

i) The company provides retirement benefits in the form of Provident Fund, Gratuity and Leave Encashment. Provident Fund contributions made to "Government Administrated Provident Fund" are treated as defined contribution plan since the company has no further obligations beyond its monthly contributions. Gratuity is treated as defined benefit plan and is administrated by making contributions to Group Gratuity Scheme of Life Insurance Corporation of India. Leave encashment is considered as defined benefit plans is administrated by making contributions to the Group Leave Encashment Scheme of Life Insurance Corporation of India and sick leave is considered as defined benefit plan and it remains unfunded.

2.2 Related Party Transactions as per Accounting Standard 18:

A) Name of related party and description of relationship with whom transactions taken place.

1) Group of Individuals having significant influence over the company & relatives of such individuals.

a) Devanshu L. Gandhi

b) Rajesh R. Gandhi

c) Virendra R. Gandhi

d) Nija K.Gandhi

e) Aastha R. Gandhi

2) Enterprises owned or significantly influenced by group of individuals or their relatives who have significant influence over the company.

a) Vadilal Industries Ltd.

b) Vadilal Soda Fountain.

c) Vadilal International Pvt Ltd.

d) Vadilal Forex and Consultancy Services Ltd.

a) Payment to key management personnel in form of Managing Director''s remuneration is shown in Note No. 27.5 )

b) Director''s Sitting fees is shown seperately in accounts.

c) Figures in bracket relates to previous year.

d) Transaction of Purchase / Sales are shown net of VAT/CST and Outstanding of Trade Payables / Receivable are inclusive of VAT / CST

2.3 Segment information as per Accounting Standard 17:

Segment Reporting as defined in Accounting Standard 17 is not applicable since revenue of segment of other trading operations in food products does not exceed 10% of total revenue. Similarly as company sells its products in India there are no reportable geographical Segments.

2.4 Operating Leases as per Accounting Standard 19:

(a) The Company has taken various residential, office and godown premises under operating lease or leave and license agreements. These are generally not non-cancellable and range between 11 months to 36 months under leave and license or longer for other leases and are renewable by mutual consent on mutually agreable terms. The company has given refundable interest free security deposits under certain agreements.

(b) Lease payments are recognised as expense in the Statement of Profit & Loss under "Other Expenses" in Note 25 "

2.5 Earning per share as per Accounting Standard 20:

a) The amount used as the numerator in calculating basic and diluted earnings per share is the net profit for the year disclosed in the Statement of profit & loss.

b) The weigthed average number of equity shares used as the denominator in calculating both basic & diluted earnings per share is 8,62,668 (P.Y.8,62,668).

3. Previous year''s figures have been regrouped wherever necessary to make them comparable with figures of the current year.

---

Mar 31, 2013

Company Information

Vadilal Enterprise Limited is a public company domiciled in India and incorporated under the provisions of the Companies Act, 1956. Its shares are listed on Bombay stock exchange & Ahmedabad stock Exchange in India. The Company is engaged in the marketing and distribution of the Ice cream and frozen deaserts and Process food products of the brand "Vadilal" all over India except Ice cream and frozen desserts in Maharashtra, Goa, Karnataka, Kerala & Andhra Pradesh.

1.1.CONTINGENT LIABILITIES NOT PROVIDED FOR :

As on As on 31-03-2013 31-03-2012 ( In Lacs) ( In Lacs)

(a) Estimated amount of Contracts remaining to be executed on Capital account and not provided For. (net of advances) 184.25 21.27

(b) Claims against the Company not acknowledged as debt / against which appeal has been filed.

(i) Sales Tax 63.38 56.53

(ii) Others 20.29 20.77

(iii) Income Tax 12.87 20.21

(c) Guarantees given by the company against Term Loans given to company 800.00 800.00 in which Directors are interested

Outstanding against this as at 31.03.2013 314.31 428.59



Note : Future Cash outflows in respect of 1 (b) above depends on ultimate settlement / conclusions with the relevant authorities.

1.2. Certain balances of receivables, payables, loans and advances and deposits from dealers/distributors are subject to confirmation.Any adjustments,if required, would be made at the time of reconciliation/settlement of the Accounts.

1.3. Based on the information available with the company, there are no suppliers who are registered under the Micro, Small & Medium Enterprises Development Act, 2006 as at 31st March 2013. Hence, the informations required under the Mirco, Small & Medium Enterprises Development Act, 2006 is not disclosed. This is relied upon by Auditors.

2.1 Related Party Transactions as per Accounting Standard 18:

a) Name of related party and description of relationship with whom transactions taken place.

