---

UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C.
20549FORM 10-K(Mark
One)[X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended December 31,
2010[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from
______________to________________Commission file number
000-29981BIOPACK ENVIRONMENTAL
SOLUTIONS INC.(Exact name of registrant as specified in its
charter)

|Nevada                                                               | 91-2027724                          
|-------------------------------------------------------------------- | ------------------------------------
|(State or other jurisdiction of incorporation or
      organization) | (I.R.S. Employer Identification No.)

Room 1302, 13/F, Enterprise Centre, 4 Hart
Avenue,Tsim Sha Tsui, Kowloon, Hong Kong(Address of
principal executive offices) (Zip Code)Registrants telephone number,
including area code 852.3586.1383Securities registered
under Section 12(b) of the Act:

|None                | N/A                                      
|------------------- | -----------------------------------------
|Title of each class | Name of each exchange on which registered

Securities registered under Section 12(g) of the Act:

Common Stock, $0.001 par value(Title of
class)

Indicate by check mark if the registrant is a well-known
seasoned issuer, as defined in Rule 405 of the Securities Act. Yes[
]     No[X]

Indicate by check mark if the registrant is not required to file
reports pursuant to Section 13 or 15(d) of the Act. Yes[ ]   
 No [X]

Indicate by check mark whether the registrant has (1) filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.Yes[X]     No[
]

---

Indicate by check mark whether the registrant has submitted
electronically and posted on its corporate Web site, if any, every Interactive
Data File required to be submitted and posted pursuant to Rule 405 of Regulation
S-T (§232.405 of this chapter) during the preceding 12 months (or for such
shorter period that the registrant was required to submit and post such
files).Yes[ ]     No[ ]

Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not
contained herein, and will not be contained, to the best of registrants
knowledge, in definitive proxy or information statements incorporated by
reference in Part III of this Form 10-K or any amendment to this Form 10-K.[
]

Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller
reporting company. See the definitions of large accelerated filer,
accelerated filer and smaller reporting company in Rule 12b-2 of the
Exchange Act.

|Large accelerated filer | [ ]                                                         | Accelerated filer         | [ ]
|----------------------- | ----------------------------------------------------------- | ------------------------- | ---
|Non-accelerated filer   | [ ]     (Do not check if a
      smaller reporting company) | Smaller reporting company | [X]

Indicate by check mark whether the registrant is a shell company
(as defined in Rule 12b-2 of the Act).Yes[ ]   
 No[X]

State the aggregate market value of the voting and non-voting
common equity held by non-affiliates computed by reference to the price at which
the common equity was last sold, or the average bid and asked price of such
common equity, as of the last business day of the registrants most recently
completed second fiscal quarter: $2,787,590 based on a price of $0.10 per share,
being the average bid and asked price of such common equity as of June 30,
2010.

APPLICABLE ONLY TO REGISTRANTS INVOLVED IN BANKRUPTCY

PROCEEDINGS DURING THE PAST FIVE YEARS:

Indicate by check mark whether the registrant has filed all
documents and reports required to be filed by Section 12, 13 or 15(d) of the
Securities Exchange Act of 1934 subsequent to the distribution of securities
under a plan confirmed by a court.Yes[ ]     No[
]     N/A

(APPLICABLE ONLY TO CORPORATE REGISTRANTS)

Indicate the number of shares outstanding of each of the
registrants classes of common stock, as of the latest practicable date:
41,032,849 shares of common stock as of April 12, 2011.

DOCUMENTS INCORPORATED BY REFERENCE

List hereunder the following documents if incorporated by
reference and the Part of the Form 10-K (e.g., Part I, Part II, etc.) into which
the document is incorporated: (1) any annual report to security holders; (2) any
proxy or information statement; and (3) any prospectus filed pursuant to Rule
424(b) or (c) of the Securities Act of 1933. The listed documents should be
clearly described for identification purposes (e.g., annual report to security
holders for fiscal year ended December 24, 1980). Not Applicable

- 2 -

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PART I

FORWARD LOOKING STATEMENTS.

This report contains forward-looking statements.
Forward-looking statements are projections in respect of future events or our
future financial performance. In some cases, you can identify forward-looking
statements by terminology such as may, should, intends, expects,
plans, anticipates, believes, estimates, predicts, potential, or
continue or the negative of these terms or other comparable terminology. These
statements are only predictions and involve known and unknown risks,
uncertainties and other factors, including the risks in Item 1A Risk Factors
commencing on page 12 of this report, which may cause our or our industrys
actual results, levels of activity or performance to be materially different
from any future results, levels of activity or performance expressed or implied
by these forward-looking statements.

Although we believe that the expectations reflected in the
forward-looking statements are reasonable, we cannot guarantee future results,
levels of activity or performance. Except as required by applicable law,
including the securities laws of the United States, we do not intend to update
any of the forward-looking statements to conform these statements to actual
results.

In this report, unless otherwise specified, all dollar amounts
are expressed in United States dollars and all references to common shares
refer to the common shares in our capital stock. Many of our obligations are
payable in either Hong Kong dollars or in Renminbi (the currency of the Peoples
Republic of China). Throughout this document, we have converted those
obligations from the native currency into U.S. dollars for purposes of making
meaningful disclosure, though we have attempted to provide the amount paid in
the native currency in parenthesis where appropriate. We have converted from
Hong Kong dollars to U.S. dollars at a rate of 7.80 and from the Renminbi at a
rate of 6.69. Both of these rates are based on the average 2010 closing middle
market telegraphic transfer rates supplied by the Hang Seng Bank Limited.

As used in this report and unless otherwise indicated, the
terms we, us and our refer to Biopack Environmental Solutions Inc. and our
wholly-owned subsidiaries. For your convenience, we have included a company
organization chart on page 5, below.

ITEM 1. BUSINESS.

Corporate History

We were incorporated on August 28, 2000 in the state of Nevada
under the name Quadric Acquisitions. Following our incorporation we were not
actively engaged in any business activities. On April 25, 2001, we were acquired
by Zkid Network Company and changed our name to ZKid Network Co. As a result, we
became engaged in the business of providing media content for children through
the use of our proprietary software.

On February 8, 2006, we announced that we would be unable to
raise the necessary funds to continue with our then-existing business model and
plan. Accordingly, we decided to seek an active company to acquire.

On May 8, 2006, we closed a share exchange agreement with Star
Metro Group Limited, which became our wholly-owned subsidiary. Under the terms
of the share exchange agreement we exchanged 60,000,000 shares of our company
for 100% of the issued and outstanding shares of Star Metro Group at a ratio of
1 share of our common stock for each 2,000 shares of Star Metro Group Limiteds
stock. As a result of the share exchange agreement, we became engaged in the
development, production and sale of a line of biodegradable, single use, food
and beverage containers.

On March 20, 2006, we changed our name from ZKid Network Co. to
Eatware Corporation.

On November 27, 2006, we changed our name from Eatware
Corporation to Star Metro Corp.. We were required to effect this name change
by the terms of an agreement we entered into on November 13, 2006, with Glory
Team Industrial Limited and Eddie Chou, an ex-director of our company. 
We effected this name change by merging Star Metro Corp., our
newly incorporated and wholly-owned subsidiary that was created for this
purpose, into our company, with our company carrying on as the surviving
corporation under the name Star Metro Corp..

- 3 -

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On February 26, 2007, we changed our name from Star Metro
Corp. to Biopack Environmental Solutions Inc.. This name change was effected
by merging Biopack Environmental Solutions Inc., our newly incorporated and
wholly-owned subsidiary that was created for this purpose, into our company,
with our company carrying on as the surviving corporation under the name
Biopack Environmental Solutions Inc..

On March 27, 2007, we completed a share exchange with the
shareholders of Roots Biopack Group Limited, a company formed under the laws of
the British Virgin Islands. Under the terms of the share exchange agreement we
acquired all of the issued and outstanding common shares of Roots Biopack Group
in exchange for the issuance by our company of 90,000,000 common shares to the
former shareholders of Roots Biopack Group. As of the closing date of the share
exchange agreement, the former shareholders of Roots Biopack Group held
approximately 62.13% of the issued and outstanding common shares of our
company.

Prior to our acquisition of the common shares of Roots Biopack
Group, we had one wholly owned subsidiary, Starmetro Group Limited, a British
Virgin Islands corporation. Starmetro Group Limited, in its turn, had two wholly
owned subsidiaries: Biopack Environmental Ltd. (formerly named as E-ware
Corporation Limited), a Hong Kong corporation, and Bioplanet Distribution Sdn
Bhd, a Malaysian corporation.

Effective July 25, 2007, we filed a certificate of designation
with the Secretary of State of Nevada, designating 1,000,000 Series B Preferred
Shares. Each Series B Preferred Share has the right to thirty (30) votes at any
meeting of our shareholders and the right to convert, at any time at the
holders option, into five (5) common shares in the capital stock of our
company. On February 25, 2008, we filed a certificate of designation with the
Secretary of State of Nevada designating 2,000,000 Series C Preferred Shares.
The rights and restrictions of these Series C Preferred Shares are identical to
the rights and restrictions for our Series B Preferred Shares.

Effective June 11, 2008, the Secretary of State of Nevada
accepted for filing a certificate of change with respect to a consolidation of
our authorized and issued and outstanding shares of common stock on a one new
for ten old basis, as approved by our board of directors on May 31, 2008. As a
result, our authorized common share capital decreased from 500,000,000 shares of
common stock to 50,000,000 shares of common stock and correspondingly our issued
and outstanding common share capital decreased from 167,569,367 shares of common
stock to approximately 16,756,937 shares of common stock. Fractional shares were
rounded-up. Preferred shares and convertible securities were not consolidated.
Except as otherwise expressly stated to the contrary, the disclosure of share
data in this Form 10-K has been adjusted to reflect this consolidation.

During 2009, we restructured our organization to improve the
efficiency of our corporate structure. On September 18, 2009, we dissolved Roots
Biopack Group. The following table shows our current structure:

- 4 -

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BIOPACK ENVIRONMENTAL SOLUTIONS INC. Organization Structure
as at 31.12.2010



On July 9, 2010, Biopack Environmental Limited, a wholly-owned
subsidiary of Starmetro Group Limited, which is our wholly-owned subsidiary,
entered into a share purchase agreement with Well Talent Technology Limited, a
company incorporated in the British Virgin Islands, whereby Well Talent agreed
to purchase:

- all of the issued and outstanding shares of Roots Biopark Limited (which
  wholly owns Jiangmen Roots Biopack Ltd.) and Roots Biopack (Intellectual
  Property) Limited; and
- the shareholders loan in the amount of HK$26,522,763.91 (approximately
  US$3,394,479) advanced by Biopack Environmental Limited to Roots Biopark
  Limited and the shareholders loan of HK$275,742.56 (approximately US$35,291)
  advanced by Biopack Environmental Limited to Roots Biopack (Intellectual
  Property) Limited.

- 5 -

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Subsidiaries

The following is a list of our subsidiaries:

Name of Subsidiary
    Corresponding number on
      diagram
    Date of
      Incorporation
    Jurisdiction of
      Incorporation
    PurposeStarmetro Group Limited
    2
    April 1, 2005
    British Virgin Islands
    Serves as an investment holding company
      which holds all subsidiaries.Biopack Environmental Limited (formerly
      E-ware Corporation Limited)
    3
    November 28, 2005
    Hong Kong
    Provided corporate
      administrative services until December 31, 2007; has served as a
      vehicle for sales and marketing of our biodegradable food
      containers and industrial packaging products since December 31,
      2007.Roots Biopack (Intellectual Property) Limited
    6
    April 27, 2005
    Hong Kong
    Serves as a vehicle for the
      patent and trademark registration of our biodegradable food
      container and industrial packaging products.Roots Biopark Limited
    4
    February 16, 2006
    Hong Kong
    Serves as an investment
      holding company which holds Jiangmen Roots Biopack Ltd.Jiangmen Roots Biopack Limited
    5
    March 30, 2006
    The Peoples Republic of China
      (PRC)
    Serves as an investment holding company
      for our manufacturing plant located in Jiangmen, China.


Our Business

We develop, manufacture, distribute and market bio-degradable
food containers and disposable industrial packaging for consumer products. We
supply our biodegradable food containers and industrial packaging products to
multinational corporations, supermarket chains and restaurants located across
North America, Europe and Asia.

We manufacture our products in our own factory, known as
Biopark, which is located in Jiangmen City in the Peoples Republic of China
(PRC).

Factory Development

By the end of 2007 we had 14 production machines, together with
the boiler, transformer and compressor units necessary for their operation,
installed and fully operational at our Biopark facility. Each production machine
is fitted with a set of customer/product specific molds. These molds are
designed by our customers to suit their specific product specifications (e.g.,
shape and size).

During 2008 we completed installation of a new wastewater
treatment system at our Biopark facility. This system uses a seven stage process
to treat up to 23,800 gallons per day of waste water, which permits us to reduce
fresh water consumption while increasing efficiency and our production capacity
for colored product.

During 2009, we installed two additional machines in our
factory. These have been fitted with molds and are fully operational. With the
16 production machines currently installed and in operation, we are now capable
of producing approximately 6,000,000 units per month.

During 2010, we signed an agreement to acquire fully automated
Bio-Coating machines, and subsequently installed our first machine. These
machines are designed to automate the entire coating application process,
consolidating several steps and greatly increasing production efficiency. Each
machine may be quickly and individually adjusted to suit the weight of coating
required for the various types and sizes of products.  The introduction of these machines will not only allow Biopack
to dramatically increase the volume of trays which can be coated, but will allow
for a more consistent coating application. Previously, coated products were
sprayed by hand. We also successfully modified one of our current production
machines, which significantly increased its efficiency by reducing the total
cycle time, eliminating the need for one of two brass molds and subsequently
needed less electricity and workers to operate.

- 6 -

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We plan to add eight more production machines by the end of
2011 to the existing 16 machines currently installed. Our plan contemplates that
six of these new machines will be fully automated and two will be
semi-automated. When the new machines have been installed, we would have a total
of 24 production machines. We plan to set up four production lines of five fully
automated machines each, with the four semi-automated machines operating
separately. We have found that the semi-automated machines provide greater
flexibility when using different mixes of product molds.

To accommodate the additional production capacity that these
new machines will add to our factory, we also intend to add two additional
mixing and pulping pools.

We also intend to modify all the existing machines to obtain
greater production efficiencies, and add additional coating machines based on
demand.

We estimate the cost of these improvements, including the new
machines and the additional mixing and pulping pools, will be approximately
$1,500,000. In addition, we believe that once all of the new machines are
installed and in operation, we will need to add additional trimming machines but
we cannot estimate the number needed until our expansion is complete. In the
short term, we plan to handle any additional trimming needs by adding extra work
shifts.

Over the next 12 months, we plan to increase sales of our
existing products and add new products, including additional industrial
packaging products and complementary products. Our plan is to focus on
increasing European orders and expansion into the North American market and the
coated tray market.

We continue to see a difference in the environmental packaging
market. Although the European market has shown a preference for environmentally
sensitive products for some time now, we believe that the current U.S.
administrations focus on green technology for both economic and environmental
reasons continues to influence a shift away from more traditional packaging
products such as those made from Styrofoam, which has actually been banned in a
number of U.S. cities, towards environmentally friendly products like ours. We
believe that our products and our company can benefit from this trend and a more
tolerant level towards a higher price for fully biodegradable products, compared
to non-environmentally friendly products.

Our sales and marketing team is located in Hong Kong. Through
our sales and marketing team and our distributors, we supply our biodegradable
food containers and industrial packaging products to multi-national
corporations, supermarket chains and restaurants located across North America,
Europe, Latin America and Asia. During the calendar year 2009 we continued to
focus on the expansion of our production capabilities expansion of marketing
efforts, focusing on an expansion of our sales, primarily in North America.
During the calendar year 2010 we continued to work on sales and marketing while
increasing our production efficiencies at the factory. During the year, we made
our first sales into the South African market, the Latin American market through
a distribution agreement with Solupack Sistemas de Embalagens Ltda. and
continued to work on developing current sales in Canada through a distribution
contact with Packaging Logistics Incorporated and in Asia through continued
sales to citysuper, which is a high end supermarket chain with stores in Hong
Kong and Taiwan.

Our most significant achievement of 2010 was the addition of
our Bio-Coating machine, which took a great deal of time and effort to develop
and install. This was following up on our first orders for coated trays in 2009,
which we believe offers a significant new opportunity and market for our
company. These product applications include large market segments such as frozen
food and entrees, ready-made meals, fresh and frozen meat, cut fruit and
vegetables, baked goods as well as the seafood market.

We also modified one of our current production machines to
achieve significant efficiency increases. Current machines at the Roots Biopark
in China operate on a three step process  a formation step and two heat
pressing steps. They operate 5 machines per line. The newly modified machine has
eliminated one of the heat press steps.  It also features an automatic stacker at the end of the
process. The results are significant efficiency increases by reducing the total
cycle time from approximately 60 seconds to 42 seconds, which allows for
increased daily production and energy savings; which saves approximately 45kg of
fuel and 115 Joules of electricity per day over the current machines; requires
only one brass mold rather than two, which decreases costs to clients, who pay
for the mold and it requires fewer workers, as previous stacking was done
manually.

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Industry Overview

Currently, the majority of disposable packaging products are
made from plastic, paper or polystyrene, which are typically non-recyclable and
non-biodegradable. Consequently, millions of tons of plastic, paper, or
polystyrene disposable packaging products are discarded in landfills across the
world each year. In the last decade there has been increasing public concern
over the harmful impact that plastic, paper, or polystyrene disposable packaging
products have on the environment. Because of this public concern, governments
have begun to adopt regulations intended to restrict and in some cases even ban
the use of plastic, paper, or polystyrene disposable packaging products and
multi-national corporations, acknowledging the need for environmentally sound
solutions, have begun to seek alternatives to plastic, paper, or polystyrene
disposable packaging products that are less harmful to the environment. As these
trends continue, we believe that market for biodegradable food containers and
industrial packaging products will face rapid growth.

Principal Products

Our current product line-up of food containers and industrial
packaging products include: plates, bowls, boxes, trays, shoe supporters and
cases for electronic devices. We can fabricate any of these or other items to
meet customer-specific requirements, including shape, size, color, density and
the degree to which they are impervious to oil and water.

Each of our products is:

- biodegradable.
- made from natural materials (primarily sugarcane fiber, or bagasse, which
  is a renewable resource that is a by-product of the sugar refining process).
- refrigerator, freezer, microwave and oven friendly in temperatures ranging
  from -25°C to 220°C.
- sterilized by an ultraviolet light process.

