ROHIT J. PATEL - Vadilal · ROHIT J. PATEL - Director BOARD OF DIRECTORS RAMCHANDRA R. GANDHI Chairman ... To appoint a Director in place of Mr. Chaitan M. Maniar, who retires by

24th ANNUAL REPORT 2007-2008 (1)

- Director

- Director (upto 24-6-2007)

- Director

- Director

BOARD OF DIRECTORS

RAMCHANDRA R. GANDHIChairman

VIRENDRA R. GANDHIVice-Chairman & Managing Director

RAJESH R. GANDHIDEVANSHU L. GANDHI

Managing Directors

C.M. MANIARM.N. VORA

KSHITISH M. SHAHROHIT J. PATEL

NIKHIL PATELCompany Secretary

AUDITORSM/s. Kantilal Patel & Co.

Chartered Accountants, Ahmedabad(A member Firm of Polaris International, USA)

BANKERSBank of Baroda • State Bank of India • State Bank of Travancore • South Indian Bank Ltd.

Export Import Bank of India (Exim Bank) • IDBI Bank Ltd.

REGISTERED OFFICE & SHARE DEPARTMENTVadilal House, Shrimali Society, Nr. Navrangpura Rly. Crossing, Navrangpura, Ahmedabad – 380 009

Phone : 079 – 26564019 to 24 • Fax : 079 – 26564027

REGISTRAR & SHARE TRANSFER AGENT(For Physical & Demat)

MCS Limited, 101, Shatdal Complex, 1st Floor, Opp. Bata Show Room, Ashram Road, Ahmedabad – 380 009.Phone : 079 – 26582878, 26584027 Fax : 079 – 26581296

FACTORIESIce-cream Division

Village Pundhra, Tal. Mansa, Dist. Gandhinagar (Gujarat)Parsakhera Industrial Area, Bareilly (Uttar Pradesh)

Dudheshwar Road, Ahmedabad (Gujarat)

Processed Foods DivisionDharampur, Dist. Valsad (Gujarat)

Forex DivisionVadilal House, Navrangpura, Ahmedabad.

Web : www.vadilalmarkets.com

E-mail for Investor [email protected] : www.vadilalgroup.com

VADILAL INDUSTRIES LIMITED (2)

NOTICE

NOTICE is hereby given that the 24th ANNUALGENERAL MEETING of the members of VADILALINDUSTRIES LIMITED will be held on Monday, the29th September, 2008, at 12.30 p.m., at Sheth ShriAmrutlal Hargovandas Memorial Hall, GujaratChamber of Commerce & Industry (GCCI), AshramRoad, Ahmedabad - 380 009 to transact the followingbusiness :

ORDINARY BUSINESS :

1) To receive, consider and adopt the BalanceSheet as at 31st March, 2008 and the Profit andLoss Account for the year ended on that dateand reports of the Directors and Auditors thereon.

2) To declare dividend on Equity Shares for theyear ended on 31st March, 2008.

3) To appoint a Director in place of Mr. Chaitan M.Maniar, who retires by rotation and being eligible,offers himself for re-appointment.

4) To appoint a Director in place of Mr. Kshitish M.Shah, who retires by rotation and being eligible,offers himself for re-appointment.

5) To appoint M/s. Kantilal Patel & Co., CharteredAccountants, Ahmedabad, as Statutory Auditorsof the Company to hold office from the conclusionof this Meeting until the conclusion of the nextAnnual General Meeting and to authorise theBoard of Directors of the Company to fix theirremuneration.

SPECIAL BUSINESS :

6) Increase in remuneration of Mr. Maulin P. Surti,Vice-President (Food Processing andPurchase), who is a relative of Mr. RamchandraR. Gandhi, Chairman of the Company.

To consider and, if thought fit, to pass, with orwithout modification(s), the following resolutionas a Special Resolution :

“RESOLVED THAT pursuant to the provisionsof Section 314 and other applicable provisions,if any, of the Companies Act, 1956 including anystatutory modification or re-enactment thereoffor the time being in force and as may beenacted from time to time, the Directors’ Relatives(Office or Place of Profit) Rules, 2003 andsubject to approval of the Central Governmentand such other approvals, permissions andsanctions, if required and as may be necessary,consent of the Company be and is herebyaccorded to Mr. Maulin P. Surti, who is arelative of Mr. Ramchandra R. Gandhi, Chairmanof the Company, and who holds office as a Vice-President (Food Processing and Purchase),and to hold and continue to hold an office orplace of profit under the Company as Vice-President (Food Processing and Purchase), orwith such other designation as the Company’s

management may, from time to time, decideupon, a revised monthly salary and otherallowances, benefits and perquisites includingbonus, reimbursement of medical expenses,LTA/LTC etc., for an amount as may be decidedby the Board/Management from time to time,within an overall limit of Rs. 1,50,000/- p.m.,with effect from 1st October 2008 or such otheramount as may be decided by the CentralGovernment, while granting its approval to theaforesaid revision in remuneration and acceptableto Mr. Maulin P. Surti.

RESOLVED FURTHER THAT the Board ofDirectors of the Company be and are herebyseverally authorised to promote him to highercadres and/or to sanction him acceleratedincrements within the said cadre or highercadre as and when they deem fit, subject,however, to the rules and regulations of theCompany, in force, from time to time, providedthat total monthly remuneration shall not exceedRs. 1,50,000/- p.m. or such other amount asmay be decided by the Central Government,while granting its approval to the revision.

RESOLVED FURTHER THAT the Board ofDirectors of the Company be and are herebyauthorised to make application to the CentralGovernment for seeking its approval for therevision in the remuneration of Mr. Maulin P.Surti, within the overall limit of Rs. 1,50,000/-p.m., to sign the application form, annexures,affidavit, Memorandum of Appearance and allother deeds and documents as may be requiredto be executed and to represent the Companybefore the Central Government, Registrar ofCompanies and such other authorities as maybe required in this matter, to accept thesuggestions, modifications or alterations assuggested by the Central Government whilegranting its approval and to do all such acts,deeds, matters and things as may be required,proper and expedient to give effect to thisresolution.”

7) Increase in Borrowing Limits

To consider and if thought fit, to pass with orwithout modification(s), the following resolutionas an Ordinary Resolution:

“RESOLVED THAT the Board of Directors(hereinafter referred to as “the Board”, whichterm shall be deemed to include any Committeewhich the Board may constitute for this purpose),be and is hereby authorized, in accordance withSection 293(1)(d) of the Companies Act, 1956(including any statutory modification or re-enactment thereof for the time being in force)and the Articles of Association of the Company,to borrow any sum or sums of money whetherrupee loans or foreign currency loans or other


external commercial borrowings (including non-fund based facilities) from time to time at theirdiscretion, for the purpose of the business ofthe Company, from any one or more Banks,Financial Institutions and other persons, firms,bodies corporate or from any other sources,notwithstanding that the monies to be borrowedtogether with the monies already borrowed bythe Company (apart from temporary loansobtained from the Company’s Bankers in theordinary course of business) may, at any time,exceed upto a sum of Rs. 100 Crores (RupeesOne Hundred Crores) over and above theaggregate of the then paid-up capital of theCompany and its free reserves (that is to sayreserves not set apart for any specific purpose)and that the Board of Directors be and is herebyempowered and authorized to arrange or fix theterms and conditions of all such monies to beborrowed from time to time as to interest,repayment, security or otherwise as they may,in their absolute discretion, think fit.

RESOLVED FURTHER THAT for the purpose ofgiving effect to this resolution, the Board be andis hereby authorized to do all such acts, deeds,matters and things as it may in its absolutediscretion thinks necessary, proper, or desirableand to settle any question, difficulty, doubt thatmay arise in respect of the borrowing(s) aforesaidand further to do all such acts, deeds and thingsand to execute all documents and writings asmay be necessary, proper, desirable or expedientto give effect to this resolution.”

8) Creation of Charge

To consider and if thought fit, to pass with orwithout modification(s), the following resolutionas an Ordinary Resolution:

“RESOLVED THAT the consent of the Companybe and is hereby granted in terms of Section293(1)(a) and all other applicable provisions ofthe Companies Act, 1956, (including any statutorymodification or re-enactment thereof, for thetime being in force), to the Board of Directors(hereinafter referred to as “the Board” whichterm shall be deemed to include any Committeewhich the Board may constitute for the purpose)to mortgage/hypothecate and/or create charge/pledge, etc. in addition to the mortgages/hypothecation/charges created/to be createdby the Company, in such form and manner andwith such ranking and at such time and on suchterms as the Board may determine, on all or anyof the movable and/or immovable properties ofthe Company, both present and future and/orthe whole or any part of the undertaking(s) ofthe Company together with the power to takeover the management of the business andconcern of the Company in certain events ofdefault, in favour of the Banks/Financial

Institutions/other Lender(s), Agent(s) andTrustee(s) for securing the borrowings availed/to be availed by the Company and/or any of theCompany’s holding / subsidiary / affiliate /associate Company, by way of loan(s) (in foreigncurrency and/or rupee currency) and Securities(comprising fully/partly convertible Debenturesand/or Non Convertible Debentures with or withoutdetachable or non-detachable Warrants and/orsecured premium notes and/or floating ratesnotes/bonds or other debt instruments), issued/to be issued by the Company, from time to time,subject to the limits approved under Section293(1)(d) of the Companies Act, 1956, togetherwith interest at the respective agreed rates,additional interest, compound interest in caseof default, accumulated interest, liquidateddamages, commitment charges, premia onprepayment, remuneration of the Agent(s)/Trustees, premium (if any) on redemption, allother costs, charges and expenses, includingany increase as a result of devaluation /revaluation / fluctuation in the rates of exchangeand all other monies payable by the company interms of the Loan Agreement(s)/ otherAgreement(s), Debenture Trust Deed(s) or anyother document, entered into/to be entered intobetween the Company and the Lender(s)/Agent(s)and Trustee(s) in respect of the said loans/borrowings / debentures and containing suchspecific terms and conditions and covenants inrespect of enforcement of security as may bestipulated in that behalf and agreed to betweenthe Board of Directors or Committee thereofand the Lender(s) / Agent(s) /Trustee(s).

RESOLVED FURTHER THAT for the purpose ofgiving effect to this resolution, the Board and/orits duly constituted Committee be and are herebyauthorized to finalise, settle and execute suchdocuments/deeds/writings/papers/agreements asmay be required and do all such acts, deeds,matters and things, as it may in its absolutediscretion thinks necessary, proper or desirableand to settle any question, difficulty or doubtthat may arise in regard to creating mortgages/charges as aforesaid.”

By order of the Board

For VADILAL INDUSTRIES LIMITED

RAMCHANDRA R. GANDHI

Chairman

Registered Office :Vadilal House, Shrimali Society,Nr. Navrangpura Rly. Crossing,Navrangpura,Ahmedabad - 380 009.

Dated : 30th July, 2008


NOTES :

(a) A MEMBER ENTITLED TO ATTEND AND VOTEAT THE MEETING IS ENTITLED TO APPOINTPROXY TO ATTEND AND VOTE ON A POLLINSTEAD OF HIMSELF AND THAT THE PROXYNEED NOT BE A MEMBER OF THE COMPANY.

THE INSTRUMENT APPOINTING PROXYSHOULD HOWEVER BE DEPOSITED AT THEREGISTERED OFFICE OF THE COMPANY NOTLESS THAN 48 HOURS BEFORE THECOMMENCEMENT OF THE MEETING.

(b) Corporate Members intending to send theirauthorised representatives to attend the meetingare requested to send a certified copy of theBoard Resolution authorising their representativesto attend and vote on their behalf at the meeting.

(c) In case of joint holders attending the meeting,only such joint holder who is higher in the orderof names will be entitled to vote.

(d) The Explanatory Statement as required underSection 173(2) of the Companies Act, 1956 inrespect of Special Business mentioned in theabove Notice is annexed hereto.

(e) The Register of Members and Share TransferBooks of the Company will remain closed from15th September, 2008 to 29th September, 2008(both days inclusive) for the purpose of paymentof dividend on Equity Shares for the yearended 31st March, 2008 as recommended bythe Board and if declared at the meeting.

(f) Dividend @ 12% on Equity Shares for the yearended on 31st March, 2008 as recommendedby the Board, if declared at the meeting, will bepaid without deduction of tax at source :

# to those members whose names appear onthe Register of Members after giving effectto all valid share transfers in physical formlodged with the Company / Share TransferAgent on or before 13th September, 2008,or

# in respect of shares held in electronic form,to those “Beneficial Owners” whose namesappear in the Statement of BeneficialOwnership furnished by NSDL and CDSL asat the end of business hours on 14thSeptember 2008.

(g) Pursuant to Section 205A of the CompaniesAct, 1956, the Company has already transferredall unclaimed dividends declared upto the financialyear ended on 31st March, 1994 (18 months) tothe General Revenue Account of the CentralGovernment as required by the CompaniesUnpaid Dividend (Transfer to the General RevenueAccount of the Central Government) Rules,1978. Those Shareholders who have so far notclaimed or collected their dividend upto theaforesaid financial year may claim their dividend

by an application in Form II of the aforesaidRules to the Registrar of Companies, Gujarat atROC Bhavan, Opp. Rupal Park, Behind AnkurBus Stand, Naranpura, Ahmedabad - 380 013.

However, pursuant to Section 205A of the Actas amended by the Companies (Amendment)Act, 1999 (1st Amendment), which came intoeffect from 31-10-1998, the Company has alreadytransferred unclaimed dividend declared for thefinancial year ended on 31st March, 1995, 31stMarch, 1996, 31st March, 1997 (Interim & FinalDividend) and 30th September, 1998 (18 months)to the Investor Education and Protection Fundestablished by the Government under Section205C(1) of the Act.

The amount of dividend for the financial yearended on 31st March, 2005, 31st March, 2006and 31st March, 2007, remaining unpaid orunclaimed for a period of 7 years is due fortransfer to the Investor Education and ProtectionFund on 3rd November, 2012, 1st November,2013 and 3rd November, 2014 respectively.Members who have so far not encashed theirdividend warrants for the said financial yearsare requested to approach the Company forrevalidation or duplicate dividend warrants.Thereafter, no claims shall lie against the saidFund or the Company for the amount of dividendso transferred nor shall any payment be madein respect of such claims.

(h) Members who hold shares in dematerialisedform are requested to bring their Client ID andDP ID numbers for easy identification ofattendance at the meeting.

(i) Members are requested to intimate immediatelythe change in their registered address, if any, totheir Depository Participants (DPs) in respect oftheir electronic share accounts and to theCompany in respect of their physical sharefolios, if any. In case of mailing address mentionedon this Annual Report is without PINCODE,members are requested to kindly inform theirPINCODE immediately.

(j) The documents and/or letters referred to in theResolutions and in the accompanying noticeare open for inspection for the members at theRegistered Office of the Company on all workingdays between 2.00 p.m. and 4.00 p.m., upto thedate of this Annual General Meeting.

(k) Members are requested to bring their copy ofAnnual Report to the meeting, as the copies ofAnnual Report will not be distributed at themeeting.

(l) Members seeking any further information aboutthe Accounts and/or Operations of the Companyare requested to send their queries to theCompany at its Registered Office, at least TENdays before the date of the meeting.


(m) At the ensuing Annual General Meeting, Mr.Chaitan M. Maniar and Mr. Kshitish M. Shah,Directors of the Company, shall retire by rotationand being eligible, offer themselves for re-appointment.

As required under Clause 49 of Listing Agreementwith the Stock Exchanges, given below are thedetails of the above Directors to be re-appointedas Directors of the Company :-

Mr. Chaitan M. Maniar

Mr. Chaitan M. Maniar is a Partner in the Firmof Crawford Bayley & Co., Solicitors & Advocates,Mumbai. He holds degrees of Master of Arts(Economic & Politics), Bachelor of Commerceand Bachelor of Laws of the University ofBombay. He is an Advocate and a member ofthe Maharashtra Bar Council. He specialises inCorporate and Commercial Laws with specialreference to Company Law, Foreign & TechnicalCollaborations, Anti-trust and Competition Laws,Cosmetics and Insecticides, Intellectual andIndustrial Property Laws - Trade Marks, Patents,Designs and Copyright and drafting of documentsgenerally. He is a Director in following otherCompanies. He is a member of RemunerationCommittee of the Directors of the Company. Heis also a member/chairman of various committeesof the other Companies, such as Audit Committee,Share Transfer Committee, Shareholder/Investors’ Grievance Committee, as mentionedhereunder. Mr. C. M. Maniar does not hold anyshares in Vadilal Industries Limited.

Directorship:

� Akzo Nobel Coatings India Private Limited

� Amsar Private Limited

� Chemtex Engineering of India Limited(Alternate Director)

� Gujarat Ambuja Exports Limited

� Foods & Inns Limited

� Godfrey Philips India Limited

� HGC Foundation Private Limited

� Hindalco Industries Limited

� Indo-Euro Investment Company Limited

� Indian Card Clothing Company Limited

� Multi Commodity Exchange of India Limited

� Northpoint Trading & Research Private Limited

� Pioneer Investcorp Limited

� Sudal Industries Limited

� Twenty-First Century Printers Limited

� Varun Shipping Company Limited

Chairman of the Board Committee:

Shareholders/Investors’ Grievance Committee:

� Varun Shipping Company Limited

Member of the Board Committees:

Audit Committee:� Hindalco Industries Limited� Varun Shipping Company Limited� Twenty-First Century Printers Limited� Pioneer Investcorp Limited

Shareholders/Investors’ Grievance Committee:� Hindalco Industries Limited� Twenty-First Century Printers Limited� Pioneer Investcorp Limited� Godfrey Philips India Limited

Share Transfer Committee:� Godfrey Philips India Limited� Pioneer Investcorp Limited� Twenty-First Century Printers Limited

Mr. Kshitish M. ShahMr. Kshitish M. Shah is BS. (Text. Chemistry), BS(Textile Technology), Masters in Textile TechnologyN. C. State University (USA). He has worked as aVice-President of Crystex Corporation, USA from1971 to 1975. He is an Industrialist, manufacturingdiecasting, one of the most diversified product linein diecasting industry. It is the largest diecastingunit in India and largest in the State of Gujarat. Heis a Joint-Managing Director of Textile Traders Co-Operative Bank Ltd. He is a Honarary Secretary ofGujarat Cancer Society, Apang Manav Mandal. Heis a Trustee of Jivaraj Mehta Memorial Foundation,Saath - Suicide Prevention Centre and he is aFounder of Madanmohan Ramanlal Centre ofHuman Resources Development, AhmedabadManagement Association. He is a Director in thefollowing other Companies. He is a member of theAudit Comittee of your Company. He is also aChairman of Remuneration Comittee of yourCompany. He is also a chairman of Audit Committeeof Vadilal Chemicals Limited. Mr. Kshitish M.Shah does not hold any shares in Vadilal IndustriesLimited.

Directorship:� Purvish Services Pvt. Ltd.� M. Ramanlal Holdings Pvt. Ltd.� Shree Vyankateswar Engineering Pvt. Ltd.� Vadilal Chemicals Ltd.� Textile Traders Co-op. Bank Ltd.� 21st Century Equipments Pvt. Ltd.

ANNEXURE TO NOTICE

EXPLANATORY STATEMENT AS REQUIRED UNDERSECTION 173(2) OF THE COMPANIES ACT, 1956.

In conformity with the provisions of Section 173(2) ofthe Companies Act, 1956, the following ExplanatoryStatement sets out all material facts relating toSpecial Business mentioned in the accompanyingNotice and should be taken as forming part of theNotice.


ITEM NO. 6

Mr. Maulin P. Surti, a relative of Mr. Ramchandra R.Gandhi, Chairman of the Company, was appointedas General Manager (Food Processing) with a Basicsalary ofRs. 9400/- p.m. in the scale of 5600-500-8100-650-13300 and other perquisites, allowances and benefitsaggregating to Rs. 42,000/- p.m. The said remunerationof Rs. 42,000/- was approved by the Shareholders ofthe Company by way of a Special Resolution passedat an Extra-Ordinary General Meeting of the Companyheld on 17th June, 2003.

Keeping in view the result oriented contributionmade by him in the growth and development of theCompany, he has been elevated as Vice-President(Food Processing and Purchase) and the Companyproposes to increase the Salary to be paid to Mr.Maulin P. Surti, from the present salary of Rs.42,000/- p.m., for such amount as may be decidedby the Board/Management from time to time withinoverall limit of Rs. 1,50,000/- p.m., with effect from1st October, 2008.

Pursuant to the provisions of Section 314 of theCompanies Act, 1956 read with Rule 10C of theCompanies (Central Government’s) General Rulesand Forms, 1956 and the Directors’ Relatives (Officeor Place of Profit) Rules, 2003, no relative of aDirector shall be appointed at any office or place ofprofit in the Company, which carries a total monthlyremuneration of Rs. 50,000/- or more, except withthe prior approval of shareholders of the Companyby a Special Resolution and the approval of CentralGovernment.

The Directors therefore recommend the Resolutionas mentioned in Item No. 6 of the Notice for approvalof the Members.

Save and except Mr. Ramchandra R. Gandhi, noneof the Directors is, in any way, concerned or interestedin the said resolution.

ITEM NO. 7

In terms of the provisions of Section 293(1)(d) of theCompanies Act, 1956, the Board of Directors of theCompany, cannot except with the consent of theCompany in general meeting, borrow moneys, apartfrom temporary loans obtained from the Company’sbankers in the ordinary course of business, in excessof aggregate of the paid-up capital and its freereserves that is to say reserves not set apart for anyspecific purpose.

The Shareholders of the company had in their meetingheld on 18th November, 1995 approved borrowingsupto an amount of Rs. 75 Crores and authorised theBoard to borrow funds from time to time for thebusiness of the company.

Keeping in view the Company’s business requirementsand its growth plans including expansion maderecently by the Company in its Ice-cream manufacturing

plants situated at Pundhra and Bareilly and ProcessedFood manufacturing plant situated at Dharampur, itis considered desirable to increase the said borrowinglimits from Rs. 75 Crores to Rs. 100 Crores.


None of the Directors of the Company is, in any way,concerned or interested in the said resolution.

ITEM NO. 8

The Borrowings by a Company, in general is requiredto be secured by mortgage/hypothecation/pledge orcharge on all or any of the movable or immovableproperties of the Company in such form, manner andranking as may be determined by the Board ofDirectors of the Company from time to time, inconsultation with the lender(s).

The mortgage/hypothecation/pledge and/or chargeon any of the movable and/or immovable propertiesand/or the whole or any part of the undertaking(s) ofthe Company, to secure borrowings of the Companyor of any of its holding, subsidiary, affiliate orassociate company, with a power to the chargeholders to take over the management of the businessand concern of the Company in certain events ofdefault, may be regarded as disposal of the Company’sundertaking(s) within the meaning of Section 293(1)(a)of the Companies Act, 1956. Hence, it is necessaryfor the Members to pass a resolution under the saidSection.


None of the Directors of the Company is, in any way,concerned or interested in the said resolution.

By order of the Board



Chairman

Registered Office :

Vadilal House, Shrimali Society,

Nr. Navrangpura Rly. Crossing,

Navrangpura,

Ahmedabad - 380 009.

Dated : 30th July, 2008


DIRECTORS’ REPORTTo,The members,VADILAL INDUSTRIES LIMITEDAhmedabad

Your Directors have pleasure in presenting herewith the 24th Annual Report together with the Audited Statement ofAccounts for the year ended on 31st March, 2008.

FINANCIAL RESULTS (Rs. In Lacs)

Particulars Year ended Previous year31-3-2008 ended 31-3-2007

(a) Profit for the year before 1,425.92 1483.79Depreciation and Financial Expenses

(b) Less: Depreciation 410.66 291.41 Financial Expenses (Net) 428.00 838.66 302.67 594.08

(c) Profit before Exceptional & Prior Year items 587.26 889.71(d) Prior Year’s Adjustments (Net) (0.30) (2.21)

(e) Profit before tax 586.96 887.50(f) Provision for Tax

— Current 100.10 272.00— Deferred Tax 87.52 (5.71)— Fringe Benefit Tax 13.00 11.00— (Short) / Excess Provision of Tax / Deferred (6.16) (51.35) Tax of earlier years (Net)

(g) Net Profit after Tax 380.18 558.86(h) Profit brought forward 263.65 255.71

Amount available for appropriation 643.83 814.57

Appropriation— Proposed Dividend 86.26 86.26— Tax on Proposed Dividend 14.66 14.66— Transfer to General Reserves 259.40 450.00— Balance carried to Balance Sheet 283.51 263.65

Total 643.83 814.57

DIVIDEND

The Directors have recommended dividend of 12% on 71,88,230 Equity Shares of Rs. 10/- each of the Company for theFinancial Year ended on 31st March, 2008. The Company declared 12% dividend for the previous Financial Year ended on 31stMarch, 2007. This will absorb Rs. 86.26 lacs as against Rs. 86.26 lacs absorbed in the previous year. The corporate dividendtax payable by the Company on the said dividend will be Rs. 14.66 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 those shareholders whose names appear in theRegister of Members of the Company as on 29th September, 2008.

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 ofChartered Accountants of India, your Company has made additional disclosures in the Notes on Accounts for the year underreview in respect of Related Party Transactions, Employees Benefits, Derivative Instruments, Segmental Reporting (in Noteson Consolidated Accounts), Calculation of EPS, etc.

QUALITY ASSURANCE AND SYSTEMS

ISO 22000:2005 AND ISO 9001:2000 CERTIFICATES

Your Company has always made continuous efforts to improve the process of manufacturing and to achieve quality andefficiency in each of its operations. This is evident from the award of ISO 9001:2000 to the Company conferred upon by NemkoAS, 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 also obtained ISO 9001:2000 certification from BVQI, Netherland for its Ice-cream plant at Bareilly in theState of Uttar Pradesh. The Company has also obtained ISO 9001:2000 and 22000:2005 certifications from BVQI, Netherlandfor its Ice-cream plant at Pundhra in the State of Gujarat. The plant has also been certified by Export Inspection Council of India.The Company has also obtained BRC (British Retail Consortium) FOOD GLOBAL STANDARD 2005 from BVQi for its ice-creamplant at Pundhra.

FINANCE :

During the year under review, 3 Term Lenders, namely, State Bank of India, IDBI Bank Ltd. and Exim Bank, have sanctionedto the Company Rupee Term Loan aggregating to Rs. 21 crores to part finance towards expansion-cum-modernisation ofCompany’s existing Ice-cream plants situated at Pundhra and Bareilly and Processed Food plant situated at Dharampur, Dist.Valsad. The Company has also executed necessary security documents in favour of the said Term Lenders for creation ofcharge on immovable and movable properties and current assets of the Company.