1) Key Management Personnel :

A) Ramchandra R. Gandhi (up to 03-11-2012)

2) Relatives of key Management Personnel :

a) Rajesh R. Gandhi

b) Virendra R. Gandhi

c) Nija K.Gandhi

d) Aastha R. Gandhi

3) Group of Individuals having significant influence over the company & relatives of such individuals. a) Devanshu L. Gandhi

4) Enterprises owned or significantly influenced by group of individuals or their relatives who have significant influence over the company.

a) Vadilal Industries Ltd.

b) Vadilal Soda Fountain.

c) Vadilal International Pvt Ltd.

d) Vadilal Forex Consultancy Services Ltd.

2.2 Segment information as per Accounting Standard 17:

Segment Reporting as defined in Accounting Standard 17 is not applicable since revenue of segment of other trading operations in food products does not exceed 10% of total revenue.

Similarly as company sells its products in India there are no reportable geographical Segments.

2.3 Operating Leases as per Accounting Standard 19:

(a) The Company has taken various residential, office and godown premises under operating lease or leave and license agreements. These are generally not non-cancellable and range between 11 months to 36 months under leave and license or longer for other leases and are renewable by mutual consent on mutually agreable terms. The company has given refundable interest free security deposits under certain agreements.

(b) Lease payments are recognised as expense in the Statement of Profit & Loss on a Straight Line basis over the lease term under "Other Expenses" in Note 24 "

2.4 Earning per share as per Accounting Standard 20:

a) The amount used as the numerator in calculating basic and diluted earnings per share is the net profit for the year disclosed in the Statement of profit & loss.

b) The weigthed average number of equity shares used as the denominator in calculating both basic & diluted earnings per share is 8,62,668 (P.Y.8,62,668).

3. Previous year''s figures have been regrouped wherever necessary to make them comparable with figures of the current year.

---

Mar 31, 2012

Terms/rights attached to equity shares :

The company has only one class of equity shares having a par value of Rs.10 per share. Each holder of equity share is entitled to one vote per share. The company declares & pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of shareholders in the ensuing Annual General meeting.

During the year ended 31 March 2012,the amount of per share dividend recognized as distributions to equity shareholders was Rs.1.2 (P.Y.Rs. 1.2)

In the event of liquidation of the company,the holders of equity shares will be entitled to receive remaining assets of the company,after distribution of all preferential amounts. The distribution will be distributed in the number of equity shares held by the shareholders.

The company does not have any holding company.

The company has not issued any bonus shares,or shares for consideration other than cash or bought back equity shares during the year or for the period of five years immediately preceding the date of balance sheet.

* Each EMI includes interest portion also.

(i) ( Secured on 1st charge by hypothecation on movable assets of the company such as Deep Freeze Machines, Refrigerator Vehicles,FOW, Push Carts,Tricycles etc. and also secured on 2nd charge by hypothecation on current assets of the company namely;stock such as Ice-Cream, Mango Pulp, Mango Juice, Frozen Fruits & Vegetables etc.) (Also Secured by Equitable Mortgage by simple deposit of Title Deeds in respect of immovable property of the company i.e.First Floor of Vadilal House situated at Shrimali Soc.,Navrangpura, Ahmedabad)

(Guaranteed by some of the Directors and a Group Company )

(ii) Car loans are secured against hypothecation of specific vehicles of the Company.

[1] Vehicle includes vehicles taken on hire purchase:

Gross Block Rs.41.29/- lacs (P.Y.Rs.41.29/- lacs)

Accumulated Depreciation Rs. 15.48/- lacs (P.Y. Rs. 11.55/- lacs)

Net Carrying Amount Rs.25.81 /- lacs (P.Y. Rs. 29.74/- lacs)

[2] Vehicles includes Vehicles amounting to Rs. 35.39/- Lacs (P.Y. Rs.35.39 /-lacs) which are held in the Name of Directors of the company.

[3] Gross Block of Rs. 4507.43/- lacs (P.Y. Rs. 3966.23/- lacs) and Depreciation up to 31-03-12 of Rs.2670.66/- lacs (P.Y. Rs. 2532.06/-lacs) include amount of Rs.920.48/- lacs (P.Y. Rs. 798.05/- lacs) which represents Fixed Assets fully depreciated and Net Block value of respective fixed assets is Rs. NIL (P.Y. Rs. NIL).

[4] Plant & Machinery includes Deep Freeze Machine & Freezers on Wheels given on operating lease.