Competitive Advantages

We believe that we have the following competitive
advantages:

- We employ our own research and development, sales and marketing, quality
  control team and customer service team.
- Successful cultivation of long-term supplier relationships with our key
  distributors and consistent quality gives us a first mover advantage, which
  helps us maintain brand loyalty.
- We have our own in-house production facilities and we manufacture our own
  proprietary product using fully automated machinery. This gives us versatility
  and permits us to react quickly to market demands for product design and
  development.

- 8 -

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We have received a number of internationally recognized
certifications and awards for our biodegradable food container and industrial
packaging products, including: the Good Manufacturing Practices awarded by SGS
Hong Kong Ltd. for compliance with international practices pertaining to quality
and management systems; the HACCP awarded by the World Health Organization for
compliance with the standards for food safety management systems set by World
Health Organization & World Food and Agricultural Organization; the
BRC/Iop awarded by the British Retail Consortium / Institute of Packaging for
food packaging products (food contact items); the ISO 9001/14001 awarded by
the International Organization for Standardization for compliance with the
standards for quality management systems and environmental management systems.

Sales and Marketing

Our sales and marketing efforts currently consist primarily of
direct marketing, agents, legacy clients and attendance at trade shows and
expositions. To enhance our corporate image and brand awareness we actively
participate in various events. Our biodegradable food container and industrial
packaging products were selected for use in the following events: 2006 Winter
Olympics, 2005 World Youth Day, 2005 Winterfest, 2003 World Alpine Ski
Championship, 2003 World Expo, 2002 World Expo.

Through our distributors we supply our biodegradable food
containers and industrial packaging products to multinational corporations,
supermarket chains and restaurants, located across North America, Europe and
Asia. We have distributors in The Netherlands, Switzerland, Hong Kong, Sweden,
South Africa, the United States, Japan, Taiwan and Israel. Although we have
historically concentrated the bulk of our marketing efforts on the European
market, we have recently decided to increase our efforts in North America during
the next 12 months.

Manufacturing Process

We currently manufacture our products in our factory in
Jiangmen City, PRC (see discussion, above). The manufacturing process at our
Biopark facility consists of the following stages:

Raw Material Preparation

Crunching/ShreddingFine mixing (set
correct concentration) Dosing (adding additives)

These first 3 stages prepare the mixture for the pulp forming
stage.

Pulp Formation

Forming Cold press Hot
press

During these three phases the product is shaped. The mixture
(fibers in water suspension) is poured into the forming mold. Wire mesh filters
the water away leaving the fiber in the form of the product. The formed product
is transferred through automation to the cold press, where additional water is
squeezed out. The pressed product is then transferred through automation to the
final drying stage where it is heat dried.

Trimming & Packing

TrimmingUltra violet
Sterilization/Sanitization Packing

During the trimming stage, rough edges are trimmed from the
finished product  the material that is removed will be re-used for other
product (returned to stage 1). Exposure to ultra violet ensures that all
coliform, germs and bacteria that may have survived the prior processing is
killed. Trimming and packaging are currently not automated (these tasks are
currently performed manually by laborers in our factory) but we are currently
developing an automatic trimming machine.

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Competition

The market for disposable packaging products is competitive and
subject to frequent product introductions with improved price and or performance
characteristics. We face competition from companies who provide disposable
packaging products which are made from plastic, paper or polystyrene. Many of
these companies have greater financial, research and development, marketing and
sales resources, offer a broader product line, have better brand recognition and
have a larger customer base than we do. Examples of these companies include:
Eastman Chemical Company, BASF Corporation - Apack AG, SK Chemicals, Showa and
Highpolymer. We also face competition from companies who provide disposable
packaging products which are made from bioplastics and other types of natural
materials. Example of these companies include: Earthshell Corp, Starch Tech
Incorporated, Biocorp NA, KTM Industries Incorporated, Eco-Products
Incorporated, Insulair, Incorporated, Novamont SPA, Green Shell Company Limited,
Far East Green World Corporation, Sanshi Green Packaging Company and Green
Eternity Company Limited.

Availability of Raw Materials

Our raw materials are sourced from the following regions:

Material Provided
    RegionSugarcane Fiber
    Guangdong Province (China) Guangxi Province
      (China)Palm Fiber
    MalaysiaPE/ PET Film
    Guangzhou (China)Coloring
    Guangdong Province (China)Water Repellent
    Guangdong Province (China)Oil Repellent
    Hong Kong CanadaCarton Box
    Guangdong Province (China)
      Hong KongMachinery
    Guangdong Province (China)


Intellectual Property

We have not registered any patent or proprietary
technology.

Trademarks

Our Roots Biodegradable trademark is currently registered in
Switzerland, Hong Kong, India and the United States and it is also registered
through the Community Trademark Registration, giving us rights in all 25 member
states of the enlarged European single market, including Austria, Belgium,
Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece,
Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands,
Poland, Portugal, Slovakia, Slovenia, Spain, Sweden, and the United Kingdom. We
are currently applying for trademark registration in Canada, Japan, India and
China. We plan to apply for trademark registrations in; Australia, New Zealand,
Malaysia, Israel, Saudi Arabia, Turkey. Details of our registered trademarks are
below:

Date
    Country
    Registration NumberJune 1, 2006
    Hong
      Kong
    200302488September 1, 2006
    Switzerland
    548477March 27, 2007
    United States
    3222538September 13, 2007
    European Union
    005083101


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Domain Names

We own and operate the following two registered internet domain
names:

- www.biopackenvironmental.com

The information contained on our website does not form part of
this annual report.

Dependence on one or more main customers

Until August of 2007, we relied on our five largest customers
for approximately 80% of our sales in 2007. In August of 2007, these five
customers were effectively consolidated when they made the decision to rely on
one importer to source all of their needs. The loss of any or all of these
customers, or the loss of the one importer that sources their needs, would
adversely affect revenues and results of operations.

Pension Plan

We participate in a defined contribution pension plan under the
Mandatory Provident Fund Schemes Ordinance for all our eligible employees in
Hong Kong. The Mandatory Provident Fund Scheme is available to all employees
aged 18 to 64 with at least 80 days of employment in Hong Kong. Contributions
are made at 5% of the participants relevant income with a ceiling of HK$20,000.
The participants are entitled to 100% of our contributions together with accrued
returns irrespective of their length of service with our company, but the
benefits are required by law to be preserved until retirement age of 65. Our
only obligation is to make the required contributions under the plan. The assets
and the schemes are controlled by trustees and held separately from those of our
company. Our total pension cost was $4,106 for the year ended December 31, 2010
and $5,848 for the year ended December 31, 2009.

Independent Testing

To ensure that our products meet health and safety and
performance standards, we have them put through the tests described in the
following table.

|Criteria                  | Objectives / Purpose | Independent Testing Laboratories          
|------------------------- | -------------------- | ------------------------------------------
|                          |                      |                                           
|Physical Performance Test | -                    | Temperature resistance, steamer, microwave
|                          |                      | and oven tests                            
|                          |                      |                                           
|                          | -                    | Water and oil proof tests                 
|                          |                      |                                           
|                          | -                    | Acid Resistance tests                     
|                          |                      |                                           
|                          |                      |                                           
|                          |                      |                                           
|Food Safety Tests         | -                    | Microbiological Tests, Coliform Bacteria, 
|                          |                      | Pesticides Residues, Moulds and Yeasts    
|                          |                      | Tests                                     
|                          |                      |                                           
|                          | -                    | Overall Migration Test                    
|                          |                      |                                           
|                          | -                    | Heavy Metals Analysis,                    
|                          |                      |                                           
|                          | -                    | Hong
      Kong Q-Mark Product Award      

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Biodegradability
    -
    ASTM D6400 (USA), DIN V 54900 and
    DIN CERTCO, BelgiumDIN EN 13432 (European
    Countries)-
    OK Compost and OK Compost HomeConformity Marks
    AIB-Vincotte, Belgium-
    Hong Kong Green Label Scheme
    Hong Kong Green Council


Governmental Regulation

With the emergence of alternatives to disposable packaging
products, which are made from plastic, paper and polystyrene, various standards
and guidelines have been developed by government organizations to assess the
performance of these substitutes. Through our quality assurance tests, we
attempt to ensure that our biodegradable food containers and industrial
packaging products meet or exceed the applicable government standards and
guidelines.

Our products comply with the following international
regulations:

- German Regulation to the protection from dangerous materials 
  Gefhstoff-Verordnung (Oct 26, 1993);
- U.S. CFR Title 21 (FDA Regulation);
- Taiwan Hygienic Standard for Food Utensil, Container and Packaging (Revised
  82.7.7); and,
- Biodegradability and Food Standards of Hong Kong Environmental Protection
  Department (HKEPD).

Research and Development

Our research and development team consists of five employees,
all of whom work from our Biopark factory in Jiangmen City, PRC. Three of the
team members are engineers who focus on machine design and efficiency. The other
two focus on ecological studies. The research and development expenses are
mainly staff cost and product testing fees which are minimal at this stage.

Employees

We currently have 56 full time and no part time employees. Of
these, 4 work in our Hong Kong administrative offices and 52 work in our Biopark
factory in Jiangmen City, PRC.

ITEM 1A. RISK FACTORS.

Our audited annual consolidated financial statements have
been prepared assuming that we will continue as a going concern.

We had net loss for the year ended December 31, 2010 of
$2,384,990. On December 31, 2010, we had an accumulated deficit of $7,276,923
and a working capital deficit of $2,172,812. We anticipate that we will continue
to incur operating expenses that will only partially be offset by operating
revenues unless and until we increase our production capabilities and begin
producing enough products to become profitable. On December 31, 2010, we had
cash of $97,888. We estimate that our operating expenses over the next 12 months
will be approximately $75,000 per month and we plan to spend approximately
$1,500,000 to add additional production capacity to our Biopark facility.
Therefore, we estimate that we will need approximately $1,900,000 over the next
12 months in order to continue our operations and make additions to the Biopark
facility. Although we believe that we will be able to pay some of these expenses
from our sales revenue, we believe that we will need to raise additional funds
to meet all of our currently budgeted operating requirements for the next 12
months. As we cannot assure a lender that we will be able to successfully
increase our production capabilities and begin profitable operations, we will
probably find it difficult to raise debt financing from traditional lending
sources.

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We have traditionally raised our operating capital from sales
of equity and, more recently, convertible debt securities but there can be no
assurance that we will be able to continue to do so. If we cannot raise the
money that we need in order to continue to operate and improve our production
capabilities, we may be forced to delay, scale back or even eliminate some or
all of our activities. If any of these were to occur, our business could fail.
These circumstances raise substantial doubt about our ability to continue as a
going concern, as described in the explanatory paragraph to our independent
auditors report on our consolidated financial statements for the year ended
December 31, 2010, which are included in this annual report on Form 10-K.
Although our consolidated financial statements raise substantial doubt about our
ability to continue as a going concern, they do not include any adjustments
relating to recoverability and classification of recorded assets, or the amounts
or classifications of liabilities that might be necessary in the event our
company cannot continue in existence.

To eliminate the financial obligation and burn rate of our
factory however, we are taking steps to hold a special meeting, where our
stockholders will be asked consider and vote on the resolution to approve the
sale (the Sale) of all of our shares of Roots Biopark Ltd. (RBL) and Roots
Biopack (Intellectual Property) Limited (BPIPL) and certain shareholders
loans held by Biopack Environmental Limited (the Vendor) to Well Talent
Technology Limited (the Purchaser) pursuant to a share purchase agreement
dated as of July 9, 2010 (the Share Purchase Agreement). The proposed Sale
would remove our factory and its manufacturing operations from our company along
with the associated large operating expenses. The factory operations
historically represented the majority of the total operational expenses for our
company (historically, the factory operations have accounted for approximately
65-66% of total operational expenses). The Sale will allow us to focus on
promoting and selling biodegradable food container and packaging products. After
the Sale, we will continue to promote and sell biodegradable food container and
packing products but will not longer be involved in the manufacturing of those
products. Further, if we do not complete the Sale, it is unlikely that we will
be able to continue as a going concern.

In November, 2010 we stopped production at the Biopark facility
to reduce expenditures and cash burn, as we try to complete its sale. Therefore
we have not been able to generate revenues or sales, and are in danger of losing
all of our clients. During this time we have not been able to raise any
additional funds through the public market.

We operate in a competitive industry and our failure to
compete effectively may adversely affect our ability to generate
revenue.

The disposable packaging industry is competitive and subject to
frequent product introductions with improved price and or performance
characteristics. Many companies, including those who manufacture their
disposable packaging products out of plastic, paper or polystyrene, have greater
financial, research and development, marketing and sales resources, offer a
broader product line, have better brand recognition and have a larger customer
base than we do. Increased competition in the disposable packaging industry
could result in significant price competition, reduced profit margins or loss of
market share, any one of which could have a material adverse effect on our
ability to generate revenues and successfully operate our business.

Our competitors may reduce their prices or engage in
advertising or marketing campaigns designed to protect their respective market
shares and impede market acceptance of our disposable packaging products. We
expect that many of our competitors may actively seek competitive alternatives
to our disposable packaging products. The development of competitive disposable
packaging products could render our disposable packaging products obsolete and
could impair our ability to compete, which would have an adverse effect on our
business, financial condition and results of operations.

We may suffer significant losses resulting from general
product liability, which may harm our financial condition and result of
operations.

As a manufacturer of disposable packaging products we are at
risk for potentially significant product liability and associated losses. We
cannot predict or protect against all potential losses or liabilities that may
arise relating to our disposable food container and industrial packaging
products. We maintain insurance against many, but not all, potential losses and
liabilities, in accordance with customary industry practice and in amounts we
believe to be necessary. If any losses or liabilities are not covered by
insurance, or if the insurance is insufficient, we would be required to satisfy
these losses and liabilities and our financial condition and results of
operations may be adversely affected.

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We rely on a number of different suppliers to supply us with
the materials that we require to manufacture our disposable packaging products.
We could be adversely affected by an increase in our suppliers prices or a
significant decline in our suppliers financial condition. As a result, our
business may fail and investors may lose their entire investment.

We rely on a number of different suppliers to supply our
company with the materials that we require to manufacture our disposable
packaging products. We could be adversely affected by an increase in any one of
our suppliers prices or a significant decline in any one of our suppliers
financial condition. If the relationship with any of our suppliers is terminated
and we are unsuccessful in establishing a relationship with an alternative
supplier who offers similar products at similar prices, our results of
operations could be adversely affected. As a result, our business may fail and
investors may lose their entire investment.

We rely on certain strategic raw materials for our
operations. If the raw materials we use to manufacture our disposable packaging
products increase substantially in price or for whatever reason becomes
unavailable to us our business could fail and investors could lose their entire
investment.

Although we believe that there are sufficient quantities of the
raw materials we use to manufacture our disposable packaging products, the
continuous existence and availability and price of these raw materials may be
affected by natural disasters, domestic and world markets, political conditions,
changes in government regulation and war or other outbreak of hostilities. If
the raw materials we use to manufacture our disposable packaging products
increase substantially in price or for any reason become unavailable to us our
business could fail and investors could lose their entire investment.

Substantially all of our assets, all of our directors and
all of our executive officers reside outside the United States. As a result it
may be difficult for investors to enforce within the United States any judgments
obtained against us or any of our directors or executive officers.

Substantially all of our assets are located outside the United
States and we do not currently maintain a permanent place of business within the
United States. In addition, all of our directors and executive officers are
nationals and residents of countries other than the United States, and all or a
substantial portion of such persons assets are located outside the United
States. As a result, it may be difficult for investors to enforce within the
United States any judgments obtained against us or our officers or directors,
including judgments predicated upon the civil liability provisions of the
securities laws of the United States or any state thereof. Consequently,
investors may be effectively prevented from pursuing remedies under United
States federal securities laws against us or any of our directors or executive
officers.

Our ability to hire and retain qualified personnel will be
an important factor in the success of our business and a failure to hire and
retain key personnel may result in our inability to manage and implement our
business plan.

Our ability to hire and retain qualified personnel will be an
important factor in the success of our business. The competition for qualified
personnel in the disposable packaging industry in which we operate is high. In
addition, in order to manage growth effectively, we must implement management
systems and continue to recruit and train new employees. We may not be able to
attract and retain the necessary qualified personnel. If we are unable to retain
or to hire qualified personnel as required, we may not be able to adequately
manage and implement our business plan.

Our international operations subject us to a number of
risks, including unfavorable political, regulatory, labor and tax conditions in
foreign countries. We may not be able to develop and implement policies and
strategies that will be effective in each location where we do business and as a
result our business could fail and investors could lose their entire investment.

Our international operations subject us to the legal,
political, social and regulatory requirements and economic conditions of many
jurisdictions. Risks inherent to international operations include the following:

- difficulty in enforcing agreements in foreign legal systems;

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- foreign countries may impose additional withholding taxes or otherwise tax
  our foreign income, impose tariffs or adopt other restrictions on foreign
  trade and investment, including currency exchange controls;
- fluctuations in exchange rates may affect product demand and may adversely
  affect our profitability in United States dollars to the extent the price of
  our products and cost of raw materials is denominated in a foreign currency;
- Inability to obtain, maintain or enforce intellectual property rights;
- Changes in general economic and political conditions in the countries in
  which we operate;
- unexpected adverse changes in foreign laws or regulatory requirements,
  including those with respect to export duties and quotas;
- difficulty with staffing and managing widespread operations;
- trade barriers such as export requirements, tariffs, taxes and other
  restrictions and expenses, which could increase the prices of our products and
  make us less competitive in some countries; and,
- difficulty of and costs relating to compliance with the different
  commercial and legal requirements of the overseas markets in which we offer
  and sell our products.

Our international operations require us to respond to rapid
changes in market conditions in these countries. The success of our
international operations depends, in part, on our ability to succeed in
differing legal, regulatory, economic, social and political conditions. We may
not be able to develop and implement policies and strategies that will be
effective in each location where we do business and as a result our business
could fail and investors could lose their entire investment.

In addition, we source all of our manufacturing in China. China
is experiencing very rapid economic growth which could have a negative impact on
our business activities there. These include worsening inflation, fluctuations
in currency and challenges to the nations electric power supply capacity. In
addition, developments in Chinas financial system and current legislative
trends could pose future business risks, including changes to its laws that
might prohibit or restrict foreign ownership.

The limitation of our available manufacturing capacity due
to significant disruption in our manufacturing operation could have a material
adverse effect on sales revenue and results of operations and financial
condition.