The Consortium Banks, namely, Bank of Baroda, State Bank of India, South Indian Bank Ltd., State Bank of Travancore, IDBIBank Ltd. and Exim Bank have enhanced their working capital facilities availed by the Company from Rs. 31.65 crores to Rs.49.25 crores. During the previous financial year, the Company has availed Working Capital Facilities aggregating to Rs. 31.65Crores from the said Consortium Banks. The Company has executed necessary security documents in favour of the saidConsortium Banks for creation of charge on immovable and movable properties and current assets of the Company.

During the year under review, the Company has availed Trade Finance Facility of Rs. 5.00 Crores from Global Trade FinanceLimited, Ahmedabad. The Company had also availed a Short Term Loan of Rs. 2.00 Crores from Development Credit BankLimited, Ahmedabad, however fully repaid during the year under review.

In terms of the provisions of Investor Education and Protection Fund (IEPF) Rules, 2001, during the year under review, theCompany has transferred the unclaimed interest on Fixed Deposit of Rs. 43,313/- upto 31-03-2001, to Investors’ Education& Protection Fund, established by the Central Government under Section 205C(1) of the Companies Act, 1956. The Companyhas also transferred the unclaimed principal amount of Fixed Deposit of Rs. 40,000/- upto 31-03-2001, to Investors’ Education& Protection Fund.

FIXED DEPOSITS :

The Company has no overdue deposits outstanding other than those unclaimed deposits of Rs. 24.30 lacs as on 31st March,2008. As on date of this Report, deposits aggregating Rs. 12.70 lacs thereof have been claimed and either paid or renewed.The Company has mobilised Fixed Deposit of Rs. 556.72 lacs during the year ended on 31st March, 2008, after complying withthe provisions of Section 58 A of the Companies Act, 1956 read with the Companies (Acceptance of Deposits) Rules, 1975 asamended. After repaying the maturities during the year, the total Fixed Deposits as on 31st March, 2008 stood at Rs. 736.99lacs.

CORPORATE GOVERNANCE :

Being a Listed Company, the Company has taken necessary measures to comply with the Listing Agreement with the StockExchanges including revised Clause 49 regarding Corporate Governance. A separate report on Corporate Governance for theyear ended on 31st March, 2008 is produced as a part of this Annual Report. A certificate from Statutory Auditors of the Companyregarding compliance of Corporate Governance as stipulated under the revised Clause 49 of Listing Agreement is obtained bythe Company and annexed to the Directors’ Report.

RESPONSIBILITY STATEMENT :

To the best of their knowledge and belief and according to the confirmation and explanations obtained by them, your Directorsmake 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 materialdepartures have been made from the same;

b) that they have selected such accounting policies and applied them consistently and made judgments and estimates thatare 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 financialyear 31st March, 2008 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 withthe provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detectingfraud 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 interestare adequately insured.

CONSOLIDATED FINANCIAL STATEMENTS:

As stipulated by Clause 32 of Listing Agreement with Stock Exchanges, Consolidated Financial Statements of the Companyand its Associates, namely, Vadilal Cold Storage, a Partnership Firm and Vadilal Chemicals Limited, an Associate Companyfor the year ended on 31st March, 2008 have been prepared by the Company in accordance with the requirements of AccountingStandard 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 AnnualReport.


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 Reportof Board of Directors) Rules, 1988, details relating to Conservation of Energy, Technology Absorption and Foreign ExchangeEarnings 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 ofthe 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 StockExchange Ltd. upto the Financial Year 2008-2009.

PARTICULARS OF EMPLOYEES:

The statement of particulars of employees providing information as per section 217 (2A) of the Companies Act, 1956 read withCompanies (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 interestedin 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.C. M. Maniar and Mr. Kshitish M. Shah, Directors of the Company, shall retire by rotation at this Annual General Meeting, andbeing eligible, offer themselves for re-appointment. The Members are requested to consider their re-appointment as Directorsof the Company, for which necessary resolutions have been incorporated in the notice of the meeting. The brief resume/detailsrelating to the said Directors, who are to be re-appointed are furnished in the Notes to the Notice of the Annual General Meeting.

AUDITORS :

M/s. Kantilal Patel & Co., Chartered Accountants, Ahmedabad, hold office as Statutory Auditors of the Company until theconclusion of this Annual General Meeting and as recommended by Audit Committee, the Board recommends theirappointment, as Statutory Auditores of the Company, for the Financial Year - 2008-2009 and to hold office from the conclusionof the ensuing 24th Annual General Meeting till the conclusion of the next Annual General Meeting of the Company. TheCompany has received a certificate from the said Auditors under Section 224(1B) of the Companies Act, 1956 to the effect thattheir appointment, if made, would be within the prescribed limits under Section 224(1B) of the Act. The Members are requestedto consider their appointment as Statutory Auditors of the Company for the Financial Year - 2008-2009, at a remuneration tobe decided by the Board of Directors.

ACKNOWLEDGEMENT:

The Directors place on record the appreciation and gratitude for the co-operation and assistance extended by variousdepartments 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 atall levels.

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

By Order of the Board of Directors


Chairman

Ahmedabad,

Dated : July 30, 2008


ANNEXURE “A” TO THE DIRECTORS’ REPORT

MANAGEMENT DISCUSSION AND ANALYSIS

1) INDUSTRY STRUCTURE & DEVELOPMENT, BUSINESS OVERVIEW AND SUSTAINABLE GROWTHOPPORTUNITIES.

a) Ice-cream Division

The ice-cream industry has slowly picked up after opening of the sector in 1997. Per capita consumptionof ice-cream in India is one of the lowest at around 180 ml per annum and the ice-cream penetrationat national level was just 15%, thus had a huge scope. The ice-cream market in India is estimated tobe about US$ 200 million per annum. The industry structure and ongoing transformation offersopportunities for organized players to invest and grow. The Ice-cream division of your Company showinga sustainable growth year to year, which has been triggered by increasing demand for newer varieties& change in consumer preferences, which has been catered by novel products & providing valueaddition to the consumers. There is a considerable increase in demand for impulses & novelties. Thereis a completely new segment of market developing, which consist of catering & institutional customersfrom where a large chunk of revenue is generated. Also with service industry, growing at the rate of 13%,has created demand for ice-cream parlor concept, which is again a focus area for ice-cream industry.

b) Processed Food Division

The country’s share in the world trade of processed fruits and vagetables is less than one percent andonly two percent of India’s total agriculture produce are processed which underlines enormous scopefor investing in processed food sector. The significance of investment potential is emphasised by factorssuch as 300 million upper & middle class segment, increased per capita income & purchasing power,investment friendly and liberal policy initiatives by Government of India, etc.

The major processed food products on offer to domestic as well as international market are canned fruitpulps, frozen fruits and vegetables, ready-to-eat snacks and meals. The overseas and domestic salesaccounts to approximately 75% and 25% respectively of total sales volume generated per annum. Thereis a tremendous growth potential in India for processed foods due to sizeable consuming population,expanding list of metro cities, increased awareness and need to adopt usage of convenience foods.Moreover, in coming years the exports is likely to accelerate due to sales in newer markets, increasedpenetration in existing countries, focus on range of volume products and host of other factors.

c) Forex Division

Money Changing - RBI authorised category II

The Forex Division of the Company is doing Full Fledged Money Changers (FFMC) activities topurchase/sale foreign currencies and travelers cheques, as licensed by RBI.

Amongst Private Money Changers operating from Ahmedabad, the Division is the second to obtain RBIlicence under Category - II. The Division is once again a separate profit generating in its relatedactivities dealing with buying and selling currencies and travelers cheques of all traded currencies, viz. USD, GBP-Sterling, EURO, Canadian Dollars, Australian Dollars. The Division is authorised stockholders of TCs of American Express travel related service.

2) FUTURE STRATEGY


For your Company, the future strategy is to give innovative & value added products to the consumers,as far as the price factor is concerned. With major expansion in both the Pundhra & Bareilly plant, therehas been increase in production capacity to cater to the needs of the markets. With the addition ofimported “Candy Machine” & “Double Sunday Machine” in capacity has created our stronger hold inmarket. Due to this expansion, the Company has been able to add innovative candies (3 layeredcandies, mini candies & innovative chocolate candies) in the product portfolio.

The Company primarily focuses on increasing the ice-cream consumption by offering novel impulses.The Company is committed in eliminating the barriers for availability of ice-cream with focuseddistribution & franchising new Happinezz parlors all over India.

The overall vision of the Company to increase the consumption of ice-cream on a national level is fullysupported by appropriate promotion and market communication. The basic focus of the Company has


been in brand building coupled with quality products & services. The Company is among the frontiersand maximum spender on News paper advertisement all over India. This spending actually surpassesthe annual advertising budget of some of the regional players.

The Company has been negotiating to set up new manufacturing facility at a strategic location in theEastern part of India. This manufacturing facility will suffice the purpose of getting a strong hold in theEastern market together with catering the need of the consumer there. Earlier this was not the case andlooking to the immense potentiality of the market, competitor scenario, and demographic profile of theregion, the Company has taken this strategic decision.

For availability of ice-cream, Vadilal has got the largest fleet of Refrigerated Vehicles in India, backedby the strong Distribution Network of C&F Agents, distributors and retail dealers. Distribution networkis continuously being improved by appointing new C&F Agents, Distributors and Dealers, together withmaking proper investment in respective territories for providing infrastructure. The Company clearlydominated the market in Gujarat, Rajasthan, Uttar Pradesh, Uttaranchal, Haryana and Delhi. Also theregional competitors often feel the presence of Vadilal in West Bengal, Orissa, Bihar, Jharkhand,Madhya Pradesh, Chhattisgarh, Tamilnadu, Chandigarh, Punjab, Himachal Pradesh, and Jammu.


Expansion process

The completion of expansion process at Dharampur Plant will boost up Company’s ability to deliverquality products backed by on-time deliveries. The 2000 MT cold storage has become operational veryrecently enabling the Company to offer temperature sensitive products such as frozen pomegranatekernels etc. Additionally, frozen products can now be offered at more competitive prices due to reducedtransportation costs.

The demand driven by ethnic population residing overseas has contributed to sale of frozen vegetables,fruits, ready-to-eat snacks & meals in the past. The promotional activities will be directed to generatesales through brand building not only amongst NRI’s but also the local popullation of targeted countries.The BRC certification (British Retail Consortium) for retail sales received by the company will ease entryto world renowed Supermarkets worldwide. The Company’s aim is to strengthen the existing distributionchannel in South Pacific and US region and simultaneously increased retail presence in European sub-continent.

In recent times, with reduction of agricultural subsidies, the price of frozen vegetables especially GreenPeas has increased in European markets thereby presenting a window of opportunity to offer suchproducts. The Company is seeking to encash this opportunity to increase sales of frozen vegetables.The frozen fruit products will be marketed with a holistic view but the focus will indeed be frozen mangoproducts. This year a special emphasis will be placed on other tropical fruits such as frozen papaya,guava products.

Domestic Market

Many of the products launched in the overseas markets are also made available in the local markets.The Company has already achieved significant volumes in frozen peas and corn. Apart from this, largequantities of mango pulp and mango ras (a pulp based proprietary product) are also being sold in thedomestic market.

3) HIGHLIGHTS OF FINANCIAL PERFORMANCE AND OPERATIONAL PERFORMANCE.

Inspite of stiff competition, particularly in ice-cream industry, your Company has earned an Income fromOperations of Rs. 13,261.84 lacs during the year ended on 31st March, 2008 as against Rs. 11,979.94 lacsearned during the previous year ended on 31st March, 2007.

Your Company has earned the Gross Profit of Rs. 1425.92 lacs before Depreciation and Financial Expensesduring the year ended on 31st March, 2008 as compared to Rs. 1483.79 lacs earned during the previous yearended on 31st March, 2007.

The Company has earned the Net Profit of Rs. 380.18 lacs during the year ended on 31st March, 2008 afterproviding Financial Expenses and Depreciation and other adjustments and after making Provision for CurrentTax of Rs. 100.10 lacs, Deferred Tax of Rs. 87.52 lacs, Fringe Benefit Tax of Rs. 13.00 lacs and otheradjustments as compared to Net Profit of Rs. 558.86 lacs earned during the previous year ended on 31stMarch, 2007.


4) SEGMENT WISE PERFORMANCE.

The Company has identified three business segments in line with the Accounting Standard on SegmentReporting (AS 17). These are (1) Ice-cream (2) Processed Foods and (3) Others. Below mentioned tablegives the audited financial results of these segments.

Segment revenue, results and capital employedfor the year ended 31st March, 2008 (Rs. in lacs)

Segment Revenue (Sales plus income from services)Ice-cream 10241.17Processed Foods 3058.33Others 197.81

Total: 13497.31Less : Inter-segment revenue (41.50)

Net Sales/Income from Operations 13455.81

Segment Results (PBIT)Ice-cream 844.14Processed Foods 243.56Others 31.10

Total: 1118.80Less : Interest (Net) & prior year adjustment 412.40 Other unallocable expenditure 103.78 516.18

Total Profits (PBT) 602.62

Capital employed in segments(Segment assets less liabilities) - as at 31st March, 2008Ice-cream 5359.50Processed Foods 3621.99Others 124.28

Total Capital employed in segments 9105.77Add : Unallocable corporate assets less corporate liabilities (5,460.23)

Total Capital Employed 3645.54

5) RISK AND CONCERN


The Company is facing competition with major competitors especially on pricing front, though companyovercome the competition successfully in past. New local & regional brands mushrooming locally thatare flooding the markets with cheaper products are creating threats in the market. But the Company withits experience & expertise of more than 8 decades for providing quality ice-cream products is wellequipped to face these developments.


China has always posed serious threat by dumping frozen and canned products at very low prices in theinternational market. But, we can not afford to ignore countries such as Thailand, Vietnam & Phillipines,offering competitively priced pineapple and other fruit products. Even the countries from SouthAmerican subcontinent, engage in volume production of frozen fruits and have sizeable market sharein US and other markets worldwide.

There are many companies in processed food sector in India that have emerged on the internationalscene resulting in increased competition, more so in Ready-to-eat snacks and meals segment.

Although the situation has improved but prime area of concern has always been lack of sufficientinfrastructure, right from cropping areas to the processing plant. The lack of overall cold chain facilityhas remained a bottleneck that results in loss of produce, quality compromise etc. every year.

6) INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY.

In view of the management, the Company has adequate internal control systems for the business processesfollowed by the Company. The External and Internal Auditors carry out periodical reviews of the functioningand suggest changes if required. The Company has also a sound budgetary control system with frequentreviews of actual performance as against those budgeted.

The Audit Committee of the Board meets periodically to review various aspects of the performance of theCompany and also reviews the adequacy and effectiveness of internal control systems and suggestimprovement for strengthening them from time to time. The External Auditors also attend these meetings andconvey their view on the business processes and also of the policies of financial disclosures. When foundnecessary, the Committee also gives suggestions on these matters.


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

The Company has also been awarded the ISO 9001:2000 certification from BVQI Netherland for its Ice-creamplant at Bareilly in the State of Uttar pradesh. The Company has also obtained ISO 9001:2000 and22000:2005 certifications from BVQI, Netherland for its Ice-cream plant at Pundhra in the State of Gujarat.The ice-cream plant has also been certified by Export Inspection Council of India. The Company has alsoobtained BRC (British Retail Consortium) FOOD GLOBAL STANDARD 2005 from BVQi for its ice-cream plantat Pundhra.

7) HUMAN RESOURCES

The Company has total staff strength of 811 at all locations, which includes 197 workers. The Companyrecognizes the important role that its employees need to play for the growth of various business activities.The human resource policies and processes of the Company are in line with this.

The Company has been maintaining cordial and healthy Industrial Relations, which has helped to a greatextent in achieving the steady growth.

8) CAUTIONARY STATEMENT

The statements made and figures given in the various sections of “Management Discussion and Analysis” iskeeping in mind the Company’s objectives, estimates and expectations. The Actual results may differ fromthose expected depending upon the economic conditions, changes in Govt. Regulations, tax regimes andother external and internal factors.

ANNEXURE “B” TO THE DIRECTORS’ REPORT[Information under Section 217(1)(e) of the Companies Act, 1956 read with Companies (Disclosure of particularsin the Report of Board of Directors) Rules, 1988 and forming part of the Directors’ Report for the year ended on31st March, 2008]

A) CONSERVATION OF ENERGY

a) Energy Conservation measures taken :

Ice-cream Division :

- The Company has installed one additional Cone Machine, so there will be separate cone machine foreach size and shape of cone.

- The Company has installed one additional continuous Freezer, to improve the production capability.

- The Company has installed new one additional Hardening Tunnel and a cold storage to enhance theproduction capacity and to improve the product availability during peak season.

- The company has installed a new pasteurizer (5,000 lts. per hours) with Homogenizer to improve thethorough put of the mix and thus saving the energy.

- Three numbers of additional I/C freezers along with Fruit Feeder have been installed to improve thecapacity and in the processes saving the total energy consumed.

- One air compressor has been added to meet the air requirements of machine for their efficient running.

- Three numbers of Ammonia compressors have been added to improve the refrigeration capacity of IBTcausing the efficient production and energy saving in the process.

- Three numbers of Cooling tower have been added for better utilization of energy obtained from thesteamed generated.

- A D.G. set (1010 KVA) has been installed to prevent the loss of production hours and for utilization ofenergy.

- Four numbers of Cold Rooms have been installed to preserve the quality of product and to preventquality deterioration and wastage of energy.

- Two numbers of new Hardening Tunnels have been installed for the improved productivity and thusreducing the energy cost.

- An additional Glycol Chiller has been installed to minimize the pasteurizer outlet temperature thusminimizing the load on freezer and Hardening Tunnel.

- The capacity of exciting IBT has been enhanced by addition of additional coil and modification ofcompressors.

- All utility lines in the plant have been insulated to avoid the waste of energy due to heat loss toatmosphere.

- Two numbers of Aging Vats and Two numbers of Mix batch tanks has been added to the system toimprove the throught put of the plant and conservation of energy due to improved utilization ofresources.


- The air-condensing unit of five numbers of cold rooms has been modified to improve its efficiency.Similarly three nos. of old hardening chambers has also been modified.

- A new transformer (2500 KVA) has been installed to take care of additional power load.- An independent power feeder has been taken from Electricity Board to minimize the power failures and

the loss of materials and energy in the process.- Capacitors have been added to the electrical system to improve the power factor for efficient use of

Electrical energy.

- The Despatch Dock has been expended for faster dispatch of vehicles and thus minimizing the time lossand energy loss.

- An additional plot of the industrial area (F-13) has been acquired for the expansion of the plant for theefficient utilization of resources at increased capacity.

- The existing Conference Hall has been extended for organizing the interaction between the processesfor better utilization of resources and improved productivity.

- A new three storied production building along with raw material and packing material stores has beenconstructed for the convince in the production at higher capacity and prevent the losses due to improperstorage of materials.

- A new refrigeration building has been constructed to accommodate the newly installed refrigerationequipments. The convince in operation is likely to minimize the energy losses.

- The worker’s amenity such as Toilet and worker’s change room has been newly constructed for theconvenience of work force and also to maintain the food safety norms to avoid product failures and theenergy cost evolved in reworking or product failure.

- A sap rate building for accounts and administration has been constructed for the convenience of workingand obtaining the better output.

- A laboratory has been constructed to monitor the incoming materials, inline testing and finished producttesting to avoid the loss of energy in reworking of the product.

Processed Food Division:

- 14'’ Suction Header installed at Condenser & Jacket Pump’s, Suction for decreasing discharge pressureof refrigeration plant resulting energy saving.

- Existing 200 TR Cooling Tower Outlet Lime modified to increase its efficiency resulting in energy saving.- For Cold Store and Plate Freezer’s Inter Coller and Chilled Water Accumulator separates Liquid

Ammonia line with Header from Ammonia Receiver provided to increase Production Rate- Mini IQF Cooling Effect has been increased by making one Duct for all three Cooling Fans instead of

separate Duct.- The Company has replaced old 500 KVA DG set with New Reconditioning 500 KVA DG to generate power

during GSEB Power-off to avoid production break-down.

- The Company has added two plate freezer and one blast freezer to increase production rate andimprovement of quality

- The Company installed a New Cold Storage of capacity of 2400 MT to enhance the production capacityand to improve the product availability during peak season.

b) Additional investments and proposals, if any, for reduction of consumption of energy :

Ice-cream Division :

- The Company has planned additional investment to increase its production capacity and product quality.The Company has made investment to install the following machines :

1. Continuous Freezers - 2 Nos.2. Automatic Cup Filling Machines - 2 Nos.3. Fruit Feeder, Tetra pack Make4. 2 Nos. of Cold Storage Machines and one Hardening Tunnels5. Raw Water Plant6. Receiving Oil in Tankers instead of in barrels7. Blow down heat recovery system8. Planning to installed one small air compressor for off peak hours load.

Processed Food Division:

- The Company has planned to change Cooling Tower Fins and install New Louvers to reduce watertemperature, discharge pressure and save electricity.

- The Company planned to add Power Capacitors Bank to improve power factor.

c) Impact of measures at (a) and (b) above for reduction of energy consumption and consequent impacton the cost of production of goods :

Ice-cream Division

- The measures listed above (a) and (b) would result in increase in production capacity, improve productquality and reduce energy consumption.


Processed Food Division

- The measures listed in above (a) and (b) would result in energy saving, increase in production rate,improvement in quality and avoiding in production break-down due to power-off.

d) Total Energy Consumption and Energy Consumption per unit of production as per prescribed Form-A :

As per Annexure - A attached. Details have been given product wise, i.e. Ice-cream and Processed Food andnot each individual factory wise.

B) TECHNOLOGY ABSORPTION

RESEARCH AND DEVELOPMENTS

a) Specific areas in which R & D carried out by the Company :

- New product development related to frozen food products.

- Process modifications to improve the productivity.

- Product diversification in similar type of products.

As ecological absorption, adaptation and innovation, the company has taken following actions-

- A new Rolla machine has been installed as a new plant, which is an automatic candy-makingmachine at a high capacity.

- A husk feed boiler has been installed to reduce the consumption of furnace oil and shifting to theuse of agricultural waste as a fuel.

- The construction of a modern anaerobic effluent treatment plant is under construction to minimizethe pollution generated though the effluent discharge.

- A peas cold room is under construction for the preservation and processing of peas.

- A hot chamber has been constructed to maintain the temperature of Glucose during winter.

- Three numbers of lifts have been installed in the plant building for the convenience in shifting of rawmaterials and packing materials between the sections.

b) Benefits derived as a result of the above R & D :

- To continuously upgrade the quality of products, the Company has given a thrust to Research andDevelopment (R&D) activities and this has resulted in better acceptance of the products by allclasses of consumers.

c) Future Plan of Action :

- The Company is planning to introduce various new products which will include full range of Frozenvegetables, Fruits and Ready to serve foods by considering consumer requirements as well asexport demand.

d) Expenditure on R & D : Rs. 5.41 lacs.

TECHNOLOGY ABSORPTION, ADAPTATION AND INNOVATION:

a) Efforts in brief, made towards technology absorption, adaptation and innovation :

- Total computerization of despatch operations including vehicle movement, billing, payments,costing analysis.

- Introduced bar coding system at production shop floor to account goods transfer from productionto cold stores. The next phase to be introduced is to despatch the goods from cold store to C&F/ Distributors.

- Adopted computerized forecast production modules for improved production planning.

- Implementation of bar coding system.

- Up-gradation of computerization.

b) Benefits derived as a result of the above efforts :

As per B (b) above.

c) In case of Imported technology (imported during last five years reckoned from the beginning of thefinancial year) following information to be furnished :

The Company has not imported any technology, hence the questionnaire is not applicable.

C) FOREIGN EXCHANGE EARNINGS AND OUTGO :

As against Foreign Exchange Earnings of Rs. 2143.24 lacs for the previous year ended on 31st March, 2007,the Company has earned Foreign Exchange of Rs. 1847.98 lacs for Export of Goods on FOB value for theyear ended on 31st March, 2008.

As against Foreign Exchange Outgo of Rs. 465.88 lacs for the previous year, the Outgo during the year underreview was Rs. 216.83 lacs.


ANNEXURE - FORM A

Form for disclosure of particulars with respect to Conservation of Energy

Year ended Year endedon 31-3-2008 on 31-3-2007

(ICE-CREAM DIVISION)(A) Power and Fuel Consumption :

1) Electricitya) Purchased -

i) Units KWH 10860533 8922633Total Amount (Rs.) 52608417 44631464Rate/Unit (Rs.) 4.84 5.00

b) Own Generation -i) Through Diesel Generator

Units KWH 598364 623445Units per liters of diesel 3.20 3.31Cost per unit (Ltrs.) (Rs.) 10.16 10.11

2) CoalQty. (Tones) Nil NilTotal Cost Nil NilAverage rate (Rs.) Nil Nil

3) Furnace Oil/LDOa) Furnace Oil for Boiler

Qty. (Kg./K. Liters) 400895 285139Total Amount (Rs.) 9482995.60 6465230.51Average rate (Rs.) 23.65 24.97

b) HSD for BoilerQty. (Kg./K. Liters) 200 2360Total Amount (Rs.) 7048.00 84769.00Average rate (Rs.) 35.24 35.92

4) Other/internal generationQty. Nil NilTotal Cost Nil NilRate/unit Nil Nil

B) Consumption per unit of production. Unit of Year ended Year endedMeasurement on 31-3-2008 on 31-3-2007

Ice-creamElectricity : Units 0.478 0.446Diesel for steam generation : Liters Nil Nil

(PROCESSED FOOD DIVISION)(A) Power and Fuel Consumption :

1) Electricitya) Purchased -

i) Units KWH 2679707 2757248Total Amount (Rs.) 14396357.00 13889700.00Rate/Unit (Rs.) 5.37 5.04

b) Own Generation -i) Through Diesel Generator

Units KWH 53890 22346Units per litre of diesel 1.78 1.97Cost per unit (Ltrs.) (Rs.) 19.27 17.92

2) CoalQty. (Tones) Nil NilTotal Cost Nil NilAverage rate (Rs.) Nil Nil

3) Furnace Oil / LDOa) Furnace Oil for Boiler

Qty. (Kg./K. Liters) 127826 135970Total Amount (Rs.) 3731245.91 3009016.00Average rate (Rs.) 29.19 22.13

b) HSD for BoilerQty. (Kg./K. Liters) Nil NilTotal Amount (Rs.) Nil NilAverage rate (Rs.) Nil Nil

4) Other/internal generationQty. Nil NilTotal Cost Nil NilRate/unit Nil Nil

B) Consumption per unit of production. Unit of Year ended Year endedMeasurement on 31-3-2008 on 31-3-2007

Processed FoodElectricity : Units 0.333 0.357Diesel for steam generation : Liters Nil Nil


CORPORATE GOVERNANCE REPORT

Report on Corporate Governance for the year ended on 31st March, 2008 (2007-2008)

Brief statement on Company’s philosophy on Code of Governance

In April, 2000, the Securities and Exchange Board of India (SEBI) introduced a comprehensive code on Corporate Governanceand amended from time to time. Pursuant to this, the Stock Exchanges have amended Listing Agreements. A report, in line withthe requirement of the Stock Exchanges pursuant to Clause 49 of Listing Agreement as amended, is given below.