Gross Block Rs. 268.71/- lacs (P.Y. Rs. NIL)

Accumulated Depreciation Rs. 17.85/- lacs (P.Y. Rs. NIL)

Net Carrying Amount Rs. 250.86/- lacs (P.Y. Rs. NIL )

Company Information

Vadilal Enterprise Limited is a public company domiciled in India and incorporated under the provisions of the Companies Act, 1956. Its shares are listed on Bombay stock exchange & Ahmedabad stock Exchange in India. The Company is engaged in the marketing and distribution of the Ice cream and frozen desserts and Process food products of the brand "Vadilal" all over India except Maharashtra, Goa, Karnataka, Kerala & Andhra Pradesh.

CHANGE IN THE ACCOUNTING POLICY

Presentation and disclosure of financial statements:

During the year ended 31 March 2012, the revised Schedule VI notified under the Companies Act 1956, has become applicable to the company, for preparation and presentation of its financial statements. The adoption of revised Schedule VI dose not impact recognition and measurement principles followed for preparation of financial statements. However, it has significant impact of presentation and disclosures made in the financial statements. The company has also reclassified the previous year figures in accordance with the requirements applicable in the current year. Additional information to the Financial Statements

1.1. CONTINGENT LIABILITIES NOT PROVIDED FOR:

As on As on 31-03-2012 31-03-2011 (Rs.In Lacs) (Rs.In Lacs)

(a) Estimated amount of Contracts remaining to be executed on Capital account and not provided For. 21.27 39.27

(b) Claims against the Company not acknowledged as debt / against which appeal has been filed.

(i) Sales Tax 56.53 31.14

(ii) Others 20.77 20.77

(iii) Income Tax 20.21 20.21

(c) Guarantees given by the company against Term Loans given 800.00 800.00 to company in which Directors are interested Outstanding against this as at 31.03.2012 428.59 542.87

Note: Future Cash outflows in respect of 1 (b) above depend on ultimate settlement / conclusions with the relevant authorities.

1.2. Certain balances of receivables, payables, loans and advances and deposits from dealers/distributors are subject to confirmation. Any adjustments, if required, would be made at the time of reconciliation/settlement of the Accounts.

1.3. Based on the information available with the company, there are no suppliers who are registered under the Micro, Small & Medium Enterprises Development Act, 2006 as at 31st March 2012. Hence, the information required under the Mirco, Small & Medium Enterprises Development Act, 2006 is not disclosed. This is relied upon by Auditors.

1.4. In pursuance of agreement entered between the Vadilal Enterprise Ltd. and Vadilal forex cons. Services Ltd, dated 31-03-2012, the company has transferred assets and liabilities of forex division of the company to Vadilal forex Consultancy services ltd at an agreed consideration of Rs.120 lacs on March 31, 2012. Surplus of Rs. 24.23 lacs arising on this transfer is shown as exceptional item in statement of Profit and loss of the company.

Note:-Amount not available for Experience adjustment on plan liabilities and on plan Assets as per actuarial certificate for Gratuity Plan up to Previous Years.

(h) The company expects to fund Rs.11.80/- Lacs (P.Y. Rs.10.76 Lacs) towards gratuity plan and Rs. 35.00/- Lacs (P.Y. Rs. 31.69/

- Lacs) towards Provident Fund plan during the year 2012-13.

Notes:

i) The company provides retirement benefits in the form of Provident Fund, Gratuity and Leave Encashment. Provident Fund contributions made to "Government Administrated Provident Fund" are treated as defined contribution plan since the company has no further obligations beyond its monthly contributions. Gratuity is treated as defined benefit plan, and is administrated by making contributions to Group Gratuity Scheme of Life Insurance Corporation of India. Leave encashment is considered as defined benefit plans is administrated by making contributions to the Group Leave Encashment Scheme of Life Insurance Corporation of India and sick leave is considered as defined benefit plan and it remains unfunded.

2.1 Related Party Transactions as per Accounting Standard 18:

a) Name of related party and description of relationship with whom transactions taken place.

1) Key Management Personnel:

A) Ramchandra R. Gandhi

2) Relatives of key Management Personnel:

a) Rajesh R. Gandhi

b) Virendra R. Gandhi

c) Nija K.Gandhi

3) Group of Individuals having significant influence over the company & relatives of such individuals. a) Devanshu L. Gandhi

4) Enterprises owned or significantly influenced by group of individuals or their relatives who have significant influence over the company.

a) Vadilal Industries Ltd.

b) Vadilal Soda Fountain.

c) Vadilal International Pvt Ltd.

d) Vadilal Forex and Consultancy Services Ltd. (Formaly known as Vadilal Hapinezz Parlour Ltd.)

