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Auditor Report of Well Pack Papers & Containers Ltd.

Mar 31, 2010

We have audited the attached Balance sheet of Well Pack Papers & Containers Ltd. as at 31st March, 2010 and also the Profit and Loss Account 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 auditing standards generally accepted in India. Those standards required 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 check 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.

1. We report as follows as required by the companies (Auditors Report) order 2003 issued by the Central Government of India, In terms of section 227 (4A) of the companies Act,1956, we enclose in the Annexure A statement on the matters specified in paragraph 4 and 5 of the said order..

2. Further to our comments in the Annexure referred to in paragraph 1 above, e report that:

(a) We have obtained all the informations and explanations, which to the best of our knowledge and belief were necessary for the purposes of audit;

(b) 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 the books.

(c) The Balance Sheet, Profit And Loss Account and Cash Flow statement dealt with by this report are in agreements with the books of account;

(d) In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow statement dealt with by this report comply with the Accounting standards referred to in subsection (3C) of section 211 of the Companies Act, 1956 except accounting standard 13 "Accounting for Investment" and accounting standard 22 "Accounting for Taxes on Income".

(e) On the basis of written representations received from the Directors, as on 31st March, 2010 and taken on record by the Board of Directors, we report that none of the Directors is disqualified as on 31st March,2010 from being appointed as a Directors in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956;

(f) in our opinion, and to the best of our information and according to the explanation given to us, the said accounts subject to.

(i) Note No. 12 regarding no provision having been made for decline in the value of investments amounting to Rs.0.46 lacs for the reason stated therein. (ii) Note No. 18 regarding short provision having been made for deferred tax liability up to 31/03/2010 amounting to Rs.109.78 lacs. Due to above Non/short-provisions, the profit for the year and reserve and surplus are overstated by Rs. 110.24 lacs and read with other notes there on, give the information required by the Companies Act, 1956 in the manner so required and give an true and fair view in conformity with the accounting Principles generally accepted in India.

(i) In the case of the Balance Sheet, of state of affairs of the company as at 31st March, 2010; and

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

(iii) In the case of Cash Flow statement of the Cash Flows for the year ended on that date.

ANNEXURE TO THE AUDITORS REPORT (Referred to in paragraph 1 of our report of even date)

(I) The nature of the Companys business / activities during the year have been such that clauses (xiii) and (xiv) of paragraph 4 of the Companys (Auditors Report) Order, 2003 are not applicable to the Company.

(II) (a) The Company has maintained proper records showing full particulars including quantitative details and situation of its fixed assets. However, the same require to be updated.

(b) All the assets have not been physically verified by the management during the year but there is a regular programme of verification, which in our opinion, is reasonable having regard to the size of the company and the nature of its assets, As explained the discrepancies, if any between physical verification and fixed assets, records will be ascertained after the records are updated.

(c) The company has not disposed of a substantial part of fixed assets during the year.

(III) (a) As explained to us, the inventories were physically verified during the year by the management at reasonable intervals.

(b) In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventories followed by the management were 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 verification between the physicals stocks and book records.

(IV) (a) According to the information and explanations given to us, the company has not granted any loans, secured or unsecured to from 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 or unsecured from companies firms or other parties covered in the register maintained under section 301 of the companies Act, 1956.

(V) 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 with regard to purchase of inventories, fixed assets and with regard to the sale of goods during the course of our Audit, we have not observed any continuing failure to correct major weaknesses in internal controls.

(vi) (a) According to the information and explanations given to us, we are of the opinion that the transactions that needs to be entered in to the register maintained under Sections 301 of the companies Act, 1956 have been so entered.

(b) According to the information and explanations given to us and excluding certain transactions of purchase of goods and material of special nature for which alternate quations are not carailabre, where each of such transactions is in excess of 5 Lakhs in respect of any party, in our opinion, the transactions have been made at prices which are Prima Facie reasonable having regards to the prevailing market prices at the relevant time.

(vii) In our opinion and according to the information and explaintions given to us the company has not accepted deposits from the public.

(viii) In our opinion the company has an internal audit system commensurate with the size and nature of its business.

(ix) We have reviewed the books of account maintained by the company relating to the manufactures of Kraft Paper pursuant to the rules made by the Central Government for the maintenance of cost records under section 209 (1) (d) of the companies act,1956 and are of the opinion that prima facie the prescribed accounts and records have been maintained. We have not however, made a detailed examination of the records with a view to determining whether they are accurate or complete.

(x)(a) According to the information and explanations given to us, the company has been generally regular in depositing undisputed statutory dues, including Provident Fund, Investor Education and Protection Fund, Income Tax, VAT, CST, Wealth Tax, Service Tax, Custom Duty, Cess and other material statutory dues with appropriate authorities during the year. According to the information and explanations given to us no undisputed amounts payable in respect of Income Tax, Wealth Tax, VAT, CST, Customs Duty and Excise Duty were outstanding as at 31st March, 2010 for a period of more than six months from the date they became payable.

(b) According to the informations and explanations given to us, there are no cases of non- deposit with the appropriate authorities of disputed dues of VAT/CST/Excise duty/Custom duty/Income tax/Wealth tax/Service tax/Cess and any other statutory dues with the appropriate authorities during the year.

(c) According to the information and explanations given to us, there are no dues of Sales Tax, Custom Duty, Wealth Tax, Service Tax, Excise Duty and Cess which have not been deposited on account of any dispute, except the demands for a Income Tax raised by the department for Rs.8.65 lacs which is disputed by the company.The details are as under:

Asst.Year Amount Rs.in lacs Forum where dispute is pending

1997-98 8.65 Honble CIT (Appeal) Ahmedabad

(xi) The company does not have accumulated losses as at the end of the year and thej company has not incurred cash losses during the current and the immediately preceding financial year.

(xii) Based on our audit procedure and on the basis of information given by the management, we are of the opinion that the company has not defaulted in the repayment of dues to financial institutions.

(xiii) According to the informations and explanations given to us, the company has not granted loans and advances on the basis of security by way of pledge of shares,; debentures and other securities.

(xiv) According to the information and explanations given to us, the company has not given any guarantee for loan taken by others from banks or financial institutions.

(xv) On the basis of review of utilisation of funds pertaining to term loans on overall basis and related information as made available to us, the term loans taken by the company were applied during the year for the purpose for which they were obtained.

(xvi) According to the cash flow statement and other records examined by us and the informations and explanations given to us, on an overall basis, funds raised on short term basis have prima facie not used during the year for long term investment.

(xvii) According to the information and explanations given to us, the company has made; preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Act. In our opinion, the price at which shares have; been issued is not prejudicial to the interest of the company.

(xviii) During the period covered by our audit report, the company has not issued debentures.

(xix) The company has not raised money by any public issues during the year and hence the question of disclosure and verification of end use of such money does not arise.

(xx) To the best of our knowledge and belief and according to the information and explanations given to us, no fraud on or by the company was noticed or reported during the year.

For, Babubhai Patel & Co. Chartered Accountants

Place : Ahmedabad B. P. PATEL

Date : 26th August, 2010 (SOLE PROPRIETOR)

( M.No.9376) FR NO.100817-W

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