Vadilal Industries Ltd

To,

The Members

VADILAL INDUSTRIES LIMITED

Ahmedabad.

Your directors have pleasure in presenting herewith the 40^th Annual Report together with the Audited Financial Statements for the year ended 31^st March, 2024.

FINANCIAL HIGHLIGHTS:

(' in crore)

STATE OF COMPANY'S AFFAIRS:

The Company has earned Revenue from Operations of Rs. 912.57 crore during the year ended on 31^st March, 2024 as against Rs. 896.71 crore during the previous year ended on 31^st March, 2023 i.e increase of 1.77% compared to previous year.

After adding thereto, the other income of Rs. 13.21 crore, the Company has earned total income of Rs. 925.78 crore during the year under review. The Company has incurred total expenses of Rs.797.21 crore including Finance cost of Rs. 13.97 crore and Depreciation and Amortization expenses of Rs. 23.15 crores, during the year under review.

The Company has earned profit before Tax of Rs. 128.57 crore during the year under review as compared to profit of Rs. 96.48 crores during the previous year ended on 31^st March, 2023. The Company has earned profit of Rs. 95.84 crores during the year ended on 31^st March, 2024 after deducting total tax expenses of Rs.32.73 crore as compared to profit of Rs. 71.93 crores during the previous year ended on 31^st March, 2023 after deducting total tax expense of Rs.24.55 crore.

During the current financial year of 2023-24, the Company has acheived Marginal growth and better operational efficiency as compared to previous financial year.

DIVIDEND:

The Directors have recommended dividend of Rs. 1.50 per share (@15%) on 71,87,830 Equity Shares of Rs. 10/- each of the Company for the Financial Year ended on 31^st March, 2024. If approved, the dividend will be paid with deduction of tax at source to the shareholders as applicable.

TRANSFER TO RESERVES:

The Company has not transferred any amount to the General Reserves during the year under review.

ANNUAL RETURN:

Pursuant to Section 92(3) of the Act and Rule 12 of the Companies (Management and Administration) Rules, 2014, the Annual Return for FY 2023-24 is available on Company's website at https://vadilalgroup.com/?page id=904

MANAGEMENT DISCUSSION AND ANALYSIS:

Management Discussion and Analysis Report has been enclosed herewith as per Annexure - A and forming part of the Directors' Report. QUALITY ASSURANCE AND AWARDS AWARDS AND CERTIFICATIONS:

Vadilal has won 27 awards over 4 consecutive years: 2008 to 2011 at 'The Great Indian Ice Cream Contest' organized by the Indian Dairy Association. The various categories for awards were: The Best in Class (3): Chocolate Frozen Dessert, Standard Chocolate Ice Cream, Rose Coconut Shell (Innovation - Novelty), Gold Medal (4): Standard Chocolate Ice Cream, Chocolate Frozen Dessert, Vanilla Frozen Dessert, and Rose Coconut Shell (Innovation - Novelty), Bronze Medal (1): Natural Orange (Premium without Inclusion). Best in Class in Kids category - Joker Ice Trooper, Gold in Kids category - Joker Face Ice Trooper, Silver in Vanilla Frozen Dessert, Bronze in Vanilla Ice Cream - Happinezz Vanilla Ice cream, Bronze in Premium - Pista Happinezz Ice Cream garnished with Green Pista.

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

Recently in 2019 Vadilal ice cream has been voted as "Super Brand' a very proud moment.

The Company has received 'THE ECONOMIC TIMES BEST BRANDS - 2021' Award.

ISO 22000:2005 AND ISO 9001 : 2008

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

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

The Ice Cream plants of the Company located in two locations - Pundhra in Gujarat & Barelly in UP are also certified for ISO-22000:2005, ISO 9001:2015 and BRC: Issue 7 for Food Safety Management System is another feather in the cap for the Company.

FINANCE:

During the year under review, the company has made regular repayment of installment & interest of term loan and GECL loan and there is no any overdue payment to Banks and FIs.