We manufacture our disposable packaging products using complex
processes that require technologically advanced equipment and continuous
modification to improve yields and performance. From time to time, we have
experienced minor disruptions in our manufacturing process as a result of power
outages or equipment failures. If production at our manufacturing plant is
disrupted for any number of reasons, manufacturing yields may be adversely
affected and we may be unable to meet our customers requirements. Consequently,
our customers may purchase disposable food packaging products from our
competitors. This could result in a significant loss of revenues and damage to
our customer relationships, which could materially adversely effect our
business, results of operations or financial condition.

Our disposable packaging products may be perceived poorly by
environmental groups, customers and government regulators, which could have an
adverse effect on our business, causing us to cease operations.

Our success depends substantially on our ability to manufacture
disposable packaging products that are less harmful to the environment than
disposable packaging products made from plastic, paper or polystyrene. Although we believe that our disposable packaging products are
less harmful to the environment than other disposable packaging products, which
are made from paper, plastic and polystyrene, our disposable packaging products
may also possess characteristics that environmental groups could perceive as
negative for the environment. When biodegradable waste is disposed of in
landfills, it breaks down under uncontrolled anaerobic conditions. This produces
landfill gas which, if not harnessed, escapes into the atmosphere. Landfill gas
contains methane, a more harmful greenhouse gas than carbon dioxide. The
European Union Landfill Directive puts key requirements on member states for the
management of biodegradable waste in order to stop global warming. Whether, on
balance, our disposable packaging products are better for the environment than
other disposable packaging products, which are made from either plastic, paper
or polystyrene is a somewhat subjective judgment. Environmental groups,
customers, and governmental regulators may not agree that our disposable
packaging products have an advantage over other disposable packaging products,
which are made from plastic, paper or polystyrene. If our disposable packaging
products are perceived as being harmful to the environment, our revenues will
likely suffer and as a result we could go out of business.

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We have a stable customer base; however, loss of, or
material financial weakness of, our largest distributor could adversely affect
our financial condition and results of operations until such business is
replaced and no assurances can be made that we would be able to regain or
replace any lost customers. This could cause us to go out of business and
investors could lose their entire investment.

We rely on one distributor for approximately 80% of our sales.
The loss of this distributor would adversely affect revenues and results of
operations, and the loss of any other significant customers could adversely
affect revenues and results of operations unless and until the lost business is
replaced. We believe that it is unlikely that we could replace this one
distributor. If we were to lose this distributor and we did not replace it, we
could be forced to cease operations and investors in our company could lose
their entire investment.

Our business is subject to complex health, safety and
environmental laws and industry regulations, which require and will continue to
require significant expenditures to remain in compliance with such laws and
regulations currently and in the future. Costs of such compliance will likely
reduce our probability.

Our business is subject to complex health, safety and
environmental laws and industry regulations, which require and will continue to
require significant expenditures to remain in compliance with such laws and
regulations currently and in the future. Unanticipated government enforcement
action, or changes in health, safety and environmental laws and industrial
regulations could result in higher costs which may negatively affect our
profitability.

Because our executive officers, directors control a high
percentage of our common stock, such insiders may have the ability to influence
matters affecting our shareholders.

Our executive officers and directors, in the aggregate,
beneficially own 30.42% of the issued and outstanding shares of our common
stock. As a result, they have the ability to influence matters affecting our
shareholders, including the election of our directors, the acquisition or
disposition of our assets, and the future issuance of our shares. Because our
executive officers, directors and principal shareholders control such shares,
investors may find it difficult to replace our management if they disagree with
the way our business is being operated. Because the influence by these insiders
could result in management making decisions that are in the best interest of
those insiders and not in the best interest of the investors, you may lose some
or all of the value of your investment in our common stock.

RISKS RELATED TO OUR COMMON STOCK

A decline in the price of our common stock could affect our
ability to raise further working capital and adversely impact our ability to
continue operations.

A prolonged decline in the price of our common stock could
result in a reduction in the liquidity of our common stock and a reduction in
our ability to raise capital. Because a portion of our continued operations will
be financed through the sale of equity securities, a decline in the price of our
common stock could be especially detrimental to our liquidity and our
operations.  Such reductions may force us to reallocate funds from other
planned uses and may have a significant negative effect on our business plan and
operations, including our ability to develop new products and continue our
current operations. If our stock price declines, we can offer no assurance that
we will be able to raise additional capital or generate funds from operations
sufficient to meet our obligations. If we are unable to raise sufficient capital
in the future, we may not be able to have the resources to continue our normal
operations.

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The market price for our common stock may also be affected by
our ability to meet or exceed expectations of analysts or investors. Any failure
to meet these expectations, even if minor, may have a material adverse effect on
the market price of our common stock.

If we issue additional shares in the future, it will result
in the dilution of our existing shareholders.

Our certificate of incorporation, as amended, authorizes the
issuance of up to 50,000,000 shares of common stock with a par value of $0.0001
and 10,000,000 shares of preferred stock with a par value of $0.001. Our board
of directors may choose to issue some or all of such shares to provide
additional financing in the future. The issuance of any such shares will result
in a reduction of the book value and market price of the outstanding shares of
our common stock. If we issue any such additional shares, such issuance will
cause a reduction in the proportionate ownership and voting power of all current
shareholders. Further, such issuance may result in a change of control of our
company.

Trading of our stock may be restricted by the Securities
Exchange Commissions penny stock regulations, which may limit a stockholders
ability to buy and sell our stock.

The Securities and Exchange Commission has adopted regulations
which generally define penny stock to be any equity security that has a market
price (as defined) less than $5.00 per share or an exercise price of less than
$5.00 per share, subject to certain exceptions. Our securities are covered by
the penny stock rules, which impose additional sales practice requirements on
broker-dealers who sell to persons other than established customers and
accredited investors. The term accredited investor refers generally to
institutions with assets in excess of $5,000,000 or individuals with a net worth
in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 jointly
with their spouse. The penny stock rules require a broker-dealer, prior to a
transaction in a penny stock not otherwise exempt from the rules, to deliver a
standardized risk disclosure document in a form prepared by the Securities and
Exchange Commission, which provides information about penny stocks and the
nature and level of risks in the penny stock market. The broker-dealer also must
provide the customer with current bid and offer quotations for the penny stock,
the compensation of the broker-dealer and its salesperson in the transaction and
monthly account statements showing the market value of each penny stock held in
the customers account. The bid and offer quotations, and the broker-dealer and
salesperson compensation information, must be given to the customer orally or in
writing prior to effecting the transaction and must be given to the customer in
writing before or with the customers confirmation. In addition, the penny stock
rules require that prior to a transaction in a penny stock not otherwise exempt
from these rules, the broker-dealer must make a special written determination
that the penny stock is a suitable investment for the purchaser and receive the
purchasers written agreement to the transaction. These disclosure requirements
may have the effect of reducing the level of trading activity in the secondary
market for the stock that is subject to these penny stock rules. Consequently,
these penny stock rules may affect the ability of broker-dealers to trade our
securities. We believe that the penny stock rules discourage investor interest
in and limit the marketability of our common stock.

The Financial Industry Regulatory Authority, or FINRA, has
adopted sales practice requirements which may also limit a stockholders ability
to buy and sell our stock.

In addition to the penny stock rules described above, FINRA
has adopted rules that require that in recommending an investment to a customer,
a broker-dealer must have reasonable grounds for believing that the investment
is suitable for that customer. Prior to recommending speculative low priced
securities to their non-institutional customers, broker-dealers must make
reasonable efforts to obtain information about the customers financial status,
tax status, investment objectives and other information. Under interpretations
of these rules, FINRA believes that there is a high probability that speculative
low priced securities will not be suitable for at least some customers. FINRA
requirements make it more difficult for broker-dealers to recommend that their
customers buy our common stock, which may limit your ability to buy and sell our
stock and have an adverse effect on the market for our shares.

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Our common stock is illiquid and the price of our common
stock may be negatively impacted by factors which are unrelated to our
operations.

Our common stock currently trades on a limited basis on the OTC
Bulletin Board. Trading of our stock through the OTC Bulletin Board is
frequently thin and highly volatile. There is no assurance that a sufficient
market will develop in our stock, in which case it could be difficult for
shareholders to sell their stock. The market price of our common stock could
fluctuate substantially due to a variety of factors, including market perception
of our ability to achieve our planned growth, quarterly operating results of our
competitors, trading volume in our common stock, changes in general conditions
in the economy and the financial markets or other developments affecting our
competitors or us. In addition, the stock market is subject to extreme price and
volume fluctuations. This volatility has had a significant effect on the market
price of securities issued by many companies for reasons unrelated to their
operating performance and could have the same effect on our common stock.

ITEM 1B. UNRESOLVED STAFF COMMENTS.

Not applicable.

ITEM 2. PROPERTIES.

Offices

Our head office is located at Room 1302, 13/F, Enterprise
Centre, 4 Hart Avenue, Tsim Sha Tsui, Kowloon, Hong Kong. Our telephone number
is (852) 3586-1383. Our facsimile number is (852) 3586-2366. We lease this
space, which consists of approximately 553 square feet, from an unrelated third
party for the sum of approximately $1,278 per month (HK$ 9,954) for a term of
one year expiring March 10, 2011. While this lease expired on March 10, 2011, we
still maintain our head office at this location.

Factory

Our Peoples Republic of China (PRC) subsidiary, Jiangmen Roots
Biopack Limited, leases 4 adjacent properties situated at No.3, Yangjiaokeng
Industrial District, Tingyuan Village, Duruan Town, Jiangmen City, PRC. We call
this area Biopark.

Biopark includes a factory, dormitories, a shop on the first
floor, an office on the second floor, toilets, a garage, a storage shelter and
land, a substation and an electricity transformer (315kW). The premises are
equipped with kitchen appliances, water, electricity and fire prevention and
fire fighting equipment. Biopark has a total area of 10,440 square meters,
including a 2,700 square meter dormitory.

The lease term is 15 years from March 1, 2007, with one option
to renew the term. A copy of the lease agreement and the translation of the
lease agreement were attached as exhibits to our annual report filed on April
17, 2007. We have a right of first refusal to purchase the premises in the event
that the landlord desires to sell.

We paid the sum of approximately $56,448 (Renminbi 390,000.00)
as a rental deposit. Pursuant to the terms of our rental agreement, the rental
deposit is to be refunded to us without interest upon the expiration of the
lease.

From the first to the fifth year, our monthly rent is Renminbi
103,000 (approximately $13,720), or Renminbi 1,236,000 (approximately $164,646
per annum. From the sixth year onward, our rent will increase by 5% every 3
years.

The table reproduced below provides a summary of our lease
commitments:

Name of Landlord
    Property location
    Rental Charges Monthly
    Duration
    Lease Contract UnderDragon Trade (H.K.) Ltd
    Room 1302, 13/F, Enterprise Centre, 4 Hart
      Avenue, Tsim Sha Tsui, Kowloon, Hong Kong
    $1,278
    11/3/2010 - 10/3/2011
    Biopack Environmental Ltd. (HK)CHENG, Jin Yao
    No.3, Yangjiaokeng Industrial District,
      Tingyuan Village, Duruan Town, Jiangmen City, PRC
    $14,908
    01/03/2007 - 28/2/2022
    Jiangmen Roots Biopack Ltd. (China)


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Twelve Months Ending
    Future MinimumDecember 31:
    Lease Payments$December 31, 2011
    182,730December 31, 2012
    178,897December 31, 2013
    178,897


We believe our facilities are suitable to our current needs and
for our needs in the foreseeable future.

ITEM 3. LEGAL PROCEEDINGS.

Other than as disclosed below, we know of no material, active
or pending legal proceedings against us, nor are we involved as a plaintiff in
any material proceedings or pending litigation. There are no proceedings in
which any of our directors, officers or affiliates, or any registered beneficial
shareholder are an adverse party or has a material interest adverse to us.

By letter dated April 12, 2007 an attorney claiming to
represent Good Value Galaxy Limited, a British Virgin Islands corporation that
is a significant shareholder of our company, advised us that all of the issued
shares of Good Value Galaxy Limited had been transferred. This attorney advised
that the shares of Good Value Galaxy Limited, which had previously been
beneficially owned by Gerald Lau, our President and Chairman of our board of
directors, had been transferred to Oung Cheng Hai effective April 11, 2007. In
addition, this attorney advised that Gerald Lau, who had previously been the
sole director of Good Value Galaxy Limited, had resigned as a director of that
company and Mr. Albert Oung had been appointed as the sole director of Good
Value Galaxy Limited.

In a second letter, also dated April 12, 2007, this same
attorney advised that he represented both Good Value Galaxy Limited and Joyful
Services Limited and that these two companies owned in excess of 10% of our
companys issued and outstanding common shares. This attorney, allegedly on
behalf of Good Value Galaxy Limited and Joyful Services Limited, demanded that
our company convene a special meeting of our shareholders to consider and pass
resolutions to remove Gerald Lau (our President and a director) and Edwin Chan
(a director of our company), appointing Albert Oung and Patrick Oung to serve as
directors from that date forward.

Upon our receipt of this correspondence, our attorneys asked
Gerald Lau for confirmation of the alleged transfer of shares of Good Value
Galaxy Limited and they asked the attorney making the allegations to provide us
with credible evidence to support his allegations. Mr. Laus attorneys informed
us that no such transfer had taken place and that Mr. Lau continued to be the
sole shareholder of both Good Value Galaxy Limited and Joyful Services Limited.
The attorney making the allegation that the shares of Good Value Galaxy Limited
were transferred to Oung Cheng Hai has not yet provided us with any credible
evidence that this alleged transfer took place. In light of the absence of
credible evidence of a transfer and the assertion from Gerald Lau, through his
attorneys, that there has been no such transfer, we do not currently intend to
comply with the requests of April 12, 2007.

On May 8, 2007, we received a letter from a different law firm
asserting that it represented Good Value Galaxy Limited and Joyful Services
Limited and enclosing a document alleged to be the written consent of Good Value
Galaxy Limited and Joyful Services Limited. Albert Oung signed this alleged
written consent on behalf of each of Good Value Galaxy Limited and Joyful
Services Limited. The alleged written consent purports to appoint Albert Oung
and Patrick Oung to our board of directors effective immediately and to amend
and restate our Bylaws. Our attorneys replied to this letter of May 8, 2007,
stating that we cannot accept the claim that ownership of the shares of Good
Value Galaxy Limited and Joyful Services Limited has been transferred absent
receipt of a persuasive explanation of the circumstances of the transfer and
credible evidence showing how and why the alleged transfer took place. We have
not yet received any such explanation or credible evidence. Until we do, we
cannot accept the alleged written consent as the act of Good Value Galaxy
Limited and Joyful Services Limited.

On May 31, 2007, our President and Chairman of our board of
directors, Gerald Lau, filed a statement of claim in the High Court of the Hong
Kong Special Administrative Region  Court of First Instance against Albert
Oung, Oung Cheng Hai, Good Value Galaxy Limited and Joyful Services Limited
regarding ownership of approximately 54.06% shares of our common stock.

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In his statement of claim, Mr. Lau alleges that in or about
January 2007, upon him learning of a severe medical condition that he developed,
he agreed to execute a declaration of trust in favour of Mr. Oung Cheng Hai
which was to take effect upon the completion of a number of conditions. Mr. Lau
alleges that he signed a declaration of trust, an instrument of transfer in
respect of the one (1) issued share in Good Value Galaxy Limited, a notice of
resignation of Good Value Galaxy Limited, a written resolution of the sole
director of Good Value Galaxy Limited approving the transfer of the share, the
resignation of the sole director and the appointment of Mr. Oung Cheng Hai. Mr.
Lau further alleges that all the executed documents were to remain undated and
were not to take effect until the following conditions were met:

- the declaration of trust was to give effect to Mr. Laus intentions that
  the shares in Good Value Galaxy Limited and any funds and benefits derived
  therefrom were to be utilized for charitable purposes;
- the declaration of trust should not take effect or become operative until
  12 to 18 months after the completion of the share exchange with the
  shareholders of Roots Biopack Group Limited and our company;
- the declaration of trust should not take effect or become operative until
  after the approval and or clearance from the United State Securities and
  Exchange Commission is obtained for the transfer of the share in Good Value
  Galaxy Limited and for the resignation of Mr. Lau from our company; and
- the declaration of trust was subject to Mr. Laus agreement and consent as
  to the date on which the documents shall take effect or become operative.

Mr. Lau further alleges that while the documents were held in
escrow by Mr. Oung Cheng Hai and Mr. Albert Oung, the documents were dated and
materially altered in breach of the agreement and the conditions referred to
above without the agreement, knowledge or consent of Mr. Lau. In particular, Mr.
Lau alleges that the declaration of trust was back-dated to the 17thof September 2003 and the instrument of transfer, notice of resignation
and corporate resolution were dated the 11thof April 2007. Mr. Lau
seeks redress from the court to declare such documents as ineffective and/or
void and/or of no effect. No hearing in this matter has yet been scheduled.

On July 13, 2007, Foshan City Shunde District Ka Fook Recycle
Products Ltd. with its legal representative Mr. Patrick Oung instituted civil
proceedings against our wholly owned subsidiary Jiangmen Roots Biopack Limited.
Foshan City Shunde District Ka Fook Recycle Products Ltd. and its legal
representative Mr. Patrick Oung allege that we and our subsidiary authorized
them to handle and establish early stage inspections, assessments, negotiations
and all matters which were in the set-up process and to provide consultation
services for setting up the factory. Foshan City Shunde District Ka Fook Recycle
Products Ltd. and its legal representative Mr. Patrick Oung further allege that
during this period our subsidiary had transferred a total of Renminbi 5,110,000
to Foshan City Shunde District Ka Fook Recycle Products Ltd. but because of
conflicts arising during the course of the set-up processes between directors of
our subsidiary, our subsidiary had not checked or reconciled the transactions
with Foshan City Shunde District Ka Fook Recycle Products Ltd. Foshan City
Shunde District Ka Fook Recycle Products Ltd. and its legal representative Mr.
Patrick Oung have asked the court to confirm that Renminbi 5,110,000 has been
paid to Foshan City Shunde District Ka Fook Recycle Products Ltd. and to order
our subsidiary to check and reconcile these transactions.

On May 31, 2007, Foshan City Shunde District Ka Fook Recycle
Products Ltd. with its legal representative Mr. Patrick Oung instituted civil
proceedings against our wholly owned subsidiary Jiangmen Roots Biopack Limited.
Foshan City Shunde District Ka Fook Recycle Products Ltd. and its legal
representative Mr. Patrick Oung allege that in February 2007 they signed a
rental agreement with our wholly owned subsidiary for the sublease of
approximately 5,000 m2in a factory located in Yangjiaokeng
Industrial District, Tingyuan Village, Duran Town at a rate of 50,000 yans per
month.