Over the past few years, the transition in the business environment, coupled with liberalisation and changing market conditions,has led to a fundamental shift in the management’s approach to enhancing shareholder value. In this context, CorporateGovernance has attained paramount importance for ensuring fairness, transparency, accountability and responsibility to allstakeholders.

The Company’s philosophy on Corporate Governance is aimed at making the top management of the Company in the efficientconduct of its business and in making its obligation to Shareholders.

The Report on Corporate Governance is divided into nine parts :-

1) Board of Directors,2) Remuneration of Directors,3) Committees of the Board - Audit Committee, Remuneration Committee and Share Transfer and Investors’ Grievance

Committee,4) General Body Meetings,5) Disclosures,6) Code of Conduct7) Means of Communication,8) General Shareholder information, and9) Compliance of non-mandatory requirements

1) Board of Directors

(i) Composition and category of Directors (as on 31-03-2008) :

The Board comprises Executive and Non-executive Directors. The majority Directors on the Board are Non-executive Directors. The day-to-day management of the Company is conducted by the Managing Directors of theCompany, subject to the supervision and control of the Board of Directors of the Company. The Company fulfills thecondition of minimum 1/3 rd Directors as Independent Directors, as the Chairman of the Company is Non-executiveChairman.

The Board of Directors of the Company as on 31-03-2008 consists the following 7 Directors :-

Category Name of Directors

- Promoter, Chairman & Mr. Ramchandra R. GandhiNon-executive Director

- Promoters & Executive Directors Mr. Virendra R. Gandhi, Mr. Rajesh R. Gandhi, Mr. Devanshu L. Gandhi.- Non-executive & Independent Directors Mr. C. M. Maniar, Mr. Kshitish M. Shah, Mr. Rohit J. Patel

Note : Mr. M. N. Vora ceased to be a Director of the Company w.e.f. 25-06-2007 due to his sad demise.

(ii) Number of Board Meetings held and the dates on which held :

6 Board Meetings of the Company were held during the year under review on 30-06-2007, 28-07-2007, 29-10-2007,15-12-2007, 31-01-2008 and 27-02-2008. The gap between two Board Meetings did not exceed 4 months.

The Board Meetings are held at the Registered Office of the Company.

(iii) Attendance of each Director at the Board Meetings (6 Board Meetings) held during the year from 01-04-2007to 31-03-2008, last Annual General Meeting (AGM) and number of Directorship and Chairmanship /Membership of Committee of each Director in various Companies as on 31-03-2008 :

Name of Director Attendance No. of directorships andparticulars committee member/ chairmanship

Board Last Directorship * Committee CommitteeMeetings AGM Membership ** Chairmanship **(6 Board

Meetings)

Ramchandra R. Gandhi 6 No 4 4 2Virendra R. Gandhi 6 No 4 3 1Rajesh R. Gandhi 5 Yes 4 3 NilDevanshu L. Gandhi 6 Yes 4 3 NilC. M. Maniar 2 No 13 9 1Kshitish M. Shah 6 Yes 2 2 1Rohit J. Patel 5 Yes 2 1 1


* This excludes Directorship held in Private/Foreign Companies and Companies incorporated under Section 25 of theCompanies Act, 1956.

** Committees of Directors includes Audit Committee and Shareholders/ Investors’ Grievance Committee.

None of the Directors of the Company is a member of Board of more than 15 Companies, in terms of Section 275 of theCompanies Act, 1956. None of the Directors is a member of more than 10 Board level Committees or a Chairman of morethan 5 such Committees as required under Clause 49 of Listing Agreement. The necessary disclosures regardingCommittee positions have been made by the Directors.

(iv) Relationship between the Directors :-

Name of the Director Name of the Relative Director Nature of relation

Mr. Ramchandra R. Gandhi Mr. Virendra R. Ganhi SonMr. Rajesh R. Gandhi Son

Mr. Virendra R. Gandhi Mr. Ramchandra R. Gandhi FatherMr. Rajesh R. Ganhi Brother

Mr. Rajesh R. Gandhi Mr. Ramchandra R. Gandhi FatherMr. Virendra R. Gandhi Brother

No other Directors have any relations inter-se.

(v) Information supplied to the Board :-

Among others, this includes :

(a) Annual operating plans and budgets and updates,(b) Capital budget and updates,(c) Quarterly Results of the Company and its operating divisions or business segments,(d) Minutes of meetings of Audit Committee & other Committees of the Board,(e) The information on recruitment and remuneration of senior officers just below the Board level,(f) Show cause, demand, prosecution notices and penalty notices which are materially Important,(g) Fatal or serious accidents, dangerous occurrences, any material effluent or pollution problems,(h) Any material default in financial obligations to and by the Company or substantial non-payment for goods sold by the

Company,(i) Any issue, which involves possible public or product liability claims of substantial Nature,(j) Details of any Joint Ventures or Collaboration Agreement,(k) Transactions that involve substantial payment towards goodwill, brand equity or intellectual property,(l) Significant labour problems and their proposed solutions. Significant development in Human Resources/Industrial

Relations front,(m) Sale of material nature of investments, subsidiaries, assets, which is not in normal course of business,(n) Quarterly details of foreign exchange exposures and the steps taken by management to limit the risks of adverse

exchange rate movement, if material,(o) Non-compliance of any regulatory, statutory nature or listing requirements and shareholders service such as non-

payment of dividend, delay in share transfer etc.

The Board is routinely presented with all information required under Clause 49 of Listing Agreement wherever applicableand materially significant. These are submitted either as a part of the Agenda papers or are tabled in the course of BoardMeeting. Action taken report on the decision / minutes of the previous meeting is placed at the immediately succeedingmeeting of the Board/Committee for noting by the Board/Committee.

2) Remuneration to all Directors :

The aggregate value of salary, perquisites, allowances and commission paid including contribution towards ProvidentFund to the two Managing Directors of the Company during the year ended on 31-03-2008 (i.e. from 01-04-2007 to 31-03-2008) are as follows as per approval received from the Central Government for re-appointment of Mr. Rajesh R. Gandhiand Mr. Devanshu L. Gandhi as Managing Directors of the Company for a further period of 5 years w.e.f. 1st April, 2004and increase in remuneration w.e.f. 1st April, 2005 for a period of 3 years :-

Amount (Rs. in lacs)

Name of Managing Director Salary Perquisites/ Commission Contribution TotalAllowances @ 1% on to PF

Net Profit

Mr. Rajesh R. Gandhi 12.00 7.21 6.26 1.44 26.91

Mr. Devanshu L. Gandhi 12.00 7.21 6.26 1.44 26.91

Besides this, the above Managing Directors are also entitled to Superannuation or Annuity Fund, to the extent not taxableand Gratuity and encashment of Leave at the end of tenure as per Rules of the Company.

The Company has not paid Bonus to the above Managing Directors of the Company for the financial year ended on31-03-2008.


The Company has entered into an Agreement on 12-8-2004 with each Managing Directors of the Company for a periodof 5 years for their appointment, powers, duties and payment of remuneration. The Company has also entered into aSupplemental Agreement on 20-04-2006 with Mr. Rajesh R. Gandhi and Mr. Devanshu L. Gandhi for increase inremuneration w.e.f. 1st April, 2005 for a period of 3 years, i.e. upto 31st March, 2008. The Managing Directors are requiredto give 3 months notice in writing to the Company to resign from the office of Managing Director.

The Company does not have a scheme for grant of stock options either to the Managing Directors or Employees. Noneof the other Directors are paid remuneration except sitting fees for attending Board and Committee Meetings.

The Company paid sitting fees to all Non-executive Directors of the Company at the rate of Rs. 2,000/- each for attendingBoard Meetings as under during the year ended on 31-03-2008 :

Sr. No. Name of the Director Amount in Rs.1 Mr. Ramchandra R. Gandhi 12,000/-2 Mr. C. M. Maniar 4,000/-3 Mr. Kshitish M. Shah 12,000/-4 Mr. Rohit J. Patel 10,000/-

The Company also paid sitting fees to the following Non-executive Directors of the Company for attending 6 AuditCommittee meetings at the rate of Rs. 2,000/- for each meeting during the year ended on 31-03-2008 :-

Sr. No. Name of the Director Amount in Rs.1 Mr. Ramchandra R. Gandhi 12,000/-2 Mr. Kshitish M. Shah 12,000/-3 Mr. Rohit J. Patel 12,000/-

The Company also paid sitting fees to the following Non-executive Directors of the Company for attending 1 RemunerationCommittee meeting of the Company held on 28-07-2007, at the rate of Rs. 2,000/- for each meeting during the year endedon 31-03-2008 :-

Sr. No. Name of the Director Amount in Rs.1 Mr. Kshitish M. Shah 2,000/-2 Mr. Rohit J. Patel 2,000/-3 Mr. C. M. Maniar 2,000/-

The Non-Executive Directors of the Company are also reimbursed the travelling and out-of-pocket expenses for attendingsuch meetings.

As on 31st March, 2008, Mr. Ramchandra R. Gandhi holds 47,798 Equity Shares of Rs. 10/- each of the Company in hisindividual capacity. No other Non-executive Directors hold any shares in the Company.

3) Committees of the Board :

(a) Audit Committee (As on 31-03-2008) :

(i) Composition

As on 31-03-2008, there were 3 members of Audit Committee as under :-1. Mr. Rohit J. Patel - Chairman2. Mr. Ramchandra R. Gandhi - Member3. Mr. Kshitish M. Shah - Member

Note : Mr. M. N. Vora ceased to be a member of the Audit Committee w.e.f. 25-06-2007 due to his sad demise.

All members of Audit Committee as mentioned above are Non-executive Directors. The constitution of the AuditCommittee also fulfills the requirements under Section 292A of the Companies Act, 1956 apart from the requirementspursuant to Clause 49 of Listing Agreement with the Stock Exchanges.

Out of 3 members of the Audit Committee, 2 members are Independent Directors, namely, Mr. Kshitish M. Shah andMr. Rohit J. Patel.

Mr. Rohit J. Patel, who is the Chairman of Audit Committee was present at the last Annual General Meeting of the Companyheld on 29-09-2007. No queries related to financial results were raised by the members present at the said meeting. Mr.Ramchandra R. Gandhi, Member of the Audit Committee, has the knowledge of Finance & Accounts.

Mr. Nikhil Patel, who is a Company Secretary of the Company, is a Secretary to the Audit Committee.

(ii) Meeting and Attendance :

The Audit Committee met 6 times during the year under review on 30-06-2007, 28-07-2007, 26-10-2007, 15-12-2007, 31-01-2008, and 27-02-2008.

The presence of the Members of the aforesaid Audit Committee Meetings are as under :

Sr. No. Name of the Director No. of Audit Committee Meetings attended.1 Mr. Rohit J. Patel 62 Mr. Ramchandra R. Gandhi 63 Mr. Kshitish M. Shah 6


The representative of the Statutory Auditors was present in all meetings of the Audit Committee. The Internal Auditors werealso present in the meetings. The Managing Directors of the Company were also generally invited to attend the AuditCommittee meetings. The Minutes of the Audit Committee Meetings are sent to all Directors of the Company at the timeof Board Meeting and are confirmed in the Board Meeting.

(iii) Terms of reference :

The terms of reference of the Audit Committee as stipulated by the Board are as under and they are in accordance withall items listed in Clause 49(II)(D) of Listing Agreement with Stock Exchanges :

a) Oversight of the Company’s financial reporting process and disclosure of its financial information.

b) Recommending the appointment and removal of external Auditor, fixation of audit fee and also approval for paymentfor any other services.

c) Reviewing with the management, the annual financial statements before submission to the Board, focusing primarilyon :

- Any changes in accounting policies and practices,

- Major accounting entries based on exercise of judgment by management,

- Qualifications in draft Audit Report,

- Significant adjustments arising out of audit,

- The going concern assumption,

- Compliance with accounting standards,

- Compliance with stock exchange and legal requirements concerning financial statements,

- Any related party transactions i.e. transactions of the Company of material nature, with promoters or themanagement, their subsidiaries or relatives, etc., that may have potential conflict with the interest of Companyat large.

d) Reviewing with the management, external and internal Auditors, the adequacy of internal control systems.Discussions with Internal Auditors any significant findings and follow-up thereon.

e) Reviewing the findings of any internal investigations by the Internal Auditors into matters where there is suspectedfraud or irregularity or a failure of internal control systems of a material nature and reporting the matter to the Board.

f) Discussions with external Auditors before the audit commences, nature and scope of audit as well as to have post-audit discussion to ascertain any area of concern.

g) Reviewing the Company’s financial and risk management policies.

h) To look into the reasons for substantial defaults in the payment to the depositors, shareholders (in case of non-payment of declared dividends) and creditors.

i) It shall have discussions with the Auditors periodically about internal control systems, the scope of audit includingobservations of the Auditors and review the half yearly and annual financial statements before submissions to theBoard. Review of annual financial statements of Subsidiary Companies.

j) It shall ensure compliance of internal control systems.

k) Taking note of Report on Corporate Governance.

(b) Remuneration Committee (As on 31-03-2008) :

The Remuneration Committee of the Directors of the Company was constituted by the Board of Directors at their meetingheld on 1st February, 2003 pursuant to the provisions contained in Schedule XIII to the Companies Act, 1956. TheRemuneration Committee consists the following three Directors of the Company, as on 31st March, 2008, namely :

1. Mr. Kshitish M. Shah - Chairman2. Mr. C. M. Maniar - Member3. Mr. Rohit J. Patel - Member

The Remuneration Committee was re-constituted by the Board at their meeting held on 30th June, 2007 by introducingMr. C. M. Maniar as the member in place of Mr. M. N. Vora, who ceased to be a member of Remuneration Committee dueto his sad demise.

The constitution of Remuneration Committee fulfills the requirements of Schedule XIII to the Companies Act, 1956. Allmembers of the Remuneration Committee are independent and non-executive Directors of the Company.

The Remuneration Committee was constituted by the Board for the purpose of taking its approval for payment ofmanagerial remuneration to Mr. Rajesh R. Gandhi and Mr. Devanshu L. Gandhi, Managing Directors of the Company.

The members of the Remuneration Committee has, at their meeting held on 28-07-2007, increased the managerialremuneration to be paid to Mr. Rajesh R. Gandhi and Mr. Devanshu L. Gandhi, Managing Directors of the Company fora period of 1 year i.e. from 01-04-2008 to 31-03-2009. The Remuneration Committee has also approved the payment ofremuneration to the said Managing Directors for their next term of office for a period of 5 years w.e.f. 1st April, 2009.


Subsequently, the Board of Directors of the Company had also approved the said increase in Managerial Remunerationand remuneration for next term of office for a period of 5 years. The Shareholders of the Company had, at the 23rd AnnualGeneral Meeting held on 29th September 2007, approved the said Managerial Remuneration.

(c) Share Transfer and Investors’ Grievance Committee :

(i) Composition :

The Board of Directors of the Company has constituted a Share Transfer and Investors’ Grievance Committee,comprising 4 Directors of the Company, namely:

1 Mr. Ramchandra R. Gandhi - Chairman & Non-executive Director2 Mr. Virendra R. Gandhi - Member3 Mr. Rajesh R. Gandhi - Member4 Mr. Devanshu L. Gandhi - Member

The Committee, interalia, approves the transfer of Shares, issue of duplicate Share Certificates, splitting andconsolidation of Shares etc. The Committee also looks after redressal of Shareholder’s complaints like transfer ofshares, non-receipt of balance sheet, non-receipt of declared dividends, etc. The Board of Directors have delegatedthe power of approving transfer of Shares etc. to the Share Transfer and Investors’ Grievance Committee.

(ii) No. of Shareholders complaints received and not solved to the satisfaction of the Shareholders :

The total number of complaints received and replied to the satisfaction of Shareholders during the year under reviewwere as under :

No. of Complaints outstanding as on 31-03-2007 - NILNo. of complaints received during the year under review - 9No. of complaints disposed off during the year under review - 8No. of complaints outstanding as on 31-03-2008 - 1

The outstanding complaint has been subsequently resolved by the Company.

(iii) Name and designation of Compliance Officer :

The Board has designated Mr. Nikhil Patel, Dy. General Manager (Secretarial & Legal) and Company Secretary, asthe Compliance Officer of the Company pursuant to Clause - 49 of the Listing Agreement.

(iv) Number of pending transfers :

No requests for transfer and dematerialisation were pending for approval as on 31st March, 2008.

4) General Body Meetings :

(i) Location and Time for last 3 Annual General Meetings (AGM) were :

Year AGM Location Date Time

2006-2007 23rd Bhaikaka Hall, Nr. Law Garden, Ellisbridge, Ahmedabad 29-09-2007 1.00 p.m.

2005-2006 22nd Bhaikaka Hall, Nr. Law Garden, Ellisbridge, Ahmedabad 27-09-2006 2.00 p.m.

2004-2005 21st Bhaikaka Hall, Nr. Law Garden, Ellisbridge, Ahmedabad 29-09-2005 3.30 p.m.

(ii) Resolution carried out through Postal Ballot :

No postal ballots were used/invited for voting at the above meetings in respect of Special Resolutions passed inthe above said meetings.

At the forthcoming 24th AGM, no resolution is proposed to be passed through Postal Ballot.

5) Disclosures :

(i) Transaction with related parties are disclosed in Note No. 8(c) of Schedule - 22 to the Notes on Accounts for the yearended on 31st March, 2008, in the Annual Report as required by the Accounting Standard (AS) 18 issued by ICAI.

However, there are no materially significant related party transactions made by the Company with its promoters,directors or the management or their subsidiaries etc. that may have potential conflict with the interests of theCompany at large.

The Independent Directors, who are also Non-executive Directors, who apart from receiving sitting fees for attendingBoard Meeting, Audit Committee and Remuneration Committee Meeting, do not have any other material pecuniaryrelationship or transactions with the company, its promoters, its management or its subsidiary, which in the judgmentof the Board may affect independence of the judgment of the Directors.

The Directors regularly make full disclosures to the Board of Directors regarding nature of their interest in theCompanies in which they are Directors or Members. Full particulars of contract entered with the Companies /Partnership Firms in which the Directors are directly or indirectly concerned or interested are entered in the Registerof Contract maintained under Section 301 of the Companies Act, 1956 and the same is placed in every Board Meetingfor the noting of the Directors.


(ii) During the last three years, there were no strictures or penalties imposed on the Company by either SEBI or theStock Exchanges or any statutory authority for non-compliance of any matter related to the capital markets.

(iii) Risk Management :

Business risk evaluation and management is an ongoing process within the Company. During the year under review,the Board of Directors has reviewed the risk assessment and minimisation procedure adopted by the Companycovering the business operations of the Company.

(iv) CEO/CFO Certification :

In terms of revised Clause 49 of Listing Agreement, the Certification by CEO and CFO on the financial statementsand internal controls relating to financial reporting has been obtained.

(v) Management :

The Management Discussion and Analysis Report is set out in a separate section included in this Annual Report andforms part of this report.

Pursuant to Clause-49 of Listing Agreement with the Stock Exchanges, the Senior Management Personnel havemade disclosures to the Board that during the year ended on 31st March, 2008, they have not entered into anymaterial financial and commercial transactions, where they have personal interest that may have a potential conflictwith the interest of the Company.

6) Code of Conduct :

The Board of Directors has adopted the Code of Business Conduct and Ethics for Directors and Senior ManagementPersonnel. The said Code has been communicated to all the Directors and members of Senior Management. They havealso affirmed to the Company about the compliance of the said Code during the financial year ended on 31st March, 2008.The Code has also been posted on the Company’s website-www.vadilalgroup.com. The Certificate received from theManaging Directors affirming compliance of the said Code of Conduct by all the Board Members and the SeniorManagement Personnel is annexed separately to this Report.

7) Means of communication :

The Company has total 10511 shareholders as on 31st March, 2008. The main channel of communication to theshareholders is through Annual Report, which includes inter alia, the Director’s Report, Management Discussions &Analysis and Report on Corporate Governance and Audited Financial Results.

The Unaudited Quarterly Results ended on 30-06-2007 (1st Quarter), 30-09-2007 (2nd Quarter), 31-12-2007 (3rd Quarter)and Annual Audited Accounts for the year ended on 31-03-2008 including notes and segment wise revenue, results andcapital employed and also the Consolidated Financial Results and Limited Review Report thereon were submitted to theStock Exchanges immediately after conclusion of the Board Meetings in which, they are approved by the Board.

The said results were published in Indian Express / Business Standard (English) and Jansatta (Gujarati) newspapers ofAhmedabad edition. The said results including Notes and Segment wise revenue, results and capital employed aredisplayed on the corporate website of the Company viz. www.vadilalgroup.com.

The Financial Results and the Shareholding Pattern of the Company are also uploaded in the EDIFAR (Electronic DataInformation Filing and Retrieval) website viz. www.sebiedifar.nic.in.

The website of the Company viz. www.vadilalgroup.com has an exhaustive investor-help section. It contains comprehensiveguidelines and procedure for investors.

8) General Shareholder information :

(i) Annual General Meeting, i.e. next AGM

- Date & Time : 29th September, 2008, at 12.30 p.m.- Venue : Sheth Shri Amrutlal Hargovandas Memorial Hall,

Gujarat Chamber of Commerce & Industry (GCCI),Ashram Road, Ahmedabad - 380 009.

(ii) Financial Calendar (from 01-04-2008 to 31-03-2009) (Tentative) :

- Results for quarter ended on 30-06-2008 : 30th July, 2008- Results for quarter ending on 30-09-2008 : Last week of October, 2008- Results for quarter ending on 31-12-2008 : Last week of January, 2009- Results for quarter ending on 31-03-2009 / Last week of April, 2009/

Audited Results for the year ending on 31-03-2009 : Last week of June, 2009- AGM for the year ending on 31-03-2009 : Last week of September, 2009

(iii) Book-closure date :

Book-closure shall be from 15th September, 2008 to 29th September, 2008 (both days inclusive) for the purposeof payment of dividend on Equity Shares for the year ended on 31st March, 2008.

(iv) Dividend payment date :

The Dividend @ 12 % on Equity Shares for the year ended on 31st March, 2008, if declared, will be paid within theprescribed time limit.


(v) Listing of Equity Shares on Stock Exchanges at -The Company’s shares are listed at the Bombay Stock Exchange Limited and Ahmedabad Stock Exchange Limited.The Listing fees for the Financial Year 2008-2009 has already been paid to the respective Stock Exchanges.

(vi) Security Code No. :- Bombay Stock Exchange Limited : 519156- Ahmedabad Stock Exchange Limited : 64530- ISIN No. of NSDL & CDSL for demat of Equity Shares : INE694D01016

(vii) Stock Market Data :The monthly High, Low and Closing Prices of Shares of the Company at Bombay Stock Exchange Limited, (BSE),for the year under review are as under:

Months High(Rs.) Low(Rs.) Closing(Rs.)

April, 2007 38.50 32.70 34.30May, 2007 47.85 34.30 42.85June, 2007 50.85 38.20 42.45July, 2007 58.00 40.20 48.10August, 2007 67.40 43.00 58.60September, 2007 101.05 56.15 85.65October, 2007 94.35 69.75 71.45November, 2007 88.65 60.00 70.65December, 2007 81.00 68.10 76.90January, 2008 93.00 55.25 56.05February, 2008 63.85 49.00 57.15March, 2008 57.00 37.25 50.45

(viii) Share price performance in comparison to BSE Sensex :

Market - Price data : The monthly high, low and closing prices of the shares of the Company, during thefinancial year under review and performance of the same in comparison to BSE Sensex are given below :

BSE SENSEXHigh Low Closing High Low Closing(Rs.) (Rs.) (Rs.) (Rs.) (Rs.) (Rs.)

April, 2007 38.50 32.70 34.30 14383.72 12425.52 13872.37

May, 2007 47.85 34.30 42.85 14576.37 13554.34 14544.46

June, 2007 50.85 38.20 42.45 14683.36 13946.99 14650.51

July, 2007 58.00 40.20 48.10 15868.85 14638.88 15550.99

August, 2007 67.40 43.00 58.60 15542.40 13779.88 15318.60

September, 2007 101.05 56.15 85.65 17361.47 15323.05 17291.10

October, 2007 94.35 69.75 71.45 20238.16 17144.58 19837.99

November, 2007 88.65 60.00 70.65 20204.21 18182.83 19363.19

December, 2007 81.00 68.10 76.90 20498.11 18886.40 20286.99

January, 2008 93.00 55.25 56.05 21203.77 15332.42 17648.71

February, 2008 63.85 49.00 57.15 18895.34 16457.74 17578.72

March, 2008 57.00 37.25 50.45 17227.56 14677.24 15644.44

Months


(ix) Registrar and Transfer Agent :

In terms of SEBI Circular No. D&CC/FITTC/CIR-15/2002, dated 27-12-2002, the Company has assigned all workrelated to Share Registry in terms of both physical and electronic to MCS Ltd., Ahmedabad, by entering into anAgreement with the said R&T Agent to that effect. Hence, all Shareholders are requested to send/deliver thedocuments/correspondence including complaints relating to the Company’s share transfer/demat/remat activity toMCS Ltd. at 101, Shatdal Complex, 1st Floor, Opp. Bata Show Room, Ashram Road, Ahmedabad-380 009.

(x) Share Transfer system :

Presently, the requests for share transfer, which are received by the Company or its Registrar & Share TransferAgent, in physical form, from the shareholders, are processed and the share certificates are returned to theshareholders, within a period of 1 month from the date of receipt of such request for transfer, subject to thedocuments being valid and complete in all respects. The Share Transfer & Investors’ Grievance Committee of theCompany, normally meets twice a month to approve the transfer, issue of duplicate share certificates, consolidationand splitting of shares etc.

(xi) Secretarial Audit :

A Practicing Company Secretary carried out secretarial audit in each of the quarter in the Financial Year - 2007-08,to reconcile the total admittted capital with National Securities Depository Limited (NSDL) and Central DepositoryServices (India) Limited (CDSL) and total issued and listed capital. The audit reports confirm that the total issued/ paid-up capital is in agreement with the total number of shares in physical form and the total number ofdematerialized shares held with depositories.

Pursuant to Clause 47 (c) of the Listing Agreement with the Stock Exchanges, certificates, on half yearly basis, havebeen issued by a Practicing Company Secretary for due compliance of share transfer formalities by the Company.

