VAPI ENTERPRISE LIMITED,

(Formerly Known as Vapi Paper Mills Limited )

The Directors have pleasure in presenting the 40th Annual Report of the Company together with Audited statement of Accounts for the year ended 31st March, 2014.

1. FINANCIAL RESULTS :

                                                (Rupees in Lacs)
                                              2013-14      2012-13 

Net Sales and Other Income                     108.37        95.51

Gross Profit / (Loss)                           52.43     (132.59)

Less: Depreciation                              14.85        14.89

Profit / (Loss) before Tax                      37.58     (147.48)

Less : Provision for Income Tax                     -            -

Deferred Tax                                        -            -

Net Profit / (Loss) After Tax                   37.58     (147.48)

Less: Extra Ordinary Items                     (7.18)      (20.34)

Net Profit / (Loss) After Tax & Extra 
Ordinary Items                                  30.40     (167.82)

Add : Balance of Profit/(Loss) 
brought forward                             (1621.22)    (1453.40)

Surplus / (Deficit) carried to Balance 
Sheet                                       (1590.82)    (1621.22)

2. DIVIDEND:

The Directors do not recommend any Dividend on Equity Shares for the year ended 31st March, 2014

3. OPERATIONS:

The Company has earned Net Revenue of Rs. 108.37 lacs during the year. The company has earned Net Profit of Rs. 30.39 lacs during the year. The cash profit from operations pertaining to current year mentioned above is Rs. 52.43 lacs.

The company and the management continue to look for opportunities to enter new businesses at the opportune time of the business cycle. As per the conservative policy of the company, the management will take value enhancing decisions at the appropriate time.

As the company is not presently engaged in any manufacturing operations, disclosures pursuant to section 217(1) (e) of the Companies Act, 1956 related to Conservation of Energy, Power and Fuel Consumption, Particulars with respect to Absorption, Adaption and Innovation, Foreign exchange Earnings and Outgo is not applicable and does not require any additional disclosures except that included in the notes to accounts.

4. FIXED DEPOSITS:

At the end of the financial year, there was no overdue Deposits.

5. DIRECTORS:

In accordance with the provisions of the Companies Act, 1956, Smt. Laxmiben J. Patel retires by rotation at the ensuring Annual General Meeting and being eligible, offer himself for re-appointment.

6. DIRECTORS' RESPONSIBILITY STATEMENT:

Pursuant to Sub Section (2AA) of Section 217 of the Companies Act, 1956, the Board of Directors of the Company hereby state and confirm that:

i. In the preparation of the Annual Accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

ii. The Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that year;

iii. The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions 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 annual accounts on a going concern basis.

7. INSURANCE:

The Insurable interest in all the properties of the company including buildings and other assets have been adequately insured considering the age, condition and useful life.

8. DISCLOSURE OF PARTICULARS:

Information required under the Companies (Disclosure of Particulars in Report of Board of Directors) Rules, 1988, relating to conservation of energy, technology absorption and foreign exchange earnings and outgo is not required to be attached as the company did not carry out any manufacturing activities during the year.

9. PARTICULARS OF EMPLOYEES:

Information pursuant to Section 217 (2A) of the Companies Act, 1956 read with Companies (particulars of Employees) Rules, 1975 as amended is not attached as the company did not have any such employee employed during the year under review.

10. CORPORATE GOVERNANCE:

The provisions of clause 49 of Listing Agreement with Mumbai Stock Exchange relating to Corporate Governance are not yet applicable to your company as paid-up capital of the company is below prescribed limit.

11. AUDITORS:

M/S Chirag N. Shah and Associates, Chartered Accountants retire at the forthcoming Annual General Meeting and being eligible, offer themselves for re-appointment. You are requested to appoint Auditors to hold office until the next Annual General Meeting and fix their remuneration.

12. AUDITORS REPORT OBSERVATIONS:

Your Directors refer to the observations made by the Auditors in their report and wish to inform as under: 1. The reference to the qualification with respect to the realisability of Long Term Deposits, Loans and Advances and Trade Payables, the Directors wish to state that these are accounted for with maximum prudence and conservative accounting approach and in the opinion of the Directors are fully realizable.

Maximum effort is being pursued to obtain confirmation certificates from such parties in order to satisfy Audit requirements.

2. A large majority of the fixed assets of the company consists of land, building, road works, general electrification, water works and general maintenance equipment. The fixed assets related to machinery and old stocks and stores and spares have largely been disposed of or written of. Hence the company is in the process of compiling the revised fixed assets register and which will be completed in due course to satisfy Audit requirements.

3. The company's accounts are being reported as a going concern inspite of negative networth of the company as the company is generation cash profits and in the opinion of the Directors, the company will eventually turn networth positive. The Directors will also explore mechanisms to infuse funds into the company in order to return to netwoth positive.

4. Unsecured Loans received by the company are primarily ICD from group companies and loans from Directors. These were taken to meet pressing and heavy financial needs of the company in the past. These loans are non-interest bearing and have been fully disclosed in the notes concerning related party transactions. Apart from these loans, the company has not accepted any unsecured loans from the public.

                                   For and on behalf of the Board

                                Sd/-                 Sd/-     
                                Manoj R. Patel       Rajeev R. Patel 
                                DIN No. 00485197     DIN No.00510532