Foshan City Shunde District Ka Fook Recycle Products Ltd. and
its legal representative Mr. Patrick Oung further allege that they had moved a
number of machines inside the factory and established production of machines for
environmentally friendly products. They further allege that on May 4, 2007 a
dispute arose amongst the directors of our company, and that our subsidiary
prohibited them from entering the factory, seized their assets and deliberately
used and damaged these properties.  Foshan City Shunde District Ka Fook Recycle Products Ltd. and
its legal representative Mr. Patrick Oung have asked the court to order our
subsidiary to return all machinery, production facilities, materials, products,
tools, business data and information and any related property belonging to
Foshan City Shunde District Ka Fook Recycle Products Ltd.

- 20 -

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On June 4, 2007, pending the hearing of the case, the court
ordered that the properties in dispute and Renminbi 2,800,000 be seized.

Also on June 4, 2007, the court ordered that all materials,
including all business information such as accounting records, information
registered under the name of Foshan City Green Machine Factory and placed at the
factory area of our wholly owned subsidiary plus our subsidiarys production
equipment, products and business records seized, detained, photographed,
video-taped, copied, investigated, and listed, in order to preserve the
evidence. Included among this property placed for safekeeping at our Biopark
factory facility are four new production machines that we cannot use in our
production line until this dispute has been resolved.

On May 10, 2007, our wholly owned subsidiary, Jiangmen Roots
Biopack Limited, and Gerald Lau as our subsidiarys legal representative filed a
report of crime with the Public Security Bureau of Jiangmen City. In the report
of crime we alleged that Patrick Oung, a former director of our subsidiary, was
given the authority to handle the early stages of the establishment of our
factory in Jiangmen due to a serious illness to our president, Gerald Lau. We
further alleged that in April 2007 we discovered that Patrick Oung had paid a
total of Renminbi 1,000,000 for a factory lease guarantee through our
subsidiarys bank account by affixing our subsidiarys company seal without
proper authorization from its board of directors or legal representative, where
the actual factory lease guarantee required was only Renminbi 309,000. Moreover,
we discovered that a total of Renminbi 610,000 was transferred to Patrick Oungs
personal account on March 6, 7, and 8, 2007. For these reasons, we decided to
file a criminal complaint and seek assistance from the Public Security Bureau of
Jiangmen City. On August 1, 2007, the Public Security Bureau of Jiangmen City
decided to prosecute Patrick Oung for embezzlement of our subsidiarys funds.
Mr. Oung was arrested on August 8, 2007, while entering the Peoples Republic of
China at Zhong Shan Port, and he was detained in the Jiangmen Detention Center.
While under detention, Mr. Oung was examined at the hospital and found to be in
serious physical condition. In view of his poor health and his promise to return
all of the money he had embezzled from our company within three months of his
release, Mr. Oung was released from detention on bail and for humanitarian
grounds. Part of Mr. Oungs bail consisted of 450,000 Renminbi and a condition
that he return 750,000 Renminbi to our companys subsidiary. Mr. Oungs release
includes a condition that he not be allowed to leave the Peoples Republic of
China. This criminal proceeding was to be adjudicated early in 2009 but, in
contravention of the terms of his release from custody, Mr. Oung has fled the
Peoples Republic of China and the case cannot be tried in his absence. A
warrant has been issued for his arrest if and when he re-enters the Peoples
Republic of China.

On September 1, 2007 our Hong Kong subsidiary Roots Biopack
Industry Limited filed suit against Patrick Oung in the High Court of the Hong
Kong Special Administrative Region Court of First Instance (Action No. 1860)
alleging that Mr. Oung acted as a shadow director of the plaintiff and that he
breached fiduciary duties owed to the plaintiff by causing the plaintiff to
engage in wrongful transactions that enriched the defendant. The plaintiff has
demanded an accounting and return of all money misapplied and/or misappropriated
by Mr. Oung.

ITEM 4. (REMOVED AND RESERVED).

- 21 -

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PART II

ITEM 5. MARKET FOR REGISTRANTS COMMON EQUITY, RELATED
STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.

Market for Securities

Our common shares are quoted for trading on the OTC Bulletin
Board under the symbol BPAC.

The following quotations obtained from the OTC Bulletin Board
reflect the highs and low bids for our common stock based on inter-dealer
prices, without retail mark-up, mark-down or commission an may not represent
actual transactions. The high and low bid prices of our common stock for the
periods indicated below are as follows:

Quarter Ended
    High
    LowDecember 31, 2010
    $0.18
    $0.01September 30, 2010
    $0.10
    $0.01June 30, 2010
    $0.19
    $0.10March 31, 2010
    $0.68
    $0.15December 31, 2009
    $0.58
    $0.46September 30, 2009
    $0.52
    $0.25June 30, 2009
    $0.25
    $0.10March 31, 2009
    $0.22
    $0.08


On April 12, 2011, the closing price for the common stock as
reported by the quotation service operated by the OTC Bulletin Board was $0.02
Our transfer agent and registrar for our common stock is Madison Stock Transfer
Inc. Their address is PO Box 145, Brooklyn, New York, USA 11229-0145. Their
telephone number is 718.627.4453. Their fax number is 718.627.6341.

Holders of our Common Stock

As of April 12, 2011, there were approximately 1,408 registered
holders of record of our common stock. As of such date, 41,032,849 common shares
were issued and outstanding.

Dividends

We have not paid dividends on our common stock in the past and
do not anticipate paying dividends in the near future. We intend to retain
earnings, if any, for use in our business and do not anticipate paying any cash
dividends. Our board of directors will determine if and when dividends should be
declared and paid in the future based on our financial position at the relevant
time. All of our shares of common stock are entitled to an equal share in any
dividends declared and paid.

Recent Sales of Unregistered Securities

Since the beginning of the fourth quarter of our fiscal year
ended December 31, 2010, we have not sold any equity securities that were not
registered under the Securities Act of 1933 that were not previously reported in
a quarterly report on Form 10-Q or in a current report on Form 8-K.

- 22 -

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Securities Authorized for Issuance Under Equity Compensation
Plans

The following table summarizes our equity compensation plan
information for the fiscal year end December 31, 2010;

Plan Category
    Number of Securities to be Issued
      Upon Exercise of Outstanding Options, Warrants and
      Rights
    Weighted-Average Exercise Price of
      Outstanding Options, Warrants and Rights
    Number of Securities Remaining Available
      for Future Issuance Under Equity Compensation
      Plans (Excluding Securities Reflected in
      Column)Equity compensation plans approved by
      security holders
    Nil
    Nil
    NilEquity compensation plans not approved by security
      holders(1)
    6,000,000
    $Nil
    NilTotal
    6,000,000
    $Nil
    Nil


|(1) | On July 8, 2005, we filed a registration statement on
      Form S-8 registering 6,000,000 shares at a proposed offering price of
      $0.013 per share or $78,000. Under this plan we issued 6,000,000 shares to
      five individuals in consideration for consulting
  services.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Purchases of Equity Securities by the Issuer and Affiliated
Purchasers

We did not purchase any of our shares of common stock or other
securities during our fiscal year ended December 31, 2010.

ITEM 6. SELECTED FINANCIAL DATA.

Not Applicable.

ITEM 7. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS.

Our managements discussion and analysis of financial condition
and results of operation provides a narrative about our financial performance
and condition that should be read in conjunction with the audited consolidated
financial statements and related notes thereto included in this annual report on
Form 10-K. This discussion contains forward looking statements reflecting our
current expectations and estimates and assumptions about events and trends that
may affect our future operating results or financial position. Our actual
results and the timing of certain events could differ materially from those
discussed in these forward-looking statements due to a number of factors,
including, but not limited to, those set forth in the sections of this Form 10-K
titled Risk Factorsand Forward-Looking Statements.

Our Business

We develop, manufacture, distribute and market bio-degradable
food containers and disposable industrial packaging for consumer products. We
supply our biodegradable food containers and industrial packaging products to
multinational corporations, supermarket chains and restaurants located across
North America, Europe and Asia.

We manufacture our products in our own factory, known as
Jiangmen Roots Biopack Ltd., which is located in Jiangmen City in the PRC.

- 23 -

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Proposed Sale of Our Subsidiaries

On July 9, 2010, Biopack Environmental Limited, a wholly-owned
subsidiary of Starmetro Group Limited, which is our wholly-owned subsidiary,
entered into a share purchase agreement with Well Talent Technology Limited, a
company incorporated in the British Virgin Islands, whereby Well Talent agreed
to purchase:

- all of the issued and outstanding shares of Roots Biopark Limited (which
  wholly owns Jiangmen Roots Biopack Ltd.) and Roots Biopack (Intellectual
  Property) Limited; and
- the shareholders loan in the amount of HK$26,522,763.91 (approximately
  US$3,394,479) advanced by Biopack Environmental Limited to Roots Biopark
  Limited and the shareholders loan of HK$275,742.56 (approximately US$35,291)
  advanced by Biopack Environmental Limited to Roots Biopack (Intellectual
  Property) Limited.

The total consideration payable to Biopack Environmental
Limited for the sale of these shares and the shareholders loans is HK$6,800,000
(approximately US$875,161). The consideration of HK$6,800,000 is payable on the
completion of the sale:

- by way of cash payment of HK$2,800,000 (approximately US$360,360); and
- by way of cancellation of the loans in the amount of HK$4,000,000
  (approximately US$514,800) advanced by Well Talent to Biopack Environmental
  Limited.

At the completion of the sale, Well Talent also agreed to
release Gerald Lau, our president and director, from his obligations as a
guarantor over the HK$4,000,000 loans advanced by Well Talent to Biopack
Environmental Limited.

The sale of these shares and the shareholders loans is
conditional upon, among other things,:

- obtaining approval from our stockholders of the sale;
- Biopack Environmental Limited, Well Talent, Roots Biopark Limited, and
  Roots Biopack (Intellectual Property) Limited entering into a deed of
  assignment, whereby Biopack Environmental Limited will assign the
  shareholders loans to Well Talent; and
- Biopack Environmental Limited entering into a distributorship agreement
  with Well Talent. The distributorship agreement grants Biopack Environmental
  Limited the exclusive right to sell bio-degradable food container and
  packaging product produced by Roots Biopark Limited and Roots Biopack
  (Intellectual Property) Limited in Europe, North America, Australia, Africa,
  South America and Hong Kong for a period of 12 months.

The sale of all of the issued and outstanding shares of Roots
Biopark Limited and Roots Biopack (Intellectual Property) Limited will
constitute the sale of all of our operating assets.

Result of Operations for the Year Ended December 31, 2010
as Compared to the Year Ended December 31, 2009

During the year ended December 31, 2010 we had a net loss of
$2,384,990, compared to net profit of $867,547 for the year ended December 31,
2009. The increase in net loss for the year ended December 31, 2010, was
primarily due to a one off gain on disposal of subsidiaries for the same period
in 2009 which didnt recur for the year ended December 31, 2010.

- 24 -

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Result of continuing operations

Our Hong Kong office which perform the sales, marketing and
distribution functions is the continuing operations of our group. We buy
products from our factory in China, the subsidiary held for sale, at the market
rate and sell to our customers in Europe, North America and other regions.

Our loss from continuing operation was $468,972 for the year
ended December 31, 2010 compared to $426,441 for the year ended December 31,
2009. The increase in the amount of our operating loss was due primarily to
decreased revenue and gross profit compared to the same period in 2009.

Net Sales and Cost of Sales

Net sales for the year ended December 31, 2010 were $364,417,
compared to net sales of $921,281 for the year ended December 31,2009. The
decrease in sales is primarily attributable to the slowing down of the European
economy.

Cost of sales for the year ended December 31, 2010 was
$328,215, which provided a gross profit of $36,202, compared to cost of sales of
$803,729 for the year ended December 31, 2009, which provided a gross profit of
$117,552 for the year ended December 31, 2009. The decrease in gross profit is
primarily due to the increase in the market price of the product we bought from
our factory in China, the subsidiary held for sale. The rising inflation rate in
China was the main contributor for increased price of the product exported from
China.

Operating Expenses

Operating expenses for the year ended December 31, 2010 were
$505,174, compared to $543,993 for the year ended December 31, 2009. The
decrease in operating expenses was due to the decrease in general and
administrative expenses as a result of decreased audit and consultancy
expenses.

Our general and administrative expenses for the year ended
December 31, 2010 were $490,286 compared to $537,063 for the year ended December
31, 2009. The decrease in general and administrative expenses in 2010 was
primarily due to decrease audit and consultancy expenses compared to the same
period in 2009.

Our depreciation expenses for the year ended December 31, 2010
were $3,991 compare to $6,930 for the year ended December 31, 2009. Most of our
continuing operations assets are office equipment with low value.

Our legal and professional expenses for the year ended December
31, 2010 were $68,858, compared to $42,705 for the year ended December 31, 2009.
The increase in legal and professional expenses is mainly due to the additional
requirement related to U.S. SEC regulatory compliance and responding to the
comments from the SEC related to our proposed sale of subsidiaries.

Interest Expenses

We incurred interest expense of $45,459 during the year ended
December 31, 2010, compared to $177,489 during the year ended December 31, 2009.
Interest expense was incurred primarily due to interest expenses accrued on long
term and short term debt. The decrease in interest expense was due primarily to
the decrease in the principal amount of our debt for the year ended December 31,
2010, compared to the year ended December 31, 2009.

Result of discontinued operations of the three subsidiaries
held for sale

The three discontinued subsidiaries held for sale have incurred
a loss of $2,146,386 for the year ended December 31, 2010, compared to loss of
$771,010 for the year ended December 31, 2009. The increase in the loss is
primarily due to the impairment loss on the plant and machinery to reflect the
fair value of the fixed asset in the factory. The loss in the manufacturing
operations in our factory in China is mainly due the fact that the production
level hasnt reached the economy of scale to generate operating profit.

- 25 -

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The general economic environment also had a negative impact on
the operating result, including the increasing raw material price in China as a
result of the draught happened in 2009, as well as increasing labour cost in
China due to the stimulation package China government has injected into the
infrastructure projects which created a shortage of labour force for 2010.

Capital Expenditures

During the year ended December 31, 2010, the bulk of our
capital expenditure was focused on the development of our Biopark production
facility. We have invested $93,320 on plant and equipment for the year ended
December 31, 2010 compared to $266,629 for the year ended December 31, 2009. As
of December 31, 2010, we do not have any material commitments for capital
expenditures.

Liquidity and Capital Resources

Our principal cash requirements are for daily working capital,
manufacturing and installation of plant and machinery at our leased factory in
Jiangmen City, PRC. On December 31, 2010 we had cash and cash equivalents of
$97,888 compared to $3,997 at December 31, 2009. We estimate that our operating
expenses over the next 12 months will be approximately $75,000 per month.
Therefore, we estimate that we will need approximately $900,000 over the next 12
months in order to continue our operations. As at December 31, 2010 we had a
working capital deficit of $2,172,812, compared to a working capital deficit of
$2,129,494 at December 31, 2009. The increase in working capital for the period
was primarily financed by the issuance of shares for debts redemption.

The sale of all of the issued and outstanding shares of Roots
Biopark Limited and Roots Biopack (Intellectual Property) Limited to Well Talent
Technology Limited is a course of action that we propose to take to address our
funding shortfalls. Also as discussed below under the section entitled Cash
Flow Provided by Financing Activities, we obtained the loans from Well Talent
and others to address our funding shortfalls. We expect our operating expenses
would dramatically decrease after the sale of the subsidiaries to Well Talent as
the factory operations historically represented the majority of the total
operational expenses for our company (historically, the factory operations have
accounted for approximately 65-66% of total operational expenses). We hope that
removing the factory operations from our company would allow our company to
continue operating more efficiently since we expect to concentrate on the sales,
marketing and distribution activities without being responsible for the large
expenses associated with the factory operations. If we cannot complete the sale,
we hope to be able to source most of this money from our sales revenue during
the next 12 months, but it is likely that we will be forced to wind up our

Cash Flow Used in Operating Activities

For the nine months ended December 31, 2010 our operating
activities provided net cash of $485,357, compared to $908,510 used for the year
ended December 31, 2009. The decrease in cash inflow was primarily due to
decrease in advances from related parties.

Cash Flow Used in Investing Activities

For the year ended December 31, 2010 investing activities used
net cash of $99,559 compared to $203,950 for the year ended December 31, 2009.
The net cash used in investing activities was primarily due to the purchase of
additional equipment for our factory.

Cash Flow Provided by Financing Activities

For the year ended December 31, 2010, financing activities
provided cash of $678,807 compared to $828,602 cash used in the year ended
December 31, 2009. The cash flow provided in financing activities was primarily
from debt notes issuance.

During the year ended December 31, 2010, we engaged in the
following financing transactions:

On January 15, 2010, we issued 500,000 shares of our common
stock to the holder of a convertible debenture dated May 15, 2010 upon
conversion of the principal and interest due under that convertible debenture,
at a conversion price of $0.10 per share.

- 26 -

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On February 2, 2010, we issued an aggregate of 2,331,955 shares
of our common stock to two investors in consideration of the debt owed by our
company to these investors, which had an aggregate principal amount of $857,000,
and an aggregate amount of accrued interest in the amount of $56,893, at a price
of $0.3919 per share.

On February 22, 2010, we issued 3,651,672 shares of our common
stock to one person upon the conversion of the remaining principal ($204,940)
and accrued interest ($38,626.57) due under a convertible debenture previously
issued by us dated March 3, 2009, at a conversion price of $0.0667 per
share.

On April 28, 2010, we issued 160,872 shares of our common stock
to the holder of a convertible debenture dated July 31, 2009 upon conversion of
the principal and interest due under that convertible debenture, at a conversion
price of $0.10 per share.

On April 22, 2010, we entered into a loan agreement with Well
Talent Technology Limited, whereby Well Talent loaned HK$2,000,000
(approximately US$257,400) to us. Well Talent has the right to terminate or
demand repayment at any time upon giving written notice to us. Notwithstanding
this right, we must repay the loan within 6 months from the date of the loan,
subject to the parties agreeing to a 3 month extension. There is no interest on
the loan for the first six months and if the parties agree to the 3 month
extension, the loan is subject to interest at a rate of 1% per month.

On June 3, 2010, we entered into another loan agreement with
Well Talent, whereby Well Talent loaned additional HK$2,000,000 (approximately
US$257,400) to us. The terms of this loan agreement are substantially the same
as the loan agreement dated April 22, 2010.

Gerald Lau, our president and director, personally guaranteed
to Well Talent on these two loans.

