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44th ANNUAL REPORT 2010 - 2011

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CONTENTS

PAGE

COMPANYINFORMATION 01

NOTICE 03

DIRECTORSREPORT 12

REPORTONCORPORATEGOVERNANCE 18

MANAGEMENTDISCUSSIONANDANALYSISREPORT 28

AUDITORSREPORT 31

BALANCESHEET 36

PROFITANDLOSSACCOUNT 37

CASHFLOWSTATEMENT 38

SCHEDULES&NOTESTOACCOUNTS 40

BALANCESHEETABSTRACTANDGENERALBUSINESSPROFILE 60

SECTION212STATEMENT 63

CONSOLIDATEDFINANCIALSTATEMENTS 65

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COMPANYINFORMATION

BOARD OF DIRECTORS

DilipG.Piramal(Chairman)

D.K.PoddarVijayKalantri

VivekNair

SudhirJatia(upto31.3.2011)

G.L.Mirchandani

NirmalGangwal

NabankurGupta

RadhikaPiramal(ManagingDirector)

T.Premanand(Director-Works)

COMPANY SECRETARY & HEAD LEGALMr.ShreyasTrivedi

STATUTORY AUDITORSM/s.M.L.Bhuwania&Co.CharteredAccountants

INTERNAL AUDITORSErnst&YoungPrivateLimited

BANKERSStateBankofIndiaCentralBankofIndia

AxisBankLimitedINGVysyaBankLimitedIDBIBankLimitedREGISTERED OFFICE78-A,MIDCEstate,SatpurNashik422007,Maharashtra

FACTORIESNashik - 78-A,MIDCEstate,Satpur,Nashik422007,Maharashtra.

Sinnar - A-7,MIDC,Sinnar422103,Maharashtra.

Haridwar - PlotNo8,Sector12,SIDCULArea,Haridwar249403,Uttaranchal.

Jalgaon - E5/2AdditionalMIDCArea,Jalgaon425016,Maharashtra.

Nagpur - L-4,MIDC,Hingna,Nagpur440016,Maharashtra.

Paithan - D/4PaithanIndustrialArea,MIDC,Paithan431107,Maharashtra.

INVESTORS SERVICES DEPARTMENTDGPHouse,5thFloor,88-C,OldPrabhadeviRoad,Mumbai400025,Maharashtra.Tel.:+91-022-66539000Fax:+91-022-66608393Email:[email protected]

REGISTRAR & SHARE TRANSFER AGENTLinkIntimeIndiaPrivateLimited,C-13,PannalalSilkMillsCompound,L.B.SMarg,Bhandup(West),Mumbai400078,Maharashtra.Tel.:+91-022-25963838,+91-022-25946970Fax:+91-022-25946969.Email:[email protected]

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Sales and PBT (` in Crores)

800

700

600

500

400

300

200

100

0

10-11

439

18 259

61 77

569 521

614

745

06-07 07-08

FinancialYears

Sales Profitbeforetax

08-09 09-10

Distribution of Earnings 2010-11

Materialsconsumed45%

Exciseduty2%

Employeesremuneration10%

Otherexpenses31%

Interest0.5%

Depreciation2%

Incometax2%

Dividend(includingdividendtax)4%Retainedearnings4%

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NOTICEisherebygiventhattheFortyFourthAnnualGeneralMeetingoftheMembersofV.I.P.INDUSTRIESLIMITEDwillbeheldatNIWEC,P-29,Street14,MIDC,Satpur,Nashik-422007,MaharashtraonThursday,the29thSeptember,2011at12.00noontotransactthefollowingbusiness:

ORDINARY BUSINESS:

1. Toreceive,considerandadopttheauditedBalanceSheetasat31stMarch,2011,theProfit&LossAccountfortheyearendedonthatdateandtheReportsoftheDirectorsandtheAuditorsthereon.

2. Toconfirmthepaymentofinterimdividendonequitysharesforthefinancialyear2010-11.

3. TodeclaredividendonEquityShares.

4. ToappointaDirectorinplaceofMr.DilipG.Piramal,whoretiresbyrotationandbeingeligible,offershimselfforre-appointment.

5. ToappointaDirector inplaceofMr.VivekNair,whoretiresbyrotationandbeingeligible,offershimselfforre-appointment.

6. ToappointStatutoryAuditorsoftheCompanytoholdofficefromtheconclusionofthisMeetinguntiltheconclusionofthenextAnnualGeneralMeetingoftheCompanyandtofixtheirremunerationandforthepurpose,toconsiderandifthoughtfit,topass,withorwithoutmodification(s),thefollowingresolutionasanOrdinaryResolution:

RESOLVED THAT pursuantto the provisions ofSection224 and all otherapplicableprovisions, ifany, oftheCompaniesAct,1956,M/s.M.L.Bhuwania&Co.,CharteredAccountantshavingRegistrationNo.101484W,theretiringAuditors,beandareherebyre-appointedastheStatutoryAuditorsoftheCompanytoholdofficefromtheconclusionofthisMeetinguntiltheconclusionofthenextAnnualGeneralMeetingoftheCompanyandthattheBoardofDirectorsoftheCompanybeandisherebyauthorizedtofixtheirremunerationforthesaidperiodinadditiontothereimbursementofactualoutofpocketexpensesasmaybeincurredbythemintheperformanceoftheirduties.

SPECIAL BUSINESS:

7. Toconsider&ifthoughtfit,topass,withorwithoutmodification(s),thefollowingresolutionasanOrdinaryResolution:

RESOLVED THATMr.Nabankur Gupta, who was appointed bytheBoard ofDirectorsof the Company asanAdditionalDirectorwitheffectfrom13 thMay,2011intermsofSection260oftheCompaniesAct,1956readwithArticle159oftheArticlesofAssociationoftheCompanyandwhoholdsofficetillthedateofthisAnnualGeneralMeeting,beandisherebyappointedasaDirectoroftheCompany.

8. To consider & if thought fit, to pass, with or without modification(s), the following resolution as an OrdinaryResolution:

RESOLVEDTHATMr.T.Premanand,whowasappointedbytheBoardofDirectorsoftheCompanyasanAdditionalDirectorwitheffectfrom27 thJuly,2010intermsofSection260oftheCompaniesAct,1956readwithArticle159oftheArticlesofAssociationoftheCompanyandwhoholdsofficetillthedateofthisAnnualGeneralMeeting,beandisherebyappointedasaDirectoroftheCompany.

9. To consider & if thought fit, to pass, with or without modification(s), the following resolution as an OrdinaryResolution:

RESOLVEDTHATinaccordance with theprovisions of Sections 198,269,309, 310andall otherapplicableprovisions, if any, of the Companies Act, 1956 (including any statutory amendment(s), modification(s) or re-enactment(s)thereofforthetimebeinginforce)(theAct)readwithScheduleXIIItotheAct,theapprovaloftheCompanybeandisherebyaccordedtotheappointmentofMr.T.PremanandasaWholetimeDirectordesignatedasDirector-WorksoftheCompanyforaperiodoffiveyearsfrom27 thJuly,2010to26thJuly,2015(bothdaysinclusive)onthetermsandconditions,includingremunerationandperquisitesasmentionedhereinbelowandsetoutmoreparticularlyintheAgreementtobeenteredintobetweentheCompanyandMr.T.Premanand,adraftofwhichisplacedbeforethisMeeting:

SALARY

` 1,50,000permonthinthescaleof`1,50,000-`3,00,000permonth.

IncrementswithinthesalaryscalewillbedecidedbytheBoardofDirectorsfromtimetotimeasitmaydeemfit.

NOTICE

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PERQUISITES

FollowingperquisitesinadditiontosalaryshallbeallowedaspertherulesoftheCompanywithintheoverallceilingfixedbytheCompany.Forthepurposeofcalculatingtheceiling,theperquisitesandallowancesshallbeevaluatedaspertheIncome-taxRules,whereverapplicable.IntheabsenceofanysuchRules,theyshallbeevaluatedatactualcost.

Housing

Residential accommodation with furnishings or house rent allowance in lieu thereof as per the policy of theCompany.

Medical Reimbursement

ReimbursementofactualexpensesforselfandfamilyaspertherulesoftheCompany.

Leave Travel Allowance

ForselfandfamilyonceinayearaspertherulesoftheCompany.

Performance Linked Incentive

AspertherulesoftheCompany.

Other Allowances

AsperthepolicyoftheCompany.

Personal Accident and Mediclaim Insurance


Provident Fund

TheCompanyscontributionnottoexceed12%ofbasicsalary.

Pension / Superannuation fund


Gratuity

AspertherulesoftheCompany.

Earned / Privilege leave

Onfullpayandallowance,asperthepolicyoftheCompany.Encashmentofleaveaccumulatedbutnotavailedduringthetenureorattheendoftenureofoffice,asthecasemaybe,inaccordancewiththepolicyoftheCompany.

The Companys contribution toProvidentFund and SuperannuationFund orAnnuity Fund,totheextent theseeithersinglyorputtogetherarenottaxableundertheIncomeTaxAct,1961,Gratuitypayableaspertherulesof

theCompanyandencashmentofleave,shallnotbeincludedinthecomputationoflimitsfortheremunerationorperquisitesaforesaid.

ForthepurposeofSuperannuation /Pension/ ProvidentFund/GratuityandPrivilegeleave,theserviceof theDirector-Workswillbeconsideredfromtheoriginaldateofhisjoiningtheservicesandtermination/renewalofagreementwillnotbeconsideredasabreakofservice.

Car & Telephones


Sitting Fees

TheDirector-WorksshallnotbepaidanysittingfeesforattendinganymeetingsoftheBoard/Committee(s)/GeneralMeeting(s)etc.

General

TheDirector-Worksshallbe subjecttotheotherserviceconditions,rulesandregulationsoftheCompanyasprevailingfromtimetotime.

NOTICE(Contd.)

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Minimum Remuneration

IntheeventofabsenceorinadequacyofprofitsoftheCompanyinanyfinancialyear,theproposedremunerationasmentioned hereinaboveshall not be reduced but shallbe payable subject tothe approval of the CentralGovernment.Intheevent,theCentralGovernmentaccordsitsapprovalsubjecttoanymodifications/alterations,theremunerationofMr.T.Premanandshallbesuch,asmaybeapprovedbytheCentralGovernment.However,intheeventoftheCentralGovernmentnotaccordingitsapproval,Mr.T.PremanandshallbeentitledtoreceivesuchamountasminimumremunerationasispermissibleunderSectionIIofPartIIofScheduleXIIItotheAct.

RESOLVEDFURTHERTHATtheBoardofDirectorsoftheCompanybeandisherebyauthorisedtoreallocate/re-designatethedutiesandresponsibilitiesofMr.T.Premanandandtograntincrementsandalterandvaryfromtimetotime,thetermsandconditions,includingremunerationandbenefitstobeprovidedtoMr.T.Premanandsoasnottoexceedtheoverallmaximumremunerationlimitsanddoallsuchacts,deeds,mattersandthingsasmaybeconsiderednecessary,proper,desirableorexpedientforthepurposeofgivingeffecttothisresolution.

10.Toconsider&ifthoughtfit,topass,withorwithoutmodification(s),thefollowingresolutionasanOrdinaryResolution:

RESOLVEDTHATpursuanttotheprovisionsofSections16,94,95andallotherapplicableprovisions,ifanyoftheCompaniesAct,1956(includinganystatutorymodification(s)orre-enactment(s)thereof,forthetimebeinginforce)andArticle5oftheArticlesofAssociationoftheCompanyandsubjecttosuchapprovals/permissions/sanctionsasmaybenecessaryfromtherelevantauthorities,approvalofthemembersbeandisherebyaccordedtotheBoardofDirectors(hereinafterreferredtoastheBoardwhichtermshallalsoincludeanyCommitteethereof)forsub-divisionofeachexistingequityshareoftheCompanyofthenominalvalueof `10(RupeesTen)eachfullypaidupinto5(Five)equitysharesofthenominalvalueof `2(RupeesTwo)eachfullypaidupandconsequently,theexistingauthorisedsharecapitaloftheCompanyof`49,40,00,000(RupeesFortyNineCroresFortyLacs)dividedinto4,93,00,000(FourCroresNinetyThreeLacs)equitysharesof 10(RupeesTen)eachand1000(OneThousand),9%RedeemableCumulativePreferenceSharesof 1000(RupeesOneThousand)eachbeandshallstandalteredto`49,40,00,000(RupeesFortyNineCroreFortyLacs)dividedinto24,65,00,000(TwentyFourCroresSixtyFiveLacs)equitysharesof`2(RupeesTwo)eachand1000(OneThousand),9%RedeemableCumulativePreferenceSharesof`1000(RupeesOneThousand)each;

RESOLVED FURTHER THAT the Memorandum of Association of the Company be and is hereby altered bysubstitutingthefollowingasnewClauseVinplaceofexistingClauseV:

V. TheAuthorisedShareCapitaloftheCompanyis 49,40,00,000(RupeesFortyNineCroresFortyLacs)dividedinto24,65,00,000(TwentyFourCroreSixtyFiveLacs)EquitySharesof 2(RupeesTwo)eachand1000(OneThousand),9%RedeemableCumulativePreferenceSharesof`1000(RupeesOneThousand)each,allofwhichsharescapitalshallbecapableofbeingincreasedorreducedinaccordancewiththeCompanysregulationsandlegislativeprovisionforthetimebeinginforceinthatbehalf,withpowertodividethesharesinthecapitalforthetimebeingintoequitysharecapitalandpreferencesharecapital,toattachtheretorespectivelyanypreferential,qualified,deferredorspecialassets,orbytheallotmentoffullyorpartlypaidshares,debentures,debenturestock,orsecuritiesofthisoranyotherconsiderationoratfairorconcessionalvalueanddivesttheownershipofanypropertyoftheCompanytoorinfavourofanypublicorlocalbodyorauthorityorCentralorStateGovernmentoranypublicinstitutionortrustengagedintheprogrammeorruraldevelopment.

