The Members,
 
 VADILAL INDUSTRIES LIMITED
 
 Ahmedabad.
 
 The Directors have pleasure in presenting herewith the 27th Annual
 Report together with the Audited Statement of Accounts for the year
 ended on 31st March, 2011.
 
 INCOME FROM OPERATIONS
 
 The Company earned the total income from operations of Rs. 23581.80
 Lacs during the year ended on 31st March,
 
 2011 as against Rs. 18896.27 Lacs earned during the previous year ended
 on 31st March, 2010.
 
 FINANCIAL RESULTS:
 
                                                          (Rs. in lacs)
  
 Particulars                              Year ended      Previous year
                                           31-3-2011    ended 31-3-2010
 
 (a) Profit for the year before 
 Depreciation and Financial Expenses         2526.58            2076.07
 
 (b) Less: Depreciation              816.65            564.97
 
 Financial Expenses (Net)            961.05  1777.70   631.90   1196.87
 
 (c) Profit before Exceptional 
 & Prior Year items                           748.88             879.20
 
 (d) Prior Year''s Adjustments (Net)           (0.21)             (0.05)
 
 (e) Profit before tax                        748.67             879.15
 
 (f) Provision for Tax 
 (Refer Note I of Schedule 22)
 
 — Current Tax                                  0.00             327.00
 
 — Current (MAT Tax)                 141.93              0.00 
 
 Less : MAT credit entitlement     (128.00)    13.93     0.00      0.00
 
 — Deferred Tax charge/(release)              233.51            (28.49)
 
 — (Short) / Excess Provision 
 of Tax / Deferred Tax of 
 earlier years (Net)                            6.94             (5.47)
 
 (g) Net Profit after Tax                     508.17             575.17
 
 (h) Profit Brought Forward                   340.72             286.28
 
 Amount available for appropriation           848.89             861.45 
 
 Appropriation:- —
 
 Proposed Dividend                            107.82             107.82
 
 — Tax on Proposed Dividend                    17.49              17.91
 
 — General Reserve                            400.00             395.00
 
 — Balance carried to Balance Sheet           323.58             340.72
 
 Total                                        848.89             861.45
 
 DIVIDEND:
 
 The Directors have recommended dividend of Rs. 1.50 per share (@15.00%)
 on 71,87,830 Equity Shares of Rs. 10/- each of the Company for the
 Financial Year ended on 31st March, 2011. The Company declared Rs. 1.50
 per share (@15.00%) dividend for the previous Financial Year ended on
 31st March, 2010. This will absorb Rs. 107.82 lacs as against Rs.
 107.82 lacs absorbed in the previous year. The corporate dividend tax
 payable by the Company on the said dividend will be Rs. 17.49 lacs as
 against Rs. 17.91 lacs in the previous year. If approved, the dividend
 will be paid without deduction of tax at source to the shareholders.
 
 MANAGEMENT DISCUSSION AND ANALYSIS:
 
 Management Discussion and Analysis Report has been enclosed herewith as
 per Annexure A and forming part of the Directors'' Report.
 
 ADDITIONAL DISCLOSURES:
 
 In line with the requirements of Listing Agreement with the Stock
 Exchanges and the Accounting Standards of the Institute of Chartered
 Accountants of India, your Company has made additional disclosures in
 the Notes on Accounts for the year under review in respect of Related
 Party Transactions, Employees Benefits, Taxes on Income and Expenses,
 Derivative Instruments, Segmental Reporting (in Notes on Consolidated
 Accounts), Calculation of EPS, etc.
 
 QUALITY ASSURANCE AND AWARDS
 
 ISO 22000:2005 AND ISO 9001:2000 CERTIFICATES
 
 The Company has always made continuous efforts to improve the process
 of manufacturing and to achieve quality and efficiency in each of its
 operations. This is evident from the award of ISO 9001:2000 to the
 Company conferred upon by Nemko AS, Certification Department, towards
 Quality Management System for its Processed Food Division
 
 situated at Dharampur, Dist. Valsad, Gujarat. The Company has also
 received award of ISO 22000:2005 from Nemko AS, Certification
 Department, towards Food Safety Management System for the said
 Processed Food Division. The Company has already been awarded Two Star
 Export House Status by Joint Director General of Foreign Trade,
 Ministry of Commerce and Industry for export of Processed Foods
 Products.
 
 The Company has also obtained ISO 22000:2005 Certification from Bureau
 Veritas, Mumbai for its ice-cream plant at Pundhra in the State of
 Gujarat and Bareilly in the State of Uttar Pradesh for Management
 System.
 
 The Company has won, for consecutive 3 years i.e. in the year 2008,
 2009 and 2010, total 22 awards in the Great Indian Ice-Cream Contest
 organised by Indian Dairy Association (IDA).
 
 FINANCE:
 
 During the year under review, the Company has availed enhanced working
 capital facilities from the Consortium Banks for working capital
 requirement of the Company. The Company has also availed the Term Loans
 from various Term Lenders towards part financing the
 expansion-cum-modernization of its existing manufacturing units.
 