On June 25, 2010, a lender unrelated to our company loaned us a
total of $400,000. As evidence of the loan, we have executed and delivered a
promissory note in the principal amount of $400,000, to be paid on demand with
interest at 0.5% per annum.

Capital Expenditures

During the year ended December 31, 2010, the bulk of our
capital expenditure was focused on the development of our Biopark production
facility. We have invested $93,320 on plant and equipment for the year ended
December 31, 2010 compared to $266,629 for the year ended December 31, 2009. As
of December 31, 2010, we do not have any material commitments for capital
expenditures.

Going Concern

The accompanying consolidated financial statements have been
prepared in accordance with the accounting principles generally accepted in the
United States of America (US GAAP), which contemplate the continuation of our
company as a going concern. We made a net loss for the year ended December 31,
2010 of $2,384,990 and, on December 31, 2010 we had an accumulated deficit of
$7,276,923 and a working capital deficit of $2,172,812. These conditions raise
substantial doubt as to our companys ability to continue as a going concern.
These consolidated financial statements do not include any adjustments that
might result from the outcome of this uncertainty. These consolidated financial
statements do not include any adjustments relating to the recoverability and
classification of recorded asset amounts, or amounts and classifications of
recorded asset amounts, or amounts and classifications of liabilities that might
be necessary should our company be unable to continue as a going concern.

The future of our company is dependent upon its attaining
profitable operations and raising the capital it will require in order to
achieve profitable operations through the issuance of equity securities,
borrowings or a combination thereof.

- 27 -

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Off-Balance Sheet Arrangements

Other than as disclosed below, we do not have any off-balance
sheet arrangements that have or are reasonably likely to have a current or
future effect on our financial condition, changes in financial condition,
revenues or expenses, results of operations, liquidity, capital expenditures or
capital resources that is material to investors.

On April 22, 2010, we entered into a loan agreement with Well
Talent, whereby Well Talent loaned HK$2,000,000 (approximately US$257,400) to
us. Well Talent has the right to terminate or demand repayment at any time upon
giving written notice to us. Notwithstanding this right, we must repay the loan
within 6 months from the date of the loan, subject to the parties agreeing to a
3 month extension. There is no interest on the loan for the first six months and
if the parties agree to the 3 month extension, the loan is subject to interest
at a rate of 1% per month.

On June 3, 2010, we entered into another loan agreement with
Well Talent, whereby Well Talent loaned additional HK$2,000,000 (approximately
US$257,400) to us. The terms of this loan agreement are substantially the same
as the loan agreement dated April 22, 2010.

Gerald Lau, our president and director, personally guaranteed
to Well Talent on these two loans.

On August 19, 2010, we entered into a loan from Mr. Sean Leigh
Webster our director in the form of unsecured, non-interest bearing advances
with no due date.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
MARKET RISK.

Not Applicable

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

- 28 -

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BIOPACK ENVIRONMENTAL SOLUTIONS INC.

(INCORPORATED IN THE UNITED STATES OF AMERICA)

CONSOLIDATED FINANCIAL STATEMENTS

YEAR ENDED 31 DECEMBER 2010



- 29 -

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C O N T E N T S

|                                                               | Page  
|-------------------------------------------------------------- | ------
|                                                               |       
|Report of Independent Registered Public
      Accounting Firm  | 1     
|                                                               |       
|Consolidated Balance Sheets                                    | 2 - 3 
|                                                               |       
|Consolidated Statement of Operations                           | 4     
|                                                               |       
|Consolidated Statement of Change in
      Shareholders Equity | 5     
|                                                               |       
|Consolidated Statement of Cash Flow                            | 6     
|                                                               |       
|Notes to the Consolidated Financial
      Statements           | 7 - 23

(All Amounts in United States Dollars unless otherwise
stated)

- 30 -

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM 
  TO
  THE BOARD OF DIRECTORS AND SHAREHOLDERS OFBIOPACK ENVIRONMENTAL SOLUTIONS
    INC.(INCORPORATED IN THE UNITED STATES OF AMERICA WITH LIMITED
  LIABILITY)

We have audited the accompanying consolidated balance sheets of
  Biopack Environmental Solutions Inc. and its subsidiaries, as of 31 December
  2010 and 2009, and the related consolidated statements of operations, change in
  shareholders equity and cash flows for each of the three years in the period
  ended 31 December 2010. These consolidated financial statements are the
  responsibility of the Company's management. Our responsibility is to express an
  opinion on these consolidated financial statements based on our audit.

We conducted our audits in accordance with standards of the
  Public Company Accounting Oversight Board (United States of America). The
  Company is not required to have, nor were we engaged to perform, an audit of its
  internal control over financial reporting. Our audits included consideration of
  internal control over financial reporting as a basis for designing audit
  procedures that are appropriate in the circumstances, but not for the purpose of
  expressing an opinion on the effectiveness of the Companys internal control
  over financial reporting. Accordingly, we express no such opinion. Those
  standards require that we plan and perform the audit to obtain reasonable
  assurance about whether the financial statements are free of material
  misstatements. An audit includes examining, on a test basis, evidence supporting
  the amounts and disclosures in the consolidated 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 our audit provide a reasonable basis for our
  opinion.

In our opinion, the financial statements referred to above
  present fairly, in all material respects, the consolidated financial position of Biopack Environmental Solutions Inc.and its subsidiaries as of 31
  December 2010 and 2009, and the consolidated results of their operations and
  their cash flows for each of the three years in the period ended 31 December
  2010, in conformity with accounting principles generally accepted in the United
  States of America.

The accompanying financial statements have been prepared
  assuming that the Company will continue as a going concern. As described in Note
  9 to the financial statements conditions exist which raise substantial doubt
  about the companys ability to continue as a going concern unless it is able to
  generate sufficient cash flows to meet its obligations and sustain its
  operations. Those conditions raise substantial doubt about its ability to
  continue as a going concern. Managements plans regarding those matters are also
  described in Note 1. The financial statements do not include any adjustments
  that might result from the outcome of this uncertainty.





---

|BIOPACK ENVIRONMENTAL SOLUTIONS INC.      
|------------------------------------------
|(INCORPORATED IN UNITED STATES OF AMERICA)
|                                          
|CONSOLIDATED BALANCE SHEETS               
|AT 31 DECEMBER 2010                       

|                                                                  |  | Notes |         |  | 2010      |           |  | 2009      | 
|----------------------------------------------------------------- |  | ----- | ------- |  | --------- | --------- |  | --------- | 
|                                                                  |  |       |         |  | $         |           |  | $         | 
|NON-CURRENT ASSETS                                                |  |       |         |  |           |           |  |           | 
|Plant and equipments                                              |  | 3     |         |  | 2,716     |           |  | 16,991    | 
|Deposits                                                          |  |       |         |  | 4,832     |           |  | 7,484     | 
|                                                                  |  |       |         |  |           |           |  |           | 
|                                                                  |  |       |         |  | 7,548     |           |  | 24,475    | 
|                                                                  |  |       |         |  |           |           |  |           | 
|CURRENT ASSETS                                                    |  |       |         |  |           |           |  |           | 
|Prepaid expenses and other receivables                            |  | 4     |         |  | 380       |           |  | 10,000    | 
|Accounts receivable                                               |  | 5     |         |  | 4,903     |           |  | 103,375   | 
|Cash and cash equivalents                                         |  |       |         |  | 97,804    |           |  | 3,817     | 
|                                                                  |  |       |         |  |           |           |  |           | 
|                                                                  |  |       |         |  | 103,087   |           |  | 117,192   | 
|Assets of three subsidiaries
      classified as held for sale 15 |  |       | 905,532 |  |           | 2,511,909 | 
|                                                                  |  |       |         |  |           |           |  |           | 
|                                                                  |  |       |         |  | 1,008,619 |           |  | 2,629,101 | 
|                                                                  |  |       |         |  |           |           |  |           | 
|TOTAL ASSETS                                                      |  |       |         |  | 1,016,167 |           |  | 2,653,576 | 
|                                                                  |  |       |         |  |           |           |  |           | 
|EQUITY AND LIABILITIES                                            |  |       |         |  |           |           |  |           | 
|CURRENT LIABILITIES                                               |  |       |         |  |           |           |  |           | 
|Accounts payable and accrued expenses                             |  | 6     |         |  | 671,003   |           |  | 896,728   | 
|Amounts due to directors                                          |  | 7     |         |  | 787,060   |           |  | 13,362    | 
|Short term loans                                                  |  | 8     |         |  | 817,836   |           |  | 1,336,596 | 
|                                                                  |  |       |         |  |           |           |  |           | 
|                                                                  |  |       |         |  | 2,275,899 |           |  | 2,246,686 | 
|Liabilities of three subsidiaries                                 |  |       |         |  |           |           |  |           | 
|classified as held for sale                                       |  | 15    |         |  | 432,679   |           |  | 405,975   | 
|                                                                  |  |       |         |  |           |           |  |           | 
|                                                                  |  |       |         |  | 2,708,578 |           |  | 2,652,661 | 
|                                                                  |  |       |         |  |           |           |  |           | 
|NON-CURRENT LIABILITIES                                           |  |       |         |  |           |           |  |           | 
|Long term debt                                                    |  | 8     |         |  | 60,000    |           |  | 331,000   | 
|Long term debt from a shareholder                                 |  | 8     |         |  | 250,000   |           |  | -         | 
|Long term debt from a director                                    |  | 8     |         |  | -         |           |  | 250,000   | 
|                                                                  |  |       |         |  |           |           |  |           | 
|TOTAL NON-CURRENT LIABILITIES                                     |  |       |         |  | 310,000   |           |  | 581,000   | 

The notes on pages 7 to 23 are an integral part of these
consolidated financial statements Report of Independent Registered Public
Accounting Firm - Page 1

- 32 -

---

|BIOPACK ENVIRONMENTAL SOLUTIONS INC.      
|------------------------------------------
|(INCORPORATED IN UNITED STATES OF AMERICA)
|                                          
|CONSOLIDATED BALANCE SHEETS               
|AT 31 DECEMBER 2010                       
|(CONTINUED)                               

|                                                                                                                                               |  | Notes |  |  | 2010       |   |  | 2009       |  
|---------------------------------------------------------------------------------------------------------------------------------------------- |  | ----- |  |  | ---------- | - |  | ---------- | -
|                                                                                                                                               |  |       |  |  | $          |   |  | $          |  
|EQUITY                                                                                                                                         |  |       |  |  |            |   |  |            |  
|Capital and reserves                                                                                                                           |  |       |  |  |            |   |  |            |  
|Preferred stock, $0.001 par
      value,        10,000,000
      shares
      authorized;        1,620,000
      shares issued and outstanding |  | 14    |  |  | 1,620      |   |  | 1,620      |  
|Common stock, $0.0001 par
      value,        50,000,000
      shares
      authorized;        41,032,849
      shares issued and outstanding  |  | 14    |  |  | 4,102      |   |  | 3,438      |  
|Additional paid-in capital                                                                                                                     |  |       |  |  | 5,031,916  |   |  | 4,082,773  |  
|Stock issued at less than par value                                                                                                            |  |       |  |  | (2,683     | ) |  | (2,683     | )
|Accumulated other comprehensive income                                                                                                         |  |       |  |  | 239,557    |   |  | 226,700    |  
|Accumulated losses                                                                                                                             |  |       |  |  | (7,276,923 | ) |  | (4,891,933 | )
|                                                                                                                                               |  |       |  |  |            |   |  |            |  
|TOTAL EQUITY                                                                                                                                   |  |       |  |  | (2,002,411 | ) |  | (580,085   | )
|                                                                                                                                               |  |       |  |  |            |   |  |            |  
|TOTAL EQUITY AND LIABILITIES                                                                                                                   |  |       |  |  | 1,016,167  |   |  | 2,653,576  |  

The notes on pages 7 to 23 are an integral part of these
consolidated financial statements Report of Independent Registered Public
Accounting Firm - Page 1

- 33 -

---

|BIOPACK ENVIRONMENTAL SOLUTIONS INC.      
|------------------------------------------
|(INCORPORATED IN UNITED STATES OF AMERICA)
|                                          
|CONSOLIDATED STATEMENT OF OPERATIONS      
|FOR THE YEAR ENDED 31 DECEMBER 2010       

|                                                                            |  | Notes |            |  | 2010       |            |  | 2009      |            |  | 2008       |  
|--------------------------------------------------------------------------- |  | ----- | ---------- |  | ---------- | ---------- |  | --------- | ---------- |  | ---------- | -
|                                                                            |  |       |            |  | $          |            |  | $         |            |  | $          |  
|                                                                            |  |       |            |  |            |            |  |           |            |  |            |  
|Turnover                                                                    |  |       |            |  | 364,417    |            |  | 921,281   |            |  | 541,533    |  
|Cost of sales                                                               |  |       |            |  | (328,215   | )          |  | (803,729  | )          |  | (373,834   | )
|                                                                            |  |       |            |  |            |            |  |           |            |  |            |  
|Gross profit                                                                |  |       |            |  | 36,202     |            |  | 117,552   |            |  | 167,699    |  
|                                                                            |  |       |            |  |            |            |  |           |            |  |            |  
|General and administrative expenses                                         |  |       |            |  | (490,286   | )          |  | (537,063  | )          |  | (598,410   | )
|Plant and equipment written off                                             |  |       |            |  | (10,897    | )          |  | -         |            |  | -          |  
|Depreciation                                                                |  |       |            |  | (3,991     | )          |  | (6,930    | )          |  | (6,026     | )
|                                                                            |  |       |            |  |            |            |  |           |            |  |            |  
|Loss from operations                                                        |  |       |            |  | (468,972   | )          |  | (426,441  | )          |  | (436,737   | )
|                                                                            |  |       |            |  |            |            |  |           |            |  |            |  
|Other income                                                                |  |       |            |  | 275,827    |            |  | 159,000   |            |  | 24,826     |  
|Gain on disposal of subsidiaries                                            |  |       |            |  | -          |            |  | 2,083,487 |            |  | -          |  
|Finance cost                                                                |  |       |            |  | (45,459    | )          |  | (177,489  | )          |  | (793,483   | )
|                                                                            |  |       |            |  |            |            |  |           |            |  |            |  
|(LOSS)/PROFIT BEFORE TAX                                                    |  |       |            |  | (238,604   | )          |  | 1,638,557 |            |  | (1,205,394 | )
|Income tax                                                                  |  | 13    |            |  | -          |            |  | -         |            |  | -          |  
|                                                                            |  |       |            |  |            |            |  |           |            |  |            |  
|                                                                            |  |       |            |  | (238,604   | )          |  | 1,638,557 |            |  | (1,205,394 | )
|Loss from discontinued operations of three subsidiaries
      held for sale |  |       |            |  | (2,146,386 | )          |  | (771,010  | )          |  | (661,936   | )
|                                                                            |  |       |            |  |            |            |  |           |            |  |            |  
|NET (LOSS)/PROFIT FOR THE YEAR                                              |  |       |            |  | (2,384,990 | )          |  | 867,547   |            |  | (1,867,330 | )
|                                                                            |  |       |            |  |            |            |  |           |            |  |            |  
|                                                                            |  |       |            |  |            |            |  |           |            |  |            |  
|(Loss)/earnings per share                                                   |  |       |            |  | (0.03      | )          |  | 0.03      |            |  | (0.10      | )
|Weighted average common shares outstanding                                  |  |       | 29,894,894 |  |            | 26,801,863 |  |           | 19,241,414 | 
|                                                                            |  |       |            |  |            |            |  |           |            |  |            |  
|Diluted (loss)/earnings per share                                           |  |       |            |  | (0.03      | )          |  | 0.02      |            |  | (0.10      | )
|Diluted weighted average common
      shares outstanding                    |  |       | 29,894,894 |  |            | 37,329,307 |  |           | 19,241,414 | 

The notes on pages 7 to 23 are an integral part of these
consolidated financial statements Report of Independent Registered Public
Accounting Firm - Page 1

