Exhibit 99.3

AUDITORS REPORT ON FINANCIAL STATEMENTS

To the Stockholders of

Papeles Allende, S.L.:



|1. | We have audited the financial statements of Papeles Allende, S.L comprising the balance sheet as of December 31, 2007, and the related statement of income and notes to
financial statements for the year then ended. The preparation of these financial statements is the responsibility of the Companys directors. Our responsibility is to express an opinion on the financial statements taken as a whole based on our
audit work performed in accordance with generally accepted auditing standards, which require examination, by means of selective tests, of the documentation supporting the financial statements and evaluation of their presentation, of the accounting
principles applied and of the estimates made.
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|2. | As required by Spanish corporate and commercial law, for comparison purposes the directors present, in addition to the 2007 figures for each item in the balance sheet, statements of
income and of changes in financial position, the figures for 2006. Our opinion refers only to the 2007 financial statements. On March 30, 2007, we issued our auditors report on the 2006 financial statements, which contains an unqualified
opinion.
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|3. | In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of Papeles Allende, S.L. at December 31, 2007 and the
results of its operations the funds obtained and applied by it and for the year then ended, in conformity with generally accepted accounting principles and standards applied on a basis consistent with that of the preceding year.
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|4. | The accompanying directors report for 2007 contains the explanations which the directors consider appropriate about the Companys situation, the evolution of its business
and other matters, but is not an integral part of the financial statements. We have checked that the accounting information in the directors report is consistent with that contained in the financial statements for 2007. Our work as auditors
was confined to checking the directors report with the aforementioned scope, and did not include a review of any information other than that drawn from the accounting records.
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

PLANCONTROL AUDITORES Y CONSULTORES, S.L.

Registered in ROAC Ander no
S1266

Manuel Indarte Latorre

March 28, 2008



---

Independent Auditors Report

To the Stockholders of Papeles Allende, S.L.:

We have audited the accompanying balance sheets of Papeles
Allende, S.L. (the Company) as of December 31, 2006, 2005 and 2004, and the related statements of income for the years then ended, all expressed in euros. These financial statements are the responsibility of the Companys
management. Our responsibility is to express an opinion on the financial statements taken as a whole based on our audit.

We conducted our
audits in accordance with auditing standards generally accepted in the United States of America. 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 audits provide a reasonable basis for our opinion.

In
our opinion, such financial statements present fairly, in all material respects, the financial position of Papeles Allende, S.L. as of December 31, 2006, 2005 and 2004, and the funds obtained and applied by them and the results of their
operations for the years then ended, in conformity with accounting principles generally accepted in Spain.

Accounting principles generally
accepted in Spain vary in certain significant respects from accounting principles generally accepted in the United States of America. The application of the latter would have affected the determination of net income for years ended December 31,
2006, 2005 and 2004, and the determination of stockholders equity and financial position as of December 31, 2006, 2005 and 2004 to the extent summarized in Note 20.

PLANCONTROL AUDITORES Y CONSULTORES, S.L.



---

Translation of financial statements originally issued in Spanish and prepared in accordance with generally accepted
accounting principles in Spain (see Note 20). In the event of a discrepancy, the Spanish-language version prevails.

PAPELES ALLENDE, S.L.

BALANCE SHEETS AT 31 DECEMBER 2007 AND 2006 (In euros)



|             |  |                |  |                                |  |                                                               |  |                |  |                |  |               
|------------ |  | -------------- |  | ------------------------------ |  | ------------------------------------------------------------- |  | -------------- |  | -------------- |  | --------------
|ASSETS       |  |                |  | 2007                           |  | 2006                                                          |  | 2005          
|B)           |  | FIXED ASSETS   |  | 15,084,145.25                  |  | 12,592,177.29                                                 |  | 11,346,223.39 
|             |  |                |  |                                | 
|             |  | I.             |  | Start-up expenses              |  |                                                              |  |               |  |              
|             |  |                |  |                                | 
|             |  | II.            |  | Intangible assets              |  | 1,005,391.83                                                  |  | 581,890.00     |  | 240,981.00    
|             |  |                |  |                                |  |                                                              
|             |  |                |  | 2.                             |  | Concessions, patents, licenses, trademarks and similar assets |  | 5,943.28       |  | 5,943.28       |  | 5,943.18      
|             |  |                |  | 3.                             |  | Goodwill                                                      |  | 15,865,264.69  |  | 15,865,264.69  |  | 15,865,264.69 
|             |  |                |  | 5.                             |  | Computer software                                             |  | 104,339.81     |  | 96,969.38      |  | 87,439.25     
|             |  |                |  | 9.                             |  | Investments in leased property                                |  | 1,194,244.80   |  | 652,405.01     |  | 282,919.67    
|             |  |                |  | 10.                            |  | Amortisation                                                  |  | -16,164,400.75 |  | -16,038,692.36 |  | -16,000,585.89
|             |  |                |  |                                | 
|             |  | III.           |  | Property, plant and equipment  |  | 13,094,111.94                                                 |  | 11,063,297.98  |  | 10,217,816.63 
|             |  |                |  |                                |  |                                                              
|             |  |                |  | 1.                             |  | Land and buildings                                            |  | 9,743,794.27   |  | 8,383,812.97   |  | 8,342,753.01  
|             |  |                |  | 2.                             |  | Plant and machinery                                           |  | 15,915,093.78  |  | 13,329,893.16  |  | 12,048,716.99 
|             |  |                |  | 3.                             |  | Other fixtures, tools and furniture                           |  | 2,347,073.71   |  | 2,185,151.38   |  | 2,016,364.70  
|             |  |                |  | 4.                             |  | Advances on fixed assets and assets under construction        |  | 459,016.21     |  | 905,786.60     |  | 28,702.37     
|             |  |                |  | 5.                             |  | Other property, plant and equipment                           |  | 2,715,645.21   |  | 2,668,222.80   |  | 2,697,314.23  
|             |  |                |  | 7.                             |  | Depreciation                                                  |  | -18,086,511.24 |  | -16,409,568.93 |  | -14,916,034.67
|             |  |                |  |                                | 
|             |  | IV.            |  | Long-term investments          |  | 984,641.48                                                    |  | 946,989.31     |  | 887,425.76    
|             |  |                |  |                                |  |                                                              
|             |  |                |  | 1.                             |  | Investments in group companies                                |  | 415,378.33     |  | 415,378.33     |  | 415,378.33    
|             |  |                |  | 3.                             |  | Investments in associates                                     |  | 450,253.03     |  | 450,253.03     |  | 450,253.03    
|             |  |                |  | 5.                             |  | Long-term investment securities                               |  | 96,102.36      |  | 96,102.36      |  | 66,111.36     
|             |  |                |  | 6.                             |  | Other loans and advances                                      |  | 63,295.07      |  | 41,209.27      |  | 58,160.83     
|             |  |                |  | 7.                             |  | Long-term deposits and guarantees                             |  |                |  |                |  |               
|             |  |                |  |                                |  |                                                               |  | 109,865.72     |  | 94,299.35      |  | 47,775.24     
|             |  |                |  | 8.                             |  | Provisions                                                    |  | -150,253.03    |  | -150,253.03    |  | -150,253.03   
|             |  |                |  |                               
|D)           |  | CURRENT ASSETS |  | 21,033,806.35                  |  | 17,672,756.46                                                 |  | 20,298,239.74 
|             |  |                |  |                                | 
|             |  | II.            |  | Inventories                    |  | 1,531,840.86                                                  |  | 1,392,206.43   |  | 1,159,237.46  
|             |  |                |  |                                |  |                                                              
|             |  |                |  | 2.                             |  | Raw materials and other supplies                              |  | 143,993.80     |  | 109,984.79     |  |               
|             |  |                |  | 4.                             |  | Finished goods                                                |  | 1,240,414.94   |  | 1,183,638.55   |  |               
|             |  |                |  | 6.                             |  | Advances                                                      |  | 147,432.12     |  | 98,583.09      |  |               
|             |  |                |  |                                | 
|             |  | III.           |  | Accounts receivable            |  | 17,256,028.80                                                 |  | 14,333,253.99  |  | 13,801,494.80 
|             |  |                |  |                                |  |                                                              
|             |  |                |  | 1.                             |  | Trade receivables                                             |  | 15,771,393.86  |  | 13,299,660.43  |  |               
|             |  |                |  | 2.                             |  | Receivable from group companies                               |  | 1,462,829.04   |  | 1,026,545.28   |  |               
|             |  |                |  | 3.                             |  | Receivable from associates                                    |  | 215,055.10     |  | 129,409.01     |  |               
|             |  |                |  | 4.                             |  | Sundry receivables                                            |  | 82,244.07      |  | 137,043.29     |  |               
|             |  |                |  | 5.                             |  | Receivable from employees                                     |  |               |  | 345.64         |  |               
|             |  |                |  | 6.                             |  | Tax receivable                                                |  | 311,367.80     |  | 324,093.68     |  |               
|             |  |                |  | 7.                             |  | Provisions                                                    |  | -586,861.07    |  | -583,843.34    |  |               
|             |  |                |  |                                | 
|             |  | IV.            |  | Short-term investments         |  | 199,748.05                                                    |  | 655,332.99     |  | 4,357,410.62  
|             |  |                |  |                                |  |                                                              
|             |  |                |  | 5.                             |  | Short-term investment securities                              |  |               |  | 606,694.21     |  | 4,200,000.00  
|             |  |                |  | 6.                             |  | Other loans and advances                                      |  | 205,077.51     |  | 54,194.60      |  | 162,966.44    
|             |  |                |  | 7.                             |  | Short-term deposits and guarantees                            |  |                |  |                |  |               
|             |  |                |  |                                |  |                                                               |  | 376.61         |  | 150.25         |  | 150.25        
|             |  |                |  | 8.                             |  | Provisions                                                    |  | -5,706.07      |  | -5,706.07      |  | -5,706.07     
|             |  |                |  |                                | 
|             |  | VI.            |  | Cash and cash equivalents      |  | 1,887,504.51                                                  |  | 1,081,341.10   |  | 788,256.93    
|             |  |                |  |                                | 
|             |  | VII.           |  | Prepayments and accrued income |  | 158,684.13                                                    |  | 210,621.95     |  | 191,839.93    
|             |  |                |  |                                |  |                                                               |  |                |  |                |  |               
|             |  |                | 
|TOTAL ASSETS |  | 36,117,951.60  |  | 30,264,933.75                  |  | 31,644,463.13                                                
|             |  |                |  |                                |  |                                                               |  |                |  |                |  |               