Note :

a) Payment to key management personnel in form of Managing Director's remuneration is shown in Note No. 27.5).

b) Director's Sitting fees is shown seperately in accounts.

c) Figures in bracket relates to previous year.

d) Transaction of Purchase are shown net of VAT/CST and Outstanding of Trade Payables are inclusive of VAT/CST

e) Vadilal Forex and Consultancy Services Ltd. Is earlier as Vadilal Happinezz Parlour Ltd.

2.2 Segment information as per Accounting Standard 17:

Segment Reporting as defined in Accounting Standard 17 is not applicable since revenue of Segment of other trading operations in food products does not exceed 10% of total revenue. Similarly as company sells its products in India there are no reportable geographical Segments.

2.3 Operating Leases as per Accounting Standard 19:

(a) The Company has taken various residential, office and godown premises under operating lease or leave and license agreements. These are generally not non-cancellable and range between 11 months to 36 months under leave and license or longer for other leases and are renewable by mutual consent on mutually agreeable terms. The company has given refundable interest free security deposits under certain agreements.

(b) Lease payments are recognised as expense in the Statement of Profit & Loss on a Straight Line basis over the lease term under "Other Expenses" in Note 24 "

2.4 Earning per share as per Accounting Standard 20:

a) The amount used as the numerator in calculating basic and diluted earnings per share is the net profit for the year disclosed in the Statement of profit & loss.

b) The weighted average number of equity shares used as the denominator in calculating both basic & diluted earnings per share is 8,62,668 (P.Y.8,62,668).

---

Mar 31, 2011

1. CONTINGENT LIABILITIES NOT PROVIDED FOR :

As on As on

31-03-2011 31-03-2010

(Rs In Lacs) (Rs In Lacs)

(a) Estimated amount of Contracts remaining to be executed on Capital account and not provided For (net of advances). 214.45 260.85

(b) Claims against the Company not acknowledged as debt / against which appeal has been filed.

(i) Sales Tax* 31.14 9.52

(ii) Others 20.77 20.77

(iii) Income Tax* 20.21 15.51

(c) Outstanding amount of bills accepted by the company 1106.93 1639.88

(d) Guarantees given by the company against Term Loans 800.00 800.00 given to company in which Directors are interested

Outstanding against this as at 31.03.2011 542.87 685.72

*(Disputed Statutory dues pending at Office of Deputy Commissioner (Appeal)

Note : Future Cash outflows in respect of 1 (b) above depends on ultimate settlement / conclusions with the relevant authorities.

2. Certain balances of debtors, creditors, loans and advances and deposits from dealers/distributors are subject to confirmation. Any adjustments,if required, would be made at the time of reconciliation/settlement of the Accounts.

3. Based on the information available with the company, there are no suppliers who are registered under the Micro, Small & Medium Enterprises Development Act, 2006 as at 31st March 2011. Hence, the informations required under the Mirco, Small & Medium Enterprises Development Act, 2006 is not disclosed. This is relied upon by Auditors.

The Computation of net profit U/s 349 of The Companies Act 1956 is not given as no commission is paid to the Managing Director in view of inadequate profit as per such computation.

4. (a) The Company has taken various residential, office and godown premises under operating lease or leave and license agreements. These are generally not non-cancellable and range between 11 months to 36 months under leave and license or longer for other leases and are renewable by mutual consent on mutually agreeable terms. The company has given refundable interest free security deposits under certain agreements.

(b) Lease payments are recognised as expense in the Profit & Loss Statement on a Straight Line basis over the lease term under "Rent" in Schedule 18 "Selling, Distribution & Other Expenses".

5. Segment Reporting as defined in Accounting Standard 17 is not applicable since revenue of segment other than trading operations in food products does not exceed 10% of total revenue.Similarly as company sells its products in India there are no reportable geographical segments.

6. EARNINGS PER SHARE:

a) The amount used as the numerator in calculating basic and diluted earnings per share is the net profit for the year disclosed in the profit & loss account.

b) The weigthed average number of equity shares used as the denominator in calculating both basic & diluted earnings per share is 8,62,668 (P.Y.8,62,668).

7. RELATED PARTY DISCLOSURES:

a) Name of related party and description of relationship with whom transactions taken place.

1) Key Management Personnel

a) Shri Ramchandra R. Gandhi

2) Relative of Key Management Personnel

a) Shri Rajesh R. Gandhi

b) Shri Virendra R. Gandhi

c) Nija K.Gandhi

3) Group of Individuals having significant influence over the company & relatives of such individuals. a) Shri Devanshu L. Gandhi

4) Enterprises owned or significantly influenced by group of individuals or their relatives who have significant influence over the company.

a) Vadilal Industries Ltd.

b) Vadilal Soda Fountain.

c) Vadilal International Pvt Ltd.

d) Vadilal Hapinezz Parlour Ltd.