RESOLVEDFURTHERTHATtheBoardbeandisherebyauthorisedtoobtainapprovals/permissions/sanctionsasmaybenecessaryfromtherelevantauthoritiesandtotakesuchstepsandactionsandgiveallsuchdirectionsasitmayinitsabsolutediscretiondeemnecessary,properorexpedienttogiveeffecttothisresolutionandtoissuenewsharecertificates,whereverrequired,incancellationoftheexistingsharecertificates,subjecttotheprovisionsoftheCompanies(IssueofShareCertificates)Rules,1960andtheArticlesofAssociationoftheCompanyandtosettleanyquestionthatmayariseinthisregardandtofinaliseandexecutealldocuments,deedsandwritingsasmaybenecessary.

11. Toconsider&ifthoughtfit,topass,withorwithoutmodification(s),thefollowingresolutionasaSpecialResolution:

RESOLVEDTHATinaccordancewiththeprovisionsofSection31andallotherapplicableprovisions,ifany,oftheCompaniesAct,1956(includinganystatutorymodification(s)orre-enactment(s)thereof,forthetimebeinginforce)(theAct)theArticlesofAssociationoftheCompanybeandareherebyalteredasfollows:

NOTICE(Contd.)

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A. The existing clause (2) of Article 91 be and is hereby deleted and substituted by the following as newclause (2) of Article 91:

NoticeofeverymeetingoftheCompanyshallbegiven:

(i) ToeverymemberoftheCompanyinanymannerauthorisedbysub-section(1)to(4)ofSection53oftheActincludingbywayofelectronicmode.

(ii) Tothepersonsentitledtoashareinconsequenceof thedeathorinsolvencyofamember,by sendingitthrough the post ina prepaid letter addressedtothemby nameor bythetitleof representativesofthe deceased, orassignees ofthe insolvent, orby any like descriptionat the address, ifany inIndiasuppliedforthepurposeorbythepersonsclaimingtobesoentitled,oruntilsuchanaddresshasbeensosupplied,bygivingthenoticeinanymannerinwhichitmighthavebeengiven,includingbywayofelectronicmode,asifthedeathorinsolvencyhadnotoccurred;and

(iii) totheauditororauditorsforthetimebeingoftheCompany,inanymannerauthorisedbySection53oftheActincludingbywayofelectronicmodeinthecaseofanymemberormembersoftheCompany.

ProvidedthatwherethenoticeofameetingisgivenbyadvertisingthesameinanewspapercirculatingintheneighbourhoodoftheregisteredofficeoftheCompanyunderSection53oftheAct,thestatementofmaterialfactsreferredtoinSection173oftheActneednotbeannexedtothenoticeasrequiredbythatsectionbutitshall bementioned inthe advertisement that the statement has been forwarded tothe members oftheCompany.

B. The existing Article 98 be and is hereby deleted and substituted by the following as new Article 98:

Atanygeneral meetinga resolutionputtothevoteatthemeeting shallunlessapollisdemanded underSection179oftheActbedecidedbyshowofhands,bymemberspresentpersonallyatthemeetingincludingatproceedingsofthemeetingconductedinelectronicmodethroughvideoconferencingoranyothermode.

C. The existing clause (1) of Article 99 be and is hereby deleted and substituted by the following as newclause (1) of Article 99:

Subject to the provisions ofthe Act, upon ashow of hands, every memberentitled to vote andpresentinpersonincludingpresentatproceedingsofthemeetingconductedinelectronicmodethroughvideoconferencingoranyothermodeshallhaveonevoteanduponapolleverymemberentitledtovoteandpresentinpersonasaforesaidorbyproxyshallhaveonevote,foreveryshareheldbyhim.

D. The existing clause (2) of Article 99 be and is hereby deleted and substituted by the following as newclause (2) of Article 99:

No membernotpersonally present(includingnotpresentin electronicmodethrough videoconferencingoranyothermode)shallbeentitledtovoteonashowofhandsunlesssuchmemberisabodycorporatepresentbyproxyorbyarepresentativedulyauthorisedunderSection187oftheActinwhichsuchproxyorrepresentativemayvoteonashowofhandsasifitwereamemberoftheCompany.

E. The existing clause (1) of Article 200 be and is hereby deleted and substituted by the following as new

clause (1) of Article 200:

AnoticemaybeservedbytheCompanyonanymembereitherpersonallyorbysendingitbyposttohimtohisregisteredaddressorifhehasnoregisteredaddressinIndiatotheaddress,ifany,withinIndiaortohiselectronicaddress,suppliedbyhimtotheCompanyforgivingsuchnoticestohim.

RESOLVEDFURTHER THATthe BoardofDirectorsbeandareherebyauthorisedtotakesuch stepsandactionsandgiveallsuchdirectionsasitmayinitsabsolutediscretiondeemnecessary,properorexpedienttogiveeffecttothisresolution.

ByOrderoftheBoardofDirectors

SHREYAS TRIVEDI

Place:Mumbai GeneralManagerLegal

Dated:10th

August,2011 &CompanySecretaryRegisteredOffice:78-A,MIDC,Satpur,Nashik-422007

NOTICE(Contd.)

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ANNEXURE TO THE NOTICE

ExplanatoryStatementpursuanttoSection173(2)oftheCompaniesAct,1956.

ITEM NO. 7TheBoardofDirectorsatitsmeetingheldon13thMay,2011appointedMr.NabankurGupta,asanAdditionalDirectoroftheCompanyintermsofSection260oftheCompaniesAct,1956(theAct)readwithArticle159oftheArticlesof

AssociationoftheCompany.Mr.GuptaholdsofficeuptothedateofthisMeeting.TheCompanyhasreceivedanoticeinwritingalongwiththerequisitedepositof`500underSection257oftheCompaniesAct,1956fromashareholderintimatingherintentiontoproposeMr.NabankurGuptaasacandidatefortheofficeofDirector.

Mr.NabankurGuptaisagraduateinElectricalEngineeringfromIITDelhiandhasanexperienceofover4decadesinthefieldofmarketingandrestructuringofbusiness.Hehadbeentherecipientofseveralnationalandinternationalcorporateawards.HewasalsoawardedtitleMarketingSuperstarbyAdvertisingAgeInternational,NewYorkin1996.Hehasbeenprovidingmanagementconsultancyservicestovariouscorporates.

TheBoardofDirectorsrecommendpassingoftheResolutionassetoutinItemNo.7oftheaccompanyingNotice.

None ofthe Directors, otherthanMr. NabankurGupta are, inany way, concerned orinterestedor deemedto beconcernedorinterestedinpassingofthesaidresolution.

ITEM NO. 8 & 9

TheBoardofDirectors(theBoard)atitsmeetingheldon27 thJuly,2010appointedMr.T.Premanand,asanAdditionalDirectoroftheCompanyintermsofSection260oftheCompaniesAct,1956(theAct)readwithArticle159ofthe

ArticlesofAssociationoftheCompany.Mr.PremanandholdsofficeuptothedateofthisMeeting.TheCompanyhasreceivedanoticeinwritingalongwiththerequisitdepositof 500underSection257oftheCompaniesAct,1956fromashareholderintimatinghisintentiontoproposeMr.T.PremanandasacandidatefortheofficeofDirector.

Mr.Premanand45,isaB.Tech.(Chemical)fromRegionalEngineeringCollege,WarangalandisintheemploymentoftheCompanyasVicePresidentManufacturingsinceFebruary2008.Hehasover23yearsofexperienceinIndianandForeignMultinationalsinthefieldofmanufacturingandsupplychain.

Consideringhisqualificationandrichexperience,theBoardatitsaforesaidmeetingalsoappointedMr.T.PremanandasaWhole-timeDirectoroftheCompanydesignatedasDirectorWorksforaperiodoffiveyearswitheffectfrom27thJuly,2010pursuanttoSections198,269and309oftheActreadwithScheduleXIIItotheAct,upontheterms&conditionsincludingtheremunerationasdetailedintheAgreementtobeenteredintobetweentheCompanyandtheDirector-WorksandalsoassetoutintheOrdinaryResolutionatItemNo.9oftheaccompanyingNotice.

InspectionbyMembers:

ThedraftoftheAgreementtobeenteredintobetweentheCompanyandMr.T.Premanand,asDirector-WorksoftheCompanyisopenforinspectionbytheMembersduringthenormalworkinghoursoftheCompanyatitsRegisteredOfficeuptothedateoftheMeeting.

TheBoardofDirectorsrecommendpassingoftheResolutionsassetoutinItemNos.8&9oftheaccompanyingNotice.

NoneoftheDirectors,otherthanMr.T.Premanandare,inanyway,concernedorinterestedordeemedtobeconcernedorinterestedinpassingofthesaidresolution.

ITEM NO. 10

Asyouareaware,theequitysharesoftheCompanyarelistedontheNationalStockExchangeofIndiaLimited(NSE)andTheBombayStockExchangeLimited,(BSE).TheequitysharesarealsoavailablefortradingunderthederivativesegmentofNSE.

ThemarketpriceoftheequitysharesoftheCompanyhaswitnessedsignificant increaseoverlastcoupleofyears.InordertoimprovetheliquidityoftheCompanyssharesinthestockmarketandtomakeitaccessibletotheretailinvestors,itisproposedtosub-dividethenominalvalueoftheequityportionoftheauthorisedsharecapitaloftheCompany.

Presently,theauthorisedequitysharecapitaloftheCompanyis`49,40,00,000dividedinto4,93,00,000equitysharesof`10eachand1,000,9%RedeemableCumulativePreferencesharesof 1,000each.Itisproposedtosub-divideeach

NOTICE(Contd.)

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equityshareof`10eachintofiveequitysharesof 2each.Accordingly,theauthorisedsharecapitaloftheCompanywouldbe24,65,00,000equityshareof `2eachand1,000,9%RedeemableCumulativePreferencesharesof `1,000eachaggregatingto 49,40,00,000.ThealterationofClauseVoftheMemorandumofAssociationisconsequentialof

thesaidchange.TheArticlesofAssociationoftheCompanystatesthattheAuthorisedCapitaloftheCompanyisasmentionedintheCapitalClauseVoftheMemorandumofAssociationoftheCompanyorasmaybeclassifiedbytheCompanyfromtimetotimeandhence,doesnotneedanalteration.

Thepaid upsharecapitalofthe Company wouldthen be14,13,17,315 equity shares of` 2eachaggregatingto`28,26,34,630.

Theaforesaidsub-divisionofshareswouldrequireshareholdersapprovalbywayofanOrdinaryResolution.


TheDirectorsoftheCompanymaybeconcernedorinterestedordeemedtobeconcernedorinterestedinpassingofthesaidresolutiononlytotheextentofequitysharesheldbythemintheCompany.

ITEM NO. 11ThepresentArticlesof Associationhavebeenadoptedandalteredconsideringtheapplicablesecuritieslaws,fromtimetotime.Overtheyears,securitieslawsinthecountrysuchastheSecuritiesExchangeBoardofIndiaAct,1992,andRegulationsmadethereunder,theSecuritiesContracts(Regulation)Act,1956,andsuchotherlegislationshaveundergonesignificantchangeswithaviewtoimprovethevariousaspectsofworkingofthesecuritieslaws.