---

|                                     |  |                          |  |                                                           |  |                                                |  |               |  |               |  |             
|------------------------------------ |  | ------------------------ |  | --------------------------------------------------------- |  | ---------------------------------------------- |  | ------------- |  | ------------- |  | ------------
|LIABILITIES AND SHAREHOLDERS EQUITY |  | 2007                     |  | 2006                                                      |  | 2005                                          
|A)                                   |  | SHAREHOLDERS EQUITY     |  | 19,532,192.76                                             |  | 18,405,484.18                                  |  | 22,196,974.56
|                                     |  |                          |  |                                                           | 
|                                     |  | I.                       |  | Issued capital                                            |  | 10,635,812.86                                  |  | 10,635,812.86 |  | 10,635,812.86
|                                     |  |                          |  |                                                           | 
|                                     |  | II.                      |  | Issue premium account                                     |  | 2,887,278.36                                   |  | 2,887,278.36  |  | 1,887,278.36 
|                                     |  |                          |  |                                                           | 
|                                     |  | IV.                      |  | Reserves                                                  |  | 4,882,392.96                                   |  | 3,909,177.46  |  | 6,631,105.56 
|                                     |  |                          |  |                                                           |  |                                               
|                                     |  |                          |  | 1.                                                        |  | Legal reserve                                  |  | 2,119,338.14  |  | 1,899,898.94  |  | 1,695,621.16
|                                     |  |                          |  | 5.                                                        |  | Differences on translation of capital to euros |  | 214.21        |  | 214.21        |  | 214.21      
|                                     |  |                          |  | 6.                                                        |  | Other reserves                                 |  | 2,762,840.61  |  | 2,009,064.31  |  | 4,935,270.19
|                                     |  |                          |  |                                                           | 
|                                     |  | VI.                      |  | Profit for the year                                       |  | 2,326,708.58                                   |  | 2,194,391.97  |  | 2,042,777.78 
|                                     |  |                          |  |                                                           | 
|                                     |  | VII.                     |  | Interim dividend paid during the year                     |  | -1,200,000.00                                  |  | -1,221,176.47 |  |             
|                                     |  |                          |  |                                                          
|B)                                   |  | DEFERRED INCOME          |  | 3,320.35                                                  |  | 5,220.31                                       |  | 1,272.06     
|                                     |  |                          |  |                                                           |  |                                               
|                                     |  |                          |  | 1.                                                        |  | Capital grants                                 |  | 3,167.37      |  | 5,067.29      |  |            
|                                     |  |                          |  | 2.                                                        |  | Foreign exchange gains                         |  | 152.98        |  | 153.02        |  | 1,272.06    
|                                     |  |                          |  |                                                          
|C)                                   |  | NON CURRENT LIABILITIES  |  |                                                          |  |                                               |  | 9,108.23     
|                                     |  |                          |  |                                                          
|E)                                   |  | CURRENT LIABILITIES      |  | 16,582,438.49                                             |  | 11,854,229.26                                  |  | 9,437,108.28 
|                                     |  |                          |  |                                                           | 
|                                     |  | II.                      |  | Liabilities to credit institutions                        |  | 1,333,071.62                                   |  | 767,640.97    |  |             
|                                     |  |                          |  |                                                           |  |                                               
|                                     |  |                          |  | 1.                                                        |  | Loans and other liabilities                    |  | 1,333,071.62  |  | 767,640.97    |  |            
|                                     |  |                          |  |                                                           | 
|                                     |  |                          |  | Liabilities to group companies and associates, short-term |  | 1,050,453.96                                   |  | 910,292.02    |  | 456,599.96   
|                                     |  |                          |  |                                                           |  |                                               
|                                     |  |                          |  | 1.                                                        |  | Liabilities to group companies                 |  | 261,640.98    |  | 397,288.56    |  |             
|                                     |  |                          |  | 2.                                                        |  | Liabilities to associates                      |  | 788,812.98    |  | 513,003.46    |  |             
|                                     |  |                          |  |                                                          
|IV.                                  |  | Trade accounts payable   |  | 11,991,340.44                                             |  | 8,674,699.53                                   |  | 7,880,220.64 
|                                     |  |                          |  | 2.                                                        |  | Payable for goods and services                 |  | 11,991,340.44 |  | 8,674,699.53  |  | 7,880,220.64
|                                     |  |                          |  |                                                          
|V.                                   |  | Other non-trade payables |  | 2,207,572.47                                              |  | 1,501,596.74                                   |  | 1,100,287.68 
|                                     |  |                          |  |                                                           |  |                                               
|                                     |  |                          |  | 1.                                                        |  | Tax payable                                    |  | 490,154.09    |  | 382,401.97    |  |             
|                                     |  |                          |  | 3.                                                        |  | Other payables                                 |  | 1,151,296.27  |  | 619,405.26    |  |             
|                                     |  |                          |  | 4.                                                        |  | Accrued wages and salaries                     |  | 566,122.11    |  | 499,789.51    |  |             
|                                     |  |                          |  |                                                           |  |                                                |  |               |  |               |  |             
|                                     |  |                          | 
|TOTAL LIABILITIES AND EQUITY         |  | 36,117,951.60            |  | 30,264,933.75                                             |  | 31,664.,463.13                                
|                                     |  |                          |  |                                                           |  |                                                |  |               |  |               |  |             



---

Translation of financial statements originally issued in Spanish and prepared in accordance with generally accepted
accounting principles in Spain (see Note 20). In the event of a discrepancy, the Spanish-language version prevails.

PAPELES ALLENDE, S.L.

INCOME STATEMENTS FOR THE YEARS ENDED DECEMBER 2007 AND 2006 (In euros)



|      |  |                               |  |                                                                           |  |               |  |               |  |              
|----- |  | ----------------------------- |  | ------------------------------------------------------------------------- |  | ------------- |  | ------------- |  | -------------
|DEBIT |  | 2007                          |  | 2006                                                                      |  | 2005         
|A)    |  | EXPENSES                      |  | 78,856,576.20                                                             |  | 63,531,260.97 |  | 53,101,093.54
|      |  |                               |  |                                                                           | 
|      |  | 2.                            |  | Supplies                                                                  |  | 53,087,561.94 |  | 39,298,350.31 |  | 33,023,823.97
|      |  |                               |  |                                                                           | 
|      |  |                               |  | b) Consumption of raw materials and other consumables                     |  | 52,379,088.99 |  | 38,670,816.17 |  |              
|      |  |                               |  | c) Other external expenses                                                |  | 708,472.95    |  | 627,534.14    |  |              
|      |  |                               |  |                                                                           | 
|      |  | 3.                            |  | Staff costs                                                               |  | 8,139,822.63  |  | 7,548,355.54  |  | 6,624,906.48 
|      |  |                               |  |                                                                           | 
|      |  |                               |  | a) Wages, salaries and similar expenses                                   |  | 5,975,972.59  |  | 5,570,108.21  |  |              
|      |  |                               |  | b) Employee welfare expenses                                              |  | 2,163,850.04  |  | 1,978,247.33  |  |              
|      |  |                               |  |                                                                           | 
|      |  | 4.                            |  | Depreciation and amortisation of fixed assets                             |  | 2,347,860.70  |  | 2,116,578.18  |  | 2,182,164.00 
|      |  |                               |  |                                                                           | 
|      |  | 5.                            |  | Change in current asset provisions                                        |  | 24,716.25     |  | 117,562.63    |  | 65,348.79    
|      |  |                               |  |                                                                           | 
|      |  |                               |  | b) Change in allowance for and losses on uncollectible receivables        |  | 24,716.25     |  | 117,562.63    |  |              
|      |  |                               |  |                                                                           | 
|      |  | 6.                            |  | Other operating expenses                                                  |  | 14,073,291.76 |  | 13,324,862.00 |  | 11,204,850.30
|      |  |                               |  |                                                                           | 
|      |  |                               |  | a) Outside services                                                       |  | 13,942,348.97 |  | 13,207,613.66 |  |              
|      |  |                               |  | b) Taxes other than income tax                                            |  | 130,443.80    |  | 117,195.71    |  |              
|      |  |                               |  | c) Other current operating expenses                                       |  | 498.99        |  | 52.63         |  |              
|      |  |                               |  |                                                                          
|I.    |  | OPERATING PROFIT              |  | 2,986,539.24                                                              |  | 2,931,898.72  |  | 2,687,586,28 
|      |  |                               |  |                                                                           | 
|      |  | 7.                            |  | Interest payable and similar charges                                      |  | 80,605.03     |  | 60,111.64     |  | 30,570.19    
|      |  |                               |  |                                                                           | 
|      |  |                               |  | c) For debts to third parties and similar expenses                        |  | 80,605.03     |  | 60,111.64     |  | 30,570.19    
|      |  |                               |  |                                                                           | 
|      |  | 9.                            |  | Foreign exchange losses                                                   |  | 38,777.65     |  | 43,010.52     |  | 8,875,45     
|      |  |                               |  |                                                                          
|II.   |  | NET FINANCIAL INCOME          |  |                                                                          |  | 63,046.52     |  |             
|      |  |                               |  |                                                                          
|III.  |  | PROFIT ON ORDINARY ACTIVITIES |  | 2,972,384.93                                                              |  | 2,994,945.24  |  | 2,681,480.24 
|      |  |                               |  |                                                                           | 
|      |  | 11.                           |  | Losses on intangible and tangible fixed assets and securities investments |  | 8,380.00      |  | 113,121.92    |  | 62,004.71    
|      |  |                               |  |                                                                           | 
|      |  | 13.                           |  | Extraordinary expenses                                                    |  | 71,405.66     |  | 49,695.93     |  | 73,649.10    
|      |  |                               |  |                                                                           | 
|      |  | 14.                           |  | Expenses and losses from prior years                                      |  | 241,333.44    |  | 98,101.47     |  | 175,717.95   
|      |  |                               |  |                                                                          
|IV.   |  | EXTRAORDINARY PROFIT          |  | 97,144.79                                                                 |  |              |  | 43,139.54    
|      |  |                               |  |                                                                          
|V.    |  | PROFIT BEFORE TAXES           |  | 3,069,529.72                                                              |  | 2,955,902.80  |  | 2,724,619.78 
|      |  |                               |  |                                                                           | 
|      |  | 15.                           |  | Corporate income tax                                                      |  | 742,821.14    |  | 761,510.83    |  | 681,842.00   
|      |  |                               |  |                                                                          
|VI.   |  | PROFIT FOR THE YEAR           |  | 2,326,708.58                                                              |  | 2,194,391.97  |  | 2,042,777.78 