- 34 -

---

|BIOPACK ENVIRONMENTAL SOLUTIONS INC.                    
|--------------------------------------------------------
|(INCORPORATED IN UNITED STATES OF AMERICA)              
|                                                        
|CONSOLIDATED STATEMENT OF CHANGE IN SHAREHOLDERS EQUITY
|FOR THE YEAR ENDED 31 DECEMBER 2010                     

|                                                                             |  |                 |   |  |              |   |  |              |   |  |          |   |  |            |   |  | Stock issued  |   |  |               |   |  | Accumulated |  |  |            |  
|---------------------------------------------------------------------------- |  | --------------- | - |  | ------------ | - |  | ------------ | - |  | -------- | - |  | ---------- | - |  | ------------- | - |  | ------------- | - |  | ----------- |  |  | ---------- | -
|                                                                             |  |                 |   |  |              |   |  |              |   |  |          |   |  | Additional |   |  | at Less       |   |  | Retained      |   |  | Other       |  |  | Total      |  
|                                                                             |  | Preferred Stock |   |  | Common Stock |   |  | Paid-in      |   |  | Than Par |   |  | Earnings   |   |  | Comprehensive |   |  | Shareholders' |  
|                                                                             |  | Shares          |   |  | Amount       |   |  | Shares       |   |  | Amount   |   |  | Capital    |   |  | Value         |   |  | (Deficit)     |   |  | Income      |  |  | Equity     |  
|                                                                             |  |                 |   |  | $            |   |  |              |   |  | $        |   |  | $          |   |  | $             |   |  | $             |   |  | $           |  |  | $          |  
|                                                                             |  |                 |   |  |              |   |  |              |   |  |          |   |  |            |   |  |               |   |  |               |   |  |             |  |  |            |  
|Balance at 31 December 2007                                                  |  | 2,000,000       |   |  | 2,000        |   |  | 173,819,421  |   |  | 17,382   |   |  | 1,466,422  |   |  | (2,683        | ) |  | (3,892,150    | ) |  | 136,073     |  |  | (2,272,956 | )
|Share cancellation 17 February 2008                                          |  | -               |   |  | -            |   |  | (11,000,000  | ) |  | (1,100   | ) |  | 866        |   |  | -             |   |  | -             |   |  | -           |  |  | (234       | )
|Convertion of Debt to Common Share
      14 May 2008                         |  | -               |   |  | -            |   |  | 4,758,212    |   |  | 476      |   |  | 665,664    |   |  | -             |   |  | -             |   |  | -           |  |  | 666,140    |  
|Reverse split 10 to 1 11 June 2008                                           |  | -               |   |  | -            |   |  | (150,819,870 | ) |  | (15,082  | ) |  | 15,082     |   |  | -             |   |  | -             |   |  | -           |  |  | -          |  
|Convertion of Preferred A share to Common
      Share 14 July 2008           |  | (380,000        | ) |  | (380         | ) |  | 1,900,000    |   |  | 190      |   |  | (190       | ) |  | -             |   |  | -             |   |  | -           |  |  | (380       | )
|Convertion of Debt to Common Share 5
      September 2008                    |  | -               |   |  | -            |   |  | 1,492,537    |   |  | 149      |   |  | 99,851     |   |  | -             |   |  | -             |   |  | -           |  |  | 100,000    |  
|Convertion of Debt to Common Share
      19 September 2008                   |  | -               |   |  | -            |   |  | 1,800,000    |   |  | 180      |   |  | 119,820    |   |  | -             |   |  | -             |   |  | -           |  |  | 120,000    |  
|Convertion of Debt to Common Share
      15 October 2008                     |  | -               |   |  | -            |   |  | 2,750,000    |   |  | 275      |   |  | 399,725    |   |  | -             |   |  | -             |   |  | -           |  |  | 400,000    |  
|Common stock issued in exchange of
      consulting services 1 December 2008 |  | -               |   |  | -            |   |  | 125,000      |   |  | 13       |   |  | (13        | ) |  | -             |   |  | -             |   |  | -           |  |  | -          |  
|Intrinsic value of convertible debt                                          |  | -               |   |  | -            |   |  | -            |   |  | -        |   |  | 790,000    |   |  | -             |   |  | -             |   |  | -           |  |  | 790,000    |  
|Translation adjustment                                                       |  | -               |   |  | -            |   |  | -            |   |  | -        |   |  | -          |   |  | -             |   |  | -             |   |  | 34,548      |  |  | 34,548     |  
|Net loss for the year ended 31
      December 2008                           |  | -               |   |  | -            |   |  | -            |   |  | -        |   |  | -          |   |  | -             |   |  | (1,867,330    | ) |  | -           |  |  | (1,867,330 | )
|Balance at 31 December 2008                                                  |  | 1,620,000       |   |  | 1,620        |   |  | 24,825,300   |   |  | 2,483    |   |  | 3,557,227  |   |  | (2,683        | ) |  | (5,759,480    | ) |  | 170,621     |  |  | (2,030,212 | )
|Common stock issued in exhange of
      consulting services 8th June 2009    |  | -               |   |  | -            |   |  | 2,145,000    |   |  | 214      |   |  | (214       | ) |  | -             |   |  | -             |   |  | -           |  |  | -          |  
|Convertible of debt to common share                                          |  | -               |   |  | -            |   |  | 7,418,050    |   |  | 741      |   |  | 525,760    |   |  |               |   |  |               |   |  |             |  |  | 526,501    |  
|Translation adjustment                                                       |  | -               |   |  | -            |   |  | -            |   |  | -        |   |  | -          |   |  | -             |   |  | -             |   |  | 56,079      |  |  | 56,079     |  
|Net income for the year ended 31
      December 2009                         |  | -               |   |  | -            |   |  | -            |   |  | -        |   |  | -          |   |  | -             |   |  | 867,547       |   |  | -           |  |  | 867,547    |  
|Balance at 31 December 2009                                                  |  | 1,620,000       |   |  | 1,620        |   |  | 34,388,350   |   |  | 3,438    |   |  | 4,082,773  |   |  | (2,683        | ) |  | (4,891,933    | ) |  | 226,700     |  |  | (580,085   | )
|Convertible of debt to common share                                          |  | -               |   |  | -            |   |  | 6,644,499    |   |  | 664      |   |  | 949,143    |   |  |               |   |  |               |   |  |             |  |  | 949,807    |  
|Translation adjustment                                                       |  | -               |   |  | -            |   |  | -            |   |  | -        |   |  | -          |   |  | -             |   |  | -             |   |  | 12,857      |  |  | 12,857     |  
|Net income for the year ended 31
      December 2010                         |  | -               |   |  | -            |   |  | -            |   |  | -        |   |  | -          |   |  | -             |   |  | (2,384,990    | ) |  | -           |  |  | (2,384,990 | )
|Balance at 31 December 2010                                                  |  | 1,620,000       |   |  | 1,620        |   |  | 41,032,849   |   |  | 4,102    |   |  | 5,031,916  |   |  | (2,683        | ) |  | (7,276,923    | ) |  | 239,557     |  |  | (2,002,411 | )

The notes on pages 7 to 23 are an integral part of these
consolidated financial statements Report of Independent Registered Public
Accounting Firm - Page 1

- 35 -

---

|BIOPACK ENVIRONMENTAL SOLUTIONS INC.      
|------------------------------------------
|(INCORPORATED IN UNITED STATES OF AMERICA)
|                                          
|CONSOLIDATED STATEMENT OF CASH FLOW       
|FOR THE YEAR ENDED 31 DECEMBER 2010       

|                                                                                   |  | 2010       |   |  | 2009       |   |  | 2008       |  
|---------------------------------------------------------------------------------- |  | ---------- | - |  | ---------- | - |  | ---------- | -
|                                                                                   |  | $          |   |  | $          |   |  | $          |  
|Cash flows from operating activities                                               |  |            |   |  |            |   |  |            |  
|Net (loss)/profit for the year                                                     |  | (2,384,990 | ) |  | 867,547    |   |  | (1,867,330 | )
|Adjustments to reconcile
      net income to net cash                              |  |            |   |  |            |   |  |            |  
|provided by operating
      activities :                                           |  |            |   |  |            |   |  |            |  
|Depreciation and amortisation                                                      |  | 237,136    |   |  | 218,322    |   |  | 65,305     |  
|Impairment loss on plant
      and machinery                                       |  | 1,417,615  |   |  | -          |   |  | -          |  
|Gain on
      disposal of subsidiaries                                             |  | -          |   |  | (2,083,487 | ) |  | -          |  
|Plant and equipment
      written off                                              |  | 10,897     |   |  | -          |   |  | -          |  
|InterestImpairmentexpensesloss in respect of plant and machinery                   |  | 45,459     |   |  | 177,489    |   |  | 793,483    |  
|OtherImpairmentcomprehensiveloss in respectincomeof construction in
      progress |  | 12,857     |   |  | 56,079     |   |  | 34,548     |  
|Changes in operating assets
      and liabilities :                                |  |            |   |  |            |   |  |            |  
|Decrease in inventory                                                              |  | 52,545     |   |  | 276,048    |   |  | (317,933   | )
|Decrease/(increase) in accounts receivable                                         |  | 98,472     |   |  | (33,598    | ) |  | (69,777    | )
|Decrease in prepaid
      expenses and other receivables                           |  | 13,362     |   |  | 193,762    |   |  | (76,614    | )
|Increase/(decrease)
      in amounts due to shareholders and directors             |  | 765,299    |   |  | (624,813   | ) |  | (1,471,150 | )
|Decrease in deposits                                                               |  | 833        |   |  | 3,093      |   |  | (10,938    | )
|(Decrease)/increase in accruals and other payables                                 |  | (754,842   | ) |  | 2,095,115  |   |  | 769,580    |  
|Taxes payable                                                                      |  | -          |   |  | (237,047   | ) |  | (1,398     | )
|                                                                                   |  |            |   |  |            |   |  |            |  
|Net cash flows (used in)/generated from operating
      activities                 |  | (485,357   | ) |  | 908,510    |   |  | (2,152,224 | )
|                                                                                   |  |            |   |  |            |   |  |            |  
|Cash flows from investing activities                                               |  |            |   |  |            |   |  |            |  
|Acquisition of plant and equipment                                                 |  | (93,320    | ) |  | (266,629   | ) |  | (1,972,436 | )
|Construction in progess                                                            |  | (6,239     | ) |  | 62,679     |   |  | 1,120,762  |  
|                                                                                   |  |            |   |  |            |   |  |            |  
|Net cash flows used in investing activities                                        |  | (99,559    | ) |  | (203,950   | ) |  | (851,674   | )
|                                                                                   |  |            |   |  |            |   |  |            |  
|Cash flows from financing activities                                               |  |            |   |  |            |   |  |            |  
|Proceeds
      from note payable                                                   |  | -          |   |  | 50,000     |   |  | 1,008,786  |  
|Proceeds from issuance of
      debentures                                         |  | -          |   |  | 174,000    |   |  | 744,649    |  
|Redemption of debts                                                                |  | (271,000   | ) |  | (1,579,103 | ) |  | -          |  
|Additional paid up
      capital                                                   |  | 949,143    |   |  | 525,546    |   |  | 1,297,322  |  
|Common
      stock $0.0001 par value                                               |  | -          |   |  | 214        |   |  | (16,360    | )
|Non-cash financing activities                                                      |  |            |   |  |            |   |  |            |  
|Common
      stock issued to retire debentures                                     |  | 664        |   |  | 741        |   |  | 1,080      |  
|                                                                                   |  |            |   |  |            |   |  |            |  
|Net cash flows from/(used in) financing
      activities                           |  | 678,807    |   |  | (828,602   | ) |  | 3,035,477  |  
|                                                                                   |  |            |   |  |            |   |  |            |  
|Net increase/(decrease) in cash and cash
      equivalents                         |  | 93,891     |   |  | (124,042   | ) |  | 31,579     |  
|Cash and cash equivalents - beginning of year                                      |  | 3,997      |   |  | 128,039    |   |  | 96,460     |  
|                                                                                   |  |            |   |  |            |   |  |            |  
|Cash and cash equivalents - end of year                                            |  | 97,888     |   |  | 3,997      |   |  | 128,039    |  

The notes on pages 7 to 23 are an integral part of these
consolidated financial statements Report of Independent Registered Public
Accounting Firm - Page 1

- 36 -

---

|BIOPACK ENVIRONMENTAL SOLUTIONS INC.          
|----------------------------------------------
|(INCORPORATED IN UNITED STATES OF AMERICA)    
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|31 DECEMBER 2010                              

|1. | THE COMPANY                                                                                                                                                                                                                                  
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                              
|   | Biopack Environmental Solutions Inc. and its subsidiaries
      develop, manufacture, distribute and market bio-degradable food containers
      and disposable industrial packaging for consumer products made from
      natural materials.
|   |                                                                                                                                                                                                                                              
|2. | SUMMARY OF SIGNIFICANT ACCOUNTING
  POLICIES                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                              
|   | (a)                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                              
|   | (b)                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                              
|   | (c)                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                              

Report of Independent Registered Public Accounting Firm - Page
1- 37 -

---

|BIOPACK ENVIRONMENTAL SOLUTIONS INC.          
|----------------------------------------------
|(INCORPORATED IN UNITED STATES OF AMERICA)    
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|31 DECEMBER 2010                              

|2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
      (CONTINUED)
|-- | ------------------------------------------------------------
|   |                                                             
|   | (d)                                                         
|   |                                                             
|   |                                                             
|   |                                                             
|   | (e)                                                         
|   |                                                             
|   |                                                             
|   |                                                             
|   | (f)                                                         
|   |                                                             
|   |                                                             
|   |                                                             
|   | (g)                                                         
|   |                                                             
|   |                                                             

Report of Independent Registered Public Accounting Firm - Page
1- 38 -

---

|BIOPACK ENVIRONMENTAL SOLUTIONS INC.          
|----------------------------------------------
|(INCORPORATED IN UNITED STATES OF AMERICA)    
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|31 DECEMBER 2010                              

|2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
      (CONTINUED)
|-- | ------------------------------------------------------------
|   |                                                             
|   | (g)                                                         

YearsLeasehold improvements
    5Furniture, fixtures and office equipment
    5Motor Vehicles
    5 to 10Computer equipment
    5Plant and Machinery
    5 to 20


| | (h) | Impairment of Assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |     | In accordance with Statement of Financial Accounting
      Standards (SFAS) No. 144, "Accounting for Impairment or Disposal of
      Long-Lived Assets", the Company evaluates its long-lived assets to
      determine whether later events and circumstances warrant revised estimates
      of useful lives or a reduction in carrying value due to impairment. If
      indicators of impairment exist and if the value of the assets is impaired,
      an impairment loss would be recognized. There was no impairment loss made
      for property and equipment as of December 31, 2010.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | (i) | Income Taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |     | Income taxes are accounted for under the asset and
      liability method. Deferred tax assets and liabilities are recognized for
      the future tax consequences attributable to differences between the
      financial statement carrying amounts of existing assets and liabilities
      and their respective tax bases and operating loss and tax credit carry
      forwards. Deferred tax assets and liabilities are measured using enacted
      tax rates expected to apply to taxable income in the years in which those
      temporary differences are expected to be recovered or settled. The effect
      on deferred tax assets and liabilities of a change in tax rates is
      recognized in income in the period that includes the enactment
  date.                                                                                                                                                                                                                                                                                                                                                                                                                             
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |     | The FASB issued Accounting Standard Codification Topic
      740 (ASC 740) Income Taxes, (Formerly known as interpretation No. 48,
      Accounting for Uncertainty in Income Taxes, an interpretation of Statement
      of Financial Accounting Standards No. 109 (FIN 48)). ASC 740 clarifies
      the accounting for uncertainty in tax positions. This requires that an
      entity recognized in the consolidated financial statements the impact of a
      tax position, if that position is more likely than not of being sustained
      upon examination, based on the technical merits of the position. The
      adoption of ASC 740 did not have any impact on the Groups results of
      operations or financial condition for the year ended December 31, 2009. As
      of the date of the adoption of ASC 740, the Group has no material
      unrecognized tax benefit which would favorably affect the effective income
      tax rate in future periods. The Group has elected to classify interest and
      penalties related to unrecognized tax benefits, if and when required, as
      part of income tax expense in the consolidated statements of
      operations.

Report of Independent Registered Public Accounting Firm - Page
1- 39 -

---

|BIOPACK ENVIRONMENTAL SOLUTIONS INC.          
|----------------------------------------------
|(INCORPORATED IN UNITED STATES OF AMERICA)    
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|31 DECEMBER 2010                              

|2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
      (CONTINUED)
|-- | ------------------------------------------------------------
|   |                                                             
|   | (j)                                                         
|   |                                                             
|   |                                                             
|   |                                                             
|   | (k)                                                         
|   |                                                             
|   |                                                             
|   |                                                             
|   |                                                             
|   |                                                             
|   | (l)                                                         
|   |                                                             
|   |                                                             

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1- 40 -

---

|BIOPACK ENVIRONMENTAL SOLUTIONS INC.          
|----------------------------------------------
|(INCORPORATED IN UNITED STATES OF AMERICA)    
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|31 DECEMBER 2010                              

|2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
      (CONTINUED)
|-- | ------------------------------------------------------------
|   |                                                             
|   | (m)                                                         
|   |                                                             
|   |                                                             
|   |                                                             
|   | (n)                                                         
|   |                                                             
|   |                                                             
|   |                                                             
|   |                                                             
|   |                                                             
|   |                                                             
|   |                                                             
|   |                                                             

Report of Independent Registered Public Accounting Firm - Page
1- 41 -

---

|BIOPACK ENVIRONMENTAL SOLUTIONS INC.          
|----------------------------------------------
|(INCORPORATED IN UNITED STATES OF AMERICA)    
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|31 DECEMBER 2010                              

|2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
      (CONTINUED)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | (o)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | (p)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | In December 2007, ASC 805, Business Combinations (ASC
      805) (formerly included under Statement of Financial Accounting Standards
      No. 141 (revised 2007), Business Combinations) contains guidance that was
      issued by the FASB. It requires the acquiring entity in a business
      combination to recognize all assets acquired and liabilities assumed in a
      transaction at the acquisition-date fair value, with certain exceptions.
      Additionally, the guidance requires changes to the accounting treatment of
      acquisition related items, including, among other items, transaction
      costs, contingent consideration, restructuring costs, indemnification
      assets and tax benefits. ASC 805 also provides for a substantial number of
      new disclosure requirements. ASC 805 also contains guidance that was
      formerly issued as FSP FAS 141(R)-1, Accounting for Assets Acquired and
      Liabilities Assumed in a Business Combination That Arise from
      Contingencies which was intended to provide additional guidance clarifying
      application issues regarding initial recognition and measurement,
      subsequent measurement and accounting, and disclosure of assets and
      liabilities arising from contingencies in a business combination. ASC 805
      was effective for business combinations initiated on or after the first
      annual reporting period beginning after December 15, 2008. The Company
      implemented this guidance effective January 1, 2009. Implementing this
      guidance did not have an effect on the Companys financial position or
      results of operations; however it will likely have an impact on the
      Companys accounting for future business combinations, but the effect is
      dependent upon acquisitions, if any, that are made in the
future.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               

Report of Independent Registered Public Accounting Firm - Page
1- 42 -

---

|BIOPACK ENVIRONMENTAL SOLUTIONS INC.          
|----------------------------------------------
|(INCORPORATED IN UNITED STATES OF AMERICA)    
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|31 DECEMBER 2010                              

|2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
      (CONTINUED)
|-- | ------------------------------------------------------------
|   |                                                             
|   | (p)                                                         
|   |                                                             
|   |                                                             
|   |                                                             
|   |                                                             

Report of Independent Registered Public Accounting Firm - Page
1- 43 -

---

|BIOPACK ENVIRONMENTAL SOLUTIONS INC.          
|----------------------------------------------
|(INCORPORATED IN UNITED STATES OF AMERICA)    
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|31 DECEMBER 2010                              

|2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
      (CONTINUED)
|-- | ------------------------------------------------------------
|   |                                                             
|   | (p)                                                         
|   |                                                             
|   |                                                             
|   |                                                             
|   |                                                             

Report of Independent Registered Public Accounting Firm - Page
1- 44 -

---

|BIOPACK ENVIRONMENTAL SOLUTIONS INC.          
|----------------------------------------------
|(INCORPORATED IN UNITED STATES OF AMERICA)    
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|31 DECEMBER 2010                              

|2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
      (CONTINUED)
|-- | ------------------------------------------------------------
|   |                                                             
|   | (p)                                                         
|   |                                                             
|   |                                                             
|   |                                                             
|   |                                                             

Report of Independent Registered Public Accounting Firm - Page
1- 45 -

---

|BIOPACK ENVIRONMENTAL SOLUTIONS INC.          
|----------------------------------------------
|(INCORPORATED IN UNITED STATES OF AMERICA)    
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|31 DECEMBER 2010                              

|2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
      (CONTINUED)
|-- | ------------------------------------------------------------
|   |                                                             
|   | (p)                                                         
|   |                                                             
|   |                                                             
|   |                                                             
|   | (q)                                                         
|   |                                                             
|   |                                                             
|   |                                                             
|3. | PLANT AND EQUIPMENT,
NET                                    

| |                                |  | 2010    |   |  | 2009    |  
| | ------------------------------ |  | ------- | - |  | ------- | -
| |                                |  | $       |   |  | $       |  
| | Cost                           |  |         |   |  |         |  
| | Office furniture and equipment |  | 3,228   |   |  | 21,583  |  
| | Computer
      equipment       |  | 12,973  |   |  | 13,020  |  
| |                                |  |         |   |  |         |  
| |                                |  | 16,201  |   |  | 34,603  |  
| | Accumulated depreciation       |  | (13,485 | ) |  | (17,612 | )
| |                                |  |         |   |  |         |  
| |                                |  | 2,716   |   |  | 16,991  |  

Depreciation expense for the years
ended December 31, 2010 and 2009 was $3,991 and $6,930.