 During the year under review, the Company also availed ad-hoc cash
 credit and L/C facilities for import of machineries from Bank of
 Baroda. The said facilities have been repaid by the Company during the
 year under review.  The Company also availed unsecured loan from
 Catholic Syrian Bank and Indian Overseas Bank.
 
 The short term loan availed by the Company during last year from
 Development Credit Bank Ltd. has been fully repaid during the year
 under review.
 
 In terms of the provisions of Investor Education and Protection Fund
 Rules, 2001 (IEPF), during the year under review, the Company has
 transferred the unclaimed interest on fixed deposit of Rs. 20,346/-
 upto 31-3-2003, to IEPF established by the Central Government under
 Section 205C(1) of the Companies Act, 1956.
 
 FIXED DEPOSITS:
 
 The Company has no overdue deposits outstanding other than those
 unclaimed deposits of Rs. 30.84 lacs as on 31st March, 2011. As on date
 of this Report, deposits aggregating Rs. 9.05 lacs thereof have been
 claimed and either paid or renewed. The Company has mobilised Fixed
 Deposit of Rs. 925.20 lacs during the year ended on 31st March, 2011,
 after complying with the provisions of Section 58 A of the Companies
 Act, 1956 read with the Companies (Acceptance of Deposits) Rules, 1975
 as amended. After repaying the maturities during the year, the total
 Fixed Deposits as on 31st March, 2011 stood at Rs. 1282.89 lacs.
 
 SUBSIDIARY COMPANY:
 
 The Company has incorporated a wholly-owned subsidiary company namely
 Vadilal Industries (USA) Inc., in the State of New Jersey in USA during
 the year – 2009-2010. However, pursuant to the provisions of Section
 212 of the Companies Act, 1956 read with the General Circular No.
 2/2011 dated 8th February, 2011 issued by Ministry of Corporate
 Affairs, granting general exemption under Section 212(8) of the
 Companies Act, 1956, the Annual Accounts and other related details of
 Vadilal Industries (USA) Inc., including the Statement under Section
 212(1)(e), for the year ended on 31-3-2011, are not attached with the
 Balance Sheet of the Company. However the financial information of the
 said subsidiary company has been included in the notes to consolidated
 accounts attached herewith.
 
 However, the Company undertakes that the Reviewed Financial Statements
 of Vadilal Industries (USA) Inc. for the year ended on 31-3-2011,
 alongwith reports of Directors and Independent Accountant thereon shall
 be made available to the shareholders and a hard copy of the same shall
 be provided to the shareholders, on their written request. The said
 Reviewed Financial Statements of Vadilal Industries (USA) Inc. for the
 year ended on 31-3-2011, alongwith reports of Directors and Independent
 Accountant thereon including Statement under section 212(1)(e) shall
 also be available for inspection by any shareholder of the Company, at
 the Share Department of the Company on any working day except Saturdays
 between 2.00 p.m. to 4.00 p.m. upto the date of Annual General Meeting.
 
 CONSOLIDATED FINANCIAL STATEMENTS:
 
 As stipulated by Clause 32 of Listing Agreement with Stock Exchanges,
 Consolidated Financial Statements of the Company, its Wholly-owned
 Subsidiary Company namely, Vadilal Industries (USA) Inc. and Vadilal
 Cold Storage, a Partnership Firm, for the year ended on 31st March,
 2011 have been prepared by the Company in accordance with the
 requirements of Accounting Standard - 21 Consolidated Financial
 Statements and Accounting Standard 23 Accounting for investments in
 Associates issued by the Institute of Chartered Accountants of India
 and prescribed under Section 211(3C) of the Companies Act, 1956. The
 Audited Consolidated Financial Statements form part of the Annual
 Report.
 
 CORPORATE GOVERNANCE:
 
 Being a Listed Company, the Company has taken necessary measures to
 comply with the Listing Agreement with the Stock Exchanges as amended
 from time to time including revised Clause 49 regarding Corporate
 Governance.  A separate report on Corporate Governance for the year
 ended on 31st March, 2011 is attached herewith as a part of this Annual
 Report. A certificate from Statutory Auditors of the Company regarding
 compliance of Corporate Governance as stipulated under the revised
 Clause 49 of Listing Agreement is obtained by the Company and annexed
 to the Corporate Governance Report.
 
 RESPONSIBILITY STATEMENT:
 
 To the best of their knowledge and belief and according to the
 confirmation and explanations obtained by them, your Directors make the
 following statement in terms of Section 217(2AA) of the Companies Act,
 1956 and confirm :
 
 a) that in the preparation of Annual Accounts, the applicable
 accounting standards have been followed and that no material departures
 have been made from the same;
 
 b) that they have selected such accounting policies and applied them
 consistently and made judgments and estimates that are reasonable and
 prudent so as to give a true and fair view of the state of affairs of
 the Company at the end of the financial year 31st March, 2011 and of
 the profit or loss of the Company for that year;
 
 c) that they have taken proper and sufficient care for the maintenance
 of adequate accounting records in accordance with the provisions of the
 Companies Act, 1956 for safeguarding the assets of the Company and for
 preventing and detecting fraud and other irregularities;
 
 d) that they have prepared the Annual Accounts on a going concern
 basis.
 