During the year the Company has repaid the pledge facility sanctioned by The Kalupur Commercial Co-Op. Bank Ltd. for Rs. Rs. 33.76 Crore (Sanctioned Rs. 35 Crore) availed in the previous year i.e. 2022-23 and in the current financial year the company has availed new short term pledge finance for Rs. 16.59 Crore (Sanctioned Rs. 35 Crore) against pledge of Skimmed Milk Powder (SMP) & Butter.

Till date company has availed working capital facility by Consortium Banking Arrangement, where in Bank of Baroda was lead bank and other member banks namely State Bank of India, IDBI Bank and IndusInd Bank were part of the Consortium. For smooth business operation Company has dissolved the consortium banking arrangement and take the exit from Bank of Baroda and State Bank of India and started new banking arrangement under Multiple banking arrangement (M.B.A.) where in ICICI Bank has sanctioned Working Capital Facility of Rs. 50 Crore and other existing members, namely IDBI Bank and IndusInd Bank will also continue under M.B.A. as and when they propose their facility during review of account.

During the year the company has fully repaid the short-term ICD (Inter Corporate Deposit), which was availed in the previous financial year i.e. 2022-23 for working capital purpose and not availed ICD in current financial year.

Based on the financial performance of previous year i.e. 2022-23, India ratings & Research Pvt. Ltd. has rated the long-term borrowing & Fund Based Working Capital Facility as BBB+/ Stable and Non-fund-based facility is rated as A2 vide its letter dated 24.01.2024.

INVESTOR EDUCATION AND PROTECTION FUND:

During the financial year - 2023-2024, the Company has deposited unclaimed/ unpaid fixed deposit amount of Rs. 69039/- to Investor Education and Protection Fund - IEPF.

During the Financial year - 2023-2024, the Company has also transferred Rs.455662 /- being amount of unpaid dividend for the year - 2015-2016 to Investor Education and Protection Fund.

DETAILS OF DEPOSITS:

a. During the year under review, the details of deposits accepted by the Company 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, are as under:

I. Details of Deposit from Shareholders:

II. Details of Deposit from Public [Accepted under Companies Act, 1956 and Companies (Acceptance of Deposit) Rules, 1975]:

(' in crore)

b. As on 31^st March, 2024, deposit of ' 15000/- has remained unpaid or unclaimed by the Company.

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

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

SUBSIDIARY COMPANY:

Company is having 2 wholly owned subsidiary companies outside India namely Vadilal Industries (USA) Inc., USA, and Vadilal Industries Pty Ltd and 2 wholly owned subsidiary companies in India viz; Vadilal Delights Limited and Varood Industries Limited.

A report on the financial position of the subsidiaries 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 - B to the Directors' Report. The Policy for determining material subsidiaries may be accessed on the Company's website viz www.vadilalgroup.com.

Pursuant to the provisions of Section 136 of the Act, separate Audited Accounts in respect of subsidiary company for the year ended on 31^st March, 2024 are available at the web-site of the Company viz. www.vadilalgroup.com.

CONSOLIDATED FINANCIAL STATEMENTS:

Pursuant to the requirements of Section 129(3) read with Schedule - III of the Companies Act, 2013 and Rules made thereunder, and Regulation 34 of the SEBI (Listing Obligation and Disclosure Requirement), 2015 and other applicable Accounting Standards, the Consolidated Financial Statements of the Company, its subsidiaries and associates, for the year ended on 31^st March, 2024 have been attached with the financial statement of the Company. The Audited Consolidated Financial Statements form part of the Annual Report.

CORPORATE GOVERNANCE:

Being a Listed Company, the Company has taken necessary measures to comply with the provisions of Regulation 72 of SEBI (Listing Obligation and Disclosure Requirement), 2015 regarding Corporate Governance. A separate report on Corporate Governance for the year ended on 31^st March, 2024 is attached herewith as a part of this Annual Report viz Annexure - C. A certif?cate from Secretarial Auditors of the Company regarding compliance of Corporate Governance as stipulated under Regulation 34(3) and 53(f) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is obtained by the Company and annexed to the Corporate Governance Report.

BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT:

The Business Responsibility and Sustainability Report ("BRSR") form part of the Director's Report. The BRSR indicates the Company's performance against the principies of the 'National Guidelines on Responsible Business Conduct'. This would enable the Members to have an insight into Environmental, Social and Governance initiatives of the Company

As required under Regulation 34(2) of SEBI (Listing Obligation and Disclosure Requirement), 2015, the Business Responsibility and sustainability Report is annexed herewith as a part of this Annual Report viz Annexure- D.