Inlinewiththerecentcirculars&clarificationsthathavebeenissuedbytheMinistryofCorporateAffairspertainingtosecuritieslawsto promotethegreeninitiativeandfacilitatespeedierand moreefficientcorporatecommunicationandcorporatemeetings,itisconsideredprudenttomakecertainamendmentsintheArticlesofAssociationoftheCompanytofacilitateeaseofapplicabilityandimplementationoftheapplicablesecuritieslaws.

IntermsofSection31oftheCompaniesAct,1956andotherapplicableprovisionsofthesaidAct,aCompanymaywiththeconsentofitsmembersbywayofspecialresolution,approveanyalterationtoitsArticlesofAssociation.

Accordingly,theproposedalterationsintheArticlesofAssociationasmorespecificallystatedatItemNo.11oftheNoticerequireyourapprovalbyspecialresolution.


NoneoftheDirectorsareinanyway,concernedorinterestedordeemedtobeconcernedorinterestedinpassingofthesaidresolution.

ByOrderoftheBoardofDirectors

SHREYAS TRIVEDI

Place:Mumbai GeneralManagerLegalDated:10thAugust,2011 &CompanySecretary

RegisteredOffice:

78-A,MIDC,Satpur,Nashik-422007

NOTES:

(a) The relativeExplanatoryStatement pursuantto Section 173(2) of the Companies Act, 1956, inrespect of thebusinessesunderitemNos7to11oftheaccompanyingNoticeandthedetailsinrespectoftheDirectorsproposedtobe appointed / re-appointedat the Annual General Meeting tobe provided underClause 49 ofthe Listing

AgreementwithStockExchange(s)wherethesharesoftheCompanyarelisted,areannexedhereto.

(b) AMEMBERENTITLEDTOATTENDANDVOTEATTHEMEETINGISENTITLEDTOAPPOINTAPROXYTOATTENDANDVOTEONAPOLLINSTEADOFHIMSELFANDSUCHPROXYNEEDNOTBEAMEMBEROFTHECOMPANY.

(c) Proxiesinordertobeeffective,shouldbedepositeddulycompleted,stampedandsignedattheRegisteredOffice

oftheCompany,notlessthan48hoursbeforetheMeeting.

(d) PursuanttoSection154oftheCompaniesAct,1956,theRegisterofMembersandtheShareTransferBooksofthe

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NOTICE(Contd.)

CompanywillbeclosedfromTuesday,the20 thSeptember,2011toThursday,the29thSeptember,2011(bothdaysinclusive).

(e) TheFinalDividendasrecommendedbytheBoardofDirectorsifapprovedbytheMembersattheensuingAnnualGeneralMeeting,willbepaidon5thOctober,2011asunder:

i) TotheMembersholdingsharesinphysicalform,whosenamesappearintheCompanysRegisterofMemberason29thSeptember,2011.

ii) TotheBeneficialOwners,whosenamesappearinthebeneficialownerslisttobefurnishedforthispurposebytheNationalSecuritiesDepositoryLimitedandtheCentralDepositoryServices(India)Limitedasonthecloseofbusinesshourson19thSeptember,2011;

(f) MembersdesirousofobtaininganyinformationinrespectofAnnualAccountsandoperationsoftheCompanyarerequestedtowritetotheCompanyatleastoneweekbeforetheMeeting,toenabletheCompanytomakeavailabletherequiredinformationattheMeeting.

(g) Membersarerequestedtonotifyimmediately,anychangeintheiraddressregisteredwiththeCompanytoLinkIntime India Private Limited,(Unit - V.I.P. IndustriesLimited) C-13, Pannalal SilkMills Compound, L.B.S.Marg,Bhandup(West),Mumbai-400078,theRegistrarandShareTransferAgentoftheCompany,inrespectofequitysharesheldinphysicalformandtotheirrespectiveDepositoryParticipants(DPs)inrespectofequitysharesheldinelectronicform.

(h) Underthe provisions ofSection109Aand 109B ofthe Companies Act, 1956, shareholder(s)is/are entitledtonominateintheprescribedmanner,apersontowhomhis/her/theirshare(s)intheCompany,shallvestafterhis/her/theirlifetime.MemberswhoareholdingsharesinphysicalformandareinterestedinavailingthisnominationfacilityarerequestedtowritetotheCompanyortheCompanysRegistrarandShareTransferAgent,LinkIntimeIndiaPrivateLimited(Unit- V.I.P.Industries Limited),C-13, PannalalSilkMillsCompound, L.B.S.Marg, Bhandup(West),Mumbai-400078.Tel.No.:022-25963838,FaxNo.:022-25962691andthoseMemberswhoareholdingshare(s)inelectronicform,arerequestedtowritetotheirrespectiveDepositoryParticipants(DPs).

(i) ConsequentupontheamendmentofSection205AoftheCompaniesAct,1956andtheinsertionofSection205Cbythe Companies (Amendment)Act,1999,theamount remainingunpaid orunclaimed for a periodof sevenyearsfromthedateoftransfertotheUnpaidDividendAccountoftheCompanyshallbetransferredtotheInvestorEducationandProtectionFund(theFund)setupbytheGovernmentofIndiaandnopaymentsshallbemadeinrespectofanysuchclaimsbytheFund.Memberswhohavenotyetencashedtheirdividendwarrantsfortheyears2003-2004onwardsarerequestedtomaketheirclaimstotheCompanyaccordingly,withoutanydelay.Itmaybenotedthattheunclaimeddividendforthefinancialyear2003-2004isduefortransfertotheFundon10thNovember2011.

(j) Asanausteritymeasure,copiesofAnnualReportwillnotbedistributedattheAnnualGeneralMeeting.MembersarerequestedtobringtheirowncopiestotheMeeting.

(k) TheCompanyisconcernedabouttheenvironmentandutilizesnaturalresourcesinasustainableway.Recently,

theMinistryofCorporateAffairs(MCA),GovernmentofIndia,videitscircularNos.17/2011and18/2011datedApril21andApril29,2011,respectively,hasallowedcompaniestosendofficialdocumentstotheirshareholderselectronicallyaspartofitsGreenInitiativeinCorporateGovernance.

RecognizingthespiritofthecircularissuedbytheMCA,theCompanyhenceforthproposetosenddocumentslikeNoticeconveningthegeneralmeetings,DirectorsReport,AuditorsReport,FinancialStatementsetctotheemailaddressprovidedbyMemberswiththeirdepositories.

TheCompanyrequeststheMemberstoexpeditiouslyupdatetheiremailaddresswiththeirrespectivedepositoryparticipanttoensurethattheannualreportandotherdocumentsreachthemontheirpreferredemail.

ThosememberswhohavesharesinphysicalformarerequestedtoexpeditiouslyinformtheiremailaddresstotheCompanyatDGPHouse,5thFloor,88-C,OldPrabhadeviRoad,Mumbai400025,Tel.:+91-022-66539000Fax:

+91-022-66608393 Email: [email protected] theCompanysRegistrar andShareTransfer Agent,LinkIntimeIndiaPrivateLimited(Unit-V.I.P.IndustriesLimited),C-13,PannalalSilkMillsCompound,L.B.S.Marg,Bhandup(West),Mumbai-400078.Tel.No.:022-25963838,FaxNo.:022-25962691

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DETAILS OF THE DIRECTORS RETIRING BY ROTATION AND SEEKING RE-APPOINTMENT

(InpursuancetoClause49oftheListingAgreement)

Name of the Director Mr. Dilip G. Piramal Mr. Vivek NairDate of Birth 2nd November, 1949 3rd January, 1952

Date of Appointment 4th June, 1979 22nd May, 2000

Qualification B.Com B.A. (Hon.), MPS from Cornel (USA)

Experience in special functional area Industrialist with rich business experience Corporate Management

Chairman / Director of other companies 1. DGP Securities Ltd. 1. Leela Lace Software Solution Pvt. Ltd.

2. Alkyl Amines & Chemicals Ltd. 2. Standard Precious Alloy Industries Pvt. Ltd.

3. Kiddy Plast Ltd. 3. Leela Housing Pvt. Ltd.

4. Gazelle Travels Pvt. Ltd. 4. Armcess Engineers Pvt. Ltd.

5. DGP Enterprises Pvt. Ltd. 5. VIBGYOR Leasing Pvt. Ltd.

6. KEC International Ltd. 6. Elegant Eateries Pvt. Ltd.

7. DGP Capital Management L td. 7. Aushim Soft Pvt. Ltd.

8. Leela Soft Pvt. Ltd.

9. Leela Lace Holdings Pvt. Ltd.

10. Hotel Leelaventure Ltd.

11. Leela Capital & Finance Ltd.

12. Buena Vista Travels Pvt. Ltd.

13. Leela Lace Estates Pvt. Ltd.

14. Zillion Hotels & Resorts Pvt. Ltd.

15. Raheja Universal Ltd.16. Leela Palaces and Resort Ltd.

17. Mumbai International Convention &Exhibition Centre Ltd.

18. Tourism Finance Corporation of India Ltd.

19. Kerala State Industrial DevelopmentCorporation Ltd.

20. Emmel Real Estate Developers Pvt. Ltd.

21. L. M. Realtors Pvt. Ltd.

22. Rockfort Estate Developers Pvt. Ltd.

Chairman/ Member of Committees ofother Companies

Nil Hotel Leelaventure Ltd.- Audit Committee

Leela Capital & Finance Ltd.- Audit Committee

No. of shares held in the Company 85304 Nil

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DETAILS OF THE DIRECTORS SEEKING APPOINTMENT(InpursuancetoClause49oftheListingAgreement)

Name of the Director Mr. T. Premanand Mr. Nabankur GuptaDate of Birth 3rd January, 1965 15th October, 1948

Date of Appointment 27th July, 2010 13th May, 2011

Qualification B. Tech. (Chemical) B.E. (Electrical)

Experience in special functional area In the field of manufacturing and supplychain.

In the field of marketing and restructuring ofbusiness.

Chairman / Director of other companies 1. Blow Plast Retail Ltd. 1. Raymond Ltd.

2. Trimurti Glass Containers Ltd. 2. Colorplus Fashions Ltd.

3. J. K. Investo Trade (India) Ltd.

4. J K Helene Curtis Ltd

5. Cravatex Limited

6. Lexicon Public Relations & CorporateConsultants Ltd.

7. Pritish Nandy Communications Ltd.

8. PNC Wellness Ltd.

9. BP Ergo Ltd.

10. Magma Fincorp Ltd.

11. Quantum Advisors Pvt. Ltd.

12. Blueocean Capital and AdvisoryServices Pvt. Ltd.

Chairman / Member of Committees of otherCompanies

Nil Raymond Ltd.- Audit Committee Member- Shareholders/Investor Grievances Chairman

J K Investor Trade (India) Ltd- Audit Committee Chairman- Shareholders/Investor Grievances Member

Pritish Nandy Communications Ltd.- Audit Committee Member

Quantum Advisors Pvt. Ltd.- Audit Committee Member

No. of shares held in the Company Nil Nil

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YourDirectorsarepleasedtopresentthe44thAnnualReporttogetherwiththeAuditedAccountsofyourCompanyfortheyearended31stMarch2011.

FINANCIAL RESULTS (`inCrores)

Year Ended31.03.2011

Year Ended31.03.2010

Sales,IncomefromOperations&OtherIncome 743.43 611.52

GrossProfit 94.47 95.68

Interest 3.07 7.96

Depreciation 14.82 17.28

ProfitBeforeTax&Extra-ordinaryItems 76.58 70.44

Extra-ordinaryItems - 9.39

TaxProvision(NetofDeferredTax)includingFringeBenefitTaxandIncomeTaxforprioryears

14.57 11.00

ProfitAfterTax 62.01 50.05

ProfitbroughtforwardfromPreviousYear 36.11 32.51

ProfitavailableforAppropriation 98.12 82.56

Appropriations:

InterimandProposedDividend 28.26 14.13

CorporateTaxonDividend 4.65 2.40

GeneralReserve 29.10 29.92

BalancecarriedtoBalanceSheet 36.11 36.11

98.12 82.56

OVERALL PERFORMANCE AND OUTLOOK

IncomefromOperations&OtherIncomeduringthefinancialyearended31stMarch2011wasat`743.43croresasagainst`611.52croreslastyear,representinganincreaseofapproximately22%overthecorrespondingperiodofpreviousyear.ProfitafterTaxfortheyearunderreviewamountedto 62.01croresafterconsideringtheExtra-ordinaryItemsof`Nil(previousyear`9.39crores)asagainst`50.05croresinthepreviousyearrepresentinganincreaseofapproximately24%overthepreviousyear.Despitecontinuouspressureinrisinginputcostsinthepreviousyear,yourCompanywasabletopassonmostofthecostincreasestoitscustomersduetothestrengthofourbrands.Salesvalueandvolumegrowthwasrobustandtheoutlookforthecurrentyearremainsstrongacrosstraditionaltradeandmodernretailsaleschannels.

