The Directors have pleasure in presenting the TWENTY SEVENTH Annual Report for the financial year ended on 31st March, 2014.

1.  FINANCIAL HIGHLIGHTS:                               (Rs. in lakhs)

PARTICULARS                                      2013-2014   2012-2013

Profit Before Depreciation and 
Financial Charges                                   123.53     (42.44)

Less: Depreciation                                   43.01       38.48

Financial Charges                                    10.14       17.21

Profit before Exceptional Items and Tax              70.38     (98.13)

Exceptional Items                                        -           -

Profit Before Tax                                    70.38     (98.13)

Provision for Deferred Tax (Asset)                   28.10           -

Profit After Tax                                     98.48     (98.13)

Balance of Profit/(Loss) carried to 
Balance sheet                                     (394.74)    (493.22)

The Company achieved the total revenue of Rs. 2634.66 lakhs as against Rs.2459.23 lakhs achieved during the previous year ended on 31st March, 2013.

The Profit for the year was Rs. 98.48 lakhs as against the Loss of Rs.98.13 lakhs during the previous year.

3. Board for Industrial & Financial Reconstruction:

The Company has been declared as a sick unit by BIFR (Board for Industrial & Financial Reconstruction) since 19.06.2000 under Case No.200/1999.The BIFR has sanctioned a Rehabilitation Scheme for the Company (SS-07) vide their Order dated 31.10.2007.This Rehabilitation Scheme is under implementation and with the support of the scheme the Company has generated profit of Rs. 98.48 Lakhs during the year.

The BIFR has granted various reliefs and concessions in its above referred order necessary for rehabilitation of our Company. One of such concessions was granted in the form of exemption from payment of Sales Tax/ VAT for a period of 5 years from cut-off date of the scheme i.e. 31.03.2007 during rehabilitation period. This concession was denied by the Sales Tax Authority of the State Government of Maharashtra during the financial year 2011-12. Against this denial the Company has filed appeal with the BIFR praying to direct the Sales Tax Authorities to grant relief to Our Company. The Final Judgment is yet to be ordered by the BIFR. The Board of the Company is hopeful for a positive order from BIFR.

4. DIVIDEND:

In view of the accumulated losses Directors regret their inability to recommend any dividend for the year.

5. TRANSFER TO RESERVES:

In view of accumulated losses the Company is unable to transfer any amount to the General Reserves.

6. DIRECTORS:

Pursuant to the provisions of the Companies Act, 2013 and Articles of Association of the Company, Mr. Subhashchandra P. Patil, Director of the Company, retire by rotation at this Annual General Meeting, and being eligible, offers himself for re-appointment.

7. DIRECTORS' RESPONSIBILITY STATEMENT:

Pursuant to the requirement under Section 217(2AA) of the Companies Act, 1956, with respect to Directors' Responsibility Statement, it is hereby confirmed that:

i) in the preparation of the accounts for the financial year ended 31st March, 2014, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

ii) the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that were 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 of the Company for the year under review;

iii) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provision of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv) the Directors have prepared the accounts for the financial year ended 31st March, 2014 on a going concern basis, despite the fact that the Company's net worth is still negative. The Company's Rehabilitation Scheme as sanctioned by BIFR is under implementation. The Directors are very much hopeful that the Company's performance will improve in the forth coming financial years.

You are aware that the Company is a sick Company and therefore there has been frequent turnover of the required personnel. Further despite the Companies efforts to employ whole time Company Secretary, it is unable to employ qualified Company secretary as per the provisions of Section 203 of the Companies Act, 2013.

8. MANAGEMENT DISCUSSION AND ANALYSIS REPORT:

The Management Discussion and Analysis Report for the year under review, as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges in India, is presented in a separate section which forms, part of the Annual Report.

9. AUDITORS AND AUDITORS' REPORT:

M/s. Vinod K. Mehta & Co., Chartered Accountants, (Registration No. 111508W), the Auditors of the Company hold their office until the conclusion of the ensuing Annual General Meeting and are recommended for re-appointment as the Company's Statutory Auditors from the ensuing Annual General Meeting till the conclusion of the Thirtieth Annual General Meeting. The Company has received their willingness to act as Auditors of the Company along with a letter from them to the effect that their appointment, if made, would be within the limits prescribed under Section 139 and 141 of the Companies Act, 2013.

Further, it may be noted that M/s Vinod K. Mehta & Co., Chartered Accountants of the Company were appointed as the Auditors in the Extra Ordinary General Meeting held on 14th November, 2013, as our earlier auditor i.e. M/ s. B.V. Shah and Associates had intimated their unwillingness to continue as auditors with the Company due to certain pre-occupations.

The Notes on Accounts referred to in the Auditors' Report are self-explanatory and do not call for any other comments.

10. CORPORATE GOVERNANCE REPORT:

The Company is committed to maintain the highest standard of Corporate Governance and adhere to the Corporate Governance requirements set out by SEBI. The Company has also implemented several best Corporate Governance Practices as prevalent globally.

The Report on Corporate Governance as stipulated under Clause 49 of the Listing Agreement forms part of the Annual Report.

The requisite Certificate from the Auditors of the Company confirming compliance with the condition of Corporate Governance as stipulated under the aforesaid Clause 49 is attached to this Report.

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

The particulars relating to conservation, technology absorption, foreign exchange earnings and outgo, as required to be disclosed under Section 217(1)(e) of the Companies Act,1956 read with Companies (Disclosure of Particulars in the Report of Board of Directors) Rules,1988 are provided in the Annexure-A to this Report.

12. COST AUDITORS:

The Board of Directors at their meeting held on 13th June, 2014 appointed M/s V V & Associates a firm of Cost Accountants, as the Cost Auditors of the Company to conduct the audit of the Cost Accounts maintained by the Company in respect of ice-cream and frozen desserts for the financial year 2014-2015.

13. PERSONNEL:

There was no employee employed during the year or part of the year drawing remuneration, which falls within the purview of the provisions of section 217(2A) of the Companies Act, 1956.Therefore the statement for the same is not attached.

14. STATUTORY DISCLOSURES:

None of the Director's of your Company is disqualified as per the provisions of Section 164(1) of the Companies Act, 2013. Your Directors have made necessary disclosures, as required under the various provisions of the Act and Clause 49 of the Listing Agreement.

15. ACKNOWLEDGEMENT:

Your Directors would like to express their sincere appreciation of the co-operation and assistance received from shareholders, bankers, regulatory bodies and other business constituents during the year under review. Your Directors also wish to place on record their deep sense of appreciation for the commitment displayed by all executives, officers and staff, resulting in the successful performance of the Company during the year.

                                         For and on behalf of the Board
                                For VADILAL DAIRY INTERNATIONAL LIMITED

                                             Sd                      Sd
                             Shailesh R. Gandhi  Subhaschandra P. Patil
Place: Mumbai                 Managing Director                Director
Date: 23rd August, 2014           DIN: 01963172           DIN: 01872909