 INSURANCE:
 
 All insurable interests of the Company including buildings, plant and
 machinery, furniture & fixtures and other insurable interest are
 adequately insured.
 
 CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
 EARNINGS AND OUTGO:
 
 As required under Section 217(1)(e) of the Companies Act, 1956 read
 with the Companies (Disclosure of Particulars in Report of Board of
 Directors) Rules, 1988, details relating to Conservation of Energy,
 Technology Absorption and Foreign Exchange Earnings and Outgo are given
 in the Annexure -B attached hereto and forming part of the Directors''
 Report.
 
 LISTING AGREEMENT WITH STOCK EXCHANGES:
 
 Pursuant to the provisions of Listing Agreement with the Stock
 Exchanges, the Company declares that the Equity Shares of the Company
 are listed on the Bombay Stock Exchange Limited, National Stock
 Exchange of India Limited and Ahmedabad Stock Exchange Limited.
 
 The Equity Shares of the Company are admitted to dealings on the
 National Stock Exchange of India Limited (NSE) on Capital Market
 Segment vide a Circular of NSE bearing Ref. No. NSE/LIST/C/2011/0587
 dated 13-06-2011 and a letter of NSE bearing Ref. No. NSE/LIST/167762-A
 dated 13th June, 2011. The Trading on Capital Segment of the NSE was
 commenced from 15-06-2011. The designated Security Code for the purpose
 of dealings at NSE is VADILALIND-EQ.
 
 The Company confirms that it has paid Annual Listing Fees due to the
 Bombay Stock Exchange Ltd., National Stock Exchange of India Ltd. and
 Ahmedabad Stock Exchange Ltd. upto the Financial Year - 2011-2012.
 
 PARTICULARS OF EMPLOYEES:
 
 The statement of particulars of employees providing information as per
 Section 217(2A) of the Companies Act, 1956 read with the Companies
 (Particulars of Employees) Rules, 1975 form part of this report.
 However, as per provisions of Section 219(1)(b)(iv) of the Companies
 Act, 1956, the Annual Report excluding this statement is being sent to
 all members. Any member interested in obtaining a copy of this
 statement may write to the Company Secretary at the Share Department 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. Ramchandra R.
 Gandhi and Mr. Rohit J. Patel, Directors of the Company, shall retire
 by rotation at this Annual General Meeting, and being eligible, offer
 themselves for re-appointment. The Members are requested to consider
 their re-appointment as Directors of the Company, for which necessary
 resolutions have been incorporated in the notice of the meeting. The
 brief resume/details relating to the said Directors, who are to be
 re-appointed are furnished in the Notes to the Notice of the Annual
 General Meeting.
 
 CORPORATE SOCIAL RESPONSIBILITY
 
 The Company daily provides Ice-cream to the patients of M. P. Shah
 Cancer Hospital, the Gujarat Cancer and Research Institute, New Civil
 Hospital Compound, Asarwa, Ahmedabad. Under Yuva Unstoppable
 programme organised by an Institution, the employees of the Company
 attended Municipal Schools in Ahmedabad and helped the students in
 learning english.
 
 AUDITORS:
 
 M/s. Kantilal Patel & Co., Chartered Accountants, Ahmedabad, holds
 office as Statutory Auditors of the Company until the conclusion of
 this Annual General Meeting and as recommended by Audit Committee, the
 Board recommends their appointment, as Statutory Auditors of the
 Company, for the Financial Year – 2011-2012 and to hold office from the
 conclusion of the ensuing 27th Annual General Meeting till the
 conclusion of the next Annual General Meeting of the Company. The
 Company has received a certificate from the said Auditors under Section
 224(1B) of the Companies Act, 1956 to the effect that their
 appointment, if made, would be within the prescribed limits under
 Section 224(1B) of the Act. The Members are requested to consider their
 appointment as Statutory Auditors of the Company for the Financial Year
 - 2011-2012, at a remuneration to be decided by the Board of Directors.
 
 AUDITORS'' REPORT OF THE COMPANY:
 
 The following clarification has been made by the Directors in respect
 of the observation made by the Auditors in CARO report for the year
 ended on 31st March, 2011 :- 1.  The Company has not paid sales tax
 overdue for more than six months due to pending litigation / legal
 cases.  The Company has obtained a stay against the said litigation.
 
 ACKNOWLEDGEMENT:
 
 The Directors place on record the appreciation and gratitude for the
 co-operation and assistance extended by various departments of the
 Union Government, State Government, Bankers and Financial Institutions.
 
 The Directors also place on record their appreciation of dedicated and
 sincere services of the employees of the Company at all levels.
 
 The Company will make every effort to meet the aspirations of its
 Shareholders and wish to sincerely thank them for their whole hearted
 co-operation and support at all times.
 
                                     By Order of the Board of Directors
 
                                                   Ramchandra R. Gandhi 
                                                               Chairman
 
 Date  : 18th July, 2011.  
 Place : Ahmedabad