Dear Members,
 
 Your Directors are pleased to present the Thirteenth Annual Report
 together with the Audited Accounts of the Company for the year ended on
 31st March, 2003.
 
 FINANCIAL RESULTS                               (Rs. In Lacs)
 
                                               Year Ended   Year Ended
                                               31.03.2003   31.03.2002
 
 Sales & Other Income                            9416.32       6408.68
 
 Profit before Interest                           168.93        142.91
 depreciation & tax
 
 Less: Interest                                    78.24         79.89
 
 Profit/(Loss) before                              90.69         63.02
 depreciation and tax
 
 Less: Depreciation                                51.13         50.32
 
 Less: Provision for Tax                            3.12          0.97
 
 Profit/(Loss) after interest                      36.44         11.73
 depreciation, tax
 
 Less : Provision for Deferred                     21.71          5.49
 Tax liability
 
 Add : Balance Brought Forward                      8.39         65.87
 
 Deferred tax assets/liabilities                  (63.72)       142.91
 as at 1.4.2001
 
 Balance carried over                              23.12          7.67
 to the Balance Sheet
 
 DIVIDEND
 
 Since the profits for the year 2002-2003 are inadequate the Board of
 Directors do not recommend any dividend for the year under review.
 
 MANAGEMENT DISCUSSION & ANALYSIS
 
 Operations
 
 The sales and other income during the year under review was Rs.9416.32
 Lacs as against Rs.6408.68 Lacs during the previous year. There has
 been an increase of 46.93% in the sales & other income during the year
 2002-2003. The production of Vanaspati and refined oils aggregated to
 23291.291 tones as against 19961.754 tones in the previous year. During
 the year the production of Vanaspati and Refined Oils increased by
 16.68%.  The Market conditions for edible oils industry continued to be
 unstable due to continuous intervention by the Government in the form
 of import duty and other changes. There has been a sharp increase in
 the prices of the edible oils during the year under review which led to
 the lower consumption of vanaspati. This was further compounded by
 duty-free import of cheap vanaspati from Nepal for a part of the year
 which was partially stemmed by quota restrictions imposed on imports
 from Nepal. The Company's endeavour to improve efficiency,
 profitability and strengthening the distribution network has resulted
 in better performance during the year under review.
 
 SWOT Analysis for the Company
 
 (a) Strengths
 
 - Brand Equity
 
 The products of Kanha Vanaspati Ltd. under the brand name PUJA enjoy
 high brand equity, and there is wide consumer preference for the
 products of the Company in comparison to other competitive products.
 The PUJA brand vanaspati is one of the largest selling brand in Uttar
 Pradesh and Bihar.
 
 - Distribution Network
 
 The company has established a wide distribution network in Uttar
 Pradesh. In addition to company's own offices and Depots, the company
 has approx. 350 dealers/distributors.  The Company is selling its
 products in the rural areas'of Uttar Pradesh.
 
 - Market Leadership
 
 The company has established its presence in the edible oils segment in
 the state of Uttar Pradesh. In Uttar Pradesh, the company has 12% share
 in the vanspati industry. The company is hopeful to maintain its lead
 in the industry in the coming year also.
 
 - Product Development
 
 The company is capable to improve the quality of existing products and
 introduction of new offerings. Focus on research will continue which
 will enable the company to launch the improved and new products of
 superior quality to meet the consumer performance and expectations from
 time to time.
 
 - Sound Plants
 
 The existing plant of the company is technically sound and the
 modernization work is done from time to time and as per the
 requirement.
 
 (b) Weaknesses
 
 - Competition
 
 The company is facing competitions with other big players in the
 industry which result in low margin and hence the low profitability.
 
 - Raw Material
 
 In the Vanaspati cost the raw material content is very high.  The price
 fluctuation of the raw material content leads to high volatility.
 
 (c) Opportunities
 
 In the Vanaspati Industry, there is still a vast potential for the
 enhanced consumption as the per capital consumption of vanaspati and
 edible oils is only 1.4 kgs. and 8.00 kgs.  respectively whereas the
 minimum nutrition requirement per capita as per Ministry of Health is
 12.00 kgs. Therefore, there are opportunities for the growth in the
 industry.
 
 (d) Threats
 
 The vanaspati and edible oils Industry is subject to intense controls
 by the Government. Any changes in the Govt. Policy may affect the
 profitability.
 
 Internal Control Systems
 
 The company has evolved a systems of internal controls to ensure that
 the assets are safeguarded and transactions are authorized, recorded
 and correctly reported. The internal control system is supplemented by
 management reviews. The scope of internal audit covers a wide veriety
 of operational methods and ensures compliance with specified standard
 with regard to availability and suitability of policies and procedures,
 extent of adherence reliability of management information system,
 authorization procedures in including steps for safeguarding of assets.
 
 Human Resources
 
 The company lays great emphasis on proper management of human resources
 and believes that this is the most important ingredient for continuous
 growth. Suitable steps are taken from time to time to have a proper
 composition of skilled and unskilled workers and the training is
 imparted to the employees working at various levels as and when
 required.
 