Report of Independent Registered Public Accounting Firm - Page
1

- 46 -

---

|BIOPACK ENVIRONMENTAL SOLUTIONS INC.          
|----------------------------------------------
|(INCORPORATED IN UNITED STATES OF AMERICA)    
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|31 DECEMBER 2010                              

|4. | PREPAID EXPENSES AND OTHER
  RECEIVABLES
|-- | ----------------------------------------

| |                   |  | 2010 |  |  | 2009   | 
| | ----------------- |  | ---- |  |  | ------ | 
| |                   |  | $    |  |  | $      | 
| |                   |  |      |  |  |        | 
| | Other receivables |  | 380  |  |  | 10,000 | 

|5. | ACCOUNTS RECEIVABLE                                                   
|-- | ----------------------------------------------------------------------
|   |                                                                       
|   | Accounts receivable consists of receivables on trade as
      follows:

| |                                       |  | 2010  |  |  | 2009    | 
| | ------------------------------------- |  | ----- |  |  | ------- | 
| |                                       |  | $     |  |  | $       | 
| | Ageing of trade and other receivables |  |       |  |  |         | 
| | 0 - 30 days                           |  | -     |  |  | 2,990   | 
| | Over 30 days                          |  | 4,903 |  |  | 100,385 | 
| |                                       |  |       |  |  |         | 
| |                                       |  | 4,903 |  |  | 103,375 | 

As at December 31, 2010, the Companys
subsidiaries had receivables total $4,903. The Company believes that there is no
issue of recoverability and the balances receivable are indicative of fair
value.

|6. | ACCOUNTS PAYABLE AND ACCRUED
  EXPENSES
|-- | ---------------------------------------

| |                                    |  | 2010    |  |  | 2009    | 
| | ---------------------------------- |  | ------- |  |  | ------- | 
| |                                    |  | $       |  |  | $       | 
| |                                    |  |         |  |  |         | 
| | Accrued expense and other payables |  | 551,964 |  |  | 711,066 | 
| | Customers deposits received        |  | -       |  |  | -       | 
| | Accounts payables                  |  | 119,039 |  |  | 185,662 | 
| |                                    |  |         |  |  |         | 
| |                                    |  | 671,003 |  |  | 896,728 | 

- 47 -

---

Report of Independent Registered Public Accounting Firm - Page
1

- 48 -

---

|BIOPACK ENVIRONMENTAL SOLUTIONS INC.          
|----------------------------------------------
|(INCORPORATED IN UNITED STATES OF AMERICA)    
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|31 DECEMBER 2010                              

|7. | DUE TO SHAREHOLDERS &
  DIRECTORS
|-- | ---------------------------------

| |                          |  | 2010    |  |  | 2009   | 
| | ------------------------ |  | ------- |  |  | ------ | 
| |                          |  | $       |  |  | $      | 
| |                          |  |         |  |  |        | 
| | Amounts due to directors |  | 787,060 |  |  | 13,362 | 

Directors of the Company have advanced $787,060 in the form of
unsecured, non-interest bearing advances with no due date.

|8. | LOANS PAYABLE
|-- | -------------

| |                  |  | 2010    |  |  | 2009      | 
| | ---------------- |  | ------- |  |  | --------- | 
| |                  |  | $       |  |  | $         | 
| |                  |  |         |  |  |           | 
| | Short term loans |  | 817,836 |  |  | 1,336,596 | 

As at December 31, 2010, the Company has short term loans on
demand of $817,836 including accrued interest of $157,571. The loans bear
interest at the rate of 1% to 7% per annum.

| |                                                     |  | 2010    |  |  | 2009    | 
| | --------------------------------------------------- |  | ------- |  |  | ------- | 
| |                                                     |  | $       |  |  | $       | 
| |                                                     |  |         |  |  |         | 
| | Long term loans                                     |  |         |  |  |         | 
| | Convertible debenture issued to non related party   |  | 60,000  |  |  | 331,000 | 
| | Convertible debenture issued to a
      shareholder |  | 250,000 |  |  | -       | 
| | Convertible debenture issued to a director          |  | -       |  |  | 250,000 | 
| |                                                     |  |         |  |  |         | 
| |                                                     |  | 310,000 |  |  | 581,000 | 

Convertible Debts

| |                                                      |  | 2010    |  |  | 2009    | 
| | ---------------------------------------------------- |  | ------- |  |  | ------- | 
| |                                                      |  | $       |  |  | $       | 
| |                                                      |  |         |  |  |         | 
| | Opening Balance of Convertible
      Debentures      |  | 581,000 |  |  | 790,000 | 
| | Plus : Convertible debentures issued during the year |  | -       |  |  | 374,000 | 
| | Less : Debentures converted to common
      shares   |  | 271,000 |  |  | 583,000 | 
| |                                                      |  |         |  |  |         | 
| | Closing Balance Convertible
      Debentures         |  | 310,000 |  |  | 581,000 | 

Report of Independent Registered Public Accounting Firm - Page
1- 49 -

---

|BIOPACK ENVIRONMENTAL SOLUTIONS INC.          
|----------------------------------------------
|(INCORPORATED IN UNITED STATES OF AMERICA)    
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|31 DECEMBER 2010                              

|8.  | LOANS PAYABLE (CONTINUED)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    | Convertible Debts (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    | The embedded beneficial conversion features present in
      the convertible debenture is valued separately at issuance and recognized
      and measured by allocating a portion of the proceeds equal to the
      intrinsic value of that feature to additional paid-in capital. That amount
      is calculated as the difference between the conversion price and the fair
      value of the common stock into which the debenture is convertible,
      multiplied by the number of shares. The intrinsic value cannot exceed the
      proceeds.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|9.  | GOING CONCERN                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    | The accompanying consolidated financial statements have
      been prepared in accordance with accounting principles generally accepted
      in the United States of America (US GAAP), which contemplate the
      continuation of the Company as a going concern. The Company made a net
      loss for the year ended December 31, 2010 of $2,384,990 and, on December
      31, 2010 it had an accumulated deficits of $7,276,923 and a working
      capital deficit of $2,172,812. These conditions raise substantial doubt as
      to the Companys ability to continue as a going concern. These
      consolidated financial statements do not include any adjustments that
      might result from the outcome of this uncertainty. These consolidated
      financial statements do not include any adjustments that might result from
      the outcome of this uncertainty. These consolidated financial statements
      do not include any adjustments relating to the recoverability and
      classification of recorded asset amounts, or amounts and classifications
      of recorded asset amounts, or amounts and classifications of liabilities
      that might be necessary should the Company be unable to continue as a
      going concern.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    | The future of the Company is dependent upon its attaining
      profitable operations and raising the capital it will require in order to
      achieve profitable operations through the issuance of equity securities,
      borrowings or a combination thereof.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|10. | CONCENTRATIONS AND CREDIT RISK                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    | Concentration of credit risk is limited to accounts
      receivable and is subject to the financial condition of major customers.
      The Company does not require collateral or other security to support
      accounts receivable. The Company conducts periodic reviews of its clients
      financial condition and customers payment practices to minimize
      collection risk on accounts receivable.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        

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1

- 50 -

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|BIOPACK ENVIRONMENTAL SOLUTIONS INC.          
|----------------------------------------------
|(INCORPORATED IN UNITED STATES OF AMERICA)    
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|31 DECEMBER 2010                              

|11. | COMMITMENTS AND CONTINGENCIES                                                                                                                                    
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                  
|    | Operating Lease Arrangements                                                                                                                                     
|    |                                                                                                                                                                  
|    | Minimum lease payments recognized as an expense under
      operating leases in respect of the office in Hong Kong during the Year
      Ended December 31, 2010:

| |          |  | 2010   |  |  | 2009   | 
| | -------- |  | ------ |  |  | ------ | 
| |          |  | $      |  |  | $      | 
| |          |  |        |  |  |        | 
| | Premises |  | 19,168 |  |  | 24,313 | 

At December 31, 2010, the Company had outstanding commitments
for future minimum lease payments under non-cancelable operating leases in
respect of premises in Hong Kong, which fall due as follows:

| |                 |  | 2010  |  |  | 2009  | 
| | --------------- |  | ----- |  |  | ----- | 
| |                 |  | $     |  |  | $     | 
| |                 |  |       |  |  |       | 
| | Within one year |  | 2,552 |  |  | 4,701 | 

|12. | RELATED PARTY
TRANSACTIONS
|--- | --------------------------

| |                                  |  | 2010    |  |  | 2009   | 
| | -------------------------------- |  | ------- |  |  | ------ | 
| |                                  |  | $       |  |  | $      | 
| | Amounts due to directors         |  |         |  |  |        | 
| | LAU Kin Chung, Gerald  Director |  | 511,934 |  |  | -      | 
| | Sean Webster - Director          |  | 275,126 |  |  | 13,362 | 
| |                                  |  |         |  |  |        | 
| |                                  |  | 787,060 |  |  | 13,362 | 

The advances are unsecured, interest
free and have no fixed terms of repayment. The respective parties are directors
of the company.

Report of Independent Registered Public Accounting Firm - Page
1- 51 -

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|BIOPACK ENVIRONMENTAL SOLUTIONS INC.          
|----------------------------------------------
|(INCORPORATED IN UNITED STATES OF AMERICA)    
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|31 DECEMBER 2010                              

|13. | INCOME TAX                                                                                                                                                                                                                                                                                                                                             
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                        
|    | No provision for HK Profits tax has been made in
      consolidated financial statements as the subsidiaries sustained loss for
      the year. The current year amount represented under provision of taxation
      in previous years.                                                                                                               
|    |                                                                                                                                                                                                                                                                                                                                                        
|    | No provision for PRC income tax has been made in the
      consolidated financial statements as the PRC subsidiary sustained loss
      during the year. No provision for deferred taxation has been recognized in
      the financial statements as the amount involved is
insignificant.                                                             
|    |                                                                                                                                                                                                                                                                                                                                                        
|    | No provision for US tax has been made for any of the year
      presented as the Company does not have any assessable profits during the
      year.                                                                                                                                                                                                   
|    |                                                                                                                                                                                                                                                                                                                                                        
|    | No deferred tax is recognized in the consolidated balance
      sheets as of December 31, 2010.                                                                                                                                                                                                                                                        
|    |                                                                                                                                                                                                                                                                                                                                                        
|14. | SHARE CAPITAL                                                                                                                                                                                                                                                                                                                                          
|    |                                                                                                                                                                                                                                                                                                                                                        
|    | On January 15, 2010, the Company issued 500,000 shares of
      common stock to the holder of a convertible debenture dated May 15, 2009
      upon conversion of the principal and interest due under that convertible
      debenture, at a conversion price of $0.10 per share.                                                                     
|    |                                                                                                                                                                                                                                                                                                                                                        
|    | On February 2, 2010, the Company issued an aggregate of
      2,331,955 shares of common stock to two investors in consideration of the
      debt owed by our company to the investors of an aggregate principal amount
      of $857,000 and an aggregate amount of accrued interest in the amount of
      $56,893, at a price of $0.3919 per share.
|    |                                                                                                                                                                                                                                                                                                                                                        
|    | On February 22, 2010, the Company issued 3,651,672 shares
      of common stock to one person upon the conversion of the remaining
      principal ($204,940) and accrued interest ($38,626.57) due under a
      convertible debenture previously issued by us dated March 3, 2008, at a
      conversion price of $0.0667 per share.                 
|    |                                                                                                                                                                                                                                                                                                                                                        
|    | On April 28, 2010, the Company issued 160,872 shares of
      common stock to the holder of a convertible debenture dated July 31, 2009
      upon conversion of the principal and interest due under that convertible
      debenture, at a conversion price of $0.10 per share.                                                                      
|    |                                                                                                                                                                                                                                                                                                                                                        
|    | On June 25, 2010, a lender unrelated to the Company
      loaned it a total of US $400,000. As evidence of the loan, the Company has
      executed and delivered a promissory note in the principal amount of US
      $400,000, to be paid on demand with interest at 0.5% per
  annum.                                                              

Report of Independent Registered Public Accounting Firm - Page
1- 52 -

---

|BIOPACK ENVIRONMENTAL SOLUTIONS INC.          
|----------------------------------------------
|(INCORPORATED IN UNITED STATES OF AMERICA)    
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|31 DECEMBER 2010                              

15. DISCONTINUED OPERATION

Biopack Environmental Limited, a wholly owned subsidiary of
Starmetro Group Limited, which is the Companys wholly-owned subsidiary, planned
to enter into a share purchase agreement with Well Talent Technology Limited, a
company incorporated in the British Virgin Islands, where by Well Talent will
purchase all of the issued and outstanding shares of Roots Biopark Ltd., which
wholly owns Jiangmen Roots Biopack Ltd. and Roots Biopack (Intellectual
Property) Limited. The completion date for selling the three subsidiaries is
expected by April 2011.

The operations of Jiangmen Roots Biopack Ltd, Roots Biopack
(Intellectual Property) Limited and Roots Biopark Ltd. have been the
manufacturing arm of the group. The operation loss of the three subsidiaries has
been shown in the separate line as discontinued operations held for sale as of
31 December 2010.

A summarized statement of operations for the discontinued
operations for the comparable years ended 31 December 2010 and 2009 is as
follows:

|                                                                            |  | 2010       |   |  | 2009     |   |  | 2008     |  
|--------------------------------------------------------------------------- |  | ---------- | - |  | -------- | - |  | -------- | -
|                                                                            |  | $          |   |  | $        |   |  | $        |  
|                                                                            |  |            |   |  |          |   |  |          |  
|Revenues                                                                    |  | -          |   |  | -        |   |  | -        |  
|Cost of sales                                                               |  | (54,163    | ) |  | (24,877  | ) |  | (159,291 | )
|                                                                            |  |            |   |  |          |   |  |          |  
|Gross loss                                                                  |  | (54,163    | ) |  | (24,877  | ) |  | (159,291 | )
|                                                                            |  |            |   |  |          |   |  |          |  
|Recovery of bad debts written off                                           |  | 190,149    |   |  | -        |   |  | -        |  
|General and administrative expenses                                         |  | (631,612   | ) |  | (534,741 | ) |  | (443,366 | )
|Impairment loss on plant and machinery                                      |  | (1,417,615 | ) |  | -        |   |  | -        |  
|Depreciation                                                                |  | (233,145   | ) |  | (211,392 | ) |  | (59,279  | )
|                                                                            |  |            |   |  |          |   |  |          |  
|Loss from operations                                                        |  | (2,092,223 | ) |  | (746,133 | ) |  | (502,645 | )
|                                                                            |  |            |   |  |          |   |  |          |  
|Loss from discontinued operations of three
      subsidiaries held for sale |  | (2,146,386 | ) |  | (771,010 | ) |  | (661,936 | )

Report of Independent Registered Public Accounting Firm - Page
1- 53 -

---

|BIOPACK ENVIRONMENTAL SOLUTIONS INC.          
|----------------------------------------------
|(INCORPORATED IN UNITED STATES OF AMERICA)    
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|31 DECEMBER 2010                              

|15. | DISCONTINUED OPERATION (CONTINUED)              
|--- | ------------------------------------------------
|    |                                                 
|    | Asset of the three subsidiaries held for
  sale:

| |                                                          |  | 2010    |  |  | 2009      | 
| | -------------------------------------------------------- |  | ------- |  |  | --------- | 
| |                                                          |  | $       |  |  | $         | 
| |                                                          |  |         |  |  |           | 
| | NON-CURRENT ASSETS                                       |  |         |  |  |           | 
| | Plant and equipments                                     |  | 564,492 |  |  | 2,122,545 | 
| | Construction in progress                                 |  | 117,986 |  |  | 111,747   | 
| | Deposits                                                 |  | 47,298  |  |  | 45,479    | 
| |                                                          |  |         |  |  |           | 
| |                                                          |  | 729,776 |  |  | 2,279,771 | 
| | CURRENT ASSETS                                           |  |         |  |  |           | 
| | Inventories                                              |  | 48,180  |  |  | 100,725   | 
| | Prepaid expenses and other receivables                   |  | 127,492 |  |  | 131,234   | 
| | Cash and cash equivalents                                |  | 84      |  |  | 179       | 
| |                                                          |  |         |  |  |           | 
| |                                                          |  | 175,756 |  |  | 232,138   | 
| |                                                          |  |         |  |  |           | 
| | Assets of three subsidiaries classified as held for sale |  | 905,532 |  |  | 2,511,909 | 

Liability of the three subsidiaries held for sale:

| |                                                                     |  | 2010    |  |  | 2009    | 
| | ------------------------------------------------------------------- |  | ------- |  |  | ------- | 
| |                                                                     |  | $       |  |  | $       | 
| | EQUITY AND LIABILITIES                                              |  |         |  |  |         | 
| | CURRENT LIABILITIES                                                 |  |         |  |  |         | 
| | Accounts payable and accrued expenses                               |  | 432,679 |  |  | 397,576 | 
| | Amounts due to directors                                            |  | -       |  |  | 8,399   | 
| |                                                                     |  |         |  |  |         | 
| | Liabilities of three subsidiaries classified as held for
      sale |  | 432,679 |  |  | 405,975 | 

Report of Independent Registered Public Accounting Firm - Page
1- 54 -

---

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE.

On April 30, 2009, we dismissed Gruber & Company, LLC as
our principal independent accountant, and on April 30, 2009, we engaged Wong Lam
Leung & Kwok CPA Limited as our principal independent accountant. Our board
of directors approved the decisions to dismiss Gruber & Company, LLC and to
appoint Wong Lam Leung & Kwok CPA Limited.

Gruber & Company, LLCs report dated March 31, 2009, on our
financial statements for the most recent fiscal years ended December 31, 2008
and 2007 did not contain an adverse opinion or disclaimer of opinion, or
qualification or modification as to uncertainty, audit scope, or accounting
principles, except that Gruber & Company, LLCs report contained an
explanatory paragraph in respect to the substantial doubt as to our ability to
continue as a going concern.

