DIRECTORS' REPORT

To,

The members,

VADILAL ENTERPRISES LIMITED

Ahmedabad.

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

STATE OF COMPANY'S AFFAIRS:

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

The Company has earned the Earnings before Interest, Tax, Depreciation and Amortisation (EBITDA) of Rs. 759.94 lacs during the year ended on 31st March, 2015 as compared to Rs. 601.44 lacs earned during the previous year ended on 31st March, 2014, showing a rise of 26.35%. The Company has incurred Finance Cost of Rs. 118.88 lacs and provided for Depreciation and Amortisation expenses of Rs. 640.18 lacs for the year ended on 31st March, 2015.

The Company has earned profit before Tax of Rs. 0.88 lacs during the year under review as compared to loss Rs. 87.26 lacs incurred during the previous year ended on 31st March, 2014. The Company has earned profit for the year of Rs. 0.60 lacs during the year ended on 31st March, 2015 after providing Finance Cost and Depreciation and Amortisation expenses and after making Provision for Deferred Tax of Rs. 0.28 lacs and other adjustments, as compared to loss of Rs. 60.55 lacs incurred by the Company during the previous year ended on 31st March, 2014.

DIVIDEND:

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

TRANSFER TO RESERVE :

The Company does not propose to transfer any amount to general reserve due to Inadequecy of Profit.

EXTRACT OF ANNUAL RETURN:

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

OPERATIONS - MARKETING FOCUS:

ICE-CREAM DIVISION:

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

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

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

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

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

This year, Vadilal launched the Ice Trooper Treasure Hunt Contest with the objective of offering its young customers a chance to win exciting prizes. A new commercial promoting the contest was aired on all major television channels throughout the summer season. A huge amount of customers from across the nation participated in the contest.

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

AWARDS WON BY VADILAL YEAR BY YEAR:

Vadilal has won 27 awards over 4 consecutive years: 2008 to 2011 at 'The Great Indian Ice Cream Contest' organized by the Indian Dairy Association. The various categories for awards were: The Best in Class (3): Chocolate Frozen

Dessert, Standard Chocolate Ice Cream, Rose Coconut Shell (Innovation - Novelty) Gold Medal (4): Standard Chocolate Ice Cream, Chocolate Frozen Dessert, Vanilla Frozen Dessert and Rose Coconut Shell (Innovation -Novelty), Bronze Medal (1) Natural Orange (Premium without Inclusion). Best in Class in Kids category - Joker Ice Trooper, Gold in Kids category - Joker Face Ice Trooper, Silver in Vanilla Frozen Dessert. Bronze in Vanilla Ice Cream

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

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

FUTURE STRATEGY:

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

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

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

Processed Food Division - Domestic:

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

The brand will be soon taking the legacy of Vadilal Ice Creams to the world under the brand 'Vadilal Quick Treat'.

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

FINANCE :

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

During the year under review, the Company has transferred the unclaimed interest on Fixed Deposit of t15000/-for the financial year ended on 31st March, 2008 to Investors' Education and Protection Fund. During the year under review, the Company has transferred the amount of unpaid and unclaimed Dividend of t 34284/- for the year 2006­2007 to Investors' Education and Protection Fund.

DETAILS OF DEPOSITS:

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

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

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

CONSOLIDATED FINANCIAL STATEMENTS:

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

ASSOCIATE COMPANIES :

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

DIRECTORS' RESPONSIBILITY STATEMENT:

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

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

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

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

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

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

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

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

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

CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES:

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

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

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

DIRECTORS AND KEY MANAGERIAL PERSONNEL:

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

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

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

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

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

BOARD EVALUATION :

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

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

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

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

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

COMMITTEES OF DIRECTORS :

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

A. AUDIT COMMITTEE :

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

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

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

B. NOMINATION AND REMUNERATION COMMITTEE :

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

The Nomination and Remuneration Committee comprises the following Directors of the Company, as on 31st March, 2015, namely:

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

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

C. STAKEHOLDERS' RELATIONSHIP COMMITTEE :

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

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

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

POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION:

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

NUMBER OF BOARD MEETINGS :

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

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

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

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

INTERNAL FINANCIAL CONTROLS

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

AUDITORS:

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

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

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

The Audit Committee and the Board of Directors recommend the re-appointment of M/s. Kantilal Patel & Co., Chartered Accountants, Ahmedabad as Statutory Auditors of the Company for the financial year 2015-2016 to hold office from the conclusion of this Annual General Meeting till the conclusion of the next Annual General Meeting of the Company.

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

Auditors of the Company to hold office from the conclusion of this Annual General Meeting till the conclusion of the next Annual General Meeting of the Company.

SECRETARIAL AUDITOR:

Section 204 of the Companies Act, 2013 inter alia requires every listed companies to annex with its Board Report

a Secretarial Audit Report given by a Company Secretary in practice in the prescribed form. The Board has appointed M/s SPANJ Associates, Practicing Company Secretaries, to conduct Secretarial Audit for the financial year 2014­15. The Secretarial Audit Report for the financial year ended March 31, 2015 is annexed herewith marked as Annexure - V to this Report.

LISTING AGREEMENT WITH STOCK EXCHANGES:

Pursuant to the provisions of Listing Agreement with the Stock Exchanges, the Company declares that the Equity

Shares of the Company are listed on the BSE Limited (BSE) (Scrip Code - 519152).

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

DEPOSITORY SYSTEM:

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

The ISIN number allotted to the Company is INE693D01018.

PARTICULARS OF EMPLOYEES:

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

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

WHISTLE BLOWER POLICY / VIGIL MECHANISM:

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

GENERAL:

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

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

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

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

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

INSURANCE:

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

TRADE RELATIONS :

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

ACKNOWLEDGEMENT:

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

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

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

By Order of the Board of Directors

RAJESH R. GANDHI CHAIRMAN

DEVANSHU L. GANDHI DIRECTOR

Date : 13th August, 2015.

Place : Ahmedabad.