Note : a) Payment to key management personnel in form of Managing Director's remuneration is shown in Note No. 4.

b) Sitting fees to the other Directors is disclosed elsewhere in accounts.

c) Figures in bracket relates to previous year.

8. (i) Defined Contribution Plans :

Amount of Rs. 37.41/-Lacs (P.Y. Rs. 26.01/-Lacs) is recognised as expenses and included in "Employee's Expenses" (schedule 17.1) in the Profit and Loss Account.

Note:-Amount not available for Experience adjustment on plan liabilities and on plan Assets as per acturial certificate for Gratuity Plan and Leave Encashment.

(h) The company expects to fund Rs. 5.00/- Lacs (P.Y.Rs. 15.45/- Lacs) towards gratuity plan and Rs.15.00/- Lacs (P.Y.Rs. 9.05/- Lacs) towards Provident Fund plan during the year 2011-12.

Notes: i) The company provides retirement benefits in the form of Provident Fund, Gratuity and Leave Encashment. Provident Fund contributions made to "Government Administrated Provident Fund" are treated as defined contribution plan since the company has no further obligations beyond its monthly contributions. Gratuity is treated as defined benefit plan, and is administrated by making contributions to Group Gratuity Scheme of Life Insurance Corporation of India. Leave encashment is considered as defined benefit plan is administrated by making contributions to the Group Leave Encashment Scheme of Life Insurance Corporation of India and sick leave is considered as defined benefit plan and it remains unfunded.

9. Previous year figures have been regrouped/rearranged wherever necessary to make them comparable with current year figures

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Mar 31, 2010

1. CONTINGENT LIABILITIES NOT PROVIDED FOR :

As on As on

31-03-2010 31-03-2009

(Rs In Lacs) (Rs In Lacs)

(a) Estimated amount of Contracts remaining to be executed on Capital account and not provided For (net of advances). 260.85 39.84

(b) Claims against the Company not acknowledged as debt / against which appeal has been filed.

(i) Sales Tax* 9.52 9.52

(ii) Others 20.77 18.80

(iii) Income Tax* 15.51 28.50

(c) Outstanding amount of bills accepted by the company 1639.88 850.43

(d) Guarantees given by the company against Term Loans 800.00 800.00 given to company in which Directors are interested

Outstanding against this as at 31.03.2010 685.72 800.00

*(Disputed Statutory dues pending at Office of Deputy Commissioner of Tax)

Note : Future Cash outflows in respect of 1 (b) above depends on ultimate settlement / conclusions with the relevant authorities.

2. Certain balances of debtors, creditors, loans and advances and deposits from dealers/distributors are subject to confirmation.Any adjustments,if required, would be made at the time of reconciliation/settlement of the Accounts.

3. Based on the information available with the company, there are no suppliers who are registered under the Micro, Small & Medium Enterprises Development Act, 2006 as at31st March 2010. Hence, the informations required under the Mirco, Small & Medium Enterprises Development Act, 2006 is not disclosed. This is relied upon by Auditors.

4. Segment Reporting as defined in Accounting Standard 17 is not applicable since revenue of segment other than trading operations in food products does not exceed 10% of total revenue.Similarly as company sells its products in India there are no reportable geographical segments.

5. EARNINGS PER SHARE:

a) The amount used as the numerator in calculating basic and diluted earnings per share is the net profit for the year disclosed in the profit & loss account.

b) The weigthed average number of equity shares used as the denominator in calculating both basic & diluted earnings per share is 8,62,668 (P.Y. 8,70,148).

6. RELATED PARTY DISCLOSURES:

a) Name of related party and description of relationship with whom transactions taken place.

1) Key Management Personnel

a) Shri Ramchandra R. Gandhi

2) Relative of Key Management Personnel

a) Shri Rajesh R. Gandhi

b) Shri Virendra R. Gandhi

3) Group of Individuals having significant influence over the company &relatives of such individuals. a) Shri Devanshu L. Gandhi

4) Enterprises owned or significantly influenced by group of individuals or their relatives who have significant influence over the company.

a) Vadilal Industries Ltd.

b) Vadilal Soda Fountain.

c) Vadilal International Pvt Ltd.

d) Vadilal Hapinezz Parlour Ltd.

7. On technical evalution considering the usage, life and place of display of Glow sign board, the company has from current year decided to treat such Glow sign Boards as advertisement expenses, which hitherto was capitalised.Current year amount charged off as expense under Advertisement, Sales Promotion & Publicity Expenses on account of Glow sign boards purchased during the year amounts to Rs. 128.69 lacs.