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Auditor Report of Acclaim Industries Ltd.

Mar 31, 2010

We have audited the attached Balance Sheet of ELPRO PACKAGING LIMITED, as at 3 Ist March 2010, the Profit and Loss Account and Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with the auditing standards generally accepted in India.Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.We believe that our audit provides a reasonable basis for our opinion.

As required by the Companies (Auditors Report) Order, 2003 issued by the Central Government of India in terms of sub section (4A) of section 227 of the Companies Act, 1956, we enclose in the Annexure, a statement on the matters specified in paragraphs 4 and 5 of the said Order.

Further to our comments in the Annexure referred to above, we report that:

(i) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purpose of our audit;

(ii) In our opinion, proper books of account as required by law have been kept by the company so far as appears from our examination of those books;

(iii) The Balance Sheet, Profit and Loss Account and the Cash Flow Statement dealt with by this report are in agreement with the books of account;

(iv) In our opinion, the Balance Sheet, the Profit and Loss Account and the Cash Flow Statement dealt with by this report comply with the accounting standards referred to in sub section (3C) of section 21 I of the Companies Act, 1956;

(v) On the basis of written representations received from the directors, as on 31s March, 2010 and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 3 I March, 2010 from being appointed as a director in terms of clause (g) of sub section (I) of section 274 of the Companies Act, 1956;

(vi) In our opinion and to the best of our information and according to the explanations given to us, the said accounts give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(a) In the case of the Balance Sheet, of the state of affairs of the company as at 31s March, 2010;

(b) In the case of the Profit and Loss Account, of the profit for the year ended on that date.

(c) In the case of the Cash Flow Statement, of the Cash Flows for the year ended on that date.

Subject to following:

d) The accounts of the company are drawn upon going concern basis despite of the fact that more than fifty percent of the Companys net worth is eroded. ii) The Company has not engaged a Whole Time Company Secretary as required by section 383 A of the Companies Act, I9S6.





ANNEXURE TO THE AUDITORS REPORT

The Annexure referred to in the auditors report to the members of Elpro Packaging Limited for the year ended 3 I March, 2010. We report that:

(i) Fixed Assets:

(a) The company is maintaining proper records showing full particulars, including quantitative details and situation of fixed assets.

(b) The company has a programme for physical verification of fixed assets at periodic intervals. In our opinion, the frequency of verification is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such verification.

(c) During the year, the company has not disposed off any part of the fixed assets.

(ii) Inventory:

(a) The Management has conducted physical verification of inventory at reasonable intervals. In our opinion, the frequency of verification is reasonable.

(b) The procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business.

(c) In our opinion and according to the information and explanations given to us, the Company has maintained proper records of its inventories and no material discrepancies were noticed on physical verification.

(iii) (a) The Company has not granted any loans, secured and unsecured, to companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956.

(b) The Company has not taken any loans, secured and unsecured, from companies, firm or other parties covered in the register maintained under section 301 of the Companies Act, 1956.

(iv) In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the company and the nature of its business. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal control systems.

(v) (a) According to the information and explanations given to us, we are of the opinion that the particulars of all contracts or arrangements that need to be entered into the register maintained under section 301 of the Companies Act, 1956 have been so entered.

(b) In our opinion and according to the information and explanations given to us, the Company does not have any transaction made in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Companies Act, 1956 and exceeding the value of rupees five lakhs in respect of any party during the year.

(vi) The company has not accepted any deposits under the provisions of Sections 58A and 58AA of the Act and the rules framed there under.

(vii) The Company does not have formal internal audit system. Internal audit is carried out by in house staff, in our opinion, there is a scope for further improvement in the internal audit system.

(viii) To the best of our knowledge and according to the information and explanations given to us, the Central Government has not prescribed any rules for the maintenance of cost records under section 209( I )(d) of the Companies Act, 1956.

(ix) (a) According to the information and explanations given to us, and the records of the Company examined by us, in our opinion, the company is generally regular in depositing the undisputed statutory dues, including provident fund, investor education and protection fund, employees state insurance, income tax, sales tax, wealth tax,

service tax, customs duty, excise duty, cess and other material statutory dues as applicable, with appropriate authorities.

(b) (i) According to the information and explanations given to us and the records of the Company examined by us, no undisputed amounts payable in respect of income tax, and cess were in arrears, as at 31 March 2010 for a period of more than six months from the date they became payable.

(ii) According to the information and explanations given to us, there are no dues of sales tax, income tax, custom duty, wealth tax, excise duty and cess which have not been deposited on account of any dispute.

(x) In our opinion, the accumulated losses of the company are more than fifty percent of its net worth. Further, the company has not incurred cash losses during the financial year covered by our audit and the immediately preceding financial year.

(xi) In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to a financial institution, bank or debenture holders.

(xii) The Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) In our opinion the Company is not a Chit Fund Company or Nidhi / Mutual Benefit Fund / Society.Therefore the paragraph 4 (xiii) Order is not applicable to the Company.

(xiv) In our opinion, the Company has maintained proper records of transactions and contracts relating to dealing or trading in shares, securities, debentures and other investments during the year and timely entries have been made therein. Further, such securities have been held by the Company in its own name.

(xv) According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions, during the year.

(xvi) The Company has not raised any term loan during the year under consideration.

(xvii) According to the information and explanations given to us, and on an overall examination of the balance sheet of the company, we report that no fund raised on short basis have been used for long term investment during the year.

(xviii) According to the information and explanations given to us, the Company has not made preferential allotment of shares to parties and companies covered in the Register maintained under Section 301 of the Companies Act, 1956.

(xix) As per the information and explanations given to us, the Company has not issued any debenture.

(xx) The company has not raised any money by public issue during the year, and hence paragraph 4(xx) of the Order is not applicable.

(xxi) During the course of our examination of the books and records of the Company, carried out in accordance with generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instances of material fraud on or by the Company, noticed or reported during the year, nor have been informed of such case by management.

For Arvind Darji Associates

Chartered Accountants

Firm Registration No: 100576W

Sd/-

Arvind M Darji

Proprietor

Membership No. 041748

Place : Pune

Date :23rd August, 2010

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