---

|       |  |                             |  |                                                                                       |  |               |  |               |  |              
|------ |  | --------------------------- |  | ------------------------------------------------------------------------------------- |  | ------------- |  | ------------- |  | -------------
|CREDIT |  | 2007                        |  | 2006                                                                                  |  | 2005         
|B)     |  | INCOME                      |  | 81,183,284.78                                                                         |  | 65,725,652.94 |  | 55,788,679.82
|       |  |                             |  |                                                                                       | 
|       |  | 1.                          |  | Net sales                                                                             |  | 80,409,322.95 |  | 64,985,782.96 |  | 55,527,954.49
|       |  |                             |  |                                                                                       | 
|       |  |                             |  | a) Sales                                                                              |  | 68,318,902.21 |  | 53,964,842.21 |  |              
|       |  |                             |  | b) Services provided                                                                  |  | 12,165,349.39 |  | 11,147,683.17 |  |              
|       |  |                             |  | c) Returns and rebates on sales                                                       |  | -74,928.65    |  | -126,742.42   |  |              
|       |  |                             |  |                                                                                       | 
|       |  | 2.                          |  | Increase in inventories of finished goods and work in process                         |  | 56,776.39     |  | 185,000.03    |  | 82,128.27    
|       |  |                             |  |                                                                                       | 
|       |  | 4.                          |  | Other operating income                                                                |  | 193,693.18    |  | 166,824.39    |  | 178,597.06   
|       |  |                             |  |                                                                                       | 
|       |  |                             |  | a) Ancillary and other current operating income                                       |  | 193,693.18    |  | 166,824.39    |  | 178,597.06   
|       |  |                             |  |                                                                                      
|I.     |  | OPERATING LOSS              |  |                                                                                      |  |              |  |             
|       |  |                             |  |                                                                                       | 
|       |  | 7.                          |  | Other interest receivable and similar income                                          |  | 103,747.43    |  | 161,175.46    |  | 29,993.07    
|       |  |                             |  |                                                                                       | 
|       |  |                             |  | c) Other interest income                                                              |  | 82,627.60     |  | 54,481.25     |  |              
|       |  |                             |  | d) Gains on investments                                                               |  | 21,119.83     |  | 106,694.21    |  |              
|       |  |                             |  |                                                                                       | 
|       |  | 8.                          |  | Foreign exchange gains                                                                |  | 1,480.94      |  | 4,993.22      |  | 3,346.53     
|       |  |                             |  |                                                                                      
|II.    |  | NET FINANCIAL LOSS          |  | 14,154.31                                                                             |  |              |  | 6,106.04     
|       |  |                             |  |                                                                                      
|III.   |  | LOSS ON ORDINARY ACTIVITIES |  |                                                                                      |  |              |  |             
|       |  |                             |  |                                                                                       | 
|       |  | 9.                          |  | Profit on disposal of intangible and tangible fixed assets and securities investments |  | 104,821.56    |  | 28,054.99     |  | 120,298.54   
|       |  |                             |  |                                                                                       | 
|       |  | 11.                         |  | Capital grants transferred to profit for the year                                     |  | 1,899.92      |  | 3,040.37      |  |             
|       |  |                             |  |                                                                                       | 
|       |  | 12.                         |  | Extraordinary income                                                                  |  | 63,301.58     |  | 63,480.98     |  | 63,984.19    
|       |  |                             |  |                                                                                       | 
|       |  | 13.                         |  | Income and profit from prior years                                                    |  | 248,240.83    |  | 127,300.54    |  | 170,228.57   
|       |  |                             |  |                                                                                      
|IV.    |  | EXTRAORDINARY LOSS          |  |                                                                                       |  |               |  |              
|       |  |                             |  |                                                                                       | 
|       |  |                             |  |                                                                                       |  |              |  | 39,042.44     |  |             
|       |  |                             |  |                                                                                      
|V.     |  | LOSS BEFORE TAXES           |  |                                                                                      |  |              |  |             
|       |  |                             |  |                                                                                      
|VI.    |  | LOSS FOR THE YEAR           |  |                                                                                      |  |              |  |             



---

Translation of financial statements originally issued in Spanish and prepared in accordance with generally accepted
accounting principles in Spain (see Note 20). In the event of a discrepancy, the Spanish-language version prevails.

PAPELES ALLENDE,
S.L.

Notes to the Financial Statements

31 December 2007

NOTE 1: COMPANY DESCRIPTION



| |  | PAPELES ALLENDE, S.L. (formerly DESPERDICIOS DE PAPEL, S.L.) was incorporated in Madrid on 13 May 1977. It is registered in the Mercantile Registry of Madrid
in General Volume 4,072, no. 3,882 of section 3, Folio 101, Sheet 37,306. Its tax identification number is B-28479533. On 31 December 1996 it changed its name to Papeles Allende, S.L.
|- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Its registered address is Polígono Zona Franca, Barcelona, 57-59.
|- |  | -----------------------------------------------------------------



| |  | Its corporate purpose is to:
|- |  | ----------------------------

Recover, classify, process, transform and sell any material from the paper, cardboard, scrap metal, textile, plastic, glass, wood and waste industries capable of being reused, recycled or incinerated; provide services outside its factories
to public or private entities, including transport by road in Company-owned vehicles; and provide any public service that may be required.

Carry out or supervise waste management activities of any kind involving waste collection, storage, transport, reuse and disposal, and monitor disposal sites after closure.

Provide public hazardous and non-hazardous waste transport services, subject to proper authorization.

The Company may carry out some or all of these activities indirectly, through companies with similar or identical corporate purpose in which it has an
ownership interest.

NOTE 2: BASIS OF PRESENTATION



| |  | The financial statements are prepared from the Companys computerised accounting records in accordance with legally established accounting standards, so as to
give a true and fair view of the Companys net assets, financial position and results of operations.
|- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | The financial statements for 2007 are pending approval by the General Meeting of Shareholders. The Companys Board of Directors considers that the financial
statements will be ratified without significant changes.
|- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



---

PAPELES ALLENDE, S.L.

Notes to the Financial Statements



| |  | Pursuant to section 2 of article 173 of the Consolidated Text of the Public Limited Companies Act, the company has included among the intangible assets in the
balance sheet Item 9, Investments in leased property, to reflect the significant investments it has made in the leased warehouses in which it carries on its waste recovery business.
|- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Amounts in these financial statements (balance sheet, income statement and notes to the financial statements) are expressed in euros.
|- |  | -------------------------------------------------------------------------------------------------------------------------------------

NOTE 3: APPROPRIATION OF PROFIT



| |  | The board of directors has recommended to the General Meeting of Shareholders that the profit for 2007 be appropriated as follows:
|- |  | ----------------------------------------------------------------------------------------------------------------------------------



|                      |  |             
|--------------------- |  | ------------
|Item                  |  | Amount      
|Distributable profit  |  |             
|Profit or loss        |  | 2,326,708.58
|                      |  |             
|                      |  | 2.326.708,58
|                      |  |             
|Appropriation         |  |             
|To legal reserve      |  | 7,824.43    
|To voluntary reserves |  | 1,118,884.15
|To dividends          |  | 1,200,000.00
|                      |  |             
|                      |  | 2.326.708,58
|                      |  |             



| |  | The total amount allocated to dividends for the year, 1,200,000.00, was paid out as an interim dividend under a board of directors resolution of
18 December 2007 and is recorded in the balance sheet under heading A-VII, Interim dividend paid during the year, as a deduction from shareholders equity.
|- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



2



---

PAPELES ALLENDE, S.L.

Notes to the Financial Statements



| |  | Below is the cash statement forecast, demonstrating that the Company has sufficient cash to pay the agreed interim dividend. This statement covers a period of one
year from the date of the board resolution.
|- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|                                                                    |  |              
|------------------------------------------------------------------- |  | -------------
|Item                                                                |  | Amount       
|Cash holdings at the date of the dividend agreement                 |  | 1,000,453.00 
|+ Forecasted receipts  forecasted payments over a one-year horizon |  | 1,116,990.00 
|= Forecasted cash balance after one year                            |  | 2,117,4430.00



| |  | Both the interim dividend paid and the dividend distribution provided for in the appropriation of profit for the year meet the requirements and limitations
established in the Companys Articles of Association and applicable law.
|- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

NOTE 4: ACCOUNTING POLICIES



| |  | The most significant accounting policies used in preparing these financial statements are detailed below:
|- |  | ---------------------------------------------------------------------------------------------------------



| | a) | Start-up expenses
| | -- | -----------------

Start-up expenses are valued at the
cost of the goods and services purchased and, in line with the principle of prudent accounting, have been fully depreciated during the year.



| | b) | Intangible assets
| | -- | -----------------

Intangible assets consists mainly of
acquired goodwill, which is fully amortised. It also includes computer software, which is valued at cost. The rate of amortisation used is 33%.

In accordance with the rules laid down by the Institute of Accounting and Auditing (ICAC) in its industry-specific adaptations of the General Chart of Accounts and the response to Consultation No. 3 in ICAC Gazette (BOICAC)
No. 44, the Company recognizes the significant investments it has made in the leased warehouses in which it carries on its waste recovery business under the heading Investments in leased property. These investments are amortised
over the lower of the term of the lease agreement, taking into account any extensions thereof, and the useful life of the asset.



3



---

PAPELES ALLENDE, S.L.

Notes to the Financial Statements



| | c) | Property, plant and equipment
| | -- | -----------------------------

Property, plant and
equipment is valued at cost, except for Buildings, which includes a revaluation of 1,643,830.61 resulting from the merger agreed on 31.12.96.

Repairs that do not extend the assets useful life, and maintenance expenses, are expensed as incurred. Costs of renovation, extension or improvement that extend the assets useful life are capitalized.

Depreciation is charged at the rates specified in the tables approved by Royal Decree 1777/2004, of 30 July, increased by the amount permitted for
tax purposes for used goods, where appropriate. The Company uses the straight line and the reducing balance methods of depreciation.