(xii) Shareholding Details :

(a) Distribution of Shareholding as on 31st March, 2008 :

No. of Equity No. of Share No. of % ofShares held holders Shares Shares

1-500 10065 828383 11.52501-1000 196 160305 2.231001-2000 93 135240 1.882001-3000 31 81696 1.143001-4000 23 82413 1.154001-5000 18 86248 1.205001-10000 33 245951 3.4210001- 50000 38 830054 11.5550001-100000 6 434152 6.04100001 & above 8 4303788 59.87

Total: 10511 7188230 100.00

(b) Categories of Shareholders as on 31st March, 2008 :

Sr. Category of No. of Equity % to total

No. Shareholder Shares held Shares

1 Directors, Relatives & HUF 1240871 17.26

2 Foreign Institutional Investors (FIIs) 500000 6.963 Mutual Funds and UTI 7750 0.114 Nationalise Bank 350 0.005 NRIs / OCBs 18035 0.256 Corporate Bodies 3602847 50.127 Public 1818377 25.30

Total 7188230 100.00

(xiii) Dematerialisation of Shares :

The Company, consequent to introduction of Depository System (DS), has established an electronic connectivitywith NSDL & CDSL, Depositories. Members, therefore, have the option of holding and dealing in the shares of theCompany in electronic form through NSDL and CDSL. In view of the numerous advantages offered by the DS,members are requested to avail the facility of dematerialisation of the Company’s shares on either of theDepositories as aforesaid.

If you wish to maintain your shareholding in the electronic form by joining DS, you will have to open an account witha Depository Participant (DP), who are agents of NSDL or CDSL and lodge your share certificates with your DP forDematerialisation. The DP will then ensure that the physical share certificates are cancelled and after verification


by the Company, an equivalent number of shares will be credited to your account with the DP in the electronic form.You are also permitted under the DS to reconvert your electronic shareholding into the physical form of sharecertificates by a process of Rematerialisation. It may be noted that the DP would charge the investors for its services,which may vary from one DP to another.

It is reiterated that requests for Dematerialisation and Rematerialisation are to be made only to the DP with whomyou have opened an account and not directly to the Company or its Registrar & Share Transfer Agent.

24,87,127 Equity Shares of the Company representing 34.60 % of the total paid-up capital of the Company have beendematerialised upto 31-03-2008. Trading in Equity Shares of the Company is permitted only in dematerialised formas per notification issued by SEBI.

(xiv) Outstanding GDRs/ADRs/Warrants or any Convertible Instruments, conversion date and likely impact onEquity :

Not Applicable

(xv) Plant locations :

Ice-cream Division : 1) Village Pundhra, Taluka Mansa, Dist. Gandhinagar (Gujarat)2) Parsakhera Industrial Area, Bareilly, (Uttar Pradesh)3) Dudheshwar Road, Ahmedabad (Gujarat)

Processed Food Division : Dharampur, Dist. Valsad (Gujarat)

Forex Division : Vadilal House, Navrangpura, Ahmedabad (Gujarat)

(xvi) Investor Correspondence :

For transfer and dematerialisation of shares, payment of dividend on shares and interest and redemption ondebentures and any other query relating to the shares of the Company :-

1) MCS Limited, (Unit : Vadilal Industries Limited), 101, Shatdal Complex, 1st Floor, Opp. Bata Show Room,Ashram Road, Ahmedabad - 380 009. Tel. Nos. : (079) 26582878, 26584027 Fax No. : (079) 26581296

2) Secretarial & Share Department

Vadilal House, Shrimali Society, Nr. Navrangpura Railway Crossing, Navrangpura, Ahmedabad - 380 009.Contact person : Mr. Nikhil Patel, Company Secretary

Tel. Nos. : (079) 26564019 to 24

Fax No. : (079) 26564027

E-mail : [email protected]

Shareholders holding shares in electronic mode should address all their correspondence to their respectiveDepository Participant.

(xvii) Amalgamation of Vadilal Financial Services Ltd. with Vadilal Industries Limited - Exchange of ShareCertificates :

Vadilal Financial Services Ltd. (VFSL), which was a Subsidiary Company, was amalgamated with Vadilal IndustriesLimited (VIL) w.e.f. 1st April, 1997. It is observed that some of the members of VFSL have still not exchanged theirShare Certificates for new Shares of VIL on amalgamation of VFSL with VIL. As the Share Certificates of VFSL areno longer valid, concerned Shareholders are requested to surrender their Share Certificates of VFSL at theRegistered Office of the Company to enable them to get new Shares of VIL in the ratio of 1:4.

(xviii)Address of Registrar of Companies (ROC), Gujarat :

The Registrar of Companies, Gujarat, ROC Bhavan, Opp. Rupal Park, Behind Ankur Bus Stand, Naranpuura,Ahmedabad - 380 013. (Phone : 079 - 27438531, 27437597)

(xix) Consolidation of Folios :

Some of the members might have more than one folio in their individual name or jointly with other person(s)mentioned in the same order. It is desirable to consolidate all similar holdings under one folio. Consolidation helpsthe members to monitor their holdings effectively. By doing so, it would also enable the Company to avoidunnecessary duplication of effort and related costs. Please write to the Company at its Registered Office or to theRegistrar & Share Transfer Agent viz. MCS Ltd., quoting the folio numbers that need to be consolidated and sendthe relevant Share Certificates.

(xx) Nomination facility :

Your Company has already offered the facility of nomination to the members. Individual Shareholders can availof the facility of nomination and may submit to the Company the prescribed Form 2B at the Registered Officeof the Company. It is advisable to avail of this facility especially by Shareholders who currently hold Sharesin single name. In case of any assistance, please contract at the Registered Office of the Company at VadilalHouse, Shrimali Society, Near Navrangpura Railway Crossing, Navrangpura, Ahmedabad-380009.Telephone Nos. (079) 26564019 - 24.


9) Compliance of non-mandatory requirements :

The Company has not adopted the following non-mandatory requirements as per Clause 49 of Listing Agreementregarding Corporate Governance :-

1) Half-yearly declaration of Financial performance and summary of significant events in last six months have not beensent to each shareholder of the Company.

2) The Company has not conducted training for the Board members.

3) The Company does not have peer group of Board of Directors to evaluate performance of Non-executive Directors.

4) The Company does not have Whistle Blower policy.

CERTIFICATETo,

The Members ofVadilal Industries Limited,

We have examined the compliance of conditions of Corporate Governance by Vadilal Industries Limited, for the yearended on 31st March, 2008, as stipulated in clause 49 of the Listing Agreement of the said Company with stockexchanges.

The compliance of conditions of Corporate Governance is the responsibility of the management. Our examination was limitedto procedures and implementation thereof, adopted by the Company for ensuring the compliance of the conditions of theCorporate Governance. It is neither an audit nor an expression of opinion on the financial statements of the Company.

In our opinion and to the best of our information and according to the explanations given to us, we certify that the Companyhas complied with the conditions of the Corporate Governance as stipulated in the above mentioned Listing Agreement.

We further state that such compliance is neither an assurance as to the future viability of the Company nor the efficiencyor effectiveness with which the management has conducted the affairs of the Company.

For KANTILAL PATEL & CO.,Chartered Accountants

Date : July 30, 2008 Arpit K. PatelPlace : Ahmedabad Partner

Membership No.: 34032

DECLARATION REGARDING AFFIRMATION OF CODE OF CONDUCT

In terms of the requirement of the amended Clause 49 of Listing Agreement with the Stock Exchanges regardingCorporate Governance, we hereby confirm that all Board Members and Senior Management Personnel of VadilalIndustries Limited have affirmed the compliance of Code of Business Conduct and Ethics for the year ended on 31stMarch, 2008.


Place : AhmedabadDate : July 15, 2008


To,The Members ofVadilal Industries Ltd,Ahmedabad.1. We have audited the attached balance sheet of Vadilal

Industries Limited as at March 31, 2008, the profit &loss account and also the cash flow statement for theyear ended on that date annexed thereto. These financialstatements are the responsibility of the company’smanagement. Our responsibility is to express an opinionon these financial statements based on our audit.

2. We conducted our audit in accordance with auditingstandards generally accepted in India. Those Standardsrequire that we plan and perform the audit to obtainreasonable assurance about whether the financialstatements are free of material misstatement. An auditincludes examining, on a test basis, evidence supportingthe amounts and disclosures in the financial statements.An audit also includes assessing the accounting principlesused and significant estimates made by management,as well as evaluating the overall financial statementpresentation. We believe that our audit provides areasonable basis for our opinion.

3. As required by the Companies [Auditors’ Report] Order,2003 issued by the Central Government of India in termsof sub-section (4A) of Section 227 of the Companies Act,1956, we enclose in the Annexure, a statement on thematters specified in paragraphs 4 and 5 of the said Order.

4. Further to our comments in the Annexure referred to inparagraph 3 above, we report that:

(i) We have obtained all the information andexplanations, which to the best of our knowledgeand belief, were necessary for the purposes of ouraudit.

(ii) In our opinion, proper books of account as requiredby law have been kept by the company so far asappears from our examination of the books.

(i) (a) The company, has maintained proper recordsshowing particulars about quantitative detailsand situation of Gross Block. However, detailssuch as adjustments for revaluation,depreciation and accumulated depreciationrelating to individual assets is under preparationand pending reconciliation with financial records.

(b) The company has not conducted physicalverification of fixed assets during the year. Inabsence of physical verification of fixed assetsduring the year material discrepancies, if any,could not be ascertained.

(c) The company has not disposed off substantialpart of fixed assets during the year.

(ii) (a) As explained to us, the inventory have beenphysically verified during the year by themanagement except stock of frozen productslying at Dharampur which has not been

(iii) The balance sheet, profit and loss account and cashflow statement dealt with by this report are inagreement with the books of account.

(iv) In our opinion, the balance sheet, profit & lossaccount and cash flow statement dealt with by thisreport comply with accounting standards referred toin sub-section (3C) of section 211 of the CompaniesAct, 1956.

(v) On the basis of the written representations receivedfrom directors, as on 31st March 2008, and taken onrecord by the Board of Directors, we report that noneof the directors is disqualified as on 31st March, 2008from being appointed as a director in terms of clause(g) of sub-section (1) of section 274 of the CompaniesAct, 1956, on the said date.

(vi) In our opinion and to the best of our information andaccording to the explanations given to us, the saidaccounts give the information required by, theCompanies Act, 1956, in the manner so requiredand give a true and fair view in conformity with theaccounting principles generally accepted in India:

(a) in the case of the balance sheet, of the state ofaffairs of the company as at 31st March, 2008;

(b) in the case of the profit & loss account, of the‘Profit’ of the company for the year ended onthat date;

and

(c) in the case of the cash flow statement, of thecash flows for the year ended on that date.


Arpit K. PatelPlace : Ahmedabad PartnerDate : June 30, 2008 Membership No.: 34032

AUDITORS’ REPORT

ANNEXURE TO THE AUDITORS’ REPORT TO THE MEMBERS OF VADILAL INDUSTRIES LIMITED, ON THEFINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH, 2008.

physically verified during the year. In respectof inventory lying with third parties, inventoryhave been confirmed by them. In our opinion,the frequency of verification is reasonable.

(b) In our opinion and according to the informationand explanations given to us, the proceduresof physical verification of inventories followedby the management are reasonable andadequate in relation to the size of the companyand the nature of its business.

(c) In our opinion and according to the informationand explanations given to us, the companyhas maintained proper records of inventoryand the discrepancies noticed on such physicalverification between physical stocks and bookrecords were not material and have beenadequately dealt with in the books of account.In absence of physical verification of frozen


We are informed that no order has been passed bythe Company Law Board or National Company LawTribunal or Reserve Bank of India or any Court orany other Tribunal.

(vii) In our opinion, the company has an internal auditsystem commensurate with the size of the companyand the nature of its business.

(viii)We are informed that Central Government has notprescribed under section 209 [1][d] of the CompaniesAct, 1956, maintenance of cost records for theproducts manufactured by the company.

(ix) (a) The company is generally regular in depositingundisputed provident fund, investor education& protection fund, employees state insurance,income tax, sales tax, wealth tax, service tax,custom duty, excise duty, cess and othermaterial statutory dues to appropriate authoritiesexcept amount of Rs.0.83 lakhs required tobe deposited with investor education andprotection fund. (Which is subsequentlydeposited)

(b) According to the information and explanationsgiven to us, no undisputed amount in respectof aforesaid statutory dues were outstandingas at 31st March, 2008 for the period of morethan six months from the date they becomepayable except sales tax of Rs.8.47 lakhswhich remains outstanding for a period ofmore than six months from the date it becamepayable.

(c) The details of disputed statutory dues as atMarch 31, 2008 that have not been depositedby the company, are as under:

(Rs. in lacs)Sr. Dispute Amt. Period to ForumNo. under: (net of which the where

deposit) amount dispute is(Rs.) relates pending

(i) Central 131.03 1997-98 - High CourtSales toTax Act 2004-05andSales 23.24 1998-99 - Tribunal

Tax Act 12.49 2000-01 - Jt. Commissioner

of various 1.55 2001-02 - Dy Commissioner

states 1.10 2002-03 - Tribunal

0.86 2002-03 - Jt. Commissioner

4.00 2003-04 - Dy Commissioner

2.39 2003-04 - Tribunal



(ii) Income 6.22 2002-03 - CIT (Appeals)Tax Act,1961

(iii) Central 1.11 2005-06 - TribunalExcise 1.53 2006-07 - AppellateAct Commissioner

products lying at Dharampur the discrepancyif any, could not be ascertained.

(iii) In respect of loans, secured or unsecured, granted ortaken by the company to or from companies, firms orother parties covered in the register maintained undersection 301 of the Companies Act, 1956 :

[a] The company has not granted loans to anycompany and hence paragraphs 4(iii) (a), (b),(c), and (d) of Company (Auditors’ Report)Order, 2003 are not applicable to the company.

[b] The company has taken unsecured loan fromone company. The year end balance of loantaken from such party is Rs.10.85 lakhs.

[c] In our opinion, the rate of interest and otherterms and conditions of such loan is not primafacie prejudicial to the interest of the company.

[d] In respect of loan taken by the company theinterest payments are regular and the principalamount is repayable on demand

(iv) In our opinion and according to the information andexplanations given to us, having regard to theexplanation that some of the items purchased areof a special nature and suitable alternative sourcesdo not exist for obtaining comparable quotations,there are adequate internal control procedurescommensurate with the size of the company andthe nature of its business with regard to purchaseof inventory, fixed assets and for the sale of goodsand services. During the course of our audit, wehave not observed any continuing failure to correctmajor weaknesses in internal controls.

(v) In respect of contracts or arrangements referred toin section 301 of the Companies Act, 1956:

[a] In our opinion and according to the informationand explanations given to us, the particularsof contracts or arrangements referred to insection 301 of the Act, have been entered inthe register required to be maintained underthat section.

[b] According to the information and explanationsgiven to us, transactions made in pursuanceof contracts or arrangements entered in theregister maintained under section 301 of theCompanies Act, 1956 and aggregating duringthe year to Rupees five lakhs or more inrespect of any party, have been made at theprices which are prima facie reasonable havingregard to prevailing market prices at therelevant time. In respect of ice cream, salesare made at predetermined prices, which inour opinion are prima facie reasonable.

(vi) In our opinion and according to the information andexplanations given to us, the company has compliedwith the provisions of section 58 A and 58AA or anyother relevant provisions of the Companies Act,1956 and the rules framed there under with regardto the deposits accepted from the public exceptthat there has been a slight shortfall in maintainingliquid assets.


The following matters, which have been excluded fromthe above table, have been decided in favour of thecompany but the department has preferred appeals athigher levels. The details are as under:

(Rs. in lakhs)

Sr. Dispute AmL Period to Forum whereNo. under: (net of which the department has

deposit) amount preferred(Rs.) relates appeals

(i) Central 4.58 1988-89 - Asst. Comm. of

Excise Central Excise

Act. 1944 4.28 2003-04 - Asst. Comm. of

Central Excise

9.17 2000-01 - High Court,

Hyderabad

(ii) Income 1.99 1991-92 - Income Tax

Tax Act, Appellate Tribunal

1961 2.16 1992-93 - Income Tax

Appellate Tribunal

19.16 1993-94 - Income Tax

Appellate Tribunal

13.14 1995-96 - Income Tax

Appellate Tribunal

21.30 1996-97 - Income Tax

Appellate Tribunal

3.12 1999- - Income Tax

2000 Appellate Tribunal

12.44 2001-02 - Income Tax

Appellate Tribunal

(x) The company has no accumulated losses and hasnot incurred any cash losses during the currentfinancial year or for immediately preceding financialyear.

(xi) In our opinion and according to the information andexplanations given to us, the company has notdefaulted in repayment of dues to financial institutionor banks. The company has not obtained anyborrowings by way of debentures.

(xii) In our opinion and according to the information andexplanation given to us, no loans and advanceshave been granted on the basis of security by wayof pledge of shares, debentures and other securities.

(xiii)The company has given guarantee for loans takenby others from banks or financial institutions. Inour opinion and based on the information andexplanations given to us, the terms and conditionsare considered not prejudicial to the interest of thecompany.

(xiv)To the best of our knowledge and belief andaccording to the information and explanations givento us, in our opinion, the term loans raised duringthe year were prima facie been used for thepurpose for which they were raised. The term loansoutstanding at the beginning of the year wereapplied for the purpose for which they were obtained.

(xv) According to the information and explanationsgiven to us and on an overall examination of thebalance sheet of the company, we report that nofunds raised on short-term basis have been usedfor long-term investment.

(xvi)During the year, the company has not made anypreferential allotment of shares to parties andcompanies covered in the register maintained undersection 301 of the Companies Act, 1956.

(xvii) According to the information and explanationsgiven to us, the company has not issued anydebentures during the year.

(xviii) The company has not raised any money by wayof public issue during the year.

(xix)To the best of our knowledge and belief andaccording to the information and explanations givento us, no fraud on or by the company was noticedor reported during the year.

(xx) In our opinion and according to the information andexplanations given to us, the nature of the company’sbusiness/activities during the year are such thatclause;

4(xiii) provisions of any special statute applicableto chit fund,

4(xiv) dealing or trading in shares, securities,debentures and other investments

of Company (Auditors’ Report) Order,2003 are not applicable to the company.




This is the Balance Sheet referred For and on behalf of the Boardto in our report of even date Ramchandra R. Gandhi : Chairman

Virendra R. Gandhi : Vice-Chairman &For KANTILAL PATEL & CO. Managing DirectorChartered Accountants Rajesh R. Gandhi : Managing Director

Devanshu L. Gandhi : Managing DirectorArpit K. PatelPartner Nikhil Patel : Company Secretary

Place : Ahmedabad Place : AhmedabadDate : June 30, 2008 Date : June 30, 2008

BALANCE SHEET AS AT 31ST MARCH, 2008

SCHEDULE As At As At31.03.2008 31.03.2007

(Rs. in Lacs) (Rs. in Lacs) (Rs. in Lacs)

I. SOURCES OF FUNDS :

(1) Shareholders’ Funds:Share Capital 1 718.78 718.78Reserves & Surplus 2 2,824.45 2,582.03

3,543.23 3,300.81(2) Deferred Government Grant 38.36 41.56(3) Loan Funds :

Secured Loans 3 4,488.74 2,655.75Unsecured Loans 4 1,012.17 822.61

5,500.91 3,478.36(4) Deferred Tax Liability (Net) 5 505.68 423.00

TOTAL -> 9,588.18 7,243.73

II. APPLICATION OF FUNDS :(1) Fixed Assets : 6

(a) Gross Block 8,135.97 6,181.59Less : Depreciation 3,568.41 3,226.65

Net Block 4,567.56 2,954.94(b) Capital Work - In - Progress 641.05 730.81

5,208.61 3,685.75(2) Investments : 7 331.65 331.89(3) Current Assets, Loans & Advances :

(a) Inventories 8 3,086.06 2,438.17(b) Sundry Debtors 9 2,737.01 2,191.53(c) Cash & Bank Balances 10 146.50 103.54(d) Other Current Assets 11 70.59 41.25(e) Loans & Advances 12 1,075.46 923.10

Sub Total (A) -> 7,115.62 5,697.59LESS : Current Liabilities & Provisions :(a) Current Liabilities 13 2,838.84 2,011.80(b) Provisions 14 271.51 491.85

Sub Total (B) -> 3,110.35 2,503.65Net Current Assets (A - B) 4,005.27 3,193.94

(4) Misc. Expenditure 15 42.65 32.15(To the extent not written off or adjusted)

TOTAL -> 9,588.18 7,243.73

Significant Accounting Policies 22Notes to Financial Statements 23


Year Ended Year EndedSCHEDULE 31.03.2008 31.03.2007


I INCOME :(a) Income From Operations 16 13,263.69 11,980.76

Less : Excise Duty on sales 1.85 0.82

Net Turnover 13,261.84 11,979.94(b) Other Income 17 287.10 157.28

Total 13,548.94 12,137.22

II EXPENDITURE :(a) (Increase) / Decrease in stock 18 (509.36) (166.76)(b) Materials Consumed and Purchase of goods 19 8,194.14 6,906.37(c) Manufacturing & Other Expenses 20 4,438.24 3,913.82(d) Financial Expenses (Net) 21 428.00 302.67(e) Depreciation 436.80 317.66

Less : Withdrawn From Revaluation Reserve/ 26.14 26.25 Deferred Govt. Grant

410.66 291.41

Total 12,961.68 11,247.51

III Profit before Exceptional & Prior year items 587.26 889.71IV Prior Years’ Adjustments (Net) (0.30) (2.21)

V Profit before Tax 586.96 887.50VI Provision for Tax (Refer Note I on Schedule 22)

- Current 100.10 272.00- Deferred 87.52 (5.71)- Fringe Benefit Tax 13.00 11.00- (Short) / Excess Provision of Tax / Deferred Tax (6.16) (51.35) of earlier years (Net)

VII Net Profit after Tax 380.18 558.86VIII Profit Brought Forward 263.65 255.71


Appropriations :(a) General Reserve 259.40 450.00(b) Proposed Dividend 86.26 86.26(c) Tax on Proposed Dividend 14.66 14.66(d) Balance carried to Balance Sheet 283.51 263.65

Total 643.83 814.57

Basic and Diluted Earnings Per Share of Rs. 10/- each 5.29 7.77(Refer Note 10 on Sch 23)


PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 2008

This is the Profit & Loss Account referred For and on behalf of the Boardto in our report of even date Ramchandra R. Gandhi : Chairman





A CASH FLOW FROM OPERATING ACTIVITIESNet profit before tax and Exceptional Items 587.26 889.71Adjusted for

Depreciation 436.80 317.66Withdrawn From Revaluation Reserve / (26.14) (26.25)Deferred Government GrantLoss / (Profit) on sale of Assets 3.37 (19.58)Loss / (Profit) on Partnership Firms (Net) (29.68) (24.61)Provision For Doubtful Advances 7.20 2.30Bad Debts 2.80 11.95Consideration Short received on Sale of property 0.11 3.80Voluntary Retirement Scheme 18.25 22.75Upfront Interest on restructuring of Loan 5.21 6.85Diminuition in value of Current Investments 0.24 0.00Excess Provision written back (71.07) (36.93)Dividend (0.14) (0.13)Financial Expenses (Net) 428.00 302.67

Operating Profit before working capital changes 1,362.21 1,450.19Adjusted for

Trade and other Receivables (649.51) (344.20)Inventories (647.89) (665.13)Trade Payables and Liabilities 883.31 558.25Deferred Revenue Expenditure (33.97) 0.00

Cash Generated from Operations 914.15 999.11Direct taxes (paid / adjusted) (346.84) (143.26)

Cash flow before extraordinary items 567.31 855.85Net Prior Year Expenses (0.30) (2.21)

Net Cash from Operating Activities 567.01 853.64B. CASH FLOW FROM INVESTING ACTIVITIES

Loans given (Net) (29.02) 43.19Purchase of fixed assets (1,910.12) (919.14)Sale of fixed assets 8.17 19.06Sale of Investments (0.24) 0.00Interest received 61.67 56.85Dividend received 0.14 0.13

Net Cash used in Investing Activities (1,869.40) (799.91)C CASH FLOW FROM FINANCING ACTIVITIES

Proceeds from borrowings 3,329.86 1,292.71Repayment of borrowings (1,307.31) (999.36)Interest paid (578.04) (427.36)Dividend paid (99.16) (82.31)

Net Cash used in Financing Activities 1,345.35 (216.32)

Net Increase/(Decrease) in cash and 42.96 (162.59)Cash equivalents (A+B+C)Op. Balance of Cash and Cash Equivalents (Includes unrealised 103.54 266.13exchange difference of Rs. 0.28 lacs (P.Y. Rs. 0.55 lacs))Cl. Balance of Cash and Cash Equivalents (Includes unrealised 146.50 103.54exchange difference of Rs. 0.05 lacs (P.Y. Rs. 0.28 lacs))Major Components of Cash and Cash Equivalents as at 31.03.2008 31.03.2007Cash and Cheques on hand 29.47 27.95Balance With Banks - On Current Accounts 81.45 31.16 - On Fixed / Margin Money Deposit Accounts 35.58 44.43

146.50 103.54

CASH FLOW STATEMENT ANNEXED TO THE BALANCE SHEETFor the year For the year

ended ended31.03.2008 31.03.2007


This is the Cash Flow Statement referred For and on behalf of the Boardto in our report of even date Ramchandra R. Gandhi : Chairman


Devanshu L. Gandhi : Managing DirectorArpit K. PatelPartner Nikhil Patel : Company SecretaryPlace : Ahmedabad Place : AhmedabadDate : June 30, 2008 Date : June 30, 2008

Notes :1. The above Cash Flow has been prepared under Indirect Method set out in AS 3, issued by The Institute of Chartered Accountants of India.2. Previous Year figures have been restated wherever necessary to make them comparable with current year figures.