Ason31stMarch2011,theReservesandSurplusofyourCompanystoodat`172.95crores.

Theoutlookforthecurrentyearisencouraging.

AdetailedanalysisoftheoperationsofyourCompanyduringtheyearunderreportisincludedintheManagementDiscussionandAnalysisReport,formingpartoftheAnnualReport.

DIVIDEND

YourDirectorsarepleasedtorecommendforyourconsideration,afinaldividendof 7(RupeesSeven)perequityshare(previousyear`3perequityshare)forthefinancialyear2010-11.YourCompanyhadpaidinFebruary2011,aninterimdividendof`3(RupeesThree)perequityshare(previousyear`2)forthefinancialyear2010-11.

Accordingly,thetotaldividenddeclaredbyyourCompanyforthefinancialyear2010-11is 10(RupeesTen)perequity

share(previousyear`5perequityshare).

SUB DIVISION OF EQUITY SHARES

TheBoardofDirectorsofyourCompanyproposedthesub-divisionofeachexistingequityshareofthenominalvalue

DIRECTORS REPORT

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of`10into5(Five)equitysharesofthenominalvalueof `2eachfullypaidup.TheRecordDateforthesameshallbedeterminedsubsequently.Thesub-dividionofequitysharesissubjecttoyourapprovalandalsoanyotherstatutoryand regulatory authorities, as applicable. The sub-division of equity shareshas been recomended with a view to

encouragegreaterparticipationfromretailinvestors.

EXPORTS AND INTERNATIONAL OPERATIONS

Exportsfortheyearended31stMarch2011wasat`73.07Croresasagainst 47.02Croresinthepreviousyear,anincreaseofapproximately56%overthepreviousyear.Whereastheglobaleconomyhasnotshownmuchsignsofrecovery,yourCompanyhasgainedsomeshareincertaincountriesincludingEuropeanmarkets.YourCompanyisexpectingthatwiththeintroductionofitsnewranges,itwillbeabletofurtherstrengthenthemarketshareinthecomingyears.

CARLTON TRAVEL GOODS LIMITED

CarltonTravelGoodsLimited(CTGL),thewhollyownedsubsidiaryofyourCompanywhichsellsanddistributesbrandCarltoninU.K.andEuropeanmarketsincurredheavylosses,bothoperationallyaswellason currencytranslated

lossesintheyear2008-09.Sincethen,CTGLhadundertakenseveralinitiativeswithaviewtoimprovesalesofthebrandCarltonincludingthatoflaunchingnewproductsformid-to-premiumcustomersandsuccessfullygainingentryintokeyluggagestoresandretailchains.Inspiteofallthesemeasures,therewerenosignsofrecovery.YourCompanyinsteadof sellingdirectlythroughitsworkforceinU.K.appointedDistributorsto reducefixedcostoverheads.YourCompanyalsostarteddirectbillinginUSDratherthanGBPtomostcustomers.TheseinitiativeswillnotonlygrowsalesandensurestrongpresenceofbrandCarltoninUKandEuropeanmarketsbutalsostemanyfurtherlossesandminimizecrosscurrencyexposures.

RESEARCH & DEVELOPMENT

TheResearchandDevelopment(R&D)centreofyourCompanyisactivelyengagedinupgradationoftechnologies,processesanddevelopmentofqualityproductstowardsensuringtechnologicalleadershipforyourCompanyintheyearstocome.

TheR&DcentrecontinuestoberecognizedbytheDepartmentofScientific&IndustrialResearch,oftheGovernmentofIndia.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the requirements under Section 217(2AA) of the Companies Act, 1956 with respect to the DirectorsResponsibilityStatement,itisherebyconfirmed:

(i) that in the preparation of the annual accounts for the financial year ended 31st March, 2011, the applicableaccountingstandardshavebeenfollowedalongwithproperexplanationrelatingtomaterialdepartures,ifany;

(ii) thatyourDirectorshaveselectedsuchaccountingpoliciesandappliedthemconsistentlyandmadejudgementsandestimatesthatarereasonableandprudentsoastogiveatrueandfairviewofthestateofaffairsofyourCompanyattheendofthefinancialyearandoftheprofitsofyourCompanyfortheyearunderreview;

(iii) thatyourDirectorshavetakenproperandsufficientcareforthemaintenanceofadequateaccountingrecordsinaccordancewiththeprovisionsoftheCompaniesAct,1956forsafeguardingtheassetsofyourCompanyandforpreventinganddetectingfraudandotherirregularities;

(iv) thatyourDirectorshavepreparedtheaccountsforthefinancialyearended31stMarch,2011onaGoingConcernbasis.

MANAGEMENT DISCUSSION & ANALYSIS REPORT AND REPORT ON CORPORATE GOVERNANCE

PursuanttoClause49oftheListingAgreementwiththeStockExchanges,theManagementDiscussionandAnalysisReport,theReportonCorporateGovernanceandtheCertificateinrespectofcomplianceofrequirementsofCorporateGovernance,areannexedtothisReportandformspartofthisAnnualReport.

SUBSIDIARIES

IntermsoftheapprovalgrantedbytheCentralGovernmentunderSection212(8)oftheCompaniesAct,1956,copiesoftheBalanceSheet,ProfitandLossAccount,ReportoftheBoardofDirectorsandAuditorsofCarltonTravelGoodsLimitedandBlowPlastRetailLimitedhavenotbeenattachedwiththeBalanceSheetofyourCompany.

DIRECTORSREPORT(Contd.)

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However,theConsolidatedFinancialStatementsofyourCompany,whichincludethefinancialresultsofCarltonTravelGoodsLimitedandBlowPlastRetailLimitedareincludedinthisAnnualReport.Further,a statementcontainingtheparticularsprescribedunderthetermsof thesaidexemptionforCarltonTravelGoodsLimitedandBlowPlastRetail

Limitedisalsoenclosed.Copiesof therelevantauditedannualaccountsofCarltonTravelGoodsLimitedandBlowPlastRetailLimitedcanalsobesoughtbyanyShareholderonmakingawrittenrequesttotheSecretarialDepartmentattheRegisteredOfficeofyourCompanyinthisregard.TheannualaccountsofCarltonTravelGoodsLimitedandBlowPlastRetailLimitedarealsoavailableforinspectionbyanyShareholderattheRegisteredOfficeofyourCompanyandattherespectiveHeadOfficesofCarltonTravelGoodsLimitedandBlowPlastRetailLimited.

INSURANCE

AlltheassetsofyourCompany,includingPlant&Machinery,Buildings,Equipmentsetc.havebeenadequatelyinsured.

DEPOSITORY

YourCompanyssharesaretradablecompulsorilyinelectronicformandyourCompanyhasestablishedconnectivitywithboththedepositories,i.e.NationalSecuritiesDepositoryLimited(NSDL)andCentralDepositoryServices(India)

Limited(CDSL).

PUBLIC DEPOSITS

YourCompanyhadnotreceivedinstructionsfrom43depositorsforrepaymentofdepositsamountingto 6,36,000(RupeesSixLakhsThirtySixThousand)asat31stMarch,2011.Noneofthesedepositshavebeenrepaidsincethen.

CENTRAL GOVERNMENT APPROVAL UNDER SECTION 211 AND 212 OF THE COMPANIES ACT, 1956

OnanapplicationmadebyyourCompanyunderSection211oftheCompaniesAct,1956,theCentralGovernmentvideitsletterNo.46/29/2011-CL-IIIdated18thJanuary,2011exemptedyourCompanyfromgivingdisclosureofquantitativedetailsincomplianceofScheduleVItotheCompaniesAct,1956inthisAnnualReport.

OnanapplicationmadebyyourCompanyunderSection212(8)oftheCompaniesAct,1956,theCentralGovernment

videitsletterNo.47/16/2011-CL-IIIdated9

th

February,2011,exemptedyourCompanyfromattachingacopyoftheBalanceSheetandtheProfitandLossAccountoftheSubsidiaryCompaniesandotherdocumentstobeattachedunderSection212(1)oftheAnnualReportofyourCompany.Accordingly,thesaiddocumentsarenotbeingattachedwiththeBalanceSheetofyourCompany.AgistofthefinancialperformanceoftheSubsidiaryCompaniesiscontainedinthisReport.TheannualaccountsoftheSubsidiaryCompaniesareopenforinspectionbyanyshareholderandyourCompanywillmakeavailablethesedocuments/detailsuponrequestbyanyshareholderofyourCompanyortoanyinvestorofitsSubsidiaryCompanieswhomaybeinterestedinobtainingthesame.Further,theannualaccountsoftheSubsidiaryCompanieswillalsobekeptforinspectionbyanyShareholderattheRegisteredOfficeofyourCompanyandattherespectiveHeadOfficesofthesubsidiarycompanies.

DIRECTORS

Mr.T.PremanandwasappointedasaWhole-timeDirectorofyourCompanydesignatedasDirectorWorks,foraperiodof5yearswitheffectfrom27 thJuly,2010.Thenecessaryapprovalofshareholdersisbeingsoughtintheensuing

AnnualGeneralMeetingfortheappointmentandpaymentofremunerationtoMr.T.PremanandasDirectorWorksofyourCompany.

Mr.NabankurGuptawasappointedasanAdditionalDirectorofyour Companywitheffectfrom13thMay,2011andholdsofficetilltheconclusionoftheensuingAnnualGeneralMeeting.ThenecessaryapprovalofshareholdersisbeingsoughtintheensuingAnnualGeneralMeetingfortheappointmentofMr.NabankurGuptaasDirectorofyourCompany.

Mr.SudhirJatiaceasedtobetheManagingDirectorofyourCompanywitheffectfrom30thApril2010.Mr.Jatiacontinuedasanon-executiveDirectorofyourCompanywitheffectfrom1stMay2010.Subsequently,Mr.JatiahasresignedasaDirectorofyourCompanyw.e.f.31stMarch,2011.

Mr.DilipG.PiramalandMr.VivekNair,Directorsretirebyrotationandbeingeligible,offerthemselvesforre-appointment.PursuanttoClause49oftheListingAgreement,informationonDirectorsretiringbyrotationisprovidedasapartofthe

NoticeconveningtheensuingAnnualGeneralMeeting.


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AUDITORS

M/s.M.L.Bhuwania&Co.,CharteredAccountants,StatutoryAuditorsretireattheensuingAnnualGeneralMeeting

andbeingeligible,haveexpressedtheirwillingnesstocontinue,ifsoappointed.AsrequiredundertheprovisionsofSection224oftheCompaniesAct,1956,yourCompanyhasobtainedawrittencertificatefromtheStatutoryAuditorsproposedtobere-appointedtotheeffectthattheirre-appointment,ifmade,wouldbeinconformitywiththelimitsspecifiedinthesaidSection.

Aproposalseekingtheirre-appointmentisprovidedasapartoftheNoticeconveningtheensuingAnnualGeneralMeeting.

Duringtheyear,Ernst&YoungPrivateLimited,wereappointedasoneoftheInternalAuditorsofyourCompanytoevaluatethecurrentstate,identificationofperformancegaps,prioritizeimprovementopportunitiesandfuturestatevisionacrossallfunctionsofyourCompany.

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

Information asrequired intermsof the provisions of Section 217(1)(e) ofthe Companies Act, 1956 read with theCompanies(DisclosureofParticularsintheReportoftheBoardofDirectors)Rules,1988,regardingconservationofenergy,technologyabsorptionandforeignexchangeearningsandoutgoisannexedherewithandformspartofthisReportasAnnexure(A).

PARTICULARS OF EMPLOYEES & EMPLOYEE STOCK OPTION SCHEME

InformationasperSection217(2A)oftheCompaniesAct,1956(theAct)readwiththeCompanies(ParticularsofEmployees)Rules,1975formspartofthisReport.AspertheprovisionsofSection219(1)(b)(iv)oftheAct,theReportandAccountsarebeingsenttotheshareholdersofyourCompanyexcludingthestatementonparticularsofemployeesunderSection217(2A)oftheAct.AnyshareholderinterestedinobtainingacopyofthesaidstatementmaywritetotheSecretarialDepartmentattheRegisteredOfficeofyourCompany.

Duringtheyearunderreview,nofreshstockoptionshavebeengrantedbyyourCompany.Accordingly,nonewequity

shareshavebeenallottedundertheEmployeeStockOptionSchemeofyourCompany.Hence,nodisclosureundertheSecuritiesandExchangeBoardofIndia(EmployeeStockOptionSchemeandEmployeeStockPurchaseScheme)Guidelines,1999havebeenmadeduringtheyearunderreview.