The
average rates used to calculate the depreciation of property, plant and equipment are as follows:



|                                    |  |                   |  
|----------------------------------- |  | ----------------- | -
|Item                                |  | Rate              |  
|Buildings                           |  | 3, 4, 5 and 8     | %
|Plant and machinery                 |  | 10, 12, 14 and 18 | %
|Other fixtures, tools and furniture |  | 8, 10 and 12      | %
|Other property, plant and equipment |  | 10, 16, 18 and 25 | %



| | d) | Marketable securities and other similar investments
| | -- | ---------------------------------------------------

Investments in group companies, associates and other companies are valued at cost.

The Company calculates the depreciation of
investments in Group companies and associates based on the realisable value of the investees at year-end, according to the balance sheet for the period or, failing that, the last published balance sheet.

Deposits and guarantees given are measured at the cash amount provided to guarantee fulfilment of an obligation. They are classified as short-term or
long-term according to whether they expire within one year or after one year.



4



---

PAPELES ALLENDE, S.L.

Notes to the Financial Statements



| | e) | Non-trade receivables and payables
| | -- | ----------------------------------

Non-trade receivables
are carried at the cash amount granted, while receivables for the sale of fixed assets are carried at the assets selling price.

The
Company calculates the corresponding provisions based on the risk of non-payment of the amounts owed.

Non-trade payables are recognised in
the balance sheet at their maturity value, while payables for the purchase of fixed assets are recognised at their nominal value.

Both
payables and receivables are classified as current or non-current according to whether they mature within one year or after one year.



| | f) | Inventories
| | -- | -----------

Inventories are valued as follows:



| |  |  | Raw Materials: At cost.
| | - |  | -----------------------



| |  |  | Finished goods:
| | - |  | ---------------



| |  |  | Recovered paper: At the average selling price at source during the last month, reduced by 20% to account for profit margin and direct selling costs.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Paper for the converted paper products business: At cost plus the value added by the conversion where appropriate.
| | - |  | ------------------------------------------------------------------------------------------------------------------



| | g) | Grants
| | -- | ------

Capital grants are valued at the amount awarded
and are transferred to profit or loss for the year in proportion to the depreciation charge on the assets financed with the grants.



5



---

PAPELES ALLENDE, S.L.

Notes to the Financial Statements



| | h) | Trade receivables and payables
| | -- | ------------------------------

Short-term trade
receivables and payables are recognised at their nominal value.

The allowance for uncollectible receivables is calculated based on the
uninsured portion of the balance of doubtful accounts at 31 December.



| | i) | Income tax
| | -- | ----------

The corporate income tax expense recorded in
the financial statements for 2007 is 742,821.14. This amount has been calculated by applying a tax rate of 32,5% to the adjusted accounting profit (accounting profit before taxes, plus or minus any permanent differences) and subtracting tax
deductions in the amount of 14,246.96, and also taking into account a tax decrease of 3,142.07 to reflect the adjustment of deferred tax assets and liabilities to the tax rate of 30% at 31 December and a tax increase of 39.49.



| | j) | Foreign currency transactions
| | -- | -----------------------------

1. Inventories

The purchase price is translated into euros at the exchange rate ruling on the date of purchase.

2. Receivables and payables

Foreign currency
transactions are valued at the exchange rate ruling at the time of the transaction.

Realised and unrealised foreign exchange losses are
generally transferred to profit or loss. Realised foreign exchange gains are credited to income, while unrealised gains are not dealt with through the income statement, except when the amount is small.



| | k) | Income and expenses
| | -- | -------------------

Income and expenses are recognised in
the period in which they are earned or incurred, independently of the period in which they are received or paid.

The Company recognizes
only the profits actually realised at year-end, while foreseeable risks and losses, including merely potential losses, are recognized as soon as they become known.

Revenues from sales of goods and services are recorded net of the taxes applicable to such transactions. Discounts included in the invoice are deducted from the transaction amount, except for cash discounts, which are
treated as financial expenses.



6



---

PAPELES ALLENDE, S.L.

Notes to the Financial Statements



The cost of purchases of goods or services, including transport and tax expenses but excluding
deductible VAT paid, is recognised in the carrying amount of the goods or services purchased.

Discounts granted, after the corresponding
invoice is issued or received, in respect of faulty goods, failure to meet delivery terms or for other similar reasons, as well as volume discounts, are recorded separately from the amounts of sales or purchases of goods, or revenues or expenses for
services rendered or received.



| | l) | Environment
| | -- | -----------

Costs incurred in environmental activities
aimed at protecting and improving the environment are recognised as an expense in the year in which they are incurred.

When these costs are
associated with the acquisition of new items of property, plant and equipment whose purpose is to protect and improve the environment, they are recognised in the carrying amount of property, plant and equipment.



7



---

PAPELES ALLENDE, S.L.

Notes to the Financial Statements



NOTE 5: START-UP EXPENSES



| |  | The movements in the Start-up expenses account during 2007 and the balance at year-end are as follows:
|- |  | --------------------------------------------------------------------------------------------------------



|                  |  |            |  |           |  |              |  |           |  |         
|----------------- |  | ---------- |  | --------- |  | ------------ |  | --------- |  | --------
|                  |  | Balance at |  | Movements |  | Balance at  
|Item              |  | 31.12.06   |  | Increases |  | Amortisation |  | Transfers |  | 31.12.07
|Start-up expenses |  | 0.00       |  | 2,486.33  |  | 24,674.34    |  | 22,188.01 |  | 0.00    

NOTE 6: INTANGIBLE ASSETS



| |  | The movements in intangible assets during 2007 and the accumulated amortization at year-end break down as follows:
|- |  | ------------------------------------------------------------------------------------------------------------------



| | a) | Intangible assets
| | -- | -----------------



|                                                          |  |               |  |           |  |             |  |            |  |              
|--------------------------------------------------------- |  | ------------- |  | --------- |  | ----------- |  | ---------- |  | -------------
|                                                          |  | Balance at    |  | Movements |  | Balance at 
|Item                                                      |  | 31.12.06      |  | Increases |  | Retirements |  | Transfers  |  | 31.12.07     
|Concessions, patents, licenses, brands and similar assets |  | 5,943.28      |  | 0.00      |  | 0.00        |  | 0.00       |  | 5,943.28     
|Goodwill                                                  |  | 15,865,264.69 |  | 0.00      |  | 0.00        |  | 0.00       |  | 15,865,264.69
|Computer software                                         |  | 96,969.38     |  | 7,370.43  |  | 0.00        |  | 0.00       |  | 104,339.81   
|Investments in leased property                            |  | 652,405.01    |  | 0.00      |  | 0.00        |  | 541,839.79 |  | 1,194,244.80 
|                                                          |  |               |  |           |  |             |  |            |  |              
|Total                                                     |  | 16,620,582.36 |  | 7,370.43  |  | 0.00        |  | 541,839.79 |  | 17,169,792.58
|                                                          |  |               |  |           |  |             |  |            |  |              



| | b) | Accumulated amortization
| | -- | ------------------------



8



---

PAPELES ALLENDE, S.L.

Notes to the Financial Statements



|                                                          |  |               |  |            |  |             |  |           |  |              
|--------------------------------------------------------- |  | ------------- |  | ---------- |  | ----------- |  | --------- |  | -------------
|                                                          |  | Balance at    |  | Movements  |  | Balance at 
|Item                                                      |  | 31.12.06      |  | Increases  |  | Retirements |  | Transfers |  | 31.12.07     
|Concessions, patents, licenses, brands and similar assets |  | 5,943.28      |  | 0.00       |  | 0.00        |  | 0.00      |  | 5,943.28     
|Goodwill                                                  |  | 15,865,264.69 |  | 0.00       |  | 0.00        |  | 0.00      |  | 15,865,264.69
|Computer software                                         |  | 80,442.38     |  | 10,498.43  |  | 0.00        |  | 0.00      |  | 90,940.81    
|Investments in leased property                            |  | 87,042.01     |  | 115,209.96 |  | 0.00        |  | 0.00      |  | 202,251.97   
|                                                          |  |               |  |            |  |             |  |           |  |              
|Total                                                     |  | 16,038,692.36 |  | 125,708.39 |  | 0.00        |  | 0.00      |  | 16,164,400.75
|                                                          |  |               |  |            |  |             |  |           |  |              

NOTE 7: PROPERTY, PLANT AND EQUIPMENT

7.1. Balance and movements



| |  | The movements in property, plant and equipment during 2007 and the accumulated depreciation at year-end are detailed below:
|- |  | ---------------------------------------------------------------------------------------------------------------------------



9



---

PAPELES ALLENDE, S.L.

Notes to the Financial Statements



| | a) | Property, plant and equipment
| | -- | -----------------------------



|                                                       |  |               |  |              |  |              |  |               |  |              
|------------------------------------------------------ |  | ------------- |  | ------------ |  | ------------ |  | ------------- |  | -------------
|                                                       |  | Balance at    |  | Movements    |  | Balance at  
|Item                                                   |  | 31.12.06      |  | Increases    |  | Retirements  |  | Transfers     |  | 31.12.07     
|Land and buildings                                     |  | 8,383,812.97  |  | 1,226,326.27 |  | 0.00         |  | 133,655.03    |  | 9,743,794.27 
|Plant and machinery                                    |  | 13,329,893.16 |  | 2,295,821.13 |  | 474,164.29   |  | 763,543.78    |  | 15,915,093.78
|Other fixtures, tools and furniture                    |  | 2,185,151.38  |  | 59,941.87    |  | 99,682.86    |  | 201,663.32    |  | 2,347,073.71 
|Advances on fixed assets and assets under construction |  | 905,786.60    |  | 1,692,188.48 |  | 470,255.83   |  | -1,668,703.04 |  | 459,016.21   
|Other property, plant and equipment                    |  | 2,668,222.80  |  | 72,654.81    |  | 31,045.51    |  | 5,813.11      |  | 2,715,645.21 
|                                                       |  |               |  |              |  |              |  |               |  |              
|Total                                                  |  | 27,472,866.91 |  | 5,346,932.56 |  | 1,075,148.49 |  | -564,027.80   |  | 31,180,623.18
|                                                       |  |               |  |              |  |              |  |               |  |              



| | b) | Accumulated depreciation
| | -- | ------------------------



|                                    |  |               |  |              |  |             |  |           |  |              
|----------------------------------- |  | ------------- |  | ------------ |  | ----------- |  | --------- |  | -------------
|                                    |  | Balance at    |  | Movements    |  | Balance at 
|Item                                |  | 31.12.06      |  | Increases    |  | Retirements |  | Transfers |  | 31.12.07     
|Buildings                           |  | 2,608,855.71  |  | 267,895.83   |  | 0.00        |  | 0.00      |  | 2,876,751.54 
|Plant and machinery                 |  | 10,075,197.16 |  | 1,528,307.91 |  | 408,666.29  |  | 0.00      |  | 11,194,838.78
|Other fixtures, tools and furniture |  | 1,484,047.26  |  | 190,917.31   |  | 83,167.86   |  | 0.00      |  | 1,591,796.71 
|Other property, plant and equipment |  | 2,241,468.80  |  | 210,356.92   |  | 28,701.51   |  | 0.00      |  | 2,423,124.21 
|                                    |  |               |  |              |  |             |  |           |  |              
|Total                               |  | 16,409,568.93 |  | 2,197,477.97 |  | 520,535.66  |  | 0.00      |  | 18,086,511.24
|                                    |  |               |  |              |  |             |  |           |  |              