SCHEDULES TO BALANCE SHEET AND PROFIT AND LOSS ACCOUNT

As At As At31.03.2008 31.03.2007

(Rs. in Lacs) (Rs. in Lacs)

SCHEDULE : 1 SHARE CAPITALAUTHORISED :1,00,00,000 Equity Shares of Rs. 10/- each 1,000.00 1,000.00

1,000.00 1,000.00

ISSUED AND SUBSCRIBED :71,88,230 ( P.Y. 71,88,230 ) Equity Shares of Rs. 10/- each 718.82 718.82

718.82 718.82

PAID UP :71,88,230 ( P.Y. 71,88,230 ) Equity Shares of Rs. 10/- each 718.82 718.82(Of the above Equity Shares 15,53,500 Equity Shares are allottedas fully paid up by way of Bonus Shares by Capitalisation of GeneralReserve of Rs. 155.35 lacs and 5,08,230 Equity Shares of Rs. 10/-each issued as fully paid up pursuant to the scheme of amalgamation ofVadilal Financial Services Limited with the company)Less : Calls Unpaid (Other than Directors) 0.04 0.04

718.78 718.78

SCHEDULE : 2 - RESERVES & SURPLUS

Balance Addition Deduction/ BalanceAs at During the Adjustment As at

01.04.2007 Year During the year 31.03.2008(Rs. in Lacs) (Rs. in Lacs) (Rs. in Lacs) (Rs. in Lacs)

1 Capital Reserve 8.82 0.00 0.00 8.82(8.82) (0.00) (0.00) (8.82)

2 Securities Premium Account* 487.27 0.00 0.00 487.27(487.27) (0.00) (0.00) (487.27)

3 General Reserve 1,650.00 259.40 9.40 ** 1,900.00(1,200.00) (450.00) (0.00) (1,650.00)

4 Revaluation Reserve*** 172.29 0.00 27.44 144.85(Refer Note No C (ii) on Schedule 22) (195.34) (0.00) (23.05) (172.29)

5 Profit & Loss Account 263.65 283.51 (a) 263.65 (b) 283.51(255.71) (263.65) (255.71) (263.65)

2,582.03 542.91 300.49 2,824.45(2,147.14) (713.65) (278.76) (2,582.03)

NOTE: Figures shown in Bracket relate to previous year* Securities Premium 487.32

Less : Calls Unpaid (arrears) 0.05

487.27

** Charge on account of transitional provisions underAccounting Standard 15 Gross Rs 14.24 Lacs. DeferredTax Assets (Net) Rs 4.84 Lacs.

*** Opening Balance 172.29Less : Utilised during the year 22.93Less : Inter Unit Transfer / Sale / Discarded 4.51

144.85

(a) Transferred from(b) Transferred to

As At As At31.03.2008 31.03.2007


SCHEDULE : 3 SECURED LOANSA. TERM LOANS

I) From Financial Institutions 525.00 205.60

Carried Forward... 525.00 205.60


As At As At31.03.2008 31.03.2007


Brought Forward... 525.00 205.60II) Loans from Banks 1,239.01 553.14

(Principal repayable within One yearRs. 129.91 Lacs (P.Y. Rs. 100.85 Lacs))

B WORKING CAPITAL LOANSFrom Banks 2,722.50 1,897.01Add : Interest accrued & due 2.23 0.00

2,724.73 1,897.01

A 1) Term loans from IDBI, SBI, Exim Bank and MFPI(BOB - Bank Guarantee) are secured by way ofLegal Mortgage on immovable properties andhypothecation on movable properties of the Companysituated at the following places by way of 1st and 2ndcharge on pari passu basis :-i Dudheshwar, Ahmedabad (Icecream Plant) (1st Charge)ii Dharampur, Dist.: Valsad (Canning Unit) (1st Charge)iii Basement and 3rd Floor, Vadilal House,

Navrangpura, Ahmedabad (Office Complex) (1st Charge)iv Village Pundhra, Tal : Kalol, Dist. : Gandhinagar

(Icecream Plant) (1st Charge)v Unit - I, Parsakhera Industrial Estate,Bareilly,

U.P.(Icecream Plant (1st Charge)vi Dharampur, Dist,: Valsad (IQF Unit) (2nd Charge)vii Ground and 2nd Floor, Vadilal House, Navrangpura,

Ahmedabad (Office Complex) (2nd Charge)viii Dharampur, Dist. : Valsad (New Land) (1st Charge)ix Unit - II, Parsakhera Industrial Estate, Bareilly,

U.P. (Icecream Plant) (Only on movable propertiesas 1st Charge)

x Gomtipur, Ahmedabad (earlier in Gujarat CupCompany, a Partnership Firm)(Only on movable properties as 1st Charge)

xi Gomtipur, Ahmedabad (earlier in VadilalCone Company) ( Only on movable propertiesas 1st Charge)

xii Specific additional Plant & Machinery situatedat IQF Unit, Dharampur and Bareilly Unit - II(movable properties in favour of IDBI Ltd. as1st Charge)

2) The above Term Loans are also secured by way of Hypothecation onentire current assets of the Company on 2nd pari-passu charge basis

3) Vehicle Loans are secured by hypothecation of vehicles

B 1) Working Capital facilities from consortium banks namelyBOB, SBI, SBT, SIB, IDBI Ltd and Exim Bank are secured byway of legal mortgage on Immovable properties and hypothecation onmovable properties of the Company situated at the following placesby way of 1st & 2nd Charge on pari-passu basis :-i Dudheshwar, Ahmedabad (Icecream Plant) (2nd Charge)

ii Dharampur, Dist. : Valsad (Canning Unit) (2nd Charge)

iii Basement and 3rd Floor, Vadilal House, Navrangpura,Ahmedabad (Office Complex) (2nd Charge)

iv Village Pundhra, Taluka Kalol, Dist. : Gandhinagar(Icecream Plant) (2nd Charge)

v Unit - I, Parsakhera Industrial Estate,Bareilly,U.P.(Icecream Plant) (2nd Charge)

vi Dharampur, Dist. : Valsad (IQF Unit) (1st Charge)

vii Ground and 2nd Floor, Vadilal House, Navrangpura,Ahmedabad (Office Complex) (1st Charge)

Carried Forward... 4,488.74 2,655.75


As At As At31.03.2008 31.03.2007


Brought Forward... 4,488.74 2,655.75

viii Unit - II, Parsakhera Industrial Estate, Bareilly, U.P.(Icecream Plant) (Only on movable properties as 2nd Charge)

ix Gomtipur, Ahmedabad (earlier in Gujarat Cup Company,a Partnership Firm) (Only on movable properties as 2nd Charge)

x Gomtipur, Ahmedabad (earlier in Vadilal Cone Company)( Only on movable properties as 2nd Charge)

2) The Working Capital facilities are also secured by way of hypothecationon entire current assets of the Company on 1st pari-passu charge basis.

C The Term Loans and Working Capital facilities are also secured byPersonal Guarantee of some of the Directors of the Company and alsoguaranteed by two Companies

4,488.74 2,655.75

SCHEDULE : 4 UNSECURED LOANS(a) Fixed Deposits 712.69 723.80

Add: Interest accrued and Due 9.83 7.12(Repayable within One year Rs. 401.63 Lacs(P.Y. Rs. 553.45 lacs)) 722.52 730.92

(b) Inter Corporate Deposits 52.27 56.55(c) Security Deposits from Customers 37.40 35.14(d) Development Credit Bank Ltd (Short Term Loan) 199.98 0.00

1,012.17 822.61

SCHEDULE : 5 DEFERRED TAX LIABILITY (NET)(Refer Note No I (a) on Schedule 22)Deferred Tax Liability

Difference between book and Income Tax Depreciation 532.22 445.06Other Timing Difference 10.11 5.71

542.33 450.77Deferred Tax Assets

Expenditure under section 43 B of the Income Tax Act, 1961 20.88 24.00Other Timing Difference 15.77 3.77

36.65 27.77

Deferred Tax Liability (Net) 505.68 423.00

SCHEDULE : 6 FIXED ASSETS (Refer Note No. C on Schedule 22) (Rs. in Lacs)

GROSS BLOCK (AT COST / REVALUED) DEPRECIATION NET BLOCKAs At Addition Deduction As At Up to As At As At

31.03.2007 31.03.2008 31.03.2008 31.03.2008 31.03.2007

Land (Freehold) 161.72 4.34 0.00 166.06 0.00 166.06 161.72

Land (Leasehold) 100.66 10.50 0.00 111.16 0.00 111.16 100.66

Buildings 1,266.98 464.13 0.00 1,731.11 357.43 1,373.68 945.05

Plant & Machinery 4,123.41 1,525.56 83.01 5,565.96 2,804.23 2,761.73 1,626.67

Furniture & Fixtures 105.73 3.99 0.00 109.72 91.57 18.15 20.61

Office Equipments 287.08 22.30 17.52 291.86 224.25 67.61 56.24

Vehicles 136.01 34.65 10.56 160.10 90.93 69.17 43.99

Total (A) 6,181.59 2,065.47 111.09 8,135.97 3,568.41 4,567.56 2,954.94

Leased Assets

Vehicles 0.00 0.00 0.00 0.00 0.00 0.00 0.00

Total (B) 0.00 0.00 0.00 0.00 0.00 0.00 0.00

Total (A+B) 6,181.59 2,065.47 111.09 8,135.97 3,568.41 4,567.56 2,954.94

Previous year 5,822.30 426.29 67.00 6,181.59 3,226.65 2,954.94 2,848.75

Capital W I P 730.81 641.05 730.81 641.05 0.00 641.05 730.81

Previous Year 91.95 723.26 84.40 730.81 0.00 730.81 91.95


NOTES :I. Land & Building includes Rs.29.43 lacs (P.Y. Rs. 100.66 lacs) & Rs. 151.61 lacs (P.Y. Rs. 170.99 lacs)

respectively in process of being transferred in the name of the company.II. a. Building includes House Building of Rs. 12.90 lacs (Gross) (P.Y. Rs. 12.90 lacs) acquired against loan which is yet

to be transferred in the name of the company.b. The Value of Building acquired against loan includes cost of documentation charges.

III Borrowing cost capitalised during the year and shown in additions to fixed assets Rs. 39.50 Lacs (P.Y. Rs 3.46 Lacs) andin additions to Capital work in progress Rs. 26.09 Lacs (P.Y. Rs. 12.38 Lacs)

IV. Estimated amount of contracts (Net Amount) remaining to be executed on capital account not provided for Rs. 178.72 Lacs(P.Y. Rs. 689.06 lacs)

V Capital Work in progress includes -i) Rs 492.05 Lacs (P.Y. Rs 193.01 Lacs) on account of Construction materials at siteii) Rs 115.87 Lacs (P.Y. Rs 525.42 Lacs) on account of Capital Advancesiii) Rs 33.13 Lacs (P.Y. Rs 12.38 Lacs) on account of Preoperative expenses

31.03.2008 31.03.2007(Rs. in Lacs) (Rs. in Lacs)

Preoperative Expensesa Opening Balance 12.38 0.00b Add :

Expenses Transferred from Profit & Loss Account 45.54 0.00Interest Capitalised 65.59 15.84

c Less : 111.13 15.84Capitalised during the year 90.38 3.46

Closing Balance 33.13 12.38

VI . Adjusted Depreciation upto 01.04.2007 3,226.65Add : Depreciation for the year 436.80

3,663.45Less : Depreciation adjusted on Assets Sold / Discarded / Transferred during the year 95.04

3,568.41

Face No of As At No of As AtValue Units / 31.03.2008 Units / 31.03.2007

(in Rs.) Shares (Rs. in Lacs) Shares (Rs. in Lacs)

SCHEDULE : 7 INVESTMENTS (At or below Cost)(Refer Note No D on Schedule 22)I Long Term Investments1 In Government / Other Securities

Unquoted(i) 7 Year National Saving Certificates 0.00 0 0.28 0 0.28

(Lodged with Govt. Authorities)(ii) 11.5 % IDBI Bond 2008 1,000.00 280 2.41 280 2.41

2 Trade Investmentsa) In Equity SharesQuoted(i) Vadilal Chemicals Ltd. 10.00 1473100 162.04 1473100 162.04Unquoted(i) Vadilal Happinezz Parlour Ltd 10.00 72500 7.25 72500 7.25(ii) Vadilal Gases Ltd. 10.00 165000 14.84 165000 14.84(iii) Majestic Farm House Ltd. 10.00 74100 1.87 74100 1.87

b) In Partnership Firm (Refer Note No 8 (D)on Schedue 23)(i) Vadilal Cold Storage 0.00 0 140.00 0 140.00

c) Other InvestmentsEquity Shares - other than trade

Unquoted(i) Textile Traders Co.op. Bank Ltd 25.00 4195 1.05 4195 1.05(ii) Siddhi Co.op. Bank Ltd 25.00 3540 0.89 3540 0.89

Total (I) 330.63 330.63


Face No of As At No of As AtValue Units / 31.03.2008 Units / 31.03.2007

(in Rs.) Shares (Rs. in Lacs) Shares (Rs. in Lacs)

II Currrent InvestmentsIn Equity SharesQuoted(i) Aminex Chemicals Ltd. 10.00 400 0.04 400 0.04(ii) Golden Agro Tech Industries Ltd 10.00 200 0.02 200 0.02(iii) Interface Financial Services Ltd 1.00 25000 2.00 25000 2.00(iv) Century Enka Ltd 10.00 15 0.06 15 0.06(v) Radhe Developers Ltd 10.00 4900 0.49 4900 0.49(vi) Matrix Laboratories Ltd 2.00 120 0.64 120 0.64(vii) Saket Projects Ltd 10.00 2500 0.25 2500 0.25(viii) Great Eastern Shipping Co.Ltd 10.00 100 0.04 141 0.05(ix) Great Offshore Ltd 10.00 25 0.01 0 0.00(x) Essar Steel Ltd. 10.00 60 0.01 60 0.01

3.56 3.56Less : Diminution in value of Investments 2.54 2.30

Total (II) 1.02 1.26In Preference SharesUnquoted(i) Essar Steel Ltd. 10.00 0.00 0.00 40.00 0.01

Total (I+II) 331.65 331.89

Aggregate Value of -a. Quoted Investments

Book Value 165.60 165.60Market Value ** 180.36 164.02

b. Unquoted InvestmentsBook Value 168.59 168.59

** In respect of Investment in shares of M/S Vadilal Chemicals Limited, book value of shares is considered in the absence ofany trading in the market.

As At As At31.03.2008 31.03.2007


SCHEDULE : 8 INVENTORIES(Refer Note No E on Schedule 22)Stores & Spares 134.53 88.96Raw Materials 898.25 911.67Packing Materials 526.00 419.51Finished Goods (Includes Goods in Transit 1,527.28 1,018.03

Rs. 85.21 Lacs (P.Y. Rs. 76.45 Lacs)

3,086.06 2,438.17

SCHEDULE : 9 DEBTORS (UNSECURED)Outstanding over six months

Considered Good 13.44 39.43Others

Considered Good 2,723.57 2,152.10

2,737.01 2,191.53

SCHEDULE : 10 CASH & BANK BALANCESCash Balance 29.47 27.95(Including cheques on hand / D D in transit

Rs. 8.11 Lacs (P.Y. Rs. 0.88 Lacs))Bank Balances.With Scheduled Banks.

In Current Accounts 76.54 28.00In Fixed / Margin Money Deposit Accounts * 35.58 44.43In Unpaid Dividend A/c 4.91 3.16


As At As At31.03.2008 31.03.2007


* Out of which deposit of Rs. 28.37 Lacs(P.Y. Rs. 43.54 Lacs)(pledged with scheduled banks)

(b) With OthersTextile Traders Co op Bank LtdIn Current Accounts 0.00 0.00(Maximum amount outstanding at any timeduring the year Rs. Nil (P.Y. Rs. 0.01 Lacs))

146.50 103.54

SCHEDULE :11 OTHER CURRENT ASSETSInterest Receivable 70.59 41.25

70.59 41.25

SCHEDULE :12 LOANS & ADVANCES(Unsecured, considered good unless otherwise stated)Advances recoverable in cash or in kind or for value to be received

Considered Good 369.59 287.59Considered Doubtful 9.50 2.30Less : Provided for : 9.50 2.30

0.00 0.00

369.59 287.59Staff Loan 8.04 7.12Deposits with Government Authorities 104.92 87.31

Considered Doubtful 3.76 3.76Less : Provided for : 3.76 3.76

0.00 0.00

104.92 87.31Other Trade / Security Deposits 408.12 414.73Advance Income Tax less Provision (Current Tax) 56.21 56.47Loans in Current Account 36.60 1.79Balance with Firm in which company is a partner 91.98 68.09

1,075.46 923.10

SCHEDULE : 13 CURRENT LIABILITIESSundry Creditors (Refer Note No 14 on Schedule 23) 1,266.21 949.93Other Liabilities 427.14 403.16Bills Payable 1,006.09 441.35Advances From Customers 33.91 25.87Interest accrued but not due on loans 55.69 49.13Temporary Overdraft in Current A/C with Banks 2.13 95.09Due to Managing Directors 12.83 18.09Unclaimed Dividends 4.90 3.15Unpaid Matured Deposits * 26.43 22.99Interest on Deposits * 3.51 2.74Unpaid Matured Debenture & Interest 0.00 0.30* These figures includes Rs. 0.98 lacs due and

outstanding as on date 31.03.2008, subsequently 2,838.84 2,011.80Rs. 0.83 lacs credited to Investor Education andProtection Fund, except Rs. 0.15 lacs (P.Y. Rs 0.15 lacs)which is held in abeyance due to legal case pending

SCHEDULE : 14 PROVISIONSEmployee Benefits (Refer Note No F On Schedule 22) 91.36 76.86Income Tax Less Advance Tax (Current Tax) 64.70 294.54Fringe Benefit Tax (Net) 8.00 6.00Proposed Dividend 86.26 86.26Tax on Proposed Dividend 14.66 14.66Other Provisions 6.53 13.53(Refer Note No 9 of Schedule 23)

271.51 491.85


As At As At31.03.2008 31.03.2007


SCHEDULE :15 MISCELLANEOUS EXPENDITUREEmployees seperation cost (Refer Note No O (a) of Schedule 22) 26.02 18.51Upfront Interest on restructuring of loan (Refer Note No O (b) of Schedule 22) 8.42 13.64Ancilliary Cost incurred in connection with Term Loans Borrowings 8.21 0.00

(Refer Note No H(ii) of Schedule 22) 42.65 32.15

Unit of Year Ended Year EndedMeasure- 31.03.2008 31.03.2007

-ment (Qty) (Rs. in Lacs) (Qty) (Rs. in Lacs)

SCHEDULE : 16 INCOME FROM OPERATIONS(Refer Note No G (i) on Schedule 22)Sales

Ice Cream & Frozen Desserts K. Ltrs 23,708.00 10,241.09 21,335.00 8,885.69Fruit Pulp,Frozen Fruits & Vegetables M.Tonnes 6,251.00 3,016.83 5,509.00 3,091.65Others - - 0.08 - 0.00

Income from Money Changing Business 5.69 3.42Sales includes Export Benefits / Licence

DEPB / Forward ContractRs. 288.41 Lacs (P.Y. Rs. 280.94 Lacs )

13,263.69 11,980.76

Year Ended Year Ended31.03.2008 31.03.2007


SCHEDULE : 17 OTHER INCOMEProfit on Sale of Fixed Assets 0.00 19.58Share of Profit / (Loss) of Partnership Firms (Refer Note No 2 (b) on Schedule 23) 29.68 24.61Excess Provision Written Back / Amount written off in earlier years recovered 71.07 36.93Miscellaneous Income 170.61 68.33Foreign Exchange Rate Fluctuation (Refer Note No J on Schedule 22) 15.60 7.70Dividend (Gross)

On Long Term Investments 0.14 0.13

287.10 157.28

SCHEDULE : 18 (INCREASE)/DECREASE IN STOCKOpening Stock :

Finished Goods 1,018.03 851.47Less : Excise Duty 0.73 0.93

1,017.30 850.54Closing Stock

Finished Goods 1,527.28 1,018.03Less : Excise Duty 0.62 0.73

1,526.66 1,017.30

(509.36) (166.76)

SCHEDULE : 19 MATERIALS CONSUMED AND PURCHASE OF GOODSRaw & Packing Materials Consumption (Refer Note No 20 on Schedule 23) 8,128.56 6,897.74Purchase of Finished Goods (Refer Note No 19 on Schedule 23) 65.58 8.63

8,194.14 6,906.37

SCHEDULE : 20 MANUFACTURING AND OTHER EXPENSESEmployees’ Expenses

Salary, Wages, Allowances, Gratuity & Bonus, etc 590.12 543.74Contribution to Provident & other funds 42.58 34.78Staff Welfare Expenses 51.57 50.59

684.27 629.11Excise Duty others 58.41 57.59Job Charges 584.81 479.11Power & Fuel 906.39 804.21Stores & Spares Consumption 31.74 64.88Warehouse Charges 195.40 143.25


Year Ended Year Ended31.03.2008 31.03.2007


RepairsBuilding 20.01 12.66Machinery 124.73 68.86Others 37.44 27.89

Other Manufacturing Expenses 45.04 36.24Rent 4.99 3.74Rates & Taxes 7.12 4.95Insurance 35.69 35.35Donation 1.33 3.14Vehicle Repairs & Petrol Expenses 49.57 53.83Research & Development Expenses (Refer Note No N on Schedule 22) 5.41 3.20Directors’ Sitting Fees 0.80 1.14Travelling 74.78 63.42

(Includes Directors Travelling Rs. 10.37 Lacs (P.Y. Rs 16.04 Lacs)Freight and Forwarding 1,143.56 1,078.40Entry Tax and Sales Tax Assessment Dues 12.37 13.54Advertisement & Sales Promotion 23.67 19.90Sales Commission and Brokerage 13.31 15.96Provision for Doubtful Debts & Advances 7.20 2.30Bad Debts 2.80 11.95Consideration Short received on Sale of property Development 0.11 3.80Loss on sale of Fixed Assets 3.37 0.00Diminuition in Value of Investments 0.24 0.01Royalty 10.81 17.71Other Expenses (Including Legal & Professional, 352.87 257.68

Conveyance, Telephone, Postage, Printing &Stationery, Reuter’s Fees, etc) 4,438.24 3,913.82

SCHEDULE : 21 FINANCIAL EXPENSES (NET)(Refer Note No H on Schedule 22)Fixed Loans 126.15 83.35Bank Overdrafts 168.75 119.02Fixed Deposits 67.68 59.26Others 12.61 7.52Bill Discounting Charges 80.23 42.12Brokerage & Other Financial Charges 63.59 59.40

519.01 370.67Less : Interest Income 91.01 68.00(TDS Rs. 20.55 lacs (P.Y. Rs. 12.46 lacs)

428.00 302.67

SCHEDULE : 22

SIGNIFICANT ACCOUNTING POLICIES :

A) ACCOUNTING CONVENTION :

The financial statements have been prepared in accordance with the accounting principles generally accepted in India(Indian GAAP) and comply with the Companies (Accounting Standards) Rules,2006 issued by the Central Government andrelevant provisions of Companies Act,1956 and are based on the historical cost convention as modified to include therevaluation of certain fixed assets.

B) USE OF ESTIMATES

Preparation of financial statements in confirmity with the generally accepted accounting principles require management tomake estimates and assumptions that affect the reported amounts of assets and liabilities on the date of the financialstatements and the reported amount of revenues and expenses during the reporting period. Differance between the actualresult and estimates, are recognised in the period in which the results are known/materialised.

C) FIXED ASSETS, DEPRECIATION AND EXPENDITURE DURING CONSTRUCTION PERIOD :

i) Fixed assets are stated at cost of acquisition & installation, net of cenvat and VAT credits availed ,if any, and includesamount added on revaluation less accumulated depreciation and impairment loss, if any. Pre-operative expenses,borrowing costs incurred during the periodof construction/acquisition of assets areadded to the cost of FixedAssets.Major expenses on modification /alterations increasing efficiency/capacity of the plant are alsocapitalised.Adjustments arising from exchange rate variations relating to borrowings attributable to the fixed assetsacquired from a country outside india are capitalised up to 31.03.2007.


ii) Free hold Land, Building and Plant & Machineries of Ice Cream Plant, Ahmedabad and Agri. Foods plant, Dharampurhave been revalued as on 31st March 2000 and are shown at the value approved by an external valuer, usingrelpacement basis policy.

The net increase due to revaluation of such assets of Rs. 669.82 lacs (Previous year Rs. 669.82 lacs) is transferredto revaluation reserve account which stands reduced to Rs.144.85 lacs as at 31st March 2008 (Previous yearRs.172.29 lacs) after charging incremental depreciation and adjustment for disposal/inter unit transfer during the lasteight years. The revalued amount of Rs. 2298.70 lacs (Previous year Rs. 2378.47 lacs) stands substituted for historicalcost of Rs. 1424.14 lacs (Previous year Rs.1470.71 lacs) in the gross block of fixed assets.

iii) a) Depreciation on fixed assets is provided on Straight Line Method at the rates and in the manner prescribed inSchedule XIV of the Companies Act 1956, (as amended).

b) Incremental cost arising on account of translation of foreign currency liabilities up to 31.03.2007 for acquisitionof fixed assets, depreciation has been provided over the residual life of the respective assets.

c) On revalued assets, depreciation is provided on the estimate of the remaining useful life of such assets.d) In respect of major alterations/modifications forming an integral part of existing assets, depreciation is provided

at the rate arrived on the basis of useful life of such assets after such alterations/ modifications or at the rateprescribed under schedule XIV, whichever is higher on the total value of such assets.

iv) IMPAIRMENT OF ASSETS

The carrying amount of assets is reviewed at each balance sheet date for any indication of impairment based oninternal/external factors. An impairment loss is recognised wherever the carrying amount of fixed assets exceeds itsrecoverable amount.The recoverable amount is measured as the higher of the net selling price and the value in usedetermined by the present value of estimated future cash flows.

D) INVESTMENTS :

Investments are classified into current and long term investments. Long term investments are carried at cost. A provisionfor diminution in value of long term investments is made for each investment individually ,if such decline is other thantemporary. Current investments are stated at the lower of cost and fair value, computed category wise.

E) INVENTORIES :

Inventories are valued as under:

i) RAW MATERIALS, PACKING : Valued at lower of cost or net realisable value and for this purposeMATERIALS AND STORES cost is determined on weighted average basis. Due provision for& SPARES. obsolescence is made.

ii) FINISHED GOODS & WORK : At cost or net realisable value, whichever is lower. Cost is determined-IN-PROGRESS on absorption basis. Due provision for obsolescence is made.

F) EMPLOYEE BENEFITS :

(a) Short Term Employee BenefitsAll employee benefits payable wholly within twelve months of rendering the service are classified as short termemployee benefits. Benefits such as salaries, wages, short term compensated absences, etc, and the expected costof bonus, ex-gratia are recognised in the period in which the employee renders the related service.

(b) Post-Employment Benefits :(i) Defined Contribution Plans :

State Governed provident fund scheme and employees state insurance scheme are defined contributionplans.The contribution paid / payable under the schemes is recognised during the period in which the employeesrenders the related services.

(ii) Defined Benefit Plans :The employee’s gratuity fund scheme and compensated absences is company’s defined benefit plans.

The present value of the obligation under such defined benefit plan is determined based on actuarial valuationusing the projected Unit Credit Method, which recognises each period of service as giving rise to additional unitof employee benefits entitlement and measures each unit seprately to build up the final obligation.

The obligation is measured at the present value of the estimated future cash flows. The discount rates used fordetermining the present value of the obligation under defined benefit plans, is based on the market yields onGovernment Securities as at the balance sheet date, having maturity periods approximating to the terms ofrelated obligations.