INDUSTRIAL RELATIONS

Industrialrelationsremainedcordialthroughouttheyearunderreview.

ACKNOWLEDGEMENT

YourDirectorsrecordtheirgratitudetotheFinancialInstitutions,BanksandotherGovernmentdepartmentsfortheircontinuedassistanceandco-operationextendedtoyourCompanyduringtheyearunderreport.

YourDirectorsalsowishtoplaceonrecord,theirappreciationforthededicatedservicesoftheemployeesofyour

Companyatalllevels.OnbehalfoftheBoardofDirectors

DILIP G. PIRAMALChairman

Place:Mumbai

Date:10thAugust,2011


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ANNEXURE (A)

Disclosures of particulars with respect to Conservation of energy, Technology absorption and Foreign exchangeearningsandoutgoasrequiredundertheCompanies(DisclosureofParticularsintheReportoftheBoardofDirectors)Rule,1988

(A) CONSERVATION OF ENERGY:

a) Energyconservationmeasurestaken:

- VanepumpofNessei600TmachineinterfacedwithACdriveresultinginreductionofpowerconsumption.

- NewgenerationofaircompressorinstalledatNashikplant.

- ReplacedACroofsheetsbyTransparentFRPsheetsatmainstoreareafornaturaldaylight.

- InstalledautomaticpowerfactorcorrectionpanelinHaridwarplant.

- InstalledTimercontrollerswitchunitforbore-wellmotoratHaridwarPlant.

b) Additionalproposals:

- ReplacementofcontinuousrunningmotorwithenergyefficientmotorsatNashikplant.

-InstallationofnewextruderforPCluggageatNashikplant.- SoftluggagewarehouseLightsof250WHPMV/HPSVreplacementbynew150WMHlampatSinnarplant.

- ToinstallEnergysaverunitforlightingload40KwatHaridwarplant.

- Replace Screw and barrel of SP 400 Injection moulding machine to reduce energy consumption atHaridwarPlant.

c) Impactofthemeasuresat(a)and(b)aboveforreductionofenergyconsumptionandconsequentimpactonthecostofproductionofgoods:

Costsavingthroughreductionin energyconsumption expectedwith aboveproposalsat Nashik,Sinnar&HariwarPlants.

d) Totalenergyconsumptionandenergyconsumptionperunitofproduction:

FormAoftheAnnexuretotheCompanies(DisclosureofParticularsintheReportofBoardofDirectors)Rules,

1988,isnotapplicabletoyourCompany.

(B) TECHNOLOGY ABSORPTION:

a) ResearchandDevelopment(R&D):

i) SpecificareasinwhichR&DcarriedoutbyyourCompany:

- Researchonnobreakpolymerblendsbyusinglatestgenerationpolymers.Thepatentforthesamehasbeenfiledthisyear.

- DevelopedPolycarbonateencasedSoftluggage.Thepatentforthesamehasbeenfiledthisyear.

- ExtrusionoftheThinnestPCsheetformakinglightweightPCluggage.

- Developmentofsoftfabrictexturesonhardcases.

- Developmentofdoubletexturedesignsforfoamedluggage.

- NewprocessdevelopmentforinternationalclassTrolleymanufacturing.

- IndigenousdevelopmentofnewrangeofWheels,Trolleysystems&ABS/PCluggageswhichwerepreviouslyimported.

ii) BenefitsderivedasaresultofaboveR&D:

- WorldClassproductsofferedtoconsumersataffordablepriceconsideringdurability&reliability.

- Lightweight,highimpactresistantandbetteraestheticsPolycarbonateproductsofferedtoconsumers.

- Worldclassfinishesanddesignsinhardandsoftluggageproducts.

- Ultralightverticaluprightdevelopedwhichisakeycustomerrequirement.

iii) Futureplanofaction:

- Researchonpolymericmaterials,blendsandfinishes.- Innovationinadhesive&textiletechnologyforsmarterworldclassinteriors.

- Todevelopnew&lightweightwheeling&Trolleysystems.

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- Alternatematerialdevelopmentofluggageshells.

iv) ExpenditureonR&D:

(Amount`

inCrores)Capital -

Recurring 2.60

Total 2.60

R&Dexpenditureasapercentageoftotalturnover 0.3%

b) TechnologyAbsorption,AdaptionandInnovation:

i) Effortstakenfortechnologyabsorption,adaptionandinnovation:

Technologyabsorptionfrom:

- TechnicalJournals.

- TrainingofpersonnelonpowerfulCAD/CAMtools.

- NationalandInternationalexhibitions/seminars.

- Jointprojectswithmajorrawmaterialsupplierstodevelopinnovativetechnology.

- Trainingonsafety&pokayokeintoolsandprocesstoavoidaccidents.

ii) Benefitsderivedasaresultoftheaboveefforts:

- Manufacturingoflargemouldsin-houseofInternationalquality,specifictocustomerrequirements.

- Effectiveutilizationofpolymers.

- Excellenthingequality.

- Reductioninvarietyofcomponentsresultingincostsaving.

iii) Informationregardingtechnologyimportedduringlast5years:

- Latestgenerationvacuumformingmachine,twinbarrelmouldingmachinesandabatteryofhi-techmouldshavebeeninductedatthemanufacturinglocation

- AdditionalTwinextrudersetupforpolycarbonateandABSsheetsseparately.

- Technical collaboration with DelseyS.A., France for manufacturing a few of their premium rangesuitcasesandbriefcases.

(C) FOREIGN EXCHANGE EARNINGS AND OUTGO:

Totalforeignexchangeusedandearnedduringtheyear:

Amount(`inCrores)

Used 189.58

Earned 75.58

OnbehalfoftheBoardofDirectors

DILIP G. PIRAMALChairman

Place :MumbaiDate :10thAugust,2011

ANNEXURE(A)(Contd.)

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COMPANYS PHILOSOPHY

Your Company is committed to adopt the best Corporate Governancepracticesand endeavours continuously to

implementthecodeofCorporateGovernanceinitstruespirit.ThephilosophyofyourCompanyinrelationtoCorporateGovernanceistoensuretransparencyinallitsoperations,makedisclosuresandenhanceshareholdersvaluewithoutcompromisinginanywayincomplyingwiththelawsandregulations.

The Board of Directors acknowledges that it has a fiduciary relationship and a corresponding duty towards thestakeholders to ensurethat theirrights areprotected.Through theGovernancemechanism inyourCompany, theBoardalongwithitsCommittees,endeavourstostrikearightbalancewithitsvariousstakeholders.

BOARD OF DIRECTORS

CompositionoftheBoard:

TheBoardofDirectorsofyourCompanyconsistsofnineDirectorsason31stMarch2011outofwhichsevenareNon-executiveDirectors,fiveofwhichareIndependentDirectorsintermsofClause49(I)(A)oftheListingAgreement.

None of the Directors on the Board are member of more than ten Committees and Chairman of more than fiveCommitteesacrossallcompaniesinwhichtheyareDirectors.

Duringthefinancialyear2010-11,fourBoardMeetingswereheldonthefollowingdates:

1. 29.4.20102. 27.7.20103. 20.10.20104. 27.1.2011

ThedetailsoftheDirectorsontheBoardofyourCompanyason31stMarch,2011aregivenbelow:

Name Category No. ofshares

held

AttendanceParticulars

No. ofOutside

Directorships(*)

No. of outsideCommittee

positions held

BoardMeetings

LastAGM

Chairman Member@

Mr. Dilip G. Piramal Chairman(Non-ExecutiveDirector)

504 4 Yes 5 - -

Ms. Radhika Piramal ExecutiveDirector 28,900 4 Yes 2 - -

Mr. T. Premanand $ ExecutiveDirector - 3 N.A. - - -

Mr. Vivek Nair Independent,Non-ExecutiveDirector

- - No 7 - 2

Mr. Vijay Kalantri Independent,Non-ExecutiveDirector

- 4 No 12 - -

Mr. D. K. Poddar Independent,Non-ExecutiveDirector

- 4 Yes 8 - 4

Mr. G. L. Mirchandani Independent,Non-ExecutiveDirector

- 4 No 8 - 1

Mr. Sudhir Jatia # Non-ExecutiveDirector

17,00,152 2 No 2 - -

Mr. Nirmal Gangwal Independent,Non-Executive

Director

- 3 No 5 - 3

NOTE:Mr.NabankurGuptawasappointedasanAdditionalDirectorofyourCompanywitheffectfrom13 thMay,2011.

$ Mr.T.PremanandwasappointedasaWhole-timeDirectorofyourCompanydesignatedasDirectorWorks,witheffectfrom27thJuly,2010.

REPORT ON CORPORATE GOVERNANCEANNEXURETOTHEDIRECTORSREPORT

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REPORTONCORPORATEGOVERNANCE(Contd.)

# Mr.SudhirJatiaceasedtobetheManagingDirectorof yourCompanywitheffectfrom30thApril2010.Mr.Jatiacontinuedasanon-executiveDirectorofyourCompanywitheffectfrom1stMay2010.Mr.JatiahasresignedasaDirectorofyourCompanywitheffectfrom31stMarch,2011.

* ExcludesdirectorshipinIndianPrivateLimitedCompanies,ForeignCompanies,Companiesundersection25oftheCompaniesAct,1956andmembershipofManagingCommitteesofvariousbodies.

@ OnlymembershipofAuditCommitteeandShareholder/InvestorsGrievancesCommitteeareconsidered.

Board Procedure:

TheBoardmeetsatleastonceinaquarter,interalia,toreviewthequarterlyperformanceandthefinancialresults.TheBoardMeetingsaregenerallyscheduledwellinadvanceandthenoticeofeachBoardMeetingisgiveninwritingtoeachDirector.The boardpapers,comprisingof theagendabackedby comprehensivebackgroundinformationarecirculatedtotheDirectorsinadvance.

Ms.RadhikaPiramal,ManagingDirectorisrelatedtoMr.DilipG.Piramal,Chairman,beinghisdaughter.NoneoftheotherDirectorsarerelatedtoeachother.

TheinformationasspecifiedinAnnexureIAtoClause49oftheListingAgreementisregularlyplacedbeforetheBoardwhereverapplicable.

TheBoardperiodicallyreviewsthecompliancereportsonvariouslawsapplicabletoyourCompany.

AUDIT COMMITTEE

Terms of reference:

TheAuditCommitteeoftheBoardofDirectorsofyourCompany,interalia,providesassurancetotheBoardontheadequacyoftheinternalcontrolsystemsandfinancialdisclosures.Duringtheyear2010-11,yourCompanyappointedErnst&YoungPrivateLimitedasoneofitsInternalAuditorstocarryouttheinternalauditofitsvariousfunctions.

Apartfromallthemattersprovidedinclause49oftheListingAgreementandsection292AoftheCompaniesAct,1956,theCommitteereviewsreportsoftheInternalAuditors,meetsStatutoryAuditorsperiodicallyanddiscussestheirfindings,suggestions,internalcontrolsystems,scopeofaudit,observationsoftheAuditorsandreviewsaccountingpoliciesfollowedbyyourCompany.TheCommitteereviewswiththemanagement,thehalfyearlyandannualfinancialstatementsbeforeitssubmissiontotheBoard.TheminutesoftheAuditCommitteemeetingsareplacedandnotedatthesubsequentmeetingoftheBoardofDirectorsofyourCompany.

Composition and Attendance at meetings:

TheAuditCommitteecomprisesoffourmembers,allofwhomareNon-ExecutiveDirectorsandfinanciallyliterateasprescribedintheListingAgreement.

Mr.D.K.Poddar,IndependentDirectoristheChairmanoftheCommittee.TheManagingDirector,theChiefFinancialOfficerandtheStatutoryAuditorsofyourCompanyarepermanentinviteesatthemeetingsoftheCommittee.The

quorumfor the AuditCommittee meetingsis two members, with atleast two Independent Directorsto bepresentatthemeeting.TheCompanySecretaryactsastheSecretarytotheCommittee.TheInternalAuditorsreporttothe

AuditCommitteewithregardtotheauditprogram,observationsandrecommendationsinrespectofdifferentareasofoperationsofyourCompany.

TheAuditCommitteegenerallymeetsonceinaquarter,interalia,toreviewthequarterlyperformanceandthefinancialresults.

TheAuditCommitteemetfourtimesduringtheyearon29.4.2010,27.7.2010,20.10.2010and27.1.2011.

Thedetailsofthecomposition,categoriesandattendanceduringtheyearareasunder:

NameoftheMember Position No.ofMeetingsheld No.ofmeetingsattended

Mr.D.K.Poddar Chairman 4 4

Mr.DilipG.Piramal Member 4 4

Mr.VijayKalantri Member 4 4

Mr.G.L.Mirchandani Member 4 4

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Mr.D.K.Poddar,ChairmanoftheCommitteewaspresentatthe43 rdAnnualGeneralMeetingofyourCompanyheldon15thJuly,2010toanswertheshareholdersqueries.