7.2. Other information



| |  | The Buildings account includes a revaluation of 1,643,830.61 resulting from the merger agreed on 31.12.96.
|- |  | -------------------------------------------------------------------------------------------------------------



| |  | The net cumulative gain at year-end and the effect of this gain on the depreciation charge for the year are shown in the following table:
|- |  | -----------------------------------------------------------------------------------------------------------------------------------------



10



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PAPELES ALLENDE, S.L.

Notes to the Financial Statements



|                                     |  |             
|------------------------------------ |  | ------------
|Item                                 |  | Amount      
|Investment                           |  | 1,643,830.61
|Depreciation expense for the year    |  | 68,383.00   
|Accumulated depreciation at year-end |  | 751,652.61  



| |  | Investments in property, plant and equipment purchased from Group companies and associates, and the associated accumulated depreciation to 31 December 2007,
are detailed below:
|- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|                 |  |            |  |                         
|---------------- |  | ---------- |  | ------------------------
|Item             |  | Investment |  | Accumulated depreciation
|Furniture (2005) |  | 450.00     |  | 247.00                  



| |  | At year-end 2007, fully depreciated property, plant and equipment in service amounted to 8,351,250.18. Details are given below:
|- |  | --------------------------------------------------------------------------------------------------------------------------------



|                                    |  |             
|----------------------------------- |  | ------------
|Item                                |  | Amount      
|Buildings                           |  | 134,960.98  
|Plant and machinery                 |  | 5,616,623.99
|Other fixtures, tools and furniture |  | 858,343.09  
|Other property, plant and equipment |  | 1,741,322.12



| |  | Part of the Companys activity is carried out on a site in the Zona Franca area of Barcelona under a 50-year lease, running from 1970 to 2020, renewable upon
expiry. The buildings on the Zona Franca site are depreciated according to the term of the lease of the land on which they are built.
|- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



11



---

PAPELES ALLENDE, S.L.

Notes to the Financial Statements



| |  | It is the Companys policy to purchase such insurance cover as may be necessary to protect against the risks to which its property, plant and equipment is
exposed.
|- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------

NOTE 8: INVESTMENTS

8.1.
Balance and movements



| |  | The opening and closing balance and the movements in long and short-term investments during 2007 are as follows:
|- |  | ----------------------------------------------------------------------------------------------------------------



| | a) | Long-term investments
| | -- | ---------------------



|                                                      |  |             |  |           |  |             |  |            |  |            
|----------------------------------------------------- |  | ----------- |  | --------- |  | ----------- |  | ---------- |  | -----------
|                                                      |  | Balance at  |  | Movements |  | Balance at 
|Item                                                  |  | 31.12.06    |  | Increases |  | Retirements |  | Transfers  |  | 31.12.07   
|Investments in group companies                        |  | 415,378.33  |  | 0.00      |  | 0.00        |  | 0.00       |  | 415,378.33 
|Investments in associates                             |  | 450,253.03  |  | 0.00      |  | 0.00        |  | 0.00       |  | 450,253.03 
|Long-term investment securities                       |  | 96,102.36   |  | 0.00      |  | 0.00        |  | 0.00       |  | 96,102.36  
|Other loans and advances                              |  | 41,209.27   |  | 41,116.41 |  | 0.00        |  | -19,030.61 |  | 63,295.07  
|Long-term deposits and guarantees                     |  | 94,299.35   |  | 17,066.12 |  | 1,650.00    |  | 150.25     |  | 109,865.72 
|Provision for impairment of investments in associates |  | -150,253.03 |  | 0.00      |  | 0.00        |  | 0.00       |  | -150,253.03
|                                                      |  |             |  |           |  |             |  |            |  |            
|Total                                                 |  | 946,989.31  |  | 58,182.53 |  | 1,6500.00   |  | -18,880.36 |  | 984,641.48 
|                                                      |  |             |  |           |  |             |  |            |  |            



12



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PAPELES ALLENDE, S.L.

Notes to the Financial Statements



| | b) | Short-term investments
| | -- | ----------------------



|                                         |  |            |  |              |  |              |  |           |  |           
|---------------------------------------- |  | ---------- |  | ------------ |  | ------------ |  | --------- |  | ----------
|                                         |  | Balance at |  | Movements    |  | Balance at  
|Item                                     |  | 31.12.06   |  | Increases    |  | Retirements  |  | Transfers |  | 31.12.07  
|Short-term investment securities         |  | 606,694.21 |  | 2,100,000.00 |  | 2,706,694.21 |  | 0.00      |  | 0.00      
|Other loans and advances                 |  | 54,194.60  |  | 772,107.29   |  | 640,254.99   |  | 19,030.61 |  | 205,077.51
|Other loans and advances (term deposits) |  | 0.00       |  | 600,000.00   |  | 600,000.00   |  | 0.00      |  | 0.00      
|Short-term deposits and guarantees       |  | 150.25     |  | 33,225.00    |  | 32,848.39    |  | -150.25   |  | 376.61    
|Provisions for short-term loans          |  | -5,706.07  |  | 0.00         |  | 0.00         |  | 0.00      |  | -5,706.07 
|                                         |  |            |  |              |  |              |  |           |  |           
|Total                                    |  | 655,332.99 |  | 3,505,332.29 |  | 3,979,797.59 |  | 18,880.36 |  | 199,748.05
|                                         |  |            |  |              |  |              |  |           |  |           

8.2. Information about group companies and associates



| |  | Investments in group companies and associates: For commercial reasons, it is considered that disclosure of this information in these notes might seriously damage
the Companys interests. Therefore, pursuant to article 200, 2a of the Implementing Regulations of the Law on Public Limited Companies, this information is omitted.
|- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

8.3. Other information



| |  | At year-end, Other loans and advances, long-term, totalled 63,295.07. This amount corresponds entirely to credit extended upon disposal of fixed
assets. The loans have the following maturities:
|- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|                         |  |           |  |          
|------------------------ |  | --------- |  | ---------
|                         |  | Maturity 
|Item                     |  | 2009      |  | 2010     
|Other loans and advances |  | 44,350.62 |  | 18,944.45



| |  | Three loans for the disposal of fixed assets in the initial amount of 179,541.49 have been granted under a purchase and sale agreement by instalments, with a
retention of title clause until the full amount agreed upon is received.
|- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



13



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PAPELES ALLENDE, S.L.

Notes to the Financial Statements



| |  | Long-term deposits and guarantees have no fixed maturity date.
|- |  | --------------------------------------------------------------

NOTE 9: INVENTORIES



| |  | The Inventories account breaks down as follows:
|- |  | -------------------------------------------------



|                                 |  |             
|-------------------------------- |  | ------------
|Item                             |  | Amount      
|Raw materials and other supplies |  | 143,993.80  
|Finished goods                   |  | 1,240,414.94
|Advances                         |  | 147,432.12  
|                                 |  |             
|Total                            |  | 1.531.840,86
|                                 |  |             

NOTE 10: SHAREHOLDERS EQUITY

10.1. Balance and movements



| |  | The movements in shareholders equity during 2007 and the balance at year-end are as follows:
|- |  | ---------------------------------------------------------------------------------------------



14



---

PAPELES ALLENDE, S.L.

Notes to the Financial Statements



|                                               |  |               |  |               |  |            |  |               |  |              
|---------------------------------------------- |  | ------------- |  | ------------- |  | ---------- |  | ------------- |  | -------------
|                                               |  | Balance at    |  | Movements     |  | Balance at
|Item                                           |  | 31.12.06      |  | Increases     |  | Decreases  |  | Transfers     |  | 31.12.07     
|Capital                                        |  | 10,635,812.86 |  | 0.00          |  | 0.00       |  | 0.00          |  | 10,635,812.86
|Issue premium account                          |  | 2,887,278.36  |  | 0.00          |  | 0.00       |  | 0.00          |  | 2,887,278.36 
|Legal reserve                                  |  | 1,899,898.94  |  | 0.00          |  | 0.00       |  | 219,439.20    |  | 2,119,338.14 
|Differences on translation of capital to euros |  | 214.21        |  | 0.00          |  | 0.00       |  | 0.00          |  | 214.21       
|Voluntary reserves                             |  | 2,009,064.31  |  | 0.00          |  | 0.00       |  | 753,776.30    |  | 2,762,840.61 
|Profit or loss                                 |  | 2,194,391.97  |  | 2,326,708.58  |  | 0.00       |  | -2,194,391.97 |  | 2,326,708.58 
|Interim dividend paid during the year          |  | -1,221,176.47 |  | -1,200,000.00 |  | 0.00       |  | 1,221,176.47  |  | -1,200,000.00
|                                               |  |               |  |               |  |            |  |               |  |              
|Total                                          |  | 18,405,484.18 |  | 1,126,708.58  |  | 0.00       |  | 0.00          |  | 19,532,192.76
|                                               |  |               |  |               |  |            |  |               |  |              

10.2. Other information



| |  | The Companys capital amounts to 10,635,812.86, divided into 1,769,686 indivisible and aggregable participation units numbered 1 to 1,769,686 inclusive,
with a par value of 6.01 per unit. All units are issued and fully paid.
|- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | The capital is owned directly by two companies. One owns 85% and the other, 15 %.
|- |  | ---------------------------------------------------------------------------------



| |  | On 18 December 2007, the General Meeting approved the distribution of an interim dividend of 1,200,000.00.
|- |  | -----------------------------------------------------------------------------------------------------------



| |  | The Company distributed the profit for the previous year as follows: 219,439.20 to the legal reserve, 753,776.30 to voluntary reserves and
1,221,176.47 to dividends, which were paid out as interim dividends during 2006.
|- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



15



---

PAPELES ALLENDE, S.L.