Acturial gains and losses are recognised immediately in the profit and loss account.

In case of funded plans, the fair value of the plan assets is reduced from the gross obligations under the definedbenefit plans, to recoginse the obligation on net basis.

Gains or losses on the curtailment or settlement of any defined benefits plans are recoginsed when thecurtailment or settlement occurs. Past service cost is recognised as expense on a straight-line basis over theaverage period until the benefits become vested.

(c) Long term employee benefits :The obligation for long term employee benefits such as long term compensated absences, is recognised in the samemanner as in case of defined benefit plans as mentioned in b) ii) above.


d) Termination benefits :

Where termination benefits such as compensation under voluntary retirement scheme are payable within a year of thebalance sheet date, the actual amount of termination benefits is amortised over a defined period.Where terminationbenefits are payable beyond one year of the balance sheet date, the discounted amount of termination is amortisedover the defined period.

The defined period of amortisation is 36 months or the period till March 31, 2010, whichever is earlier.

G) REVENUE RECOGNITION :

i) SALES ACCOUNTING :

a) Sales is inclusive of Excise,Export Incentives/Licences and exclusive of VAT and Sales Tax.

b) Excise duty paid for captive consumption of goods, where cenvet credit is not available, is shown as exciseexpense.

ii) DIVIDEND INCOME :

Dividend income from Investment is accounted for when the right to receive is established.

H) BORROWING COSTS :

i) Borrowing costs whether specific or general, utilized for acquisition, construction or production of qualifying assets arecapitalised as part of cost of such assets till the activities necessary for its intended use are complete. Generalborrowing costs are capitalised at the weighted average of such borrowings outstanding during the year.All otherborrowing costs are charged in statement of profit & loss of the year in which incurred.

ii) Ancilliary cost incurred in connection with term loan borrowings is amortised over the period of term loan.

I) TAXES ON INCOME AND EXPENSES

a) Current tax is determined as the amount of tax payable in respect of taxable income for the year. Deferred tax isrecognised, on timing difference, being the difference between taxable income and accounting income that originatein one period and are capable of reversal in one or more subsequent periods. Where there is unabsorbed depreciationor carry forward losses, deferred tax assets are recognised only if there is virtual certainty that sufficient future taxableincome will be available against which such assets can be realised. Other deferred tax assets are recognised only tothe extent there is reasonable certainty of realisation in future. Such assets are reviewed at each balance sheet dateto reassess realisation.

b) Fringe benefit tax has been determined at current applicable rate on taxes falling within the ambit of “Fringe Benefit”as defined under the Income Tax Act, 1961.

J) FOREIGN CURRENCY TRANSACTIONS :

i) Transactions denominated in foreign currencies are normally recorded at the Exchange Rate prevailing at the time ofthe transaction.

ii) Monetary items denominated in foreign currency at the year end are translated at the Exchange Rates prevailing atthe Balance Sheet date.

iii) Premium or discount arising at the inception of the forward exchange contract is amortised as income or expense overthe period of the contract. Any profit or loss arising in renewal or cancellation of forward exchange contracts isrecognised as income or expense during the year.

iv) Any income or expense on account of exchange difference either on settlement or on translation is recognised in theprofit and loss account.

v) Losses in respect of all outstanding derivative contracts at the balance sheet date is provided by marking them tomarket.

K) PROVISION, CONTINGENT LIABILITIES AND CONTINGENT ASSETS :

Provisions are recognised when the company has present obligation as a result of past events,for which it is probable thatan outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate canbe made for the amount of the obligation.

Contingent Liabilities are disclosed by way of notes to financial statements.

Contingent Assets are neither recognised nor disclosed in the financial statements.

Provisions, contingent liabilities and contingent assets are reviewed at each balance sheet date.

L) CONTINGENCIES AND EVENTS OCCURRING AFTER THE BALANCE SHEET DATE :

All contingencies and events occurring after the Balance Sheet date which have a material effect on the financial positionof the company are considered for preparing the financial statements.

M) ACCOUNTING FOR GOVERNMENT GRANTS :

i) Government grants in the form of promoters contribution is treated as capital receipt and credited to capital reserve.

ii) Grant in the form of revenue subsidy is treated as revenue receipt and credited to “Other Income” in Profit and LossAccount. However,from 2007-08, specific grants in the form of revenue subsidy is deducted from the related expenses.

iii) Grant towards specific fixed assets was presentedas deduction from its gross value up to 31.03.2005 and thereafterthe same is presented by credit to Deferred Government grant and amortised overthe period of useful life of specificfixed assets.


N) RESEARCH AND DEVELOPMENT EXPENSES :

Expenditure relating to capital items is debited to Fixed Assets and depreciated at applicable rates. Revenue expenditureis charged to Profit and Loss Account of the periodin which they are incurred.

O) MISCELLANEOUS EXPENDITURE :

a) Compensation paid for Voluntary Retirement of employees is amortised over a period of 36 months or the period upto 31st March 2010, whichever is earlier, as per the revised AS-15.

b) Upfront interest paid on restructuring of term loans is amortised over the tenure of such loans.

SCHEDULE : 23

NOTES TO FINANCIAL STATEMENTS

1) [ A ] CONTINGENT LIABILITIES NOT PROVIDED FOR : (Rs. in Lacs)

C. Year P. YearI) Guarantees given by the company 1245.00 995.00

against Term Loans given to companiesin which Directors are interested .

Outstanding against this as at 31.03.2008 523.03 582.94

II) i) For Excise -

a) Related to a matter decided in favour of the company,against which the Excise department has preferredan appeal.Gross Rs 18.03 lacs (P.Y. Rs 18.03 lacs)Net of Tax 11.96 11.96

b) Related to the matters for which, final hearing of thesubmissions filed by the company in response toshow cause notices by the Excise Department ispending.Gross Rs Nil lacs (P.Y. Rs 32.01 lacs)Net of Tax 0.00 21.24

c) Related to a matter which is disputed by thecompany against which appeal is preferred.Gross Rs. 2.64 lacs (P. Y. Rs. Nil lacs)Net of Tax 1.74 0.00

ii) For Income Tax -

a) whichis disputed by the company 5.55 5.55and against which company has preferred appeal,based on the demand notices raised by IncomeTax Dept. and received by the company.

b) Against which Income Tax department has 73.31 85.99preferred appeal (as per informationavailable with the company )

c) In respect of erstwhile Vadilal Financial Services 3.95 3.95Limited (VFSL) Income Tax Demand(including interest) for which the companyhas preferred appeal.

iii) For Sales Tax -

Disputed by the company and against whichcompany has preferred an appeal.Gross Rs 85.59 lacs ( P.Y. Rs 77.69 lacs )Net of Tax 56.78 51.54

iv) For other Matters -Gross Rs 1.94 lacs (P.Y. Rs.1.94 lacs)Net of Tax 1.29 1.29

v) In respect of other labour suits pending beforevarious courts, liability is unascertainable.

vi) Differential amount of custom/excise duty in respect 386.64 28.71of machinery imported under EPCG scheme.

Note : a) Future cash outflows in respect of A (II) (i) to (v) above depends on ultimate settlement / conclusions with the relevantauthorities.

b) Future cash outflows in respect of A (II) (vi) above depends if company unable to fulfill export obligations of Rs. 2450.53Lacs within next twelve years.


[B] Particulars of dues of Sales Tax, Income Tax and Excise Duty as at March 31, 2008, which have not been deposited.(I) Disputed cases, where company has preferred appeals.

Name of Nature Amount Period of Forum whereStatute of (Rs. in which the dispute is

dues Lacs) amount relates pending

(i) FOR SALES TAX ASST.DUESS.Tax Asst.dues 0.00 1997-98 S.Tax Tribunal

(2.37)Asst.dues 23.24 1998-99 S.Tax Tribunal

(23.24)Asst.dues 12.49 2000-01 Jt.Comm.,S.Tax

(0.00)Asst.dues 1.55 2001-02 Dy.Comm.,S.Tax



(0.00)Asst.dues 4.00 2003-04 Dy.Comm.,S.Tax




(3.67)

Total 65.92(54.94)

(ii) FOR S.TAX EXEMPTION CERTIFICATE - [ Ref.Note No.3 ]S.Tax Asst.dues 131.03 1997-98 High Court

(130.06) to 2004-05

(iii) FOR EXCISEExcise Cenvat credit 1.11 2005-06 Appellate Tribunal

(0.00)Cenvat credit 1.53 2006-07 Appellate

(0.00) Commissioner

Total 2.64(0.00)

iv) FOR INCOME TAXI. Tax Computation of

I. Tax under 6.22 2002-03 CIT (Appeals)section 115JB (6.22)

(II) Decided in favour of the company but the department has preferred appeals.

(i) Excise Goods clearedwithout duty 4.58 1988-89 Asst.Commissioner

(4.58)Cenvat credit 4.28 2003-04 Asst.Commissioner

(4.28)Cenvat credit 9.17 2000-01 High Court,

(9.17) Hyderabad

Total 18.03(18.03)

(ii) I.Tax I.Tax Asst. 1.99 1991-92 ITAT(1.99)

2.16 1992-93 ITAT(14.83)

19.16 1993-94 ITAT(19.17)

13.14 1995-96 ITAT(13.14)

21.30 1996-97 ITAT(21.30)

3.12 1999-2000 ITAT(3.12)12.44 2001-02 ITAT

(12.44)

Total 73.31(85.99)

Note : Figures in brackets relate to previous year.


2) a) INVESTMENT IN PARTNERSHIP FIRMS

The details regarding investment in the total capital of the partnership firm as well as Profit/Loss sharing ratio of thecompany alongwith other partner is stated hereunder :

Investment in the Capital of - ( Rs.in Lacs )M/s Vadilal Cold StorageTotal Capital Rs 142.90Investment in Capital Account Rs 140.00Name of the Partners Share in Profit/

Losses of the firmi) Vadilal Industries Limited 98 %ii) Vadilal Chemicals Limited 2 %

b) Amount of share of profit in partnership firm amounting to Rs. 29.68 Lacs have been accounted on the basis ofUnaudited Financial Statements of the partnership firm.

3) Company has availed Sales Tax exemption benefit of Rs. 151.46 lacs up to 31.03.2008 (previous year Rs.151.46 lacs) inrespect of assets and liabilities of Bareilly plant - II assigned from erstwhile company. In respect of erstwhile company,U.P.Trade Tax Tribunal has upheld the eligibility exemption against the order of Divisional Level Committee, Bareilly Region,Bareilly refusing exemption. Trade Tax Dept. U.P. has preferred appeal against the said order of U.P.Trade Tax Tribunal inHigh Court of Allahabad, Lucknow Bench.The company has filed counter appeal. Based on legal advise of its entitlementto sales tax exemption,the company is contesting demand for sales tax of Rs. 137.35 lacs (Previous year Rs. 136.38 lacs)raised up to 2004-05 for completed sales tax assessment.

4) a) The company has accounted transport subsidy available on exports for the year 2006-07 of Rs. 61.71 Lacs in currentyear on accrual basis due to reasonable certainty of receipt of claims.The same was earlier accounted on settlementbasis. The same has been shown under “Other Income”.

b) For the year 2007-08, though a formal policy is not pronounced by the distribution agency i.e. APEDA,(Agricultural andProcessed Food Products Export Development Authority) the company has accounted transport subsidy of Rs. 42.83Lacs, based on anticipation of pronouncement of such policy considering announcements by Government from timeto time and such benefit being made available in past years. Such income is deducted from freight expense.

5) a) The Company has taken building on operating lease that is renewable on a perodic basis and cancelable at its option.Rental expenses for operating lease recognised in statement of profit and loss for the year is Rs. 4.99 lacs (Previousyear Rs. 3.74 lacs).

b) In respect of asset taken on finance lease on or after 1st April, 2001 : (Rs. in Lacs)

Balance Not later Later than LaterParticulars as at than one one year & not than five

31.03.08 year later than five years years

i) Total of minimum lease payments 48.87 11.76 37.11 —ii) Present value of minimum lease payments 38.95 8.07 30.88 —

iii) A general description of the significant finance lease arrangements :The company has taken vehicle on finance lease for a period of 24 to 60 months.

6) The company has written down the inventories to net realisable value during the year by Rs. 73.08 Lacs (Previous yearRs. 35.82 Lacs).

7) (i) Pursuant to the transitional provision of Accounting Standard (AS) 15 (Revised) on “Employees Benefits”, an amountof Gross Rs 14.24 Lacs (Net of Tax Rs.9.40 Lacs) has been debited to the General Reserve. The said amount representthe difference between the liability in respect of various employees benefits determined under AS 15 (Revised) as onApril 1, 2007 and the liability that existed as on that date as per AS 15 prior to the revision.

(ii) Defined Contribution Plans:Amount of Rs. 24.90 Lacs is recognised as expense and included in “Employee’s Expenses” (Schedule 20) in the Profitand Loss Account.

(iii) Defined Benefit Plans :(a) The changes in the present value of defined benefit obligation representing reconciliation of opening and closing

balance thereof are as follows:

Particulars Gratuity Plan Leave EncashmentCurrent Year(Rs.in Lacs)

Opening defined benefit Obligation as at 01.04.07 83.07 26.34Service Cost 7.21 2.00Interest Cost 6.80 2.16Actuarial Losses (Gains) 2.94 1.38Losses (Gains) on curtailments — —Liabilities extinguished on settlements — —Benefits Paid (8.71) (2.24)

Closing defined benefit obligation as at 31.03.2008 91.31 29.64


(b) Changes in the fair value of plan assets representing reconciliation of the opening and closing balance thereofare as follows:


Opening fair value of plan assets as at 01.04.2007 35.85 —Expected return 3.75 —Acturial gains and (Losses) (0.85) —Assets distributed on settlements — —Contribution by employer 17.42 —Benifit paid (8.71) —

Closing balance of fair value of plan assets as at 31.03.2008 47.46 —

(c) The amounts recognised in Balance Sheet are as follows :


Amount to be recognised in Balance SheetA) Present Value of Defined Benefit Obligation- Funded 47.46 —- Unfunded 43.85 29.64

Total 91.31 29.64Less: Fair Value of Plan Assets 47.46 —- Unrecognised Past Service Costs — —

Amount to be recognised as liability 43.85 29.64

B) Amount Reflected in the Balance SheetLiabilities 43.85 29.64Assets — —

Net Liability/(Asset) 43.85 29.64

(d) The amounts recognised in Profit and Loss account are as follows:


1. Current Service Cost 7.21 2.002. Interest cost 6.81 2.163. Expected return on plan assets (3.75) —4. Net Acturial Losses (Gains) recognised in year 3.79 1.385. Past service cost — —6. Losses (gains) on curtailments and settlement — —

Total Included in ‘Employee’s expense’ [ Ref. Sch. 20 ] 14.06 5.54

Actual return on plan assets 2.90 —

(e) The Major categories of plan asset as a percentage of total plan assets are as follows:


Government of India Securities 0.00 % 0.00 %High quality corporate bonds 0.00 % 0.00 %Equity shares of listed companies 0.00 % 0.00 %Property 0.00 % 0.00 %Insurance company 100.00 % 0.00 %

(f) Principal acturial assumptions at the balance sheet date.(expressed as weighted averages):


Discount rate 8.20 % 8.20 %Expected return on plan assets 9.00 % 0.00 %Proportion of employees opting for early retirement/Attrition rate 17.00 % 17.00 %Annual increase in salary costs 6.00 % 6.00 %


The estimates of future salary increase, considered in acturial valuation, take account of inflation, seniority,promotion, and other relavant factors, such as supply and demand in the employment market,

(g) Amount pertaining to defined benefits plans are as follows :


Defined benefit obligation 91.31 —Plan assets 47.46 —Surplus / (Deficit) (43.85) —Experience adjustment on plan Liabilities — —Experience adjustment on plan Assets — —

Note : The current year ended 31.03.2008, being the first year of adoption of AS-15 (Revised),the figures for theprevious year are not applicable.

(h) The company expects to fund Rs. 20.00 Lacs towards gratuity plan and Rs. 30.00 Lacs towards provident fundplan during the year 2008-09.

Notes : i) No corresponding figures for the previous year are presented as the company has adopted AS-15(Revised), effective 01.04.2007.

ii) 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 definedcontribution plan since the company has no further obligations beyond its monthly contributions. Gratuityis treated as defined benefit plan, and is administrated by making contributions to Group Gratuity Schemeof Life Insurance Corporation of India. Leave encashment and Sick leave is considered as defined benefitplan and remains unfunded.

8) RELATED PARTY DISCLOSURES : As per Accounting Standard 18.

A) Name of related party and description of relationship where control exists.

Vadilal Cold Storage : Partnership firm where share is more than 51 %

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

1) Associates :Vadilal Chemicals Ltd.

2) Key Management Personnel :i) Virendra R Gandhiii) Rajesh R Gandhiiii) Devanshu L Gandhi

3) Enterprises owned or significantly influenced by key management personnel or their relatives :i) Vadilal Enterprises Ltd.ii) Vadilal International Pvt. Ltd.iii) Kalpit Reality & Services Ltd.iv) Vadilal Happiness Parlour Ltd.v) Veronica Construction Pvt.Ltd.vi) Padm Complex Pvt.Ltd.vii) Ambica Dairy Productsviii) Majestic Farm House Ltd.ix) Vadilal Soda Fountain

4) Relative of key Management Personnel :Mamta R Gandhi

C) Transaction with related parties : (Rs. in Lacs)

Sr. Particulars of Transaction & Control Associates Relatives of Enterprises TotalNo. Name of Related Party with Exist Key owned or

whom transactions are more management significantlythan 10% Personnel influenced by

key managementpersonnel or

their relatives

1 Sales : i) Vadilal Enterprises Ltd. — — — 10671.57 10671.57

(—) (—) (—) (9200.03) (9200.03) ii) Others — — — 51.21 51.21

(—) (—) (—) (45.87) (45.87)



whom Transactions are more management significantlythan 10% Personnel influenced by


their relatives

2 Purchase :i) Vadilal Chemicals Ltd. — 8.29 — — 8.29

(—) (6.42) (—) (—) (6.42)ii) Others — — — — —

(—) (—) (—) (0.64) (0.64)3 Sale of RM/PM :

i) Vadilal Enterprises Ltd. — — — — —(—) (—) (—) (0.18) (0.18)

ii) Vadilal Soda Fountain — — — — —(—) (—) (—) (0.32) (0.32)

4 Hire Charges/Rent paid :Vadilal Cold Storage 6.79 — — — 6.79

(4.55) (—) (—) (—) (4.55)5 Freight paid :

Kalpit Reality & Services Ltd. — — — 251.31 251.31(—) (—) (—) (246.25) (246.25)

6 Rent Income : Vadilal Enterprises Ltd. — — — 0.90 0.90(—) (—) (—) (0.90) (0.90)

7 Interest paid :i) Vadilal Happiness Parlour Ltd. — — — 1.06 1.06

(—) (—) (—) (1.01) (1.01)ii) Padm Complex Pvt.Ltd. — — — 4.46 4.46

(—) (—) (—) (4.79) (4.79)8 Salary paid : Mamta R.Gandhi — — 1.08 — 1.08

(—) (—) (1.20) (—) (1.20)9 Interest Income :

Vadilal International Pvt.Ltd. — — — 4.03 4.03(—) (—) (—) (4.00) (4.00)

10 Share of profit in partnership firm :Vadilal Cold Storage 29.68 — — — 29.68

(24.61) (—) (—) (—) (24.61)11 Royalty paid/payable :

Vadilal International Pvt. Ltd. — — — 10.81 10.81(—) (—) (—) (17.71) (17.71)

12 Corporate guarantee given :Vadilal Enterprises Ltd. — — — 250.00 250.00

(—) (—) (—) (380.00) (380.00)13 Corporate guarantee taken :

Vadilal Enterprises Ltd. — — — 800.00 800.00(—) (—) (—) (—) (—)

14 Balance outstanding at year end :a) Investments :i) Vadilal Chemicals Ltd. — 162.04 — — 162.04

(—) (162.04) (—) (—) (162.04)ii) Others — — — 1.87 1.87

(—) (—) (—) (1.87) (1.87)b) Receivable :i) Vadilal Enterprises Ltd. — — — 2304.65 2304.65

(—) (—) (—) (1847.49) (1847.49)ii) Vadilal International Pvt. Ltd. — — — 381.47* 381.47

(—) (—) (—) (400.00)* (400.00)



whom transactions are more management significantlythan 10% Personnel influenced by


their relatives

iii) Others 231.98** — — 84.75 316.73(208.09)** (—) (—) (45.57) (253.66)

c) Payable :i) Vadilal Chemicals Ltd. — 11.62 — — 11.62

(—) (8.94) (—) (—) (8.94)ii) Padm Complex Pvt.Ltd. — — — 41.42 41.42

(—) (—) (—) (46.47) (46.47)iii) Vadilal Happiness Parlour Ltd. — — — 10.85 10.85

(—) (—) (—) (10.08) (10.08)d) Against corporate guarantee given :

Vadilal Enterprises Ltd. — — — 523.03 523.03(—) (—) (—) (582.94) (582.94)

e) Against corporate guarantee taken :Vadilal Enterprises Ltd. — — — 750.00 750.00

(—) (—) (—) (—) (—)Note : a) Payment to key management personnel in form of Managing Director’s remuneration is shown in Note No. 16 a).

* b) Represents towards deposit.** c) Represents as capital investments and amount in current account with partnership firm in which company is partner.

d) Director’s sitting fees is shown seperately in accounts.e) Transaction of sales are shown net of VAT & S.Tax.f) Figures in brackets relate to previous year.

D) Disclosure as required under clause No.32 of Stock Exchange listing agreement :Loans/Advances and Investments of the company :

O/S.as at Maximum O/S.Particulars 31.03.08 during the year

(Rs.in Lacs) (Rs.in Lacs)

(I) ASSOCIATES

Vadilal Chemicals Ltd.

- Investments 162.04 162.04

(162.04) (162.04)

(II) PARTNERSHIP FIRMS WHERE SHARE IS MORE THAN 51 %

Vadilal Cold Storage

- Investments 140.00 140.00

(140.00) (140.00)

Figures in bracket relate to previous year.

9) Disclosure as required by Accounting Standard (AS)29 "Provision, Contingent Liabilities and Contingent Assets" :

a) Movement in provisions : (Rs.in Lacs)

Sr. Particulars of —— Class of Provisions ——-No. Disclosure Excise Others Total1) Balance as at 01.04.2007 7.81 5.72 13.53

2) Additional provision during 2007-08 — — —

3) Provision used during 2007-08. 7.00 — 7.00

4) Provision reversed during 2007-08. — — —

5) Balance as at 31.03.2008 0.81 5.72 6.53

b) Nature of provisions :

Provision for others represents Entry Tax.

c) The timing and the probability of the outflow with regards to these matters depend on the ultimate settlement /conclusion with the relevant authorities.

10) EARNINGS PER SHAREa) 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 and loss account.


b) The weighted average number of equity shares used as the denominator in calculating both basic and diluted earningsper share is 71,88,230.

11) As per Accounting Standard (AS) 17, “Segment Reporting”, segment information is provided in the Notes to ConsolidatedFinancial Statements.

12) PARTICULARS OF DERIVATIVE INSTRUMENTS :a) Derivative contracts entered into by the company and outstanding as on 31st March, 2008

i) Particulars of derivative instruments acquired for hedging amount as under :

PARTICULARS C.YEAR P.YEAR(NOS.) (AMOUNT) (NOS.) (AMOUNT)

Number of sell contract 5 US $ 5000000 2 US $ 2000000Aggregate Amount Rs. 2007.00 Lacs Rs. 871.20 Lacs

ii) All derivative and financial instruments acquired by the company are for hedging.iii) Foreign currency exposure that are not hedged by derivative instruments as on 31st March, 2008 :

US $ 1346742 equal to Rs. 539.05 Lacs (Previous year US $ 1719232 equal to Rs. 751.16 Lacs)Euro 363243 equal to Rs.228.20 Lacs (Previous year Euro 116850 equal to Rs. 67.84 Lacs)

b) In respect of all outstanding derivative contracts at the balance sheet date by marking them to market shows net profit,which has been ignored.

13) Exchange (loss)/gain in respect of forward exchange contracts to be recognised in the Profit & Loss Account of subsequentaccounting period aggregate to Rs. 1.75 Lacs (Previous year Rs. 13.60 Lacs)

14) Based on the information available with the company, there are no suppliers who are registered under the Micro, Small andMedium Enterprises Development Act, 2006 as at March 31,2008. Hence,the disclosure relating to amounts unpaid as atthe year end together with interest paid/payable under this Act have not been given.

15) AUDITORS REMUNERATION (Rs.in Lacs)

C.YEAR P.YEAR

Audit fees 6.85 * 5.50Tax Audit fees 2.56 2.30Certification 4.57 3.95Taxation matter fees 2.35 0.79Out of pocket expenses 0.60 0.44

Total 16.93 12.98

* Included in preoperative expenses incurred during the year Rs. 0.75 Lacs (Previous year Nil).

16) MANAGERIAL REMUNERATIONa) Salaries, Wages, Allowances, Bonus etc. includes Rs. 53.82 lacs towards Managing Director’s remuneration

as per details given below (Rs.in Lacs)C.YEAR P.YEAR

Salary 24.00 24.00Commission 12.52 18.09Contribution to P.F. 2.88 2.88other perquisites in cash or kind 14.42 14.42

Total.... 53.82 59.39

b) Computation of net profit u/s. 349 of the Companies Act,1956.Net Profit/(Loss) before tax for the year as per Profit & Loss A/c 586.96 887.50Add :1) Depreciation charged in a/c’s 436.80 317.66

Less : Withdrawn from Revaluation Reserve / Deferred Govt. Grant 26.14 26.25

410.66 291.41

2) Director’s remuneration 53.82 59.393) Sitting Fees 0.80 1.144) Loss on sale of assets u/s. 349 (3) (c) (d) 3.37 —5) Loss on sale of investments — —6) Provision for doubtfull debts/ Advances 7.20 2.30

1062.81 1241.74

Less :1) Depreciation u/s.350 of the Companies Act, 1956 436.80 317.662) Profit of a capital nature in terms of section 349 (3) (d) — 19.58

436.80 337.24

Net Profit / (Loss) U/S. 349 of the Companies Act,1956 626.01 904.50Commission payable to two Managing Directors @ 1 % each 12.52 18.09


17) LICENSED, INSTALLED CAPACITY & PRODUCTION

* Licensed capacity ** Installed capacity Production(as registered (as certified by

with DGTD) Managing Director)(per annum) (per annum)

a) Ice cream & Frozen Dessert 700 MT 51900 K.Ltrs. 23962 K.Ltrs.(700) MT (37740) K.Ltrs. (21386) K.Ltrs.

b) Fruit Pulp, Frozen Fruits & Vegetables 5400 MT 25000 MT 8216 MT(5400) MT (16200) MT (7780) MT

c) Sugar Cone 231.00 Nos. 187.59 Nos.(210.00) in Lacs (165.50) in Lacs

d) Paper Cup/Lid & Corrugated Boxes 1050.00 Nos. 1199.24 Nos.(1050.00) in lacs (948.98) in Lacs

* For Pundhra and Bareilly plant 17500 MT per annum (Previous year 17500 MT per annum) capacity is registered with S.I.A.for which licence is not required.