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) 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 and of the profit and loss of the company for that period;

(c) They have 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) They have prepared the annual accounts on a going concern basis;

(e) They have 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) They have 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 forms part of the Notes to the financial statements provided in this Annual Report.

CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES:

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

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 - 47 to the financial statement which sets out related party disclosures.

DIRECTORS AND KEY MANAGERIAL PERSONNEL:

Pursuant to the provisions of Section 152 of the Companies Act, 2013 and Rules made thereunder, Mr. Rajesh R. Gandhi, Director (DIN:00009879) of the Company, shall retire by rotation at this Annual General Meeting and, being eligible, offers himself for re- appointment. The Members are requested to consider his re-appointment as Director of the Company, for which a necessary resolution has been incorporated in the notice of the meeting.

Pursuant to the provisions of Section 152 of the Companies Act, 2013 and Rules made thereunder, Mrs. Deval D. Gandhi (DIN:00988905) of the Company shall retire by rotation at this Annual General Meeting, and being eligible, offers herself 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.

Necessary resolutions relating to Directors who are seeking appointment/reappointment are included in the Notice of Annual General Meeting. The relevant details of the said Directors are given in the Notes/Annexures to the Notice of the Annual General Meeting.

BOARD EVALUATION:

The Board of Directors carried out an annual evaluation of its own performance, Board committees and individual directors pursuant to the provisions of the Act and the corporate governance requirements as prescribed under Regulation 17 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

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

The Board 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 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, considering the views of executive directors and non-executive directors.

COMMITTEES OF DIRECTORS:

The details of various committees of Directors constituted under provisions of Companies Act, 2013 and Rules made thereunder, their constitution, terms of reference and other details are provided in the Corporate Governance Report annexed with the Directors' Report.

OTHER POLICIES AND MEASURES AS PER THE REQUIREMENT OF SEBI (LISTING OBLIGATION AND DISCLOSURE REQUIREMENT), 2015

The policies formulated by the Company under various provisions of Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 are available on the website of the Company viz : www.vadilalgroup.com.

NUMBER OF BOARD MEETINGS:

During the year under review, 4 Meetings of the Board of Directors were held the details of which are mentioned in the Corporate Governance Report annexed with the Directors' Report.

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

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

RISK MANAGEMENT:

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

In view of the same and in terms of requirements of the regulation 17 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 regarding Corporate Governance, the Board of Directors had, approved the risk assessment and minimization procedure adopted by the Company in relation to its business.

The Board of the Company has formed a Risk Management Committee to frame, implement and monitor the risk management plan for the Company. The committee is responsible for reviewing the risk management plan and ensuring its effectiveness. The audit committee has additional oversight in the area of financial risks and controls. The major risks identified by the businesses are systematically addressed through mitigation actions on a continual basis.

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

CORPORATE SOCIAL RESPONSIBILITY:

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

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

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

INTERNAL FINANCIAL CONTROLS

The Company has an Internal Control System, commensurate with the size, scale and complexity of its operations. The External and Internal Auditors carry out periodic reviews of the functioning and suggest changes, if required. The company has also a sound budgetary control system with frequent reviews of actual performance as against those budgeted.

The Statutory Auditors have given qualified opinion on the financial reporting in their Report with regards to assessment and closure of the various financial, operational and governance related matters emanating out of the allegations made by promoter directors against

each other and their consequential impact, if any, on the standalone financia! statements of the Company The Management does not expect any material impact on the financial statements of the Company considering the fact that the matters pertain to earlier financial years and amount as already been expenses in the relevant financial years. Voluntary inquiries by external agencies initiated by the management are in process to substantiate its conclusion.