Notes to the Financial Statements



NOTE 11: CAPITAL GRANTS



| |  | Details of the capital grants received as of 31 December are as follows:
|- |  | ------------------------------------------------------------------------



|                                |  |               |  |                                      |  |                             |  |                                  
|------------------------------- |  | ------------- |  | ------------------------------------ |  | --------------------------- |  | ---------------------------------
|Granting agency                 |  | Amountgranted |  | Recognised inincome inprevious years |  | Recognised inincome in 2007 |  | Amount not yetrecognised inincome
|Generalitat de Catalunya (2005) |  | 10,810.00     |  | 5,742.71                             |  | 1,899.92                    |  | 3,167.37                         



| |  | The Company meets all the conditions to be eligible to receive and use the grant for the acquisition of positioning systems.
|- |  | ----------------------------------------------------------------------------------------------------------------------------

NOTE 12: NON-TRADE PAYABLES

12.1. Breakdown



| |  | Item E.III.1 on the liabilities side of the balance sheet, amounting to 261,640.98, reflects amounts owed for purchases and services received from Group
companies, without there being any loan or interest payable.
|- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Item E.III.2 on the liabilities side of the balance sheet, amounting to 788,812.98, reflects amounts owed for purchases and services received from Group
companies, associated without there being any loan or interest payable.
|- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Item E.V.3 on the liabilities side of the balance sheet, amounting to 1,151,296.27, reflects short-term debts to suppliers of fixed assets.
|- |  | --------------------------------------------------------------------------------------------------------------------------------------------



16



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PAPELES ALLENDE, S.L.

Notes to the Financial Statements



12.2. Other information



| |  | At 31 December 2007 the limit on the bill discounting facility granted by banks was 2,103,552.10 and the amount of credit drawn was 1,333,071.62.
|- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------



| |  | At 31 December 2007 the Company had no debts secured by collateral.
|- |  | -------------------------------------------------------------------

NOTE 13: TAX MATTERS

13.1. A reconciliation of accounting profit for 2007 to taxable income is provided below:



|                               |  |            |  |            |  |             
|------------------------------ |  | ---------- |  | ---------- |  | ------------
|Item                           |  | Increases  |  | Decreases  |  | Amount      
|Accounting profit for the year |  |            |  |            |  | 2,326,708.58
|Corporate income tax           |  | 742,821.14 |  | 0.00       |  | + 742,821.14
|Permanent differences          |  | 10,006.03  |  | 759,641.84 |  | - 749,635.81
|Temporary differences          |  | 17,941.12  |  | 0.00       |  | + 17,941.12 
|a) Arising in the current year |  | 17,941.12  |  | 0.00       |  |             
|b) Arising in prior years      |  | 0.00       |  | 0.00       |  |             
|Taxable income                 |  |            |  |            |  | 2,337,835.03

13.2. Other information



| |  | On 31 December 1996 a merger agreement was signed between: Desperdicios de Papel, S.L. as acquirer and Papeles Allende, S.A., Papeles Barcelona, S.A. and
Inversiones PGA, S.A. as acquirees.
|- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



17



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PAPELES ALLENDE, S.L.

Notes to the Financial Statements



For accounting purposes the merger date, and the date from which the acquirees were understood to be
operated by the acquirer, was 1 January 1997. Information about the merger is disclosed in the notes to the financial statements for 1997, as required under article 93 of Royal Decree-Law 4/2004, of 5 March, enacting the Consolidated Text
of the Corporate Tax Act.



| |  | All the Companys tax returns that have not been inspected and for which the statutory limit for tax assessments has not expired remain open to inspection by
the tax authorities.
|- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Under current tax law, tax returns cannot be considered definitive until they have been verified by the tax authorities or the statutory limit for assessments has
expired.
|- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | In the opinion of the Companys management, inspections of the years liable to audit are unlikely to give rise to any material contingencies.
|- |  | ---------------------------------------------------------------------------------------------------------------------------------------------



| |  | The corporate income tax expense recorded in the financial statements for 2007 is 742,821.14. This amount has been calculated by applying a tax rate of 32,5%
to the adjusted accounting profit (accounting profit before taxes, plus or minus any permanent differences) and subtracting tax deductions in the amount of 14,246.96, and also taking into account a tax decrease of 3,142.07 to reflect the
adjustment of deferred tax assets and liabilities to the tax rate of 30% at 31 December and a tax increase of 39.49.
|- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | The movements in deferred income tax assets during 2007 are shown below:
|- |  | ------------------------------------------------------------------------



|                                                                    |  |          
|------------------------------------------------------------------- |  | ---------
|Item                                                                |  | Amount   
|Pending recovery at the start of the year                           |  | 35,016.08
|Deferred tax assets recognised in 2007                              |  | 5,830.87 
|Deferred tax assets from previous years recovered in 2007           |  | -0.00    
|Adjustment of deferred tax assets to account for change in tax rate |  | -3,142.07
|Pending recovery at the end of the year                             |  | 37,704.88



| |  | The movements in deferred tax liabilities during 2007 are shown below:
|- |  | ----------------------------------------------------------------------



18



---

PAPELES ALLENDE, S.L.

Notes to the Financial Statements



|                                                             |  |       
|------------------------------------------------------------ |  | ------
|Item                                                         |  | Amount
|Pending settlement at the start of the year                  |  | 0.00  
|Deferred tax liabilities recognised in 2007                  |  | 0.00  
|Deferred tax liabilities from previous years settled in 2007 |  | 0.00  
|Pending settlement at the end of the year                    |  | 0.00  



| |  | In 2007 the Company claimed tax deductions from total corporate income tax due amounting to 14,246.96, which breaks down as follows:
|- |  | -------------------------------------------------------------------------------------------------------------------------------------



|                  |  |          
|----------------- |  | ---------
|Item              |  | Amount   
|Training expenses |  | 1,531.73 
|Reinvestment      |  | 12,715.23
|                  |  |          
|Total             |  | 14.246,96
|                  |  |          



| |  | The Company has no unused corporate income tax incentives.
|- |  | ----------------------------------------------------------



| |  | The Company has no unused tax losses from previous years.
|- |  | ---------------------------------------------------------



| |  | As of year-end the Company had paid 538,336.79 in corporate income tax through interim payments and withholdings.
|- |  | ------------------------------------------------------------------------------------------------------------------



| |  | Reinvestment of extraordinary profit at 31 December 2007 (Art. 42 TRLIS): The Company claimed the deduction for reinvestment of extraordinary profit for 2007.
In accordance with article 42.10 of Royal Decree-Law 4/2004 of 5 March, enacting the Consolidated Text of the Corporate Tax Act, the date and amount of the deduction for reinvestment are as shown below:
|- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|                             |  |                               |  |                                  
|---------------------------- |  | ----------------------------- |  | ---------------------------------
|Year in which the gain arose |  | Income eligible for deduction |  | Date on which gain was reinvested
|2007                         |  | 87,691.21                     |  | 2007                             



19



---

PAPELES ALLENDE, S.L.

Notes to the Financial Statements



| |  | The Company claimed the deduction for reinvestment on extraordinary profit for 2006. In accordance with article 42.10 of Royal Decree-Law 4/2004 of 5 March,
enacting the Consolidated Text of the Corporate Tax Act, the date and amount of the deduction for reinvestment are as shown below:
|- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|                             |  |                               |  |                                  
|---------------------------- |  | ----------------------------- |  | ---------------------------------
|Year in which the gain arose |  | Income eligible for deduction |  | Date on which gain was reinvested
|2006                         |  | 18,806.87                     |  | 2006                             



| |  | The Company claimed the deduction for reinvestment on extraordinary profit for 2005. In accordance with article 42.10 of Royal Decree-Law 4/2004 of 5 March,
enacting the Consolidated Text of the Corporate Tax Act, the date and amount of the deduction for reinvestment are as shown below:
|- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|                             |  |                               |  |                                  
|---------------------------- |  | ----------------------------- |  | ---------------------------------
|Year in which the gain arose |  | Income eligible for deduction |  | Date on which gain was reinvested
|2005                         |  | 5,866.89                      |  | 2005                             



| |  | The Company claimed the deduction for reinvestment on extraordinary profit for 2004. In accordance with article 42.10 of Royal Decree-Law 4/2004 of 5 March,
enacting the Consolidated Text of the Corporate Tax Act, the date and amount of the deduction for reinvestment are as shown below:
|- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|                             |  |                               |  |                                  
|---------------------------- |  | ----------------------------- |  | ---------------------------------
|Year in which the gain arose |  | Income eligible for deduction |  | Date on which gain was reinvested
|2004                         |  | 39,641.33                     |  | 2004                             



20



---

PAPELES ALLENDE, S.L.

Notes to the Financial Statements



| |  | In accordance with the ICAC Resolution of 9 October 1997 and based on the principle of prudent valuation, the Company
|- |  | ---------------------------------------------------------------------------------------------------------------------



| |  |  | did not record any tax credit in previous years.
| | - |  | ------------------------------------------------



| |  |  | as of 31 December 2007 the Company had no deferred income tax assets due to the temporary difference between accounting and tax criteria for the amortization
of goodwill. Deferred income tax assets have been treated as follows:
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | in previous years the Company did not recognise deferred income tax assets arising in the years to 2000 in the cumulative amount of 1,854,107.36 (35% of
5,297,449.60) due to the temporary difference between accounting and tax criteria for the amortization of goodwill.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | in previous years the Company did not recognise the decrease in deferred income tax assets arising in the years to 2001, 2002, 2003, 2004, 2005 and 2006 in the
cumulative amount of 1,854,107.36 (35% of 5,297,449.60) due to the decrease of the temporary difference between accounting and tax criteria for the amortization of goodwill.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | In 1996 a provision was recorded for the depreciation of the goodwill in Desperdicios de Papel, S.L. in the amount of 3,818,252.53, which for corporate income
tax purposes was considered a permanent gain, as it did not classify as a tax-deductible expense under article 12 of Royal Decree-Law 4/2004, of 5 March, enacting the Consolidated Text of the Corporate Tax Act. Of that amount, 20,043.29
was recorded as a permanent loss in 2006 and 759,641.84 in 2007, leaving 3,038,567.40 outstanding for future periods.
|- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

NOTE 14: GUARANTEES ISSUED ON BEHALF OF THIRD PARTIES AND OTHER CONTINGENT LIABILITIES



| |  | At 31 December 2007, the Company has no guarantees to third parties nor any other contingent liabilities.
|- |  | ---------------------------------------------------------------------------------------------------------



21



---

PAPELES ALLENDE, S.L.