Theminutesof theAuditCommitteeMeetingsformpartofthedocumentsplacedbeforethemeetingsoftheBoardofDirectors.Inaddition,theChairmanoftheAuditCommitteeappraisestheBoardmembersaboutthesignificantdiscussionsattheAuditCommitteemeetings.

FINANCE COMMITTEE

Terms of reference:

TheFinanceCommitteeofyourCompany,reviewsandassessesthefinancialmattersofyourCompany.TheCommitteealsolooksanddecidesonallissuesrelatedtotakingorgivingloans,investments,hedgingofforeignexchangewithrespecttoimportsandexportsoftheCompanyandanyothertransactionsinvolvingforeigncurrencies.

Composition and Attendance at Meetings:

TheFinanceCommitteecomprisesofthreemembers,twoofwhomareNon-ExecutiveDirectors.

Mr.NirmalGangwal,IndependentDirectoristheChairmanoftheCommittee.

TheFinanceCommitteemettwiceduringtheyear,on13thSeptember,2010and13thJanuary,2011.


Name Position No.ofMeetingsheld No.ofMeetingsattended

Mr.NirmalGangwal Chairman 2 2


Ms.RadhikaPiramal Member 2 2

REMUNERATION AND COMPENSATION COMMITTEE

Terms of reference:

The Remuneration and Compensation Committee of your Company, reviews, assesses and recommends, theperformance of managerial personnel on a periodical basis and also reviews their remuneration package andrecommendssuitablerevisiontotheBoard.

TheCommitteealsolooksintoanddecidesonallissuesrelatedtoadministrationandimplementationofyourCompanysEmployeesStockOptionSchemeandothermattersconnectedthereto.

Composition and Attendance at Meetings:

TheRemunerationandCompensationCommitteecomprisesoffourmembers,allofwhomareNon-ExecutiveDirectors.

Mr.D.K.Poddar,IndependentDirectoristheChairmanoftheCommittee.

TheRemunerationandCompensationCommitteemetthriceduringtheyearon29thApril,2010,27thJuly,2010and30thMarch,2011.


Name Position No.ofMeetingsheld No.ofMeetingsattended

Mr.D.K.Poddar Chairman 3 3


Mr.VijayKalantri Member 3 3

Mr.G.L.Mirchandani Member 3 3

Mr.NabankurGuptahasbeenappointedasthememberoftheRemunerationandCompensationCommitteewitheffectfrom13thMay2011.Duetohispre-occupation,Mr.VijayKalantriceasestobethememberoftheRemunerationandCompensationCommitteeofyourCompany.

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Remuneration Policy:

Theremunerationpolicyisdirectedtowardsrewardingperformance,basedonreviewofachievements.Itisaimedat

attractingandretaininghighcalibertalent.TheremunerationpolicyisinconsonancewiththeexistingpracticeintheIndustry.

i) Non-Executive Directors Remuneration:

TheNon-ExecutiveDirectorsarepaidbywayofsittingfeesandcommission.TheremunerationpayablebywayofcommissionasmentionedhereinbelowandasapprovedbytheBoardofDirectorsiswithinthelimitsprescribedundertheCompaniesAct,1956,presentlynotexceeding1%ofthenetprofitsofyourCompanycalculatedinaccordancewiththeprovisionsofSection198,349and350oftheCompaniesAct,1956.YourCompanypaidsittingfeesof 5,000permeetingforattendingeachmeetingoftheAuditCommittee&RemunerationCommitteeand` 20,000per meeting forattendingeachmeeting ofthe Finance Committee and the BoardMeeting. ThepaymentofremunerationbywayofsittingfeesandcommissionisbasedoncertaincriteriasuchasattendanceattheBoard/Committeemeetings,timedevoted,industrytrendsetc.

(in`)

Name SittingFees Commission Total

Mr.DilipG.Piramal 1,55,000 11,075,000 11,230,000

Mr.VivekNair Nil - -

Mr.VijayKalantri 1,15,000 - 1,15,000

Mr.D.K.Poddar 1,15,000 - 1,15,000

Mr.G.L.Mirchandani 1,15,000 - 1,15,000

Mr.NirmalGangwal 1,00,000 - 1,00,000

Mr.SudhirJatia # 40,000 - 40,000

# Upon cessation as the Managing Director, Mr. Sudhir Jatia continued to be a non-executive Director of your

Companyeffective1stMay2010andhencethesittingfeesarepaidfortheBoardmeetingsattendedbyhimsubsequenttohisassumingthechargeasnon-executiveDirector.Sincethen,Mr.SudhirJatiahasresignedasaDirectorofyourCompanywitheffectfrom31stMarch,2011.

ii) Executive Directors Remuneration:

a) ManagingDirector:

Ms.RadhikaPiramalwasappointedastheManagingDirectorofyourCompanywitheffectfrom1stMay,2010to12thJuly,2012(bothdaysinclusive).Thecontractmaybe terminatedbyeitherpartybygivingtheotherparty,3monthsnoticeoryourCompanypayingnoticepayequaltotheamountduetotheManagingDirectoronaccountofsalaryandperquisitesforsuchnoticeperiod.Thereisnoseparateprovisionforpaymentofseverancefees.

Mr.SudhirJatiaceasedtobetheManagingDirectorofyourCompanywitheffectfrom30thApril2010andhence

theremunerationpaidtohimastheManagingDirectorduringthepartofthefinancialyearhasbeendisclosedseparatelybelow.

YourCompany paysremuneration bywayof salary,perquisites,allowances and commission totheManagingDirector.SalaryispaidwithinthelimitsapprovedbytheShareholders.

DetailsofremunerationofManagingDirectorfortheyearended31stMarch,2011areasfollows:(in`)

Name *GrossRemuneration

Commission StockOption(NumberofShares)

Total

Mr.SudhirJatia 1,15,21,217 - - 1,15,21,217

Ms.RadhikaPiramal 93,28,880 1,10,75,000 - 2,04,03,880

*GrossRemunerationincludessalary,contributiontoProvidentFundandotherperquisites.


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b) Whole-timeDirector:

Mr.T.PremanandwasappointedasaDirectorinthewhole-timeemploymentofyourCompanydesignated

asDirector-Worksforaperiodoffiveyearsfrom27

th

July,2010to26

th

July,2015(bothdaysinclusive).Thecontractmaybeterminatedbyeitherpartybygivingtheotherparty,3monthsnoticeoryourCompanypayingnoticepayequaltotheamountduetotheWhole-timeDirectoronaccountofsalaryandperquisitesforsuchnoticeperiod.Thereisnoseparateprovisionforpaymentofseverancefees.

YourCompanypaysremunerationbywayofsalary,perquisitesandallowancestotheWhole-timeDirector.

DetailsofremunerationpaidtotheWhole-timeDirectorfortheperiodfrom27thJuly2010upto31stMarch2011isasfollows:

(in`)

Name *GrossRemuneration

Commission StockOption(NumberofShares)

Total

Mr.T.Premanand 35,88,377 - - 35,88,377

*GrossRemunerationincludessalary,contributiontoProvidentFundandotherperquisites.

INVESTORS GRIEVANCES & SHARE TRANSFER COMMITTEE:

Terms of reference:

ThetermsofreferenceoftheCommitteeincluderedressingshareholderandinvestorcomplaintslikenonreceiptoftransferandtransmissionofshares,nonreceiptofsharecertificates,non-receiptofbalancesheet,non-receiptofdividendsetc.andtoensureexpeditioussharetransferprocess.

LinkIntimeIndiaPrivateLimitedistheRegistrarandTransferAgentofyourCompanyandtheCommitteeoverseestheperformanceoftheRegistrarandTransferAgentandrecommendsmeasuresforoverallimprovementinthequalityof

investorservices.

Composition:

Ms.RadhikaPiramal,ManagingDirectorofyourCompanywasappointedasthememberoftheInvestorsGrievancesandShareTransferCommitteeinplaceofMr.SudhirJatiawitheffectfrom1 stApril2011.Accordingly,theCommitteecomprisesofthreemembersviz.Mr.DilipG.Piramal,Ms.RadhikaPiramalandMr.VijayKalantri.Mr.ShreyasTrivedi,GeneralManager-Legal&CompanySecretaryistheComplianceOfficerofyourCompany.

Your Company has approximately 35531 investors comprising of shareholders and fixed deposit holders as on31stMarch2011.Duringtheyear,yourCompanyprocessed331sharetransferscomprisingof34,189equitysharesinthephysicalform.YourCompanyreceived233complaintsduringtheyear,allofwhichhavebeenattendedtowithinaperiodoffifteendaysfromthedateofreceiptofthesame.

TheInvestorsGrievancesandShareTransferCommitteegenerallymeetsonceinafortnightandapprovesallmattersrelatedtosharesvis--vistransfers,transmissions,dematerializationandre-materializationofsharesetc.Incaseofsharesheldinphysicalform,alltransfersarecompletedwithin14daysfromthedateofreceiptofcompletedocuments.

GENERAL BODY MEETINGS:

ParticularsofGeneralMeetingsheldduringlastthreeyears:

AnnualGeneralMeeting(AGM)

Date Venue Time No.ofSpecialResolutionsPassed

41stAGM(2007-08) 29thAugust,2008 NIWEC,Satpur,Nashik-422007 12.30p.m Nil

42nd AGM (2008-09) 25thSeptember,2009 NIWEC,Satpur,Nashik-422007 11.30a.m. 1

43rd

AGM (2009-10) 15th

July,2010 NIWEC,Satpur,Nashik-422007 12.30p.m. 1

ThefollowingSpecialresolutionswerepassedbythemembersduringthelasttwoyearsGeneralMeetings:


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42nd Annual General Meeting held on 25th September, 2009

ToappointMs.RadhikaPiramalasanExecutiveDirectorofyourCompanywitheffectfrom13thJuly,2009foraperiod

of3years.43rd Annual General Meeting held on 15th July, 2010

TopaycommissiontotheNon-ExecutiveDirectors.

Postal Ballot

Duringtheyearended31stMarch,2011,noresolutionswerepassedthroughPostalBallot:

DISCLOSURES:

YourCompanyhasno materialsignificanttransactionswithitsrelatedpartiesthatmayhavea potentialconflictwiththeinterestofyourCompanyduringthefinancialyear2010-2011.ThedetailsoftransactionbetweenyourCompanyandtherelatedpartiesaregivenforinformationunderNote16oftheNotestoAccountstotheBalanceSheetasat31stMarch,2011.

Inthepreparationofthefinancialstatements,yourCompanyfollowsAccountingStandardsissuedbytheInstituteofCharteredAccountantsofIndia.

YourCompanyhasformulatedandlaiddownaprocedureonriskassessmentandminimization.TheseprocedureshavebeenconsideredbytheBoardandaproperlydefinedframeworkislaiddowntoensurethatexecutivemanagementcontrolstheidentifiedrisks.YourCompanyhasnotframedanyWhistleBlowerPolicyduringtheyear2010-11.

Duringtheyearunderreview,yourCompanydidnotraiseanyproceedsthroughapublicissue,rightsissueand/orapreferentialissue.

ThedetailsinrespectofDirectorsseekingre-appointmentareprovidedaspartoftheNoticeconveningtheensuingAnnualGeneralMeeting.

Means of Communication

Financialresultsarepublishedinwidelycirculatingnationalandlocaldailynewspapers,suchasEconomicTimes,FreePressJournalandNavashakti.Thesearenotsentindividuallytotheshareholders.

YourCompanysresultsandofficialnewsreleasesandpresentations,ifany,madetoInvestorsaredisplayedonyourCompanyswebsitewww.vipbags.com

ManagementDiscussionandAnalysisReportformspartoftheAnnualReport.

GENERAL SHAREHOLDER INFORMATION

1. AnnualGeneralMeeting:

- DateandTime : Thursday,29thSeptemebr,2011at12.00noon

- Venue : NIWEC,P-29,Street14,MIDC, Satpur,Nashik422007,Maharashtra.

2. TentativeFinancialCalendar : ThefinancialyearoftheCompanyisfortheperiodfrom 1stAprilto31stMarchofthefollowingyear.

1. PublicationofAuditedResults : By30thMayorimmediatelyuponitsadoptionbytheBoardeachyear

2. FirstQuarterResults : By14thAugustofeachyear

3. SecondQuarterResults : By14thNovemberofeachyear

4. ThirdQuarterResults : By14thFebruaryofeachyear

3.DateofBookClosure : Tuesday,20thSeptember,2011toThursday,29thSeptember,2011 (bothdaysinclusive)


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4. DividendPaymentDate(2010-11) : On5thOctober,2011.