 Cautionary Statement
 
 The statements in this report, particularly those which relate to
 Management Discussions and Analysis are the forward looking statements,
 within the meaning of applicable laws and regulations.  Actual results
 may be different from those, which are expressed or implied.
 
 DIRECTORS
 
 In accordance with the provisions of the Companies Act, 1956 and the
 Articles of Association of the company Shri Ajay Agarwal, Director of
 the Company retires by rotation and being eligible offers himself for
 re-appointment.
 
 DIRECTOR'S RESPONSIBILITY STATEMENT
 
 Pursuant to the provisions of Section 217(2AA) of the Companies Act,
 1956 Directors of the Company state:
 
 1.  That in the preparation of the annual accounts, the applicable
 accounting standards have been followed;
 
 2.  That the Directors have selected such accounting policies and
 applied them consistently and made judgements and estimates that are
 reasonable and prudent so as to give a true and fair view of the state
 of affairs of the Company at the end of the financial year and of the
 profit or loss of the Company for that period;
 
 3.  That the Directors have taken proper and sufficient care for the
 maintenance of adequate accounting records in accordance with the
 provisions of the Act for safeguarding the assets of the Company and
 for preventing and detecting fraud and other irregularities;
 
 4.  That your Directors have prepared the annual accounts on a going
 concern basis.
 
 AUDITORS
 
 M/s. V. Tripathi & Co. Chartered Accountants, Statutory Auditors of the
 company, who hold office of the Auditor until the conclusion of this
 Annual General Meeting, being eligible for re-appointment, has conveyed
 their willingness and eligibility in terms of Section 224 (1B) of the
 Companies Act, 1956. Your Directors recommend their appointment as
 Auditors of the company to hold office from the conclusion of this
 Annual General Meeting up to the conclusion of next Annual General
 Meeting.
 
 AUDITORS' REMARKS
 
 Auditors' Remarks are self explanatory and require no clarification
 from the Directors.
 
 COST AUDIT
 
 The Central Government has directed Cost Audit to be carried out every
 year in respect to Vanaspati. Cost Audit is in progress and the reports
 thereof will be submitted to the Central Government.
 
 FIXED DEPOSITS
 
 There was unclaimed deposit for Rs. 14.10 Lacs as on 31st March, 2003.
 
 DEMATERIALISATION OF SHARES
 
 The fully paid up equity shares of your Company can be traded on the
 stock exchange only in demat form w.e.f. 30.10.2000. The shareholders
 have the option to hold their shares in demat form by opening a
 depository A/c with DP of their choice.
 
 CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION & FOREIGN EXCHANGE
 EARNINGS & OUTGO
 
 The information relating to conservation of energy, technology
 absorption and foreign exchange earnings & outgo as required under
 section 217(1)(e) of the Companies Act, 1956 read with the Companies
 (Disclosure of particulars in the report of Board of Directors) Rules,
 1988 is given in the Annexure-A which forms part of the Directors'
 Report.
 
 PARTICULARS OF EMPLOYEES
 
 There has been no employee who was getting the remuneration in excess
 of the prescribed limits under section 217(2A) of the Companies Act,
 1956. Therefore, the information as required under section 217(2A) of
 the Companies Act, 1956 read with Companies (Particulars of Employees)
 Rules, 1975 has not been furnished.
 
 EMPLOYEE RELATIONS
 
 Industrial relations remained cordial and harmonious at all levels
 during the year under review. Your Directors are pleased to acknowledge
 the sincere and dedicated efforts of the employees of the Company at
 all levels and would like to thank them for the same.
 
 CORPORATE GOVERNANCE
 
 A report on the Corporate Government alongwith Auditors' Certificate is
 attached to the report.
 
 INSURANCE
 
 All properties and insurable assets of the Company including Building,
 Plant & Machinery and Stocks has been adequately insured whenever
 considered necessary and to the extent required.
 
 SEGMENT - WISE PERFORMANCE
 
 Your Company is engaged in the manufacturing of edible oils and
 vanaspati, which is in the context of Accounting Standard-17 issued by
 the Institute of Chartered Accountants of India is considered the only
 business segment i.e. Edible Oils Segment.
 
 ACKNOWLEDGMENTS
 
 Your Directors convey their sincere thanks for the support, guidance
 and cooperation extended to the Company by various agencies of the
 Central government, State Governments, Financial Institutions, Banks,
 Customers, Distributors and Suppliers of the Company. The Directors
 also acknowledge the trust and confidence the shareholders have placed
 in the Company. Your Directors also wish to place on record their
 appreciation for the sincere and dedicated services of the employees of
 the Company working at all levels.
 
                                    By Order of the Board of Directors
                                        for KANHA VANASPATI LIMITED
 
                                              K.B. Agarwal
                                          (Managing Director)
 
 Place : Delhi                                V.B. Agarwal
 Date  : 30th July, 2003                (Jt. Managing Director)