AUDITORS:

The Board of Directors in its meeting held on 13^th August, 2021 approved and recommended appointment of M/s. Arpit Patel & Associates as Statutory Auditors of the Company for a remaining period of 4 years i.e. till the conclusion of the 41^st Annual General Meeting of the Company to be held in the year 2025 subject to approval of shareholders in the annual general meeting. However, at the 37^th Annual General Meeting (AGM) of the members of the Company held on 18^th September, 2021, the resolution for the reappointment of M/s. Arpit Patel & Associates as Statutory Auditors of the Company for a remaining period of 4 years i.e. till the conclusion of the 41^st Annual General Meeting of the Company to be held in the year 2025 was not passed and therefore, pursuant to the provisions of Section 139(10) of the CA 2013, Board of Directors vide circular resolution passed on 05^th October, 2021 took note of continuation of M/s. Arpit Patel & Associates as Statutory Auditors of the Company for the financial year 2021-22 i.e. till the conclusion of next Annual General Meeting of the members of the Company to be held in the year 2021-22 as Auditors of the Company.

M/s. Arpit Patel & Associates (FRN: 144032W), Chartered Accountants, Ahmedabad Statutory Auditors of the Company were appointed, as such at the Annual General Meeting of the Company held on 29.09.2022 and 21.09.2023 for one year (out of his remaining tenure of three and two years respectively out of the current term of five consecutive years) to hold office from the conclusion of 38^th and 39^th Annual General Meeting till the conclusion of 39^th and 40^th Annual General Meeting of the Company respectively to be held in the year 2023 and 2024.

On the recommendation of the audit committee at its meeting held on 06^th August, 2024, the Board of Directors at its meeting held on 06^th August, 2024, have approved and recommended to the Members for appointment\ reappointment of M/s Arpit Patel & Associates as Statutory Auditors of the Company for one year (out of his remaining tenure of one year out of the current term of five consecutive years) i.e till the conclusion of the 41^st Annual General meeting of the Company to be held in the year 2025.

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 SPAN & Co., Company Secretaries LLP, to conduct Secretarial Audit for the financial year - 2023-2024. The Secretarial Audit Report for the financial year ended March 31, 2024 is annexed herewith marked as Annexure - H to this Report.

The Secretarial Auditors' Report of the Company for the year ended 31^st March, 2024 contains certain Comments/ observations. The explanation on observations therein is as under: -

1. As required under Regulation 31(2) of LODR Regulations, hundred percent shareholding of one of the promoters is not maintained in dematerialized form: The promoter group are in the process of dematerialization of shares of the Company.

INSURANCE:

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

LISTING WITH STOCK EXCHANGES:

The Equity Shares of the Company are listed on the BSE Limited (BSE) and the National Stock Exchange of India Limited (NSE).

The Company confirms that it has paid Annual Listing Fees due to the BSE Limited and National Stock Exchange of India Limited upto the Financial Year -2024-2025.

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 -1.

MATERIAL INFORMATION:

In the matter of Company Petition Nos. 41, 42 and 43 of 2017 filed by the Petitioners alleging oppression and mismanagement and seeking remedies under Sections 241 and 242 of the Companies Act, 2013 before the National Company Law Tribunal, Ahmedabad ("NCLT"), the Hon'ble NCLT, Ahmedabad, has pronounced its order (dated 10^th July 2024) The Honorable NCLT Ahmedabad passed an order on July 10, 2024, and dismissed petition No. 42 of 2017 filed by Petitioners against the Company as one of the Respondents.

Further, under regulation 30 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended, the company has submitted the same to the Stock Exchange & has also uploaded on the company's website www.vadilalgroup.com.

With respect to directions in Company Petition Nos. 41 & 43 of 2017 (where the Company is one of the joint Respondents), there has

been an appeal filed before the NCLAT by one of the Respondents and the matter is sub-judice.

GENERAL:

0 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 31^st March, 2024 till the date of this report.

0 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.

0 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.

0 During the year under review, no Director or Managing Director of the Company has received any remuneration or commission from subsidiary of the Company in terms of provisions of Section 197(14) of the Companies Act, 2013.

0 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.

0 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. The Company has also organized an awareness program for its employees on the said policy on prevention, prohibition and redressal of sexual harassment at workplace adopted by the Company.

0 The trademark "Vadilal" and its associated trademarks are owned by Vadilal International Pvt. Ltd. The Company is a licensee of the said Trademarks.

ACKNOWLEDGEMENT:

The Directors place on record its 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.