5. ListingonStockExchange : 1.BombayStockExchangeLimited(BSE) PhirozeJeejeebhoyTowers,DalalStreet,

Mumbai400023

: 2. NationalStockExchangeofIndiaLimited(NSE) ExchangePlaza,5thFloor,PlotNo.C/1,G-Block, Bandra-KurlaComplex,Bandra(East), Mumbai400051

6. ListingFees : ListingfeesofboththeStockExchangesfortheyear 2011-12hasbeenpaid.

7. StockCode

BSE : 507880

NSE : VIPIND

InternationalSecurities : INE054A01019 IdentificationNumber(ISIN)

8. ThemonthlyHighandLowofmarketpriceoftheequitysharesofyourCompayontheBSEandNSEandthestockperformanceduringthelastfinancialyearwasasunder:

Bombay Stock Exchange National Stock Exchange

Period(Year2010-11) High( ) Low(`) Sensex(High) High(`) Low(`) Nifty(High)

April2010 299.00 255.00 18047.86 298.40 252.60 5399.65

May2010 276.30 224.05 17536.86 276.80 220.15 5250.15

June2010 351.65 242.90 17919.62 351.55 243.00 5354.35

July2010 429.10 335.00 18237.56 428.55 330.10 5466.25

August2010 520.00 420.60 18475.27 517.80 421.00 5506.15

September2010 585.70 466.50 20234.05 585.90 458.15 6073.50

October2010 801.40 575.00 20854.55 801.80 575.15 6284.10

November2010 730.80 581.55 20970.91 731.40 561.65 6338.50

December2010 690.70 488.00 20552.03 690.85 486.65 6147.30

January2011 688.70 545.00 20664.80 688.50 558.00 6181.05

February2011 601.60 454.25 18690.97 601.65 455.00 5599.25

March2011 688.00 501.25 19575.16 687.85 500.05 5872.00

900

800

700

600

500

400

300

200

22000

20000

18000

16000Apr-10 May-10 Jun-10 Jul -10 Aug-10 Sep-10 Oct-10 Nov-10 Dec-10 Jan-11 Feb-11 Mar-11

VIP(`) Sensex(High)StockperformanceV.I.P.v/sBSE


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9. DistributionScheduleandShareholdingPatternason30thJune,2011.

DISTRIBUTION SCHEDULE SHAREHOLDING PATTERN

CategoryNo.ofShares

No.ofShareholders

No.ofShares

CategoryofShareholders No.ofShares

%

Upto500 30820 3090229 Promoters 14690735 51.98

501-1000 1034 757822 MutualFundsandUTI 5414 0.02

10012000 381 559347 Banks,FinancialInstitutions,InsuranceCompanies 186328 0.66

20013000 109 269720 ForeignInstitutionalInvestors 2342139 8.29

30014000 41 145350 BodiesCorporate 1569992 5.55

40015000 31 145537 IndianPublic 9076435 32.11

500110000 51 384340 NonResidentIndividuals/

10001andabove 85 22911118 OverseasCorporateBodies 392420 1.39TOTAL 32552 28263463 TOTAL 28263463 100.00

Note :ThepromotershaveintimatedtoyourCompanyandtheStockExchangesthatduetovariousamalgamationswhichtookplaceovertheyearsinyourCompany,someofthepromotergroupentitieswereinadvertantlyomittedtobedisclosedasPromoterGroupshareholders.Suchshareholdingaggregatingto7.86%ofthepaid-upsharecapital of the Company are now being disclosed as Promoter Group shareholding. Most of the shares wereacquiredoverseveralyearsbywayofamalgamationandnoneoftheseacquisitionstriggeredanyobligationofmakinganopenoffer.

10.RegistrarandShareTransferAgents : LinkIntimeIndiaPrivateLimited, C-13,PannalalSilkMillsCompound, L.B.S.Marg,Bhandup(West),Mumbai400078,

Tel.No.:022-25963838/25946970, FaxNo.:022-25962691 Email:[email protected]

11. Dematerializationofsharesandliquidity: 91.06%ofthepaid-upcapitalofyourCompanyhasbeendematerializedason31stMarch,2011.TheequitysharesofyourCompanyareactivelytradedontheBSEandtheNSEindematerializedform.

12. OutstandingGDRs/ADRs/Warrants :NILoranyconvertibleinstruments

13. P lantLocations : (i) Nashik-78A,MIDCEstate,Satpur,Nashik422007 (ii)Sinnar-A-7,MIDC,Sinnar422103 (iii)Haridwar-PlotNo8,Sector12,SIDCULArea,Haridwar249403 (iv)JalgaonE5/2AdditionalMIDCArea,Jalgaon425016

(v)Nagpur-L-4,MIDC,Hingna,Nagpur440016 (vi)PaithanD/4PaithanIndustrialArea,MIDC,Paithan431107

14. Addressforcorrespondence : i) LinkIntimeIndiaPrivateLimited (UnitV.I.P.IndustriesLimited) C-13,PannalalSilkMillsCompound, L.B.S.Marg,Bhandup(West),Mumbai400078. Tel.No.022-25963838/25946970 FaxNo.:022-25962691

ii) TheCompanySecretary V.I.P.IndustriesLimited 5thfloorDGPHouse, 88-C,OldPrabhadeviRoad,Mumbai400025 Tel.No.022-66539000, FaxNo.:022-66539089

15. DesignatedE-mailIDforregisteringComplaintsbytheinvestors : [email protected]


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COMPLIANCE WITH NON-MANDATORY REQUIREMENTS:

The extent of compliance in respect of non-mandatory requirements is as follows:

i. The Board: A separate office is maintained for the Non-Executive Chairman and your Company reimbursesexpensesincurredbytheNon-ExecutiveChairmaninperformanceofhisduties,ifapplicable.

ii. ShareholdersRights:Detailsofsignificantevents,ifany,areputuponyourCompanyswebsitetogetherwiththefinancialresults.DesignatedE-mailIDofthegrievanceredresselsectionexclusivelyforthepurposeofregisteringcomplaintsbytheInvestorsisinvestor-help@vipbags.com

iii. AuditQualifications:Duringtheyearunderreview,therewasnoauditqualificationinyourCompanysfinancialstatements.YourCompanycontinuestoadoptbestpracticestoensurearegimeofunqualifiedfinancialstatements.

iv. TrainingofBoardMembers:TheDirectorsinteractwiththemanagementinaveryfreeandtransparentmanneroninformationthatmayberequiredbythemfororientationwithbusinessofyourCompany.

CHIEF EXECUTIVE OFFICER (CEO) AND CHIEF FINANCIAL OFFICER (CFO) CERTIFICATION

To the Board of Directors of V.I.P. Industries Limited

DearSirs,

Sub: CEO / CFO Certificate(Issued in accordance with the provisions of Clause 49 of the Listing Agreement)

We,RadhikaPiramal,ManagingDirector,andManojTulsian,ChiefFinancialOfficerofV.I.P.Industries Limited,tothebestofourknowledgeandbelief,certifythat:

Wehave reviewedthe financialstatements,readwith thecash flowstatement ofV.I.P.Industries Limitedfor theyear

ended31stMarch,2011andthattothebestofourknowledgeandbelief,westatethat;

(a) (i) Thesestatementsdonotcontainanymateriallyuntruestatementoromitanymaterialfactorcontainstatementsthatmaybemisleading;

(ii) Thesestatementspresentatrueandfairviewofthe Companysaffairsandare incompliancewithcurrentaccountingstandards,applicablelawsandregulations.

(b) Thereare,tothebestofourknowledgeandbelief,notransactionsenteredintobytheCompanyduringtheyearwhicharefraudulent,illegalorinviolationoftheCompanyscodeofconduct.

(c) We accept responsibility for establishing and maintaining internal controls for financial reporting. We haveevaluatedtheeffectivenessofinternalcontrols,ifany,andstepstakenorproposedtobetakenforrectifyingthesedeficiencies.

(d) WehaveindicatedtotheAuditorsandtheAuditCommittee:

(i) Thattherearenosignificantchangesininternalcontroloverfinancialreportingduringtheyear;

(ii) Significantchangesin accounting policiesmade during the year and that the same have been disclosedsuitablyinthenotestothefinancialstatements;and

(iii) thattherearenofraudsofwhichwehavebecomeawareandtheinvolvementtherein,ifany,ofthemanagementoranemployee.

ForV.I.P. INDUSTRIES LIMITED

RADHIKA PIRAMAL MANOJ TULSIAN ManagingDirector ChiefFinancialOfficer

Place:MumbaiDate:10thAugust,2011


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DECLARATION UNDER CLAUSE 49 OF THE LISTING AGREEMENT

Inaccordancewithsub-clauseI(D)ofClause49oftheListingAgreementwiththeStockExchanges,I,RadhikaPiramal,ManagingDirectorof V.I.P.IndustriesLimitedherebyconfirmthattheBoardMembersandtheSeniorManagementpersonnelofyourCompanyhaveaffirmedcompliancewiththeCompanysCodeofConductforthefinancialyearended31stMarch,2011.

ForV.I.P. INDUSTRIES LIMITED

RADHIKA PIRAMALManagingDirector

Place:MumbaiDated:10thAugust,2011


ANNEXURE TO THE DIRECTORS REPORT

CERTIFICATE FROM AUDITORS REGARDING COMPLIANCE OF CONDITIONS OF CORPORATE GOVERNANCE

To the Members of V.I.P. Industries Limited

WehaveexaminedthecomplianceofconditionsofCorporateGovernancebyV.I.P.IndustriesLimitedfortheyearendedon31stMarch,2011,asstipulatedinclause49oftheListingAgreementofthesaidCompanywithStockExchanges.

ThecomplianceofconditionsofCorporateGovernanceistheresponsibilityoftheManagement.Ourexaminationwaslimitedtoproceduresandimplementationthereof,adoptedbytheCompanyforensuringcomplianceoftheconditionsofCorporateGovernanceasstipulatedinClause49oftheabovementionedListingAgreement.ItisneitheranauditnoranexpressionofopiniononthefinancialstatementsoftheCompany.

Inouropinion,andtothebestofourinformationandaccordingtotheexplanationsgiventous,wecertifythattheCompanyhascompliedinallmaterialrespectswiththeconditionsofCorporateGovernanceasstipulatedintheabovementionedListingAgreement.

WefurtherstatethatsuchcomplianceisneitheranassuranceastothefutureviabilityoftheCompanynortheefficiencyoreffectivenesswithwhichthemanagementhasconductedtheaffairsoftheCompany.

ForM. L. BHUWANIA & CO.Chartered Accountants

Place:Mumbai J. P. BAIRAGRADate:10thAugust,2011 Partner

MembershipNo.12839FirmRegistrationNo.101484W

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A. INDUSTRY STRUCTURE AND DEVELOPMENT

LUGGAGE

Domestic Markets

Theyear underreview wasvery good dueto growth in travel sectorwhich directlyimpactsthegrowthof theluggagecategory.Increaseddisposableincome,significantincreaseininvestmentsintravelinfrastructurelikeairports,nationalhighwaysetchavecontributedtogrowthintravelsegment.Bothdomesticandinternationalairtravelhavenowshownconsistentdoubledigitgrowthoverayear.WorldTourismOrganizationisreportedtohavepredictedthatIndiawillaccountfor50millionoutboundtouristsby2020.MoreandmoreinternationaldestinationshavebeeninvestinginIndiatoattractIndianstovisitthem.

Theluggagecategoryisestimatedtobeof`3500Croresinsizeandgrowingataround15%perannum,withsoftluggagegrowingfasterthanhardluggage.Alldistributionchannelshavegrownwell,inparticularorganizedmoderntradeacrosslifestyleandhyperformats.Inthecomingyear,yourCompanyexpectstowitnessmorenewproductintroductions,consolidateHardLuggagepremiumvolumesandfurtherenhanceSoftLuggagevolumes.

International Markets

TheInternationalBusinessofyourCompanyregisteredagrowthinallregionsledbytheAsiaPacificregionwhichgrewby78%.DespiterecessioninEuropeandadepressedsituationintheMiddleEast,yourCompanysbusinessgrewby13%inEuropeand18%intheMiddleEast.TherewereseveralnewproductslaunchedinCarltonrangeswhichareextremely lightweight,aesthetic,colourfulandappealingtomost consumerswhilebeingaffordable.These launches received a very good response from most of the International markets. The value formoneyofferinginrecessionarytimeshelpedyourCompanygrowitsbusiness.