Notes to the Financial Statements



NOTE 15: INCOME AND EXPENSES

15.1. Breakdown:



| |  | Item 2.b on the debit side of the income statement, Consumption of raw materials and other consumables, breaks down as follows:
|- |  | ---------------------------------------------------------------------------------------------------------------------------------



|                                                           |  |              
|---------------------------------------------------------- |  | -------------
|Item                                                       |  | Amount       
|Purchases of raw materials and other consumables           |  | 52,413,098.00
|Change in inventory of raw materials and other consumables |  | -34,009.01   
|                                                           |  |              
|Total                                                      |  | 52,379,088.99
|                                                           |  |              



| |  | Item 3.b on the debit side of the income statement, Employee welfare expenses, breaks down as follows:
|- |  | --------------------------------------------------------------------------------------------------------



|                                    |  |             
|----------------------------------- |  | ------------
|Item                                |  | Amount      
|Social security paid by the Company |  | 1,806,809.51
|Other employee welfare expenses     |  | 357,040.53  
|                                    |  |             
|Total                               |  | 2,163,850.04
|                                    |  |             



22



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PAPELES ALLENDE, S.L.

Notes to the Financial Statements



| |  | Item 5.b on the debit side of the income statement, Change in allowance for and losses on uncollectible receivables, breaks down as follows:
|- |  | ----------------------------------------------------------------------------------------------------------------------------------------------



|                                                  |  |          
|------------------------------------------------- |  | ---------
|Item                                              |  | Amount   
|Losses on uncollectible trade receivables         |  | 493.30   
|Change in allowance for uncollectible receivables |  | 24,222.95
|                                                  |  |          
|Total                                             |  | 24,716.25
|                                                  |  |          

15.2. Other information:



| |  | Details of transactions with group companies and associates during 2007 are given below:
|- |  | ----------------------------------------------------------------------------------------



|                                                  |  |                 |  |             
|------------------------------------------------- |  | --------------- |  | ------------
|Item                                              |  | Group companies |  | Associates  
|Purchases, returns of goods purchased and rebates |  | 2,114,943.40    |  | 3,017,730.04
|Sales, returns of goods sold and rebates          |  | 29,871,255.83   |  | 171,778.33  
|Services provided                                 |  | 124,166.40      |  | 189.00      
|Services received                                 |  | 992,739.37      |  | 7,300.15    
|Interim dividends paid                            |  | 1,020,000.00    |  | 0.00        



| |  | The Company made foreign currency purchases in the amount of 1,086,150.92, received services in the amount of 10,739.22 and made foreign currency sales
in the amount of 758,796.36.
|- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Details of the distribution of the Companys net sales by business line and geographical market are omitted in these notes to the financial statements as
disclosure would seriously harm the Companys business interests.
|- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



23



---

PAPELES ALLENDE, S.L.

Notes to the Financial Statements



| |  | The average number of employees during 2007, by job category, was as follows:
|- |  | -----------------------------------------------------------------------------



|                     |  |                             |  |        |  |        
|-------------------- |  | --------------------------- |  | ------ |  | -------
|                     |  | Average number of employees
|Job category         |  | Men                         |  | Women  |  | Total  
|Senior managers      |  | 1.00                        |  | 0.00   |  | 1.00   
|Technical staff      |  | 8.00                        |  | 4.00   |  | 12.00  
|Administrative staff |  | 25.00                       |  | 20.00  |  | 45.00  
|Labourers            |  | 166.00                      |  | 3.00   |  | 169.00 
|                     |  |                             |  |        |  |        
|Total                |  | 2000.00                     |  | 270.00 |  | 2270.00
|                     |  |                             |  |        |  |        



| |  | The fees invoiced to Papeles Allende, S.L. during 2007 for the auditing of the financial statements amounted to 19,784.00.
|- |  | ---------------------------------------------------------------------------------------------------------------------------



| |  | Extraordinary expenses in the amount of 71,405.66 relate mainly to insurance losses during the year (53,933.45) and fines (9,033.66).
|- |  | ---------------------------------------------------------------------------------------------------------------------------------------



| |  | Extraordinary income in the amount of 63,301.58 relates to rectifications of balances with third parties (15,760.93) and insurance claims
(47,450.65).
|- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Expenses and losses from previous years relate mainly to rectifications and adjustments for differences in forecasts.
|- |  | ---------------------------------------------------------------------------------------------------------------------

NOTE 16: ENVIRONMENTAL INFORMATION



| |  | Environmental assets and associated accumulated depreciation at 31 December 2007 are as follows:
|- |  | ------------------------------------------------------------------------------------------------



|                    |  |                        |  |                                     
|------------------- |  | ---------------------- |  | ------------------------------------
|Item                |  | Investment at 31.12.07 |  | Accumulated depreciation at 31.12.07
|Transport equipment |  | 1,105,128.76           |  | 992,594.76                          



24



---

PAPELES ALLENDE, S.L.

Notes to the Financial Statements



| |  | Expenses incurred in the year for the purpose of protecting and improving the environment are detailed below:
|- |  | -------------------------------------------------------------------------------------------------------------



|                                                 |  |         
|------------------------------------------------ |  | --------
|Item                                             |  | Amount  
|Aenor                                            |  | 2,480.55
|Environmental services (strategy and management) |  | 1,016.75
|                                                 |  |         
|Total                                            |  | 3,497.30
|                                                 |  |         



| |  | The Company has no revenues or liabilities deriving from environmental activities.
|- |  | ----------------------------------------------------------------------------------

NOTE 17: OTHER INFORMATION



| |  | The Company is exempt from the requirement to prepare consolidated financial statements, as it satisfies the conditions established in article 9 of Royal Decree
1815/91, of 20 December. The Company belongs to the ARAGOCIAS, S.A. group, whose registered address is in Zaragoza.
|- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | The Company has not paid any amounts to directors in the form of salaries, fees or other remuneration.
|- |  | ------------------------------------------------------------------------------------------------------



| |  | It has not granted any advances or loans to directors.
|- |  | ------------------------------------------------------



| |  | The Company has no pension or life insurance obligations towards its directors.
|- |  | -------------------------------------------------------------------------------



| |  | The present value of the Companys obligations to its employees is covered by an insurance policy.
|- |  | --------------------------------------------------------------------------------------------------



25



---

PAPELES ALLENDE, S.L.

Notes to the Financial Statements



NOTE 18: POST-BALANCE SHEET EVENTS



| |  | There have been no post-balance sheet events important enough to alter the information provided in the financial statements and management report for 2007.
|- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------

NOTE 19: STATEMENT OF SOURCE AND APPLICATION OF FUNDS



|                                                                  |  |              |  |              |  |             
|----------------------------------------------------------------- |  | ------------ |  | ------------ |  | ------------
|Applications                                                      |  | 2007         |  | 2006         |  | 2005        
|2. Start-up expenses and borrowing costs                          |  | 24,674.34    |  | 32,224.76    |  | 11,546.93   
|3. Fixed asset purchases                                          |  | 5,390,297.51 |  | 3,553,920.62 |  | 2,584,029.26
|a) Intangible assets                                              |  | 549,210.22   |  | 468,073.26   |  | 147,493.12  
|b) Property, plant and equipment                                  |  | 4,782,904.76 |  | 2,992,398.95 |  | 1,826,625.31
|c) Long-term investments                                          |  | 58,182.53    |  | 93,448.41    |  | 609,910.83  
|c3) Other investments                                             |  | 58,182.53    |  | 93,448.41    |  |             
|6. Dividends                                                      |  | 1,200,000.00 |  | 5,985,882.35 |  |            
|9. Change in short-term deferred income                           |  | 0.00         |  | 3,015.12     |  |            
|                                                                  |  |              |  |              |  |             
|Total Applications                                                |  | 6,614,971.85 |  | 9,575,042.85 |  | 2,595,576.19
|                                                                  |  |              |  |              |  |             
|Excess of sources over applications (Increase in working capital) |  | 0.00         |  | 0.00         |  | 1,941,243.29
|                                                                  |  |              |  |              |  |             



26



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PAPELES ALLENDE, S.L.

Notes to the Financial Statements



|                                                                              |  |              |  |              |  |             
|----------------------------------------------------------------------------- |  | ------------ |  | ------------ |  | ------------
|Sources                                                                       |  | 2007         |  | 2006         |  | 2005        
|1. Cash provided by operating activities                                      |  | 4,576,227.80 |  | 4,397,209.91 |  | 4,166,647.95
|3. Capital grants                                                             |  | 0.00         |  | 10,810.00    |  |            
|5. Fixed asset disposals                                                      |  | 652,704.39   |  | 107,467.12   |  | 321,169.32  
|b) Property, plant and equipment                                              |  | 651,054.39   |  | 99,380.72    |  |             
|c) Long-term investments                                                      |  | 1,650.00     |  | 8,086.40     |  |             
|c3) Other investments                                                         |  | 1,650.00     |  | 8,086.40     |  |             
|7. Prepayment or reclassification of investments from long-term to short-term |  | 18,880.32    |  | 16,951.56    |  | 48,146.00   
|c) Other investments                                                          |  | 18,880.32    |  | 16,951.56    |  |             
|                                                                              |  |              |  |              |  |             
|Total sources                                                                 |  | 5,247,812.51 |  | 4,532,438.59 |  | 4,536,819.48
|                                                                              |  |              |  |              |  |             
|Excess of applications over sources (Decrease in working capital)             |  | 1,367,159.34 |  | 5,042,604.26 |  |            
|                                                                              |  |              |  |              |  |             