** This being technical matter the auditors have placed reliance on certificate issued by the Managing Director.1) Figures in brackets relate to previous year.2) Production of Fruit Pulp,Frozen Fruits & Vegetables includes 1346 MT (Previous year 990 MT) processed by third parties,

and 1242 MT (Previous year 2010MT) used for captive consumption.3) Licenced capacity is not applicable for Frozen Fruits and Vegetables.18) STOCK OF FINISHED GOODS : (Rs.in Lacs)

Sr. Products Units Opening Stock Closing StockNo. (Qty.) (Rs.) (Qty.) (Rs.)

A) Ice cream & Frozen Dessert K.Ltrs. 708 308.23 967 438.40(681) (263.76) (708) (308.23)

B) Fruit Pulp, Frozen Fruits & Vegetables MT 2795 709.80 3525 1088.88(2664) (587.71) (2795) (709.80)

19) QUANTITATIVE DETAILS IN RESPECT OF PURCHASE OF GOODS.

Sr. Products Units Quantity Purchase ValueNo. (Rs.in Lacs)A) Fruit Pulp, Frozen Fruits & Vegetable MT 223 65.58

(19) (8.63)

B) Others — —(—) (—)

NOTE : Figures in brackets relate to previous year.20) CONSUMPTION OF RAW AND PACKING MATERIALS .

Particulars Units C.YEAR P.YEARQty. in Value Qty. in Value

Lacs Rs. in Lacs Lacs Rs. in LacsMilk & Milk Products Kgs. 49.78 2203.32 52.89 1769.62Dry Fruits, Fresh Fruits & Vegetables Kgs. 130.54 1960.17 105.78 1523.31Packing Materials — 1821.38 — 1648.38Others — 2143.69 — 1956.43

8128.56 6897.74

NOTES :-1) Inter godown transportation and Octroi charges included in others Rs. 8.29 lacs (previous year Rs. 6.21 lacs).2) Consumption of Raw and Packing Materials :

C.YEAR %age P.YEAR %ageRs.in Lacs Rs.in Lacs

1) Imported 361.97 4.45 510.45 7.40

2) Indigenous 7766.59 95.55 6387.29 92.60

8128.56 100.00 6897.74 100.00

21) STORES AND SPARES CONSUMED : Rs.in Lacs

C.YEAR %age P.YEAR %age1) Imported 5.93 18.68 8.73 13.462) Indigenous 25.81 81.32 56.15 86.54

31.74 100.00 64.88 100.00


22) A) C.I.F. VALUE OF IMPORTS : (Rs.in Lacs)C.YEAR P.YEAR

a) Raw Materials and Packing Materials 93.20 293.61b) Stores and Spares 10.15 11.86c) Capital Goods 31.34 84.17

B) EXPENDITURE IN FOREIGN CURRENCY:i) Sales Promotion and Commission 9.36 4.10ii) Travelling 8.80 8.61iii) Freight 49.60 47.64iv) Others 14.38 15.89

C) EARNINGS IN FOREIGN CURRENCY:-Export of Goods (F.O.B.Value) 1847.98 2143.24

23) REMITTANCE OF FOREIGN CURRENCIES FOR DIVIDENDS :The company has not made any remittances in foreign currencies on account of dividends during the year. The particularsof dividends paid to non-resident shareholders are as follows : C.YEAR P.YEARYear to which dividend relates 2006-07 2005-06Number of non-resident shareholders 14 9Number of shares held by them on which dividend is due 21845 50925Amount remitted to bank accounts in India of non-resident shareholders - (Rs. in Lacs) 0.26 0.51

24) Previous year figures have been restated wherever necessary to make them comparable with current year’s figures.

25) BALANCE SHEET ABSTRACT AND COMPANY’S GENERAL BUSINESS PROFILEI REGISTRATION DETAILS

Registration No. 5169 State Code 04Balance Sheet Date 31.03.2008

II CAPITAL RAISED DURING THE YEAR (AMT.IN RS.THOUSAND)Public issue Nil Right issue NilBonus issue Nil Private placement Nil

III POSITION OF MOBILISATION AND DEPLOYMENT OF FUNDS AMT. (RS.IN THOUSAND)Total liabilities 958818 Total Assets 958818Sources of FundsPaid up capital 71878 Reserves & Surplus 282445(Incl.share capital suspense)Deferred Govt. Grant 3836 Secured Loans 448874Unsecured Loans 101217 Deferred Taxation (Net) 50568Application of FundsNet Fixed Assets 520861 Investments 33165Net Current Assets 400527 Misc.Expenditure 4265Accumulated Losses Nil

IV PERFORMANCE OF COMPANY (AMT. IN RS. THOUSANDS)Turnover 1354894 Total Expenditure 1296198Profit/(Loss) before tax 58696 Profit/(Loss) after tax 38018Earnings per share (in Rs.) Annualised 5.29 Dividend rate 12 %

V GENERIC NAME OF PRINCIPAL PRODUCT OF THE COMPANYItem Code No. (ITC Code) 040210.09Product Description Ice CreamItem Code No. (ITC Code) 081290.02Product Description Mango PulpItem Code No. (ITC Code) 200490.00Product Description Frozen Vegetable

Signatures to schedule 1 to 23 For and on behalf of the Board

Ramchandra R. Gandhi : ChairmanVirendra R. Gandhi : Vice-Chairman &

For KANTILAL PATEL & CO. Managing DirectorChartered Accountants Rajesh R. Gandhi : Managing Director




I. SOURCES OF FUNDS :(1) Shareholders’ Funds:

(a) Share Capital 1 718.78 718.78(b) Reserves & Surplus 2 2,823.76 2,570.76

3,542.54 3,289.54(2) Minority Interest 6.44 5.84(3) Deferred Government Grant 38.36 41.56(4) Loan Funds :

(a) Secured Loans 3 4,488.74 2,655.75(b) Unsecured Loans 4 1,012.17 822.61

5,500.91 3,478.36(5) Deferred Tax Liability (Net) 5 505.68 423.00

TOTAL -> 9,593.93 7,238.30

II. APPLICATION OF FUNDS :(1) Fixed Assets : 6

(a) Gross Block 8,422.63 6,463.69Less : Depreciation 3,755.77 3,409.24

Net Block 4,666.86 3,054.45(b) Capital Work In Progress 641.05 730.81

5,307.91 3,785.26(2) Investments : 7

(a) In Associate 161.31 150.72(b) In Others 29.61 29.85

(3) Current Assets, Loans & Advances : 190.92 180.57(a) Inventories 8 3,086.06 2,438.17(b) Sundry Debtors 9 2,742.44 2,197.73(c) Cash & Bank Balances 10 149.63 105.48(d) Other Current Assets 11 70.59 41.32(e) Loans & Advances 12 1,155.00 986.15

Sub Total (A) -> 7,203.72 5,768.85LESS : Current Liabilities & Provisions :(a) Current Liabilities 13 2,862.55 2,023.31(b) Provisions 14 288.72 505.22

Sub Total (B) -> 3,151.27 2,528.53Net Current Assets (A - B) 4,052.45 3,240.32

(4) Misc. Expenditure 15 42.65 32.15(To the extent not written off or adjusted)

TOTAL -> 9,593.93 7,238.30


SCHEDULE As At As At31.03.2008 31.03.2007


CONSOLIDATED BALANCE SHEET AS AT 31ST MARCH, 2008

This is the Balance Sheet referred For and on behalf of the Boardto in our report of even date Ramchandra R. Gandhi : Chairman





This is the Profit & Loss Account referred For and on behalf of the Boardto in our report of even date Ramchandra R. Gandhi : Chairman




I. INCOME :(a) Income From Operations 16 13,455.81 12,170.68

Less : Excise Duty on sales 1.85 0.82

Net Turnover 13,453.96 12,169.86(b) Other Income 17 257.49 133.73

Total 13,711.45 12,303.59

II. EXPENDITURE :(a) (Increase) / Decrease in stock 18 (509.36) (166.76)(b) Materials Consumed and Purchase of goods 19 8,194.14 6,906.37(c) Manufacturing & Other Expenses 20 4,595.92 4,074.90(d) Financial Expenses (Net) 21 412.40 288.77(e) Depreciation 441.57 322.49

Less : Withdrawn From Revaluation Reserve / 26.14 26.25 Deferred Govt. Grant

415.43 296.24

Total 13,108.53 11,399.52

III. Profit before Exceptional & Prior year items 602.92 904.07IV. Prior Years’ Adjustments (Net) (0.30) (2.21)V. Profit before Tax 602.62 901.86VI. Provision for Tax

- Current 115.10 285.30- Deferred 87.52 (5.71)- Fringe Benefit Tax 13.06 11.07- (Short) / Excess Provision of Tax / Deferred Tax (6.16) (51.84)

of earlier years (Net)VII Profits applicable to minority interest 0.60 0.50vIII Share in Profit/(Loss) of Associate 10.59 17.27IX. Net Profit after Tax 390.77 576.13X Profit Brought Forward 205.97 180.76


Appropriations :(a) General Reserve 259.40 450.00(b) Proposed Dividend 86.26 86.26(c) Tax on Proposed Dividend 14.66 14.66(d) Balance carried to Balance Sheet 236.42 205.97

Total 596.74 756.89

Basic and Diluted Earnings Per Share of Rs. 10/- each 5.44 8.02Significant Accounting Policies 22Notes to Financial Statements 23

CONSOLIDATED PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 2008SCHEDULE Year Ended Year Ended

31.03.2008 31.03.2007(Rs. in Lacs) (Rs. in Lacs) (Rs. in Lacs)


This is the Cash Flow Statement referred For and on behalf of the Boardto in our report of even date Ramchandra R. Gandhi : Chairman


Devanshu L. Gandhi : Managing DirectorArpit K. PatelPartner Nikhil Patel : Company SecretaryPlace : Ahmedabad Place : AhmedabadDate : June 30, 2008 Date : June 30, 2008

For the Year For the YearEnded Ended

31.03.2008 31.03.2007(Rs. in Lacs) (Rs. in Lacs) (Rs. in Lacs)

CONSOLIDATED CASH FLOW STATEMENT ANNEXED TO THE BALANCE SHEET

A. CASH FLOW FROM OPERATING ACTIVITIESNet profit before tax and Exceptional Items 602.92 904.07Adjusted for

Depreciation 441.57 322.49Withdrawn From Revaluation Reserve / (26.14) (26.25)Deferred Government GrantLoss / (Profit) on sale of Assets 3.37 (19.58)Provision For Doubtful Advances 7.20 2.30Bad Debts Written Off 2.80 11.95Consideration short received for sale of property 0.11 3.80Voluntary Retirement Scheme 18.25 22.75Upfront Interest on restructuring of Loan 5.21 6.85Diminuition in value of Current Investments 0.24 0.00Excess Provision written back (71.08) (37.99)Dividend (0.14) (0.13)Financial Expenses (Net) 412.40 288.77

Operating Profit before working capital changes 1,396.71 1,479.03Adjusted for

Trade and other Receivables (669.49) (343.91)Inventories (647.89) (665.13)Trade Payables and Liabilities 895.63 555.32Deferred Revenue Expenditure (VRS) (33.97) 0.00

Cash Generated from Operations 940.99 1,025.31Direct taxes (paid / adjusted) (360.84) (152.89)

Cash flow before extraordinery items 580.15 872.42Net Prior Year Expenses (0.30) (2.21)

Net Cash from Operating Activities 579.85 870.21B. CASH FLOW FROM INVESTING ACTIVITIES

Loans given (Net) (51.78) 20.23Purchase of fixed assets (1,914.68) (925.87)Sale of fixed assets 8.17 19.06Purchase of Investments (0.24) 0.00Interest received 77.34 70.68Dividend received 0.14 0.13

Net Cash used in Investing Activities (1,881.05) (815.77)C. CASH FLOW FROM FINANCING ACTIVITIES

Proceeds from borrowings 3,329.86 1,292.71Repayment of borrowings (1,307.31) (999.36)Interest paid (578.04) (427.36)Dividend paid (99.16) (82.31)

Net Cash used in Financing Activities 1,345.35 (216.32)

Net Increase/(Decrease) in cash and Cash equivalents (A+B+C) 44.15 (161.88)Op. Balance of Cash and Cash Equivalents (Includes unrealised 105.48 267.36exchange difference of Rs. 0.28 lacs (P.Y. Rs. 0.55 lacs))Cl. Balance of Cash and Cash Equivalents (Includes unrealised 149.63 105.48exchange difference of Rs. 0.05 lacs (P.Y. Rs. 0.28 lacs))Major Components of Cash and Cash Equivalents as at 31.03.2008 31.03.2007Cash and Cheques on hand 31.74 29.44Balance With Banks - On Current Accounts 82.31 31.61

- On Fixed / Margin Money Deposit Accounts 35.58 44.43

149.63 105.48

Notes :1. The above Cash Flow has been prepared under indirect method set out in AS 3, issued by the Institute of Chartered Accountants of India.2. Previous Year figures have been restated wherever necessary to make them comparable with current year figures.


SCHEDULES TO CONSOLIDATED BALANCE SHEET AND PROFIT AND LOSS ACCOUNT

As At As At31.03.2008 31.03.2007


SCHEDULE : 1 SHARE CAPITALAUTHORISED :1,00,00,000 Equity Shares of Rs. 10/- each 1,000.00 1,000.00

1,000.00 1,000.00

ISSUED AND SUBSCRIBED :71,88,230 ( P.Y. 71,88,230 ) Equity Shares of Rs. 10/- each 718.82 718.82

718.82 718.82

PAID UP :71,88,230 ( P.Y. 71,88,230 ) Equity Shares of Rs. 10/- each 718.82 718.82

Less : Calls Unpaid (Other than Directors) 0.04 0.04

718.78 718.78

SCHEDULE : 2 RESERVES & SURPLUS

Balance Addition Deduction/ BalanceAs at during the Adjustment As at

01.04.2007 Year during the Year 31.03.2008(Rs. in Lacs) (Rs. in Lacs) (Rs. in Lacs) (Rs. in Lacs)

1. Capital Reserve 55.23 0.00 0.00 55.23(55.23) (0.00) (0.00) (55.23)

2. Securities Premium * 487.27 0.00 0.00 487.27(487.27) (0.00) (0.00) (487.27)

3. General Reserve 1,650.00 259.40 9.40 ** 1,900.00(1,200.00) (450.00) (0.00) (1,650.00)

4. Revaluation Reserve *** 172.29 0.00 27.45 144.84(195.34) (0.00) (23.05) (172.29)

5. Profit & Loss Account 205.97 236.42 (a) 205.97 (b) 236.42(180.76) (205.97) (180.76) (205.97)

2,570.76 495.82 242.82 2,823.76

(2,118.60) (655.97) (203.81) (2,570.76)

NOTE: Figures shown in Bracket relate to previous year* Securities Premium 487.32

Less : Calls Unpaid (arrears) 0.05

487.27

** Charge on account of transitional provisions underAccounting Standard 15 Gross Rs 14.24 Lacs.Deferred Tax Assets (Net) Rs 4.84 Lacs

** Opening Balance 172.29Less : Utilised during the year 22.94Less : Inter Unit Transfer / Sale / Discarded 4.51

144.84

(a) Transferred from(b) Transferred to


SCHEDULE : 3 SECURED LOANSA. TERM LOANS

i) From Financial Institutions 525.00 205.60ii) Loans from Banks 1,239.01 553.14

(Principal repayable within One year Rs. 129.91 Lacs(P.Y. Rs. 100.85 Lacs))

B. WORKING CAPITAL LOANSFrom Banks 2,722.50 1,892.84Add : Interest Accrued and due 2.23 4.17

2,724.73 1,897.01

4,488.74 2,655.75SCHEDULE : 4 UNSECURED LOANSFixed Deposits 712.69 723.80Add: Interest accrued and Due 9.83 7.12

(Repayable within One year Rs. 401.63 lacs)(P.Y. Rs. 553.45 lacs)) 722.52 730.92

Inter Corporate Deposits 52.27 56.55Security Deposits from Customers 37.40 35.14Development Credit Bank Ltd (Short Term Loan) 199.98 0.00

1,012.17 822.61SCHEDULE : 5 DEFERRED TAX LIABILITY (NET)Deferred Tax Liability

Difference between Book and Income Tax Depreciation 532.22 445.06Other Timing Difference 10.11 5.71

542.33 450.77

Deferred Tax AssetsExpenditure under section 43 B of the Income Tax Act, 1961 20.88 24.00Other Timing Difference 15.77 3.77

36.65 27.77

Deferred Tax Liability (Net) 505.68 423.00

SCHEDULE : 6 FIXED ASSETS (Rs. in Lacs)

GROSS BLOCK (AT COST / REVALUED) DEPRECIATION NET BLOCKAs At Addition Deduction As At Up to As At As At

31.03.2007 31.03.2008 31.03.2008 31.03.2008 31.03.2007

Land (Freehold) 161.72 4.34 0.00 166.06 0.00 166.06 161.72Land (Leasehold) 144.28 10.50 0.00 154.78 0.00 154.78 144.28Buildings 1,356.17 464.13 0.00 1,820.30 416.76 1,403.54 975.33Plant & Machinery 4,270.44 1,530.12 83.01 5,717.55 2,930.37 2,787.18 1,652.08Furniture & Fixtures 105.92 3.99 0.00 109.91 91.71 18.20 20.67Office Equipments 289.15 22.30 17.52 293.93 225.99 67.94 56.39Vehicles 136.01 34.65 10.56 160.10 90.94 69.16 43.98Total (A) 6,463.69 2,070.03 111.09 8,422.63 3,755.77 4,666.86 3,054.45Leased AssetsPlant & Machinery 0.00 0.00 0.00 0.00 0.00 0.00 0.00Vehicles 0.00 0.00 0.00 0.00 0.00 0.00 0.00Total (B) 0.00 0.00 0.00 0.00 0.00 0.00 0.00Total (A+B) 6,463.69 2,070.03 111.09 8,422.63 3,755.77 4,666.86 3,054.45Previous year 6,097.67 433.02 67.00 6,463.69 3,409.24 3,054.45 2,946.36Capital W I P 730.81 641.05 730.81 641.05 0.00 641.05 730.81Previous Year 91.95 723.26 84.40 730.81 0.00 730.81 91.95

NOTES :I. Land & Building includes Rs. 29.43 lacs (P.Y. Rs. 100.66 lacs ) & Rs. 151.61 lacs (P.Y. Rs. 170.99 lacs) respectively

in process of being transferred in the name of the company.II. a. Building includes House Building of Rs. 12.90 lacs (Gross) (P.Y. Rs. 12.90 lacs) acquired against loan which is

yet to be transferred in the name of the company.b. The Value of Building acquired against loan includes cost of documentation charges.

As At As At31.03.2008 31.03.2007



III. Borrowing cost capitalised during the year and shown in additions to fixed assets Rs. 39.50 lacs (P. Y. Rs. 3.46 Lacs) andin additions to capital work in progress Rs. 26.09 Lacs (P. Y. Rs. 12.38 Lacs)

IV. Estimated amount of contracts (Net Amount) remaining to be executed on capital account not provided for Rs. 178.72lacs (P.Y. Rs. 689.06 lacs)

V Capital Work in progress includes Rs 525.42 Lacs (P.Y. Rs 70.76 Lacs) as Capital Advancei) Rs 492.05 Lacs (P.Y. Rs 193.01 Lacs) on account of Construction materials at siteii) Rs 115.87 Lacs (P.Y. Rs 525.42 Lacs) on account of Capital Advancesiii) Rs 33.13 Lacs (P.Y. Rs 12.38 Lacs) on account of Preoperative expenses

31.03.2008 31.03.2007(Rs. In lacs) (Rs. In lacs) (Rs. In lacs)

Preoperative Expensesa Opening balance 12.38 0.00b Add :

Expenses Transferred from Profit & Loss Account 45.54 0.00Interest Capitalised 65.59 15.84

c Less : 111.13 15.84Capitalised during the year 90.38 3.46

d Closing balance 33.13 12.38

VI Adjusted Depreciation upto 01.04.2007 3,409.24Add : Depreciation for the Year 441.57

3,850.81Less : Depreciation adjusted on Assets Sold / Discarded / Transferred during the Year 95.04

3,755.77

Face No of As At No of As AtValue Units / 31.03.2008 Units / 31.03.2007in Rs. Shares (Rs. in Lacs) Shares (Rs. in Lacs)

SCHEDULE : 7 INVESTMENTS(At or below Cost)I In Associate

Vadilal Chemicals Ltd. 10.00 1473100 161.31 1473100 150.72(Including Rs 46.41 lacs of capital 208.45 208.45reserve after adjusting Rs 15.14lacs in share of accumulatedlosses upto 31.03.2002)Less : Accumulated Losses 47.14 57.73since 2002-03 Onwards

II OthersA Long Term Investments1 In Government / Other Securities

Unquoted(i) 7 Year National Saving Certificates 0.00 0 0.28 0 0.28

(Lodged with Govt. Authorities)(ii) 11.5 % IDBI Bond 2008 1000.00 280 2.41 280 2.41

2 Trade Investmentsa) In Equity Shares

Unquoted(i) Vadilal Happinezz Parlour Ltd. 10.00 72500 7.25 72500 7.25(ii) Vadilal Gases Ltd. 10.00 165000 14.84 165000 14.84(iii) Majestic Farm House Ltd. 10.00 74100 1.87 74100 1.87

b) Other InvestmentsEquity Shares - other than tradeUnquoted(i) Textile Traders Co-op Bank Ltd 25.00 4195 1.05 4195 1.05(ii) Siddhi Co-op Bank Ltd 25.00 3540 0.89 3540 0.89

Total (A) 28.59 28.59

B Currrent InvestmentsIn Equity SharesQuoted(i) Aminex Chemicals Ltd. 10.00 400 0.04 400 0.04(ii) Golden Agro Tech Ind Ltd 10.00 200 0.02 200 0.02(iii) Interface Financial Services Ltd. 1.00 25000 2.00 25000 2.00(iv) Century Enka Ltd 10.00 15 0.06 15 0.06


Face No of As At No of As AtValue Units / 31.03.2008 Units / 31.03.2007in Rs. Shares (Rs. in Lacs) Shares (Rs. in Lacs)

(v) Radhe Developers Ltd 10.00 4900 0.49 4900 0.49(vi) Matrix Laboratories Ltd 2.00 120 0.64 120 0.64(vii) Saket Projects Ltd 10.00 2500 0.25 2500 0.25(viii) Great Eastern Shipping Co Ltd. 10.00 100 0.04 141 0.05(ix) Great Offshore Ltd 10.00 25 0.01 0 0.00(x) Essar Steel Ltd. 10.00 60 0.01 60 0.01

3.56 3.56Less : Diminution in value of Investments 2.54 2.30

Total (B) 1.02 1.26In Preference SharesUnquoted(i) Essar Steel Ltd. 10.00 0.00 0.00 40 0.01

Total (A+B) 29.61 29.85

Total (I+II) 190.92 180.57

As At As At31.03.2008 31.03.2007


SCHEDULE : 8 INVENTORIESStores & Spares 134.53 88.96Raw Materials 898.25 911.67Packing Materials 526.00 419.51Finished Goods (Includes Goods in Transit 1,527.28 1,018.03Rs. 85.21 lacs (P.Y. Rs. 76.45 lacs)

3,086.06 2,438.17SCHEDULE : 9DEBTORS (UNSECURED)Outstanding over six months

Considered Good 13.44 39.43Others

Considered Good 2,729.00 2,158.30

2,742.44 2,197.73

SCHEDULE : 10 CASH & BANK BALANCESCash Balance 31.74 29.44(Including cheques on hand / D D in transitRs. 8.11 lacs (P.Y. Rs. 0.88 lacs))

Bank Balances.