MOULDED FURNITURE

YourCompanyregisteredagrowthinthebusinessofover33%ascomparedtothepreviousyear,despitetheupwardmovementofrawmaterialcostwhichcontinuedtobeaconcernthroughouttheyear.ThebrandMODERNA

becauseofitsuncompromisedqualityhasmanagedtoregisteranotheryearofgoodperformance.

B. OPPORUTNITIES AND THREATS

LUGGAGE

YourCompanyexpectsdomesticluggagemarkettogrowonaccountofincreasedbusinessandleisuretravelintheyearaheadandhigherdisposableincomesinIndia.Increaseinairtravelwillbenefitthepopularandpremiumsegmentofthemarket.WithinvestmentonpremiumbrandslikeCarltonandVIP,yourCompanyisequippedtomaximizeitsshareofthisgrowth.WithyourCompanysmultisegmentmultibrandapproach,itwillbeabletoaddressallsegmentsofthemarket,includingthosecustomerswhoarepriceconscious,throughvaluebrandslike

Alfa,SkybagsandAristocrat.Withfavorablemarriagecalendarduringtheyear,hardluggagedemandislikelytoberobust.

Crudeoil prices goinguponaccountofuncertaintyinthe MENA regionwillincreasethe inputcosts for hardluggage.AppreciationoftheYuan,increasedmaterialandlabourcostsmayincreasebuyingpricesforsoftluggagefinishedgoodsfromChina.ThesecostincreasesmaypressureyourCompanysmargins,howeveritshouldbenotedthatallluggageplayerswillexperiencethesamecostpressuresacrosstheindustry.

MOULDED FURNITURE

Beingprimarilyaplasticproduct,mouldedfurniturewillalsoexperiencemarginpressureifoilandplasticpricesremainhighandvolatile.However,theModernabrandprovidessomepricingpower.

C. SEGMENT / PRODUCT WISE PERFORMANCE

LUGGAGE

YourCompanyhassegmentedthemarketandclearlydefinedtheroleforeachofitssixbrandsinthecategory.CARLTONhasbeenintroducedthroughsoftlaunchinNovember2010acrosspremiumdistributionchannel.Initialresponsehasbeenveryencouraging.ItspositioningasinternationalstylishpremiumbrandfromEnglandhasbeenwellreceived.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

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Withmultiplesuccessfulrangelaunchesacrosscategoriesandwithconsistentandeffectivemarketinginvestments,brandVIPhasdoneverywellandhasachievedbesteverperformance.Thegrowthinthesoftluggagesegmenthasbeenalmostdoublethanthatoftheentirecategory.Thebrandcontinuestobetheleaderinthecategoryand

withbankofinnovativeproductlaunches,thebrandislikelytofurtherimproveitsleadgoingahead.

Aftersuccessfultestmarketingincertainterritories,thebrand SKYBAGS isbeingrolledoutacross traditionaldistributionchannelsbeyondHyperchannel.Thebrandispositionedasastylishofferingfornewergenerationoftravelers.YourCompanyhassignedBollywoodstaricon,JohnAbrahamforendorsingSKYBAGSandhaspromotedSKYBAGSthroughmassmedianationally.

Afteragapofsevenyears,brandAlfawaspromotedonTVduringOctober-November2010marriageseason.ThenewrangeofBoxerhardsideuprighthasbeenverywellreceivedbythemarketandhasbecomeoneofthelargestvolumerangesinaveryshorttime.WithrenewedfocusonbrandFootlooseandwithimprovedproductranges,thisbrandhasmorethandoubleditsturnoverintheyearunderreview.ThisperformancehasgivenalotofconfidencetoyourCompanytofurtherexpandthebrandwidthintheyearsahead.Aristocratbrandhasshownrobustgrowthinthesoftluggagesegment.

MOULDED FURNITURE

The implementation and continuation with advance payment policy has substantially de-risked the business.Renewed focus on institutional business has also helped your Company to get good volume from differentsegments.

D. OUTLOOK

LUGGAGE

Consideringthethreats,opportunitiesandthestrengthsofyourCompany,thekeytaskathandwillbetomakemostofthecategorygrowthacrossallpricesegments.YourCompanyissuccessfullyexecutingitsmultibrandmultisegmentstrategywithconsistentinvestmentinadvertisingforallitsluggagebrands.

MOULDED FURNITURE

YourCompanyisconfidentthatitwillbeabletoimproveuponitssalesinthecomingyearsthroughfreshinitiatives,includingtheintroductionofproductsofdifferentdesignandcolours.

E. RISKS AND CONCERNS

ThedependenceofyourCompanyonChinaforsourcingofsoftluggagecontinues.AnyappreciationofChineseYuanmayadverselyimpactthemarginsofyourCompany.

F. INTENAL CONTROL SYSTEMS

Duringtheyearunderreview,yourCompanyhasappointedErnst&YoungPrivateLimited,asoneoftheInternal

Auditorsofyour Companyfor maintaininginternalcontrolstosafeguardyourCompanysassetsagainstlossesfromunauthorizeduseandensureproperauthorizationoffinancialtransactions,toevaluatethecurrentstateandidentifyperformancegaps,toprioritizeimprovementopportunitiesandfuturestatevisionacrossallfunctionsoftheCompany,toprovideahighdegreeofassuranceregardingtheeffectivenessandefficiencyofoperations,to assessthe reliability of financial controls and compliance with laws and regulations.Your Company has abudgetarycontrolsystemtomonitorallexpendituresagainstapprovedbudgetsonanongoingbasis.

TheInternalAuditorssubmittheirreportstotheAuditCommitteefromtimetotime.ThemanagementdulyconsidersandtakesappropriateactionontherecommendationsmadebytheStatutoryAuditors,InternalAuditorsandthe

AuditCommitteeofyourCompany.

Allsignificantchanges,ifany,intheaccountingpoliciesduringtheyear,havebeendisclosedinthenotestothefinancialstatement.

MANAGEMENTDISCUSSIONANDANALYSISREPORT(Contd.)

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MANAGEMENTDISCUSSIONANDANALYSISREPORT(Contd.)

G. FINANCIAL PERFORMANCE

SALES:

TheSalesandOtherIncomeofyourCompanyfortheyearended31stMarch,2011wasat`743.43crores(PreviousYear`611.52crores).TheconsolidatedSalesandOtherIncomefortheyearunderreviewwas 761.04crores(PreviousYear 645.98crores).

EXPENDITURE:

YourCompanycontinueditsfocusoncostmanagementinitiatives.

PROFIT:

ProfitafterTaxfortheyearunderreviewamountedto 62.02crores(PreviousYear 50.05crores).TheconsolidatedProfitafterTaxfortheyearunderreviewwas 88.72croresasagainstpreviousyears`48.38crores.

H. HUMAN RESOURCE DEVELOPMENT & INDUSTRIAL RELATIONS

TheHuman Resourcesdepartmentofyour Companyhaseffectively partneredthebusiness in theyear underreview,toregisterstronggrowthandachievetargets.AstructuredrecruitmentprocesshashelpedyourCompanyattracttherighttalent.Apositiveworkenvironmentandexcitingcareerprospectshavehelpedkeepattritionundercontrolinspiteofveryaggressiveexternalmarketfactors.

InspiteofawrittenagreementwithrespecttotheretirementageinyourCompanybeing56years,whichhasbeeninplacesince2004andre-affirmedin2009,someworkershavedisputedthisretirementageandthematterhasbeenreferredtotheIndustrialTribunal,Nashik.TherelationshipwiththeUnion/Employeesandtheplantlocationscontinuestobecordial,professionalandproductive.

Theemployeestrengthason31stMarch2011was1685.

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AUDITORS REPORT

TOTHEMEMBERSOF

V.I.P. INDUSTRIES LIMITED

1. WehaveauditedtheattachedBalanceSheetofVIPIndustriesLimitedasat31stMarch2011,theProfitandLossAccountandalsotheCashFlowStatementfortheyearendedonthatdate,annexedthereto.ThesefinancialstatementsaretheresponsibilityoftheCompanysmanagement.Ourresponsibilityisto expressanopiniononthesefinancialstatementsbasedonouraudit.

2. WeconductedourauditinaccordancewiththeauditingstandardsgenerallyacceptedinIndia.ThoseStandardsrequirethatweplanandperformtheaudittoobtainreasonableassuranceaboutwhetherthefinancialstatementsarefreeofmaterialmisstatement.Anauditincludesexamining,onatestbasis,evidencesupportingtheamountsanddisclosuresinthefinancialstatements.Anauditalsoincludesassessingtheaccountingprinciplesusedandsignificantestimatesmadebymanagement,aswellasevaluatingtheoverallfinancialstatementpresentation.Webelievethatourauditprovidesareasonablebasisforouropinion.

3. AsrequiredbytheCompanies(AuditorsReport)Order,2003asamendedbytheCompanies(AuditorsReport)(Amendment)Order,2004(togethertheOrder)issuedbytheCentralGovernmentofIndiaintermsofsub-section

(4A)ofsection227oftheCompaniesAct,1956,weencloseintheAnnexureastatementonthemattersspecifiedinparagraphs4and5ofthesaidOrder.

4. FurthertoourcommentsintheAnnexurereferredtoinparagraph3above,wereportthat:

(i) Wehaveobtainedalltheinformationandexplanations,whichto thebestofourknowledgeandbeliefwerenecessaryforthepurposesofouraudit;

(ii) Inour opinion,proper books ofaccount asrequiredby law have been kept bythe Company sofar asitappearsfromourexaminationofthosebooks;

(iii) TheBalanceSheet,ProfitandLossAccountandCashFlowStatementdealtwithbythisreportareinagreementwiththebooksofaccount;

(iv) Inouropinion,theBalanceSheet,ProfitandLossAccountandCashFlowStatementdealtwithbythisreportcomplywiththeAccountingStandardsreferredto insub-section(3C)ofsection211of theCompaniesAct,1956;

(v) Onthebasisofwrittenrepresentationsreceivedfromthedirectorsofthecompanyason31stMarch2011andtakenonrecordbytheBoardofDirectors,wereportthatnoDirectorisdisqualifiedason31stMarch2011frombeingappointedasadirectoroftheCompanyintermsofclause(g)ofsub-section(1)ofsection274oftheCompaniesAct,1956;

(vi) Inour opinion and tothe best ofour information and according tothe explanations givento us,thesaidaccountsreadwithothernotesthereonmoreparticularlyNoteNo. 25ofScheduleW,givetheinformationrequiredbytheCompaniesAct,1956,inthemannersorequiredandgiveatrueandfairviewinconformitywiththeaccountingprinciplesgenerallyacceptedinIndia:

a. inthecaseoftheBalanceSheet,ofthestateofaffairsoftheCompanyasat31stMarch2011;

b. inthecaseoftheProfitandLossAccount,oftheprofitfortheyearendedonthatdate;and

c. inthecaseoftheCashFlowStatement,ofthecashflowsfortheyearendedonthatdate.

ForandonbehalfofM.L.BHUWANIA&CO.

CharteredAccountants

J.P.BairagraPartner

MembershipNo.12839

FirmRegistrationNo.101484WPlace:MumbaiDate:10thAugust,2011.

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Annexure referred to in paragraph 3 of Auditors report to the members of VIP Industries Limited for the yearended 31st March 2011.

OntheBasisoftherecordsproducedtousforourverification/perusal,suchchecksasweconsideredappropriate,andinterms

ofinformationandexplanationgiventousonourenquiries,westatethat:

(i) (a) Thecompanyismaintainingproperrecordsshowingfullparticulars,includingquantitativedetailsandsituationoffixedassets.

(b) ThefixedassetsoftheCompanyarephysicallyverifiedbytheManagementaccordingtoaphasedprogrammedesignedtocoveralltheitemsoveraperiodofthreeyears,whichinouropinion,isreasonablehavingregardtothesizeoftheCompanyandthenatureofitsassets.Pursuanttotheprogramme,aportionofthefixedassetshasbeenphysicallyverifiedbytheManagementduringtheyearanddiscrepanciesnoticedbetweenthe book records and the physicalinventories were not materialandhavebeenproperlydealt with intheaccounts.

(c) Inour opinionand accordingtotheinformationand explanationgiventous, asubstantialpartof thefixed

assetshasnotbeendisposedoffbytheCompanyduringtheyear.

(ii) (a)Duringtheyear,theinventorieshavebeenphysicallyverifiedbythemanagement.Inouropinion,thefrequencyofverificationisreasonable.

(b) Inour opinion and accordingto the informationand explanations givento us,theprocedures ofphysicalverificationofinventoriesfollowedbythemanagementarereasonableandadequateinrelationtothesizeoftheCompanyandthenatureofitsbusiness.

(c) Onthebasisof ourexamination ofthe records ofinventorie

VIP_AR_2010-11

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