|                                     |  |              |  |              |  |              |  |              |  |              |  |             
|------------------------------------ |  | ------------ |  | ------------ |  | ------------ |  | ------------ |  | ------------ |  | ------------
|                                     |  | 2007         |  | 2006         |  | 2005        
|Increase/decrease in working capital |  | Increases    |  | Decreases    |  | Increases    |  | Decreases    |  | Increases    |  | Decreases   
|2. Inventories                       |  | 139,634.43   |  | 0.00         |  | 232,968.97   |  | 0.00         |  | 65,969.84    |  |             
|3. Accounts receivable               |  | 2,922,774.81 |  | 0.00         |  | 531,759.19   |  | 0.00         |  | 873,556.55   |  |             
|4. Accounts payable                  |  | 0.00         |  | 4,728,209.23 |  | 0.00         |  | 2,417,120.98 |  |              |  | 539,379.82  
|5. Short-term investments            |  | 0.00         |  | 455,584.94   |  | 0.00         |  | 3,702,077.63 |  |              |  | 2,589,905.65
|7. Cash and cash equivalents         |  | 806,163.41   |  | 0.00         |  | 293,084.17   |  | 0.00         |  |              |  | 1,040,160.53
|8. Accrual accounts                  |  | 0.00         |  | 51,937.82    |  | 18,782.02    |  | 0.00         |  |              |  | 8,648.40    
|                                     |  |              |  |              |  |              |  |              |  |              |  |             
|Total                                |  | 3,868,572.65 |  | 5,235,731.99 |  | 1,076,594.35 |  | 6,119,198.61 |  | 3,529,432.04 |  | 1,588,188.75
|                                     |  |              |  |              |  |              |  |              |  |              |  |             
|Increase/Decrease                    |  | 0.00         |  | 1,367,159.34 |  | 0.00         |  | 5,042,604.26 |  | 1,941,243.29 |  |             
|                                     |  |              |  |              |  |              |  |              |  |              |  |             



27



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PAPELES ALLENDE, S.L.

Notes to the Financial Statements



|     |  |                                                     |  |   |  |             
|---- |  | --------------------------------------------------- |  | - |  | ------------
|Item |  | Amount                                             
|+    |  | Accounting profit for 2007                          |  | + |  | 2,326,708.58
|+    |  | Start-up expenses and borrowing costs               |  | + |  | 24,674.34   
|+    |  | Provision for amortisation of intangible assets     |  | + |  | 125,708.39  
|+    |  | Provision for depreciation of tangible fixed assets |  | + |  | 2,197,477.97
|+    |  | Loss on disposal of tangible fixed assets           |  | + |  | 8,380.00    
|-    |  | Gain on disposal of fixed assets                    |  | - |  | 104,821.56  
|-    |  | Capital grants transferred to income                |  | - |  | 1,899.92    
|=    |  | Cash provided by operating activities               |  | = |  | 4,576,227.80



28



---

PAPELES ALLENDE, S.L.

Notes to the Financial Statements



|20. | NET INCOME AND SHAREHOLDERS EQUITY RECONCILIATION TO US GAAS AND US CASH FLOW STATEMENT
|--- | ---------------------------------------------------------------------------------------



|                                                  |  |                      |  |            |  |                     |  |            |  |            |  |            |  |           
|------------------------------------------------- |  | -------------------- |  | ---------- |  | ------------------- |  | ---------- |  | ---------- |  | ---------- |  | ----------
|COMPANY                                           |  | PAPELES ALLENDE S.L. |  |            |  |                     |  |            |  |            |  |            |  |           
|EUROS                                             |  |                      |  | NET INCOME |  | SHAREHOLDERS EQUITY
|                                                  |  |                      |  | YEAR ENDED |  | YEAR ENDED         
|                                                  |  |                      |  | 12/31/2007 |  | 12/31/2006          |  | 12/31/2005 |  | 12/31/2007 |  | 12/31/2006 |  | 12/31/2005
|NET INCOME AS SHOWN IN THE FINANCIAL STATEMENTS   |  | 2,326,709            |  | 2,194,392  |  | 2,042,778           |  | 19,532,193 |  | 18,405,484 |  | 22,196,975
|ITEMS HAVING EFFECT OF INCREASING REPORTED INCOME |  |                      |  |            |  |                     |  |            |  |            |  |           
|GOODWILL AMORTIZATION                             |  | 0                    |  | 0          |  | 0                   |  | 0          |  | 0          |  | 0         
|POSITIVE EXCHANGE ADJUSTMENTS                     |  | 153                  |  | 153        |  | 1.272               |  | 153        |  | 153        |  | 1.272     
|ITEMS HAVING EFFECT OF DECREASING REPORTED INCOME |  |                      |  |            |  |                     |  |            |  |            |  |           
|TAX ADJUSTMENT OF ABOVE                           |  | -54                  |  | -54        |  | -146                |  | -54        |  | -54        |  | -146      
|                                                  |  |                      |  |            |  |                     |  |            |  |            |  |            |  |           
|NET INCOME ACCORDING TO US GAAP                   |  | 2,326,916            |  | 2,194,491  |  | 2,043,904           |  | 19,532,292 |  | 18,405,584 |  | 22,197,801
|                                                  |  |                      |  |            |  |                     |  |            |  |            |  |            |  |           



29



---

PAPELES ALLENDE, S.L.

Notes to the Financial Statements



PAPELES ALLENDE, S.L.

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED 31 DECEMBER 2007, 2006

AND 2005





|                                                                                    |  |                   |  |            |  |            | 
|----------------------------------------------------------------------------------- |  | ----------------- |  | ---------- |  | ---------- | 
|(In thousands Euros)                                                                |  | FOR THE 12 MONTHS | 
|                                                                                    |  | 12/31/2007        |  | 12/31/2006 |  | 12/31/2005 | 
|Net earnings                                                                        |  | 2,326,709         |  | 2,194,491  |  | 2,043,605  | 
|Adjustments to reconcile net earnings to net cash provided by operating activities: |  |                   |  |            |  |            | 
|insurance proceeds-boiler                                                           |  |                   |  |            |  |            | 
|Loss on sales of marketable securities                                              |  |                   |  |            |  |            | 
|Depreciation of property, plant and equipment                                       |  | 2,197,478         |  | 2,022,495  |  | 2,122,453  | 
|Amortization of other assets                                                        |  | 125,708           |  | 67,139     |  | 48,164     | 
|(Gain) loss on sale of property, plant and equipment                                |  | -93,442           |  | 85,067     |  | -58,294    | 
|Advances to & investments in subsidiaries                                           |  |                   |  |            |  |            | 
|Equity in net earnings                                                              |  |                   |  |            |  |            | 
|Deferred income taxes                                                               |  |                   |  |            |  |            | 
|Changes in assets and liabilities excluding the effects of acquisitions:            |  |                   |  |            |  |            | 
|Decrease/(increase) in marketable securities                                        |  | 0                 |  |            |  |            | 
|Decrease/(increase) in accounts receivable                                          |  | -2,922,775        |  | -531,759   |  | -873,557   | 
|Decrease/(increase) in inventories                                                  |  | -139,635          |  | -232,969   |  | -65,970    | 
|Decrease/(increase) in other current assets                                         |  | 455,585           |  | 3,702,078  |  | -2,589,905 | 
|Decrease/(increase) in intercompany activities-us                                   |  |                   |  | 0          |  | 0          | 
|Decrease/(increase) in other assets                                                 |  | 51,938            |  | -20,416    |  | 8,648      | 
|Decrease/(increase) in Goodwill/Step Up for Additional purchase price               |  |                   |  | 0          |  | 0          | 
|Increase/(decrease) in accounts payable and accrued expenses                        |  | 4,728,209         |  | 2,417,274  |  | 539,409    | 
|Increase/(decrease) in other liabilities                                            |  |                   |  | 0          |  | 0          | 
|                                                                                    |  |                   |  |            |  |            | 
|Net cash provided by operating activities                                           |  | 6,729,775         |  | 9,703,400  |  | 1,174,554  | 
|                                                                                    |  |                   |  |            |  |            | 
|Proceeds from sale of PPE                                                           |  | 651,054           |  | 99,381     |  | 321,169    | 
|Proceeds from sale of marketable securities                                         |  |                   |  | 25,038     |  | 48,146     | 
|Business acquisitions net of cash acquired                                          |  |                   |  |            |  |            | 
|Capital expenditures                                                                |  | -5,316,483        |  | -3,455,404 |  | -2,524,218 | 
|FINANCIAL INVESTMENTS                                                               |  | -58,183           |  | -93,448    |  | -59,811    | 
|Proceeds from sale of property, plant and equipment                                 |  | 0                 |  |            |  |            | 
|DIVIDENDS RECEIVED                                                                  |  | -1,200,000        |  | -5,985,882 |  |            | 
|Decrease/(increase) in restricted cash                                              |  |                   |  |            |  |            | 
|                                                                                    |  |                   |  |            |  |            | 
|Net cash used in investing activities                                               |  | -5,923,612        |  | -9,410,376 |  | -2,214,714 | 
|                                                                                    |  |                   |  |            |  |            | 
|Repayment of long-term debt                                                         |  |                   |  |            |  |            | 
|Proceeds from long-term debt                                                        |  |                   |  |            |  |            | 
|Deferred Financing Fees                                                             |  |                   |  |            |  |            | 
|Purchase of treasury stock                                                          |  |                   |  |            |  |            | 
|                                                                                    |  |                   |  |            |  |            | 
|Net cash used in financing activities                                               |  | 0                 |  | 0          |  | 0          | 
|                                                                                    |  |                   |  |            |  |            | 
|NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                                |  | 806,163           |  | 293,084    |  | -1,040,160 | 
|CASH AND CASH EQUIVALENTS, beginning of period                                      |  | 1,081,341         |  | 788,257    |  | 1,828,417  | 
|                                                                                    |  |                   |  |            |  |            | 
|CASH AND CASH EQUIVALENTS, end of period                                            |  | 1,887,504         |  | 1,081,341  |  | 788,257    | 
|                                                                                    |  |                   |  |            |  |            | 



30



---

PAPELES ALLENDE, S.L.

Notes to the Financial Statements



|21. | EXPLANATION ADDED FOR TRANSLATION TO ENGLISH
|--- | --------------------------------------------



| |  | These financial statements are presented on the basis of accounting principles generally accepted in Spain. Certain accounting practices applied by the Company that
conform with generally accepted accounting principles in Spain may not conform with generally accepted accounting principles in other countries.
|- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



31