(a) With Scheduled Banks.In Current Accounts 77.40 28.45In Fixed / Margin Money Deposit Accounts * 35.58 44.43In Unpaid Dividend A/c 4.91 3.16(* Out of which deposit of Rs. 28.37 Lacs(P.Y. Rs. 43.54 lacs)pledged with scheduled banks)

(b) With OthersTextile Traders Co-op Bank LtdIn Current Accounts 0.00 0.00(Maximum amount outstanding at any timeduring the year Rs. Nil(P.Y. Rs. 0.01 Lacs))

149.63 105.48

SCHEDULE :11 OTHER CURRENT ASSETSInterest Receivable 70.59 41.32

70.59 41.32


As At As At31.03.2008 31.03.2007


SCHEDULE : 12 LOANS & ADVANCES(Unsecured, considered good unless otherwise stated)Advances recoverable in cash or in kind 392.84 287.74or for value to be received


0.00 0.00

392.84 287.74Staff Loan 8.25 7.34Deposits with Government Authorities 104.92 89.54


0.00 0.00

104.92 89.54Other Trade / Security Deposits 408.12 414.84Advance Income Tax less Provision (Current Tax) 61.99 59.47Loans in Current Account 178.88 127.22

1,155.00 986.15

SCHEDULE : 13 CURRENT LIABILITIESSundry Creditors 1,266.21 949.93Other Liabilities 436.33 411.60Bills Payable 1,006.09 441.35Advances From Customers 33.91 25.87Interest accrued but not due on loans 55.69 49.13Temporary Overdraft in Current A/C with Banks 16.65 98.16Due to Managing Directors 12.83 18.09Unclaimed Dividends 4.90 3.15Unpaid Matured Deposits* 26.43 22.99Interest on Deposits * 3.51 2.74Unpaid Matured Debenture & Interest 0.00 0.30* These figures includes Rs 0.98 Lacs due

and outstanding as on date 31.03.2008. 2,862.55 2,023.31Subsequently Rs 0.83 Lacs credited to Investor Educationand Protection fund, except Rs 0.15 Lacs (P.Y. Rs 0.15 Lacs)which is held in abeyance due to legal case pending)

SCHEDULE : 14 PROVISIONSEmployee Benefits 91.36 76.86Income Tax Less Advance Tax (Current Tax) 81.87 307.84Fringe Benefit Tax 8.04 6.07Proposed Dividend 86.26 86.26Tax on Proposed Dividend 14.66 14.66Other Provisions 6.53 13.53

288.72 505.22

SCHEDULE : 15 MISCELLANEOUS EXPENDITUREEmployees seperation cost 26.02 18.51Upfront Interest on restructuring of loan 8.42 13.64Ancilliary Cost incurred in connection with 8.21 0.00 Term Loan Borrowings

42.65 32.15

Unit of Year Ended 31.03.2008 Year Ended 31.03.2007Measurement (Qty) (Rs. in Lacs) (Qty) (Rs. in Lacs)

SCHEDULE : 16 INCOME FROM OPERATIONSSales

Ice Cream & Frozen Desserts K. Ltrs 23708 10,241.09 21335 8,885.69Fruit Pulp,Frozen Fruits & Vegetables M.Tonnes 6251 3,016.83 5509 3,091.65Others - 192.20 - 189.92Income from Money Changing business - 5.69 - 3.42

Sales includes Export Benefits / Licence / DEPB / Forward ContractRs. 288.41 Lacs (P.Y. Rs. 280.94 Lacs )

13,455.81 12,170.68


Year ended Year ended31.03.2008 31.03.2007


SCHEDULE : 17 OTHER INCOMEProfit on Sale of Fixed Assets 0.00 19.58Excess Provision Written Back 71.08 37.99Miscellaneous Income 170.67 68.33Foreign Exchange Rate Fluctuation 15.60 7.70Dividend (Gross) On Long Term Investments 0.14 0.13

257.49 133.73

SCHEDULE : 18 (INCREASE)/DECREASE IN STOCKOpening Stock :

Finished Goods 1,018.03 851.47Less : Excise Duty 0.73 0.93

1017.30 850.54

Less : Closing stock :Finished Goods 1,527.28 1,018.03

Less : Excise Duty 0.62 0.73

1,526.66 1,017.30

(509.36) (166.76)

SCHEDULE : 19 MATERIALS CONSUMED AND PURCHASE OF GOODSRaw & Packing Materials Consumption 8,128.56 6,897.74Purchase of Finished Goods 65.58 8.63

8194.14 6906.37

SCHEDULE : 20 MANUFACTURING AND OTHER EXPENSESEmployees’ Expenses

Salary, Wages, Allowances, Gratuity & Bonus, etc 619.23 571.99Contribution to Provident & other Funds 42.58 34.78Staff Welfare Expenses 53.36 50.95

715.17 657.72Excise Duty Others 58.41 57.59Job Charges 584.81 479.11Power & Fuel 986.94 895.20Stores & Spares Consumption 31.74 64.88Warehouse Charges 191.01 141.10Repairs

Building 27.30 19.48Machinery 142.27 78.77Others 41.83 31.18

Other Manufacturing Expenses 48.89 39.98Rent 2.59 2.53Rates & Taxes 7.13 5.37Insurance 36.15 35.35Donation 1.33 3.14Vehicle Repairs & Petrol Expenses 49.64 53.83Research & Development Expenses 5.41 3.20Directors’ Sitting Fees 0.80 1.14Travelling (Includes Directors Travelling Rs 10.37 Lacs (P.Y. Rs 16.04 Lacs) 74.99 63.72Freight and Forwarding 1,153.30 1,088.86Sales & Turnover Tax and VAT 12.37 13.54Advertisement & Sales Promotion 23.67 19.90Sales Commission and Brokerage 13.31 15.96Provision for Doubtful Debts and Advances 7.20 2.30Bad debts 2.80 11.95Consideration short received for sale of Property Development 0.11 3.80Loss on sale of Fixed Assets 3.37 0.00Diminuition in Value of Investments 0.24 0.01Royalty 10.81 17.71Other Expenses (Including Legal & Professional, 362.33 267.58

Conveyance, Telephone, Postage, Printing &Stationery, Reuters Fess, etc) 4,595.92 4,074.90


SCHEDULE : 22SIGNIFICANT ACCOUNTING POLICIES :A) ACCOUNTING CONVENTION :

The consolidated financial statements have been prepared in accordance with Accounting standards 21 ( AS 21) -”Consolidated Financial Statements” and Accounting standards 23 ( AS 23) - “ Accounting for investments in associates”issued by the Institute of Chartered Accountants of India.

B) PRINCIPLES OF CONSOLIDATIONThe consolidated financial statements relate to “ Vadilal Industries Ltd.”( The Parent Company ), Enterprise under the controlof a parent and Vadilal Chemicals Ltd.,an Associate Company.The consolidated statements have been prepared on thefollowing basis.a) The financial statements have been combined on a line -by-line basis by adding together the book values of like items

of Assets, Liabilities, Income and Expenses. The Intra-group balances and Intra-group transactions and unrealisedprofits or losses have been fully eliminated .

b) The consolidated financial statements are prepared by adopting uniform accounting policies for like transactions andother events in similar circumstances and are presented to the extent possible, in the same manner as the parentcompany’s separate financial statements.

c) The difference between the cost/carrying amount of investments over the net assets is recognised in financialstatements as goodwill or capital reserve as the case may be.

d) Minority interest’s share of net profit/loss of consolidated for the year is identified and adjusted against the income ofthe group in order to arrive at the net income attributable to shareholders.

e) In case of associates where the company holds more than 20 % of equity, investments in associates are accountedfor using equity method in accordance with Accouting Standard - ( AS 23 ) “Accounting for investments in associatesin consolidated financial statements” issued by the Institute of Chartered Accountsts of India.

f) The company accounts for its share in the change in the net assets of the associate, post acquisition,after eliminatingunrealised profit and losses resulting from transactions between the company and its associate to the extent of itsshare,through its profit and loss account to the extent such change is attributable to the associate’s profit and lossaccount and through its reserves for the balance,based on available information.

g) The difference between the carrying amount of investments in the associate and the share of net assets at the timeof acquisition of shares in the associate is identified in the financial statements as goodwill or capital reserve as thecase may be.

C) Investments other than in subsidiaries and associates have been accounted as per Accounting Standard 13 on Accountingfor Investments.

D) OTHER SIGNIFICANT ACCOUNTING POLICIES :These are setout in the notes to financial statements under “Statement of accounting policies” of the financial statementsof Vadilal Industries Ltd.

SCHEDULE : 23NOTES TO FINANCIAL STATEMENTS1) Enterprises considered in the consolidated financial statements are :

Name Country of Proportion ofIncorporation ownership interest

Vadilal Cold Storage India 98.00 %

2) The associate considered in the consolidated financial statement is :

Name Country of Proportion ofIncorporation ownership interest

Vadilal Chemicals Ltd. India 30.22 %

3) The original cost of investments in associate, Vadilal Chemicals Ltd. has been substituted during the year 2002-03 byadjusting / writting off diminution in value aggregating to Rs.63.36 lacs against Securities Premium Account. Capital reserve

Year ended Year ended31.03.2008 31.03.2007


SCHEDULE : 21 FINANCIAL EXPENSES (NET)Fixed Loans 126.15 83.35Bank Overdrafts 168.75 119.02Fixed Deposits 67.68 59.26Others 12.61 7.52Bill Discounting Charges 80.23 42.12Brokerage & Other Financial Charges 63.59 59.40

519.01 370.67Less : Interest Income 106.61 81.90(TDS Rs. 20.55 lacs (P.Y. Rs. 12.46 lacs)

412.40 288.77


has been accordingly worked out considering the carrying amount instead of original cost. Share of net profit/(losses) inassociate after relationship up to 31.03.2002 amounting to Rs.15.14 lacs is reduced from capital reserve arising on suchreworking.

4) CONTINGENT LIABILITIES NOT PROVIDED FOR : C. Year P. Year

( Rs. in Lacs )

I) Guarantees given by the company 1245.00 995.00

against Term Loans given to companies

in which Directors are interested .

Outstanding against this as at 31.03.2008 523.03 582.94

II) i) For Excise -

a) Related to a matter decided in favour of the company, against which

the Excise department has preferred an appeal.

Gross Rs.18.03 lacs (P.Y. Rs 18.03 lacs)

Net of Tax 11.96 11.96

b) Related to the matters for which, final hearing of the submissions

filed by the company in response to show cause notices by the Excise

Department is pending.Gross Rs. Nil lacs (P.Y. Rs 32.01 lacs)

Net of Tax 0.00 21.24

c) Related to a matter which is disputed by the Company against

which appeal is preferred.Gross Rs. 2.64 lacs (P.Y.Rs. Nil lacs)

Net of Tax 1.74 0.00

ii) For Income Tax -

a) which is disputed by the company and against which Company 5.55 5.55has preferred appeal, based on the demand notices raised by IncomeTax Dept. and received by the company.

b) Against which Income Tax department has preferred appeal 73.31 85.99(as per information available with the company )

c) In respect of erstwhile Vadilal Financial Services Limited(VFSL) Income Tax 3.95 3.95Demand ( including interest) for which the company haspreferred appeal.

iii) For Sales Tax -

Disputed by the company and against which company has preferred an appeal.

Gross Rs.85.59 lacs (P.Y. Rs. 77.69 lacs)

Net of Tax 56.78 51.54

iv) For other Matters -

Gross Rs.1.94 lacs (P.Y. Rs. 1.94 lacs)

Net of Tax 1.29 1.29

v) In respect of other labour suits pending before various courts,

liability is unascertainable.

vi) Differential amount of custom/excise duty in respect of machinery 386.64 28.71

imported under EPCG scheme.

Note : a) Future cash outflows in respect of A (II) (i) to (v) above depends on ultimate settlement / conclusions with the relevantauthorities.

b) Future cash outflows in respect of A (II) (vi) above depends if company unable to fulfill export obligations of Rs. 2450.53Lacs within next twelve years.

5) Company has availed Sales Tax exemption benefit of Rs. 151.46 lacs up to 31.03.2008 ( previous year Rs.151.46 lacs) inrespect of assets and liabilities of Bareilly plant - II assigned from erstwhile Company. In respect of erstwhile Company,U.P.Trade Tax Tribunal has upheld the eligibility exemption against the order of Divisional Level Committee, Bareilly Region,Bareilly refusing exemption. Trade Tax Dept. U.P. has preferred appeal against the said order of U.P.Trade Tax Tribunal inHigh Court of Allahabad, Lucknow Bench.The company has filed counter appeal. Based on legal advise of its entitlementto sales tax exemption, the company is contesting demand for sales tax of Rs. 137.35 lacs ( Previous year Rs. 136.38 lacs)raised up to 2004-05 for completed sales tax assessment.

6) a) The Company has taken building on operating lease that is renewable on a periodic basis and cancelable at its option.Rental expenses for operating lease recognised in statement of profit and loss for the year is Rs. 4.99 lacs ( Previousyear Rs. 3.74 lacs ).


c) In respect of assets taken on lease from 1st April, 2001 : (Rs. in Lacs)Balance Not later Later than Lateras at than one one year & not than five31.03.08 year later than five years years

i) Total of minimum lease payments 48.87 11.76 37.11 —

ii) Present value of minimum lease payments 38.95 8.07 30.88 —

iii) A general description of the significant finance leasing arrangements :

The company has taken vehicle on finanace lease for a period of 24 To 60 months.

7) The Company has written down the inventories to net realisable value during the year by Rs. 73.08 lacs ( Previous year Rs.35.82 lacs )

8) SEGMENT INFORMATION :

A PRIMARY SEGMENT - BUSINESS SEGMENT : [Rs. in Lacs]

SR. PARTICULARS ICE CREAM PROCESSED OTHERS ELIMINATION TOTALNO. FOODS

a) SEGMENT REVENUEExternal Sales 10241.17 3016.83 197.81 13455.81

(8885.69) (3091.65) (193.34) (12170.68)Inter segment 41.50 -41.50 0.00

(-34.81) (34.81) (0.00)Other segment Income 71.45 185.77 0.11 257.33

(33.23) (62.77) (1.28) (97.28)Total segment revenue 10312.62 3244.10 197.92 -41.50 13713.14

(8918.92) (3119.61) (194.62) (34.81) (12267.96)b) SEGMENT RESULTS 844.14 243.56 31.10 1118.80

(808.75) (401.70) (24.33) (1234.78)Unallocated Expenditurenet of unallocated income 103.78

(44.15)Operating profit 1015.02

(1190.63)Interest Expense ( Net ) 412.40

(288.77)Taxation for the year- Current Tax 115.10

(285.30)- Deferred Tax 87.52

(-5.71)- Fringe Benefit Tax 13.06

(11.07)- Short/Excess provision of 6.16 I.Tax of earlier years (51.84)

- Minority Interest 0.60(0.50)

- Share in Profit/Loss of 10.59

Associate (17.27) Net Profit/ (Loss) 390.77

(576.13)TOTAL CARRYING AMOUNT OF

c) SEGMENT ASSETS 7907.83 3965.02 158.42 12031.27(6342.53) (2684.77) (128.56) (9155.86)

Unallocated Assets 671.25(578.86)

Total Assets 12702.52(9734.72)

d) SEGMENT LIABILITIES 2548.33 343.03 34.14 2925.50(1655.89) (413.94) (13.03) (2082.86)

Unallocated liabilities 6131.48(4347.07)

Total Liabilities 9056.98(6429.93)


SR. PARTICULARS ICE CREAM PROCESSED OTHERS ELIMINATION TOTALNO. FOODS

e) Cost incurred during the periodto acquire segment fixed assets 1719.96 986.43 4.69 2711.08

(880.64) (240.45) (35.19) (1156.28)f) Depreciation/Amortisation 334.66 96.02 5.57 436.25

(211.94) (88.66) (16.57) (317.17)g) Non cash expenses other than

depreciation/amortisation 0.11 10.00 0.00 10.11(18.05) (0.00) (0.00) (18.05)

Note : Figures in brackets relate to previous year.

B SECONDARY SEGMENT - GEOGRAPHICAL SEGMENT :Segment revenue by geographical area based on geographical location of customers :

(Rs. in Lacs)Geographical Area Current Year Previous Year

1 India 11428.99 9836.51

2 Middle East Asia 659.39 431.68

3 North America 301.66 585.74

4 Europe 648.71 882.45

5 Asia pecific 417.06 424.02

6 Africa 0.00 10.28

13455.81 12170.68

C OTHER DISCLOSURES

a) Inter segment revenue

Inter segment transfers have been recognized at cost price.

b) Business Segment

Ice Cream : Ice Cream & Frozen Dessert

Processed Food : Mango Pulp, Frozen Fruit, Pulp, Vegetable & Ready to eat/serve food

Others : Forex management, Money changing and Cold Storage

c) The company’s operating facilities are located in India.

9) The figures of the partnership firm, enterprise under control of the company is considered on the basis of its unauditedfinancial statements.

10) RELATED PARTY DISCLOSURES

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

1) Associates :

Vadilal Chemicals Ltd.

2) Key Management Personnel :

i) Virendra R Gandhi

ii) Rajesh R Gandhi

iii) Devanshu L Gandhi

3) Enterprises owned or significantly influenced by key management personnel or their relatives :

i) Vadilal Enterprises Ltd.

ii) Vadilal International Pvt. Ltd.

iii) Kalpit Reality & Services Ltd.

iv) Vadilal Happiness Parlour Ltd.

v) Veronica Construction Pvt.Ltd.

vi) Padm Complex Pvt.Ltd.

vii) Ambica Dairy Products

viii) Majestic Farm House Ltd.

ix) Vadilal Soda Fountain

4) Relative of Key Management Personnel :

Mamta R Gandhi


B) Transaction with related parties : (Rs. in Lacs)

Sr. Particulars of Transaction Associates Relatives of Enterprises owned TotalNo. & Name of Related Party Key Management or significantly

with whom transactions are Personnel influenced bymore than 10% Key Management

personnel ortheir relatives

1 Sales :

i) Vadilal Enterprises Ltd. — — 10671.57 10671.57

(—) (—) (9200.03) (9200.03)

ii) Others — — 51.21 51.21

(—) (—) (45.87) (45.87)

2 Purchase :

i) Vadilal Chemicals Ltd. 8.29 — — 8.29

(6.42) (—) (—) (6.42)

ii) Others — — — —

(—) (—) (0.64) (0.64)

3 Sale of RM/PM :

i) Vadilal Enterprises Ltd. — — — —

(—) (—) (0.18) (0.18)

ii) Vadilal Soda Fountain — — — —

(—) (—) (0.32) (0.32)

4 Freight paid :Kalpit Reality & Services Ltd. — — 251.31 251.31

(—) (—) (246.25) (246.25)

5 Rent Income : Vadilal Enterprises Ltd. — — 0.90 0.90

(—) (—) (0.90) (0.90)

6 Interest paid :

i) Vadilal Happiness Parlour Ltd. — — 1.06 1.06

(—) (—) (1.01) (1.01)

ii) Padm Complex Pvt.Ltd. — — 4.46 4.46

(—) (—) (4.79) (4.79)

7 Salary paid : Mamta R.Gandhi — 1.08 — 1.08

(—) (1.20) (—) (1.20)

8 Interest Income : Vadilal International Pvt.Ltd. — — 4.03 4.03

(—) (—) (4.00) (4.00)

9 Royalty paid/payable : Vadilal International Pvt.Ltd. — — 10.81 10.81

(—) (—) (17.71) (17.71)

10 Corporate guarantee given : Vadilal Enterprises Ltd. — — 250.00 250.00

(—) (—) (380.00) (380.00)

11 Corporate guarantee taken : Vadilal Enterprises Ltd. — — 800.00 800.00

(—) (—) (—) (—)

12 Balance outstanding at year end :

a) Investments :


(162.04) (—) (—) (162.04)

ii) Others — — 1.87 1.87

(—) (—) (1.87) (1.87)

b) Receivable :

i) Vadilal Enterprises Ltd. — — 2304.65 2304.65

(—) (—) (1847.49) (1847.49)

ii) Vadilal International Pvt.Ltd. — — 381.47 * 381.47

(—) (—) (400.00)* (400.00)

iii) Others — — 84.75 84.75

(—) (—) (45.57) (45.57)


Sr. Particulars of Transaction Associates Relatives of Enterprises owned TotalNo. & Name of Related Party Key Management or significantly

with whom transactions are Personnel influenced bymore than 10% key management

personnel ortheir relatives

c) Payable :


(8.94) (—) (—) (8.94)

ii) Padm Complex Pvt.Ltd. — — 41.42 41.42

(—) (—) (46.47) (46.47)

iii) Vadilal Happiness Parlour Ltd. — — 10.85 10.85

(—) (—) (10.08) (10.08)

d) Against corporate guarantee given :

Vadilal Enterprises Ltd. — — 523.03 523.03

(—) (—) (582.94) (582.94)

e) Against corporate guarantee taken :

Vadilal Enterprises Ltd. — — 750.00 750.00

(—) (—) (—) (—)

Notes :* a) Represents towards deposit.

b) Transaction of sales are shown net of VAT & S.Tax.c) Figures in brackets relate to previous year.

11) EARNINGS PER SHARE

a) The amount used as the numerator in calculating basic and diluted earning per share is the net profit for the yeardisclosed in the profit and loss account.

b) The weighted average number of equity shares used as the denominator in calculating both basic and diluted earningsper share is 71,88,230.

12) PARTICULARS OF DERIVATIVE INSTRUMENTS :

a) Derivative contracts entered into by the company and outstanding as on 31st March, 2008.

i) Particulars of derivative instruments acquired for hedging amount as under :

PARTICULARS C.YEAR P.YEARNOS. AMOUNT NOS. AMOUNT

Number of sell contract 5 US $ 5000000 2 US $ 2000000Aggregate Amount Rs. 2007.00 Lacs Rs. 871.20 Lacs

ii) All derivative and financial instruments acquired by the company are for hedging.

iii) Foreign currency exposure that are not hedged by derivative instruments as on 31st March, 2008 -

US $ 1346742 equal to Rs. 539.05 Lacs (Previous year US $ 1719232 equal to Rs. 751.16 Lacs)

Euro 363243 equal to Rs.228.20 Lacs (Previous year Euro 116850 equal to Rs. 67.84 Lacs)

b) In respect of all derivative contracts at the balance sheet date by marking them to market shows net profit, which hasbeen ignored.

13) Exchange (loss)/gain in respect of forward exchange contracts to be recognised in the Profit & Loss account of subsequentaccounting period aggregate to Rs. 1.75 Lacs (Previous year Rs. 13.60 Lacs).

14) Previous year figures have been restated wherever necessary to make them comparable with current year’s figures.

Signatures to schedule 1 to 23 For and on behalf of the BoardFor KANTILAL PATEL & CO. Ramchandra R. Gandhi : ChairmanChartered Accountants Virendra R. Gandhi : Vice-Chairman & Managing Director

Rajesh R. Gandhi : Managing DirectorDevanshu L. Gandhi : Managing Director

Arpit K. Patel Nikhil Patel : Company SecretaryPartnerPlace : Ahmedabad Place : AhmedabadDate : June 30, 2008 Date : June 30, 2008


Auditors’ Report to The Board of Directors of VADILAL

INDUSTRIES LIMITED on the Consolidated Financial

Statements.

1. We have audited the attached consolidated balance

sheet of Vadilal Industries Limited, (“the Company”)

and its partnership firm / associate as at 31st March

2008, the consolidated profit and loss account and

the consolidated cash flow statement for the year

ended on that date annexed thereto. These financial

statements are the responsibility of the company’s

management and have been prepared by the

management on the basis of separate financial

statements and other financial information regarding

components. Our responsibility is to express an

opinion on these financial statements based on our

audit.

2. We conducted our audit in accordance with generally

accepted auditing standards in India. These standards

require that we plan and perform the audit to obtain

reasonable assurance whether the financial

statements are prepared, in all material respects, in

accordance with an identified financial reporting

framework and are free of material misstatements. An

audit includes examining, on a test basis, evidence

supporting the amounts and disclosures in the financial

statements. An audit also includes assessing the

accounting principles used and significant estimates

made by management, as well as evaluating the

overall financial statement presentation. We .believe

that our audit provides a reasonable basis for our

opinion.

3. We did not audit the financial statements of partnership

firm which in aggregate represent .total assets (net)

as at March 31, 2008 of Rs.238.43 lakhs and total

revenues for the year ended on that date of Rs.192.19

lakhs and of associate which reflect the company’s

share of profit for the year of Rs. 10.59 lakhs. The

financial Statements and other financial information

of the associate have been audited by other qualified

auditor whose report has been furnished to us by the

management of the company, and our opinion is

based solely on the report of the other auditor.

4. As stated in note 9 of schedule 22 as the audited

financial statements of partnership firm, are not

available, we have relied upon the unaudited financial

statements as provided by the management of the

firm for the purpose of our examination of consolidated

financial statements.

5. Subject to our remark in paragraph 4 above :

(i) We report that consolidated financial statements

have been prepared by the Company’s

management in accordance with the requirements

of Accounting Standard (AS) 21, Consolidated

Financial Statements and Accounting Standard

(AS) 23, Accounting for Investments in Associates

in Consolidated Financial Statements, issued by

the Institute of Chartered Accountants of India.

(ii) Based on our audit and on consideration of report

of other auditor on separate financial statements

and on the other financial information of the

components, and to the best of our information

and according to the explanations given to us, we

are of the opinion that the attached consolidated

financial statements give a true and fair view in

conformity with the accounting principles

generally accepted in India :

(a) in the case of consolidated balance sheet, of

the. consolidated state of affairs of the

company, its partnership firm and associate

as at 31st March 2008;

(b) in the case of the consolidated profit and

loss account, of the consolidated results of

operations of the company, its partnership

firm and associate for the year ended on that

date; and

(c) in the case of the consolidated cash flow

statement, of the consolidated cash flows of

the company, its partnership firm and

associate for the year ended on that date.




ATTENDANCE SLIP

VADILAL INDUSTRIES LIMITED

Regd. Office : Vadilal House, Shrimali Society,Nr. Navrangpura Railway Crossing,

Navrangpura, Ahmedabad - 380 009.

Tear

her

e

FORM OF PROXY


Regd. Office : Vadilal House, Shrimali Society,Nr. Navrangpura Railway Crossing,

Navrangpura, Ahmedabad - 380 009.

I /We of

being a member/members of VADILAL INDUSTRIES LIMITED, hereby appoint

of

or failing him/her of

as my/our Proxy to vote for me/us on my/our behalf at the 24th Annual General Meeting of the membersof the Company to be held on Monday, the 29th September, 2008, at 12.30 p.m., at Sheth Shri AmrutlalHargovandas Memorial Hall, Gujarat Chamber of Commerce & Industry (GCCI), Ashram Road,Ahmedabad - 380 009 and at any adjournment thereof.

Ledger Folio No.

*DP ID No. :

*Client ID No. :

No. of Shares

Signed this day of 2008

* Applicable for investors holding shares in electronic form.

IMPORTANT

[1] This form duly completed and signed across the stamp as per specimen signature registered withthe Company should be deposited at the Registered Office of the Company not less than 48 hoursbefore the time fixed for the commencement of the Meeting.

[2] Revenue Stamp of 15 Paise is to be affixed on this form.

[3] A Proxy need not be a member.

Affix15 Paise

Signature............... Revenue ........................Stamp

I hereby record my presence at the 24th Annual General Meeting of the members of the Company onMonday, the 29th September, 2008, at 12.30 p.m., at Sheth Shri Amrutlal Hargovandas Memorial Hall,Gujarat Chamber of Commerce & Industry (GCCI), Ashram Road, Ahmedabad - 380 009

* Applicable for investors holding shares in electronic form.

Signature of Shareholder(s)/Proxy

Shareholder

Proxy

Name Regd Folio No.*DP ID No. and No. of Shares held

Client ID No.

PLEASE COMPLETE THIS ATTENDANCE SLIP AND HAND IT OVER AT THE ENTRANCE OF THEMEETING HALL. JOINT SHAREHOLDERS MAY OBTAIN ADDITIONAL ATTENDANCE SLIP ON REQUEST.

24th ANNUAL GENERAL MEETING

Day - Monday

Date - 29th September, 2008

Time - 12.30 p.m.

Venue - Sheth Shri Amrutlal Hargovandas Memorial Hall,Gujarat Chamber of Commerce & Industry (GCCI),Ashram Road, Ahmedabad - 380 009.

CONTENTS PAGE NO.

� Board of Directors and other details 1

� Notice & Explanatory Statement 2-6

� Directors’ Report 7-9

� Management Discussion & Analysis 10-13

� Report on Corporate Governance 17-22

� Shareholder Information 22-26

� Auditors’ Certificate on 26Corporate Governance

� Auditors’ Report on Accounts 27-29

� Balance Sheet 30

� Profit & Loss Account 31

� Cash Flow Statement 32

� Schedules to Balance Sheet 33-40and Profit & Loss Account

� Significant Accounting Policies 40-43

� Notes on Accounts 43-52

� Balance Sheet Abstract and 52Company’s General Business Profile

� Consolidated Accounts 53-67

� Auditors’ Report on Consolidated Accounts 68

� Proxy Form & Attendance Slip


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