In connection with the audit of our financial statements for
the two most recent years ended December 31, 2008 and 2007 and in the subsequent
interim period through the date of dismissal, there were no disagreements,
resolved or not, with Gruber & Company, LLC on any matters of accounting
principles or practices, financial statement disclosure or auditing scope or
procedures, which disagreements, if not resolved to the satisfaction of Gruber
& Company, LLC, would have caused Gruber & Company, LLC to make
reference to the subject matter of the disagreement in connection with its
report on the financial statements for such years.

During the years ended December 31, 2008 and 2007, and in the
subsequent interim period through the date of resignation, there were no
reportable events as described in Item 304(a)(1)(v) of Regulation S-K.

During the years ended December 31, 2008 and 2007, and the
subsequent interim period through the date hereof, Wong Lam Leung & Kwok CPA
Limited has performed annual audit reviews of the consolidated financial
statements of our subsidiaries Roots Biopack Group Ltd. (BVI) and Starmetro
Group Limited (BVI). These audit reviews were conducted under International
Financial Reporting Standards for the limited purpose of complying with Honk
Kong statutory requirements and were neither used nor relied upon by Gruber
& Company, LLC.

ITEM 9A. CONTROLS AND PROCEDURES.

Disclosure Controls and Procedures

As required by Rule 13a-15(b) under the Securities Exchange Act
of 1934, as amended, our management, including our chief executive officer and
our chief financial officer, performed an evaluation of the effectiveness of our
disclosure controls and procedures, as that term is defined in Rules 13a-15(e)
of the Exchange Act, as of the end of the period covered by this annual report.
Based on that evaluation, our management has concluded that our disclosure
controls and procedures were effective as of the end of the period covered by
this annual report.

Report of Management on Internal Control over Financial
Reporting

Our management is responsible for establishing and maintaining
adequate internal control over financial reporting as defined in Rules 13a-15(f)
under the Securities Exchange Act of 1934, as amended. Our internal control over
financial reporting is a process designed to provide reasonable assurance
regarding the reliability of our financial reporting and the preparation of
financial statements for external purposes in accordance with Generally Accepted
Accounting Principles (GAAP) in the United States of America and includes those
policies and procedures that (1) pertain to the maintenance of records that, in
reasonable detail, accurately and fairly reflect the transactions and
dispositions of the assets of our company; (2) provide reasonable assurance that
transactions are recorded as necessary to permit preparation of consolidated
financial statements in accordance with GAAP, and that receipts and expenditures
of our company are being made only in accordance with authorizations of our
management and directors; and (3) provide reasonable assurance regarding
prevention or timely detection of the unauthorized acquisition, use or
disposition of our companys assets that could have a material effect on the
consolidated financial statements. Because of its inherent limitations, internal
control over financial reporting may not prevent or detect misstatements. Also,
projections of any evaluation of effectiveness to future periods are subject to
the risks that controls may become inadequate because of changes in conditions,
or that the degree of compliance with the policies or procedures may
deteriorate.

- 55 -

---

Our management conducted an evaluation of the effectiveness of
our companys internal control over financial reporting as of December 31, 2010
based on the framework in Internal ControlIntegrated Framework issued by the
Committee of Sponsoring Organizations of the Treadway Commission. Based on this
evaluation, our management concluded that our internal control over financial
reporting was effective as of December 31, 2010.

Changes in Internal Control over Financial Reporting

As required by Rule 13a-15(d), under the Exchange Act, our
management, including our chief executive officer and our chief financial
officer, also conducted an evaluation of our internal control over financial
reporting to determine whether any changes occurred during our fourth fiscal
quarter have materially affected, or are reasonably likely to materially affect,
our internal control over financial reporting. Based on that evaluation, it has
been determined that there has been no such change during our fourth fiscal
quarter.

ITEM 9B. OTHER INFORMATION.

None.

- 56 -

---

PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE
GOVERNANCE.

Directors and Executive Officers

As at April 12, 2011, our directors and executive officers,
their ages, positions held, and duration of such, are as follows:

Name
    Position Held with our Company
    Age
    Date First Elected or AppointedGerald Lau King Chung
    President, Chief Executive
      Officer 
      and Director Director of Jiangment Roots Biopack
      Limited
    54
    March 27, 2007
      March 30, 2006Michael Joseph Forster
    Director
    45
    April 29, 2008Sean Webster
    Chief Financial Officer, Secretary 
      and Treasurer
      Director Director of Biopack Environmental Limited
    38
    October 6, 2008 August 6, 2008 October 1, 2008


Business Experience

The following is a brief account of the education and business
experience of each director and executive officer during at least the past five
years, indicating each persons principal occupation during the period, and the
name and principal business of the organization by which he was employed.

Gerald Lau  Chief Executive Officer and Director of our
company and Director of our subsidiary Jiangmen Roots Biopack Ltd.

Gerald Lau was appointed as our Chief Executive Officer and a
director upon the closing of the share exchange agreement with Roots Biopack
Group, which occurred on March 27, 2007. He is responsible for accounting
functions, as well as overall financial planning and management. During the
period of November 2004 to June 2006, Mr. Lau served as a director for Good
Value International Limited, Good Value Galaxy Limited and Joint Eagle
Investment Limited. From November 2002 to October 2004, he served as an
executive director of GIN International Limited, a Hong Kong based company
specializing in SMS text messaging services. While with GIN International
Limited, Mr. Lau was responsible for the general administration and accounting
matters. Mr. Lau was awarded a bachelors degree in Business Administration
majoring in Business Economics & Quantitative Methods at University of
Hawaii at Manoa in August 1981.

We believe Mr. Lau is qualified to serve on our board of
directors because of his knowledge of our companys history and current
operations, which he gained from working for our company as described above, in
addition to his education and business experiences as described above.

Sean Webster  Secretary, Treasurer, Chief Financial Officer
and Director of our company and Director of our subsidiary Jiangmen Roots
Biopack Ltd.

- 57 -

---

Mr. Webster is currently a director of our company and was
appointed as our Secretary, Treasurer and Chief Financial Officer on October 6,
2008. Mr. Webster had been in the financial services industry beginning with
Yorkton Securities Inc. in January 1999 and finishing with the same company
under the name Blackmont Capital Inc. in October of 2007. In his work there, he
was a fully licensed Investment Advisor with the Investment Dealers Association
of Canada, focusing on the raising of funds for small cap public companies and
managing client portfolios. He was the lead broker for Grand Power
Logistics Group Inc.s (TSX-V:GPW) initial public offering in November 2004 on
the TSX Venture Exchange, and is currently their Senior Vice President, Finance
and Business Development. Grand Power is an air-freight forwarding and
sea-freight services, customs brokerage, logistics, warehousing and distribution
company with its main operations in Hong Kong and throughout Greater China. In
addition, Mr. Webster is the President and Chief Financial Officer of Boashinn
Corporation (OTCBB:BHNN.OB), a listed company which is based in Hong Kong and
offers extended travel services primarily focused on wholesale business and
corporate clients. In 1996, he received a B.A. in Economics and Management from
the University of Calgary.

We believe Mr. Webster is qualified to serve on our board of
directors because of his knowledge of our companys history and current
operations, which he gained from working for our company as described above, in
addition to his education and business experiences as described above.

Michael Joseph Forster - Director

Mr. Forster is the CEO/President/Chairman of Power-Save Energy
Company (Symbol PWSV) whose shares of common stock are listed Over the Counter
on the Bulletin Board (OTCBB). Mr. Forster is an experienced entrepreneur in
all facets of business. He has organized and executed the start-up of companies.
He has worked under contract in both the private and public company sectors to
affect corporate and financial restructuring. As well, Mr. Forster has held
senior management level positions at a Fortune 500 company. Mr. Forster holds a
Bachelor of Science Degree in Aeronautical Engineering from California
Polytechnic State University.

We believe Mr. Forster is qualified to serve on our board of
directors because of his knowledge of our companys history and current
operations, which he gained from working for our company as described above, in
addition to his education and business experiences as described above.

Term of Office

Our directors hold office until the next annual meeting or
until their successors have been elected and qualified, or until they resign or
are removed. Our board of directors appoints our officers, and our officers hold
office until their successors are chosen and qualify, or until their resignation
or their removal.

Family Relationships

There are no family relationships among our directors or
officers.

Involvement in Certain Legal Proceedings

Our directors and executive officers have not been involved in
any of the following events during the past ten years:

| | 1. | any bankruptcy petition filed by or against any business
      of which such person was a general partner or executive officer either at
      the time of the bankruptcy or within two years prior to that
  time;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | 2. | any conviction in a criminal proceeding or being subject
      to a pending criminal proceeding (excluding traffic violations and other
      minor offenses);                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | 3. | being subject to any order, judgment, or decree, not
      subsequently reversed, suspended or vacated, of any court of competent
      jurisdiction, permanently or temporarily enjoining, barring, suspending or
      otherwise limiting his involvement in any type of business, securities or
      banking activities;                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | 4. | being found by a court of competent jurisdiction (in a
      civil action), the Securities and Exchange Commission or the Commodity
      Futures Trading Commission to have violated a federal or state securities
      or commodities law, and the judgment has not been reversed, suspended, or
      vacated;                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | 5. | being the subject of, or a party to, any federal or state
      judicial or administrative order, judgment, decree, or finding, not
      subsequently reversed, suspended or vacated, relating to an alleged
      violation of: (i) any federal or state securities or commodities law or
      regulation; or (ii) any law or regulation respecting financial
      institutions or insurance companies including, but not limited to, a
      temporary or permanent injunction, order of disgorgement or restitution,
      civil money penalty or temporary or permanent cease-and-desist order, or
      removal or prohibition order; or (iii) any law or regulation prohibiting
      mail or wire fraud or fraud in connection with any business entity;
    or

- 58 -

---

| | 6. | being the subject of, or a party to, any sanction or
      order, not subsequently reversed, suspended or vacated, of any
      self-regulatory organization (as defined in Section 3(a)(26) of the
      Securities Exchange Act of 1934), any registered entity (as defined in
      Section 1(a)(29) of the Commodity Exchange Act), or any equivalent
      exchange, association, entity or organization that has disciplinary
      authority over its members or persons associated with a
  member.
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Committees

All proceedings of the board of directors for the year ended
December 31, 2010 were conducted by resolutions consented to in writing by the
board of directors and filed with the minutes of the proceedings of our board of
directors. Our company currently does not have nominating, compensation or audit
committees or committees performing similar functions nor does our company have
a written nominating, compensation or audit committee charter. Our board of
directors does not believe that it is necessary to have such committees because
it believes that the functions of such committees can be adequately performed by
the board of directors.

Our company does not have any defined policy or procedural
requirements for shareholders to submit recommendations or nominations for
directors. The board of directors believes that, given the stage of our
development, a specific nominating policy would be premature and of little
assistance until our business operations develop to a more advanced level. Our
company does not currently have any specific or minimum criteria for the
election of nominees to the board of directors and we do not have any specific
process or procedure for evaluating such nominees. The board of directors will
assess all candidates, whether submitted by management or shareholders, and make
recommendations for election or appointment.

A shareholder who wishes to communicate with our board of
directors may do so by directing a written request addressed to our president at
the address appearing on the first page of this annual report.

Audit Committee Financial Expert

Our board of directors has determined that it does not have an
audit committee member that qualifies as an audit committee financial expert
as defined in Item 407(d)(5)(ii) of Regulation S-K. We believe that the audit
committee members are collectively capable of analyzing and evaluating our
financial statements and understanding internal controls and procedures for
financial reporting. In addition, we believe that retaining an independent
director who would qualify as an audit committee financial expert would be
overly costly and burdensome and is not warranted in our circumstances given the
early stages of our development and the fact that we have not generated revenues
to date.

Nomination Procedures For Appointment of Directors

As of April 12, 2011, we did not effect any material changes to
the procedures by which our stockholders may recommend nominees to our board of
directors.

Code of Ethics

Effective March 26, 2003, our companys board of directors
adopted a Code of Business Conduct and Ethics that applies to, among other
persons, members of our board of directors, our companys officers, contractors,
consultants and advisors. As adopted, our Code of Business Conduct and Ethics
sets forth written standards that are designed to deter wrongdoing and to
promote:

| | (1) | honest and ethical conduct, including the ethical
      handling of actual or apparent conflicts of interest between personal and
      professional relationships;                                                          
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                              
| | (2) | full, fair, accurate, timely, and understandable
      disclosure in reports and documents that we file with, or submit to, the
      Securities and Exchange Commission and in other public communications made
      by us;

- 59 -

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| | (3) | compliance with applicable governmental laws, rules and
      regulations;                                                                                                                       
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                  
| | (4) | the prompt internal reporting of violations of the Code
      of Business Conduct and Ethics to an appropriate person or persons
      identified in the Code of Business Conduct and Ethics; and
| |     |                                                                                                                                                                                                  
| | (5) | accountability for adherence to the Code of Business
      Conduct and Ethics.                                                                                                                   

Our Code of Business Conduct and Ethics requires, among other
things, that all of our company's senior officers commit to timely, accurate and
consistent disclosure of information; that they maintain confidential
information; and that they act with honesty and integrity.

In addition, our Code of Business Conduct and Ethics emphasizes
that all employees, and particularly senior officers, have a responsibility for
maintaining financial integrity within our company, consistent with generally
accepted accounting principles, and federal and state securities laws. Any
senior officer who becomes aware of any incidents involving financial or
accounting manipulation or other irregularities, whether by witnessing the
incident or being told of it, must report it to our company. Any failure to
report such inappropriate or irregular conduct of others is to be treated as a
severe disciplinary matter. It is against our company policy to retaliate
against any individual who reports in good faith the violation or potential
violation of our company's Code of Business Conduct and Ethics by another.

Our Code of Business Conduct and Ethics was filed with the
Securities and Exchange Commission on April 15, 2003 as Exhibit 20.1 to our
annual report. We will provide a copy of the Code of Business Conduct and Ethics
to any person without charge, upon request. Requests can be sent to: Biopack
Environmental Solutions Inc., Room 1302, 13/F, Enterprise Centre, 4 Hart Avenue,
Tsim Sha Tsui, Kowloon, Hong Kong, Attention: President.

Section 16(a) Beneficial Ownership Compliance

Section 16(a) of the Securities Exchange Act requires our
executive officers and directors, and persons who own more than 10% of our
common stock, to file reports regarding ownership of, and transactions in, our
securities with the Securities and Exchange Commission and to provide us with
copies of those filings. Based solely on our review of the copies of such forms
received by us, or written representations from certain reporting persons, we
believe that during fiscal year ended December 31, 2010, all filing requirements
applicable to our officers, directors and greater than 10% percent beneficial
owners were complied with.

ITEM 11. EXECUTIVE COMPENSATION.

The particulars of compensation paid to the following
persons:

| | (a) | all individuals serving as our principal executive
      officer during the year ended December 31, 2010;                                                                                                                             
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                       
| | (b) | each of our two most highly compensated executive
      officers other than our principal executive officer who were serving as
      executive officers at December 31, 2010 who had total compensation
      exceeding $100,000; and
| |     |                                                                                                                                                                                                                                       
| | (c) | up to two additional individuals for whom disclosure
      would have been provided under (b) but for the fact that the individual
      was not serving as our executive officer at December 31,
  2010,                             

who we will collectively refer to as the named executive
officers, for the years ended December 31, 2010 and 2009, are set out in the
following summary compensation table:

- 60 -

---

Summary Compensation

The following table provides a summary of the compensation
received by the persons set out therein for each of our last two fiscal
years:

SUMMARY COMPENSATION
      TABLEName and
      Principal Position
    Year
    Salary ($)
    Bonus ($)
    Stock Awards
      ($)
    Option Awards
      ($)(4)
    Non-Equity
      Incentive Plan Compensa- tion
      ($)
    Change in
      Pension Value and Nonqualified
      Deferred Compensation Earnings
      ($)
    All
      Other Compensa -tion ($)
    Total ($)Gerald Lau(1)President, Chief
      Executive Officer
    2010 2009
    Nil Nil
    Nil Nil
    Nil Nil
    Nil Nil
    Nil Nil
    Nil Nil
    Nil Nil
    Nil NilEddie Chou(2)
    2010
    Nil
    Nil
    Nil
    Nil
    Nil
    Nil
    Nil
    NilFormer Secretary, Treasurer, Chief Financial
      Officer and Chief Technology Officer, Chief Executive
      Officer, E-Ware Corporation Ltd.
    2009
    Nil
    Nil
    Nil
    Nil
    Nil
    Nil
    Nil
    NilSean Webster(3)Secretary, Treasurer,
      Chief Financial Officer
    2010 2009
    Nil Nil
    Nil Nil
    Nil Nil
    Nil Nil
    Nil Nil
    Nil Nil
    Nil Nil
    Nil NilJames Yiu Yeung Loong (4)Director
    2010 2009
    Nil Nil
    Nil Nil
    Nil Nil
    Nil Nil
    Nil Nil
    Nil Nil
    Nil Nil
    Nil NilMa Cheng Ji(5)Director
    2010 2009
    Nil Nil
    Nil Nil
    Nil Nil
    Nil Nil
    Nil Nil
    Nil Nil
    Nil Nil
    Nil NilMichael Forster(6)Director
    2010 2009
    Nil Nil
    Nil Nil
    Nil Nil
    Nil Nil
    Nil Nil
    Nil Nil
    Nil Nil
    Nil Nil


(1) Gerald Lau was appointed our President and Chief Executive
Officer on March 27, 2007.

(2) Eddie Chou was appointed as our Secretary, Treasurer and
Chief Financial Officer on February 6, 2006 and as our Chief Technology Officer
on March 27, 2007. On July 24, 2007, Eddie Chou resigned as our Chief Financial
Officer and was then reappointed as our Chief Financial Officer on October 2,
2007. Mr. Chou resigned as our Chief Financial Officer on October 1, 2008.

(3) Sean Webster was appointed as a director of our company on
August 6, 2008 and as our Secretary, Treasurer and Chief Financial Officer on
October 6, 2008.

(4) James Yiu Yeung Loong was appointed as a director of our
company on April 1, 2008 and resigned on April 6, 2011.

(5) Ma Cheng Ji was appointed as a director of our company on
April 1, 2008. Mr. Ma resigned as our director on July 7, 2010

(6) Michael Forster was appointed as a director of our company
on April 29, 2008.

Outstanding Equity Awards at Fiscal Year-End

There were no outstanding stock options or stock appreciation
rights granted to our executive officers and directors at December 31, 2010.

- 61 -

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Aggregated Option Exercises

There were no options exercised by any officer or director of
our company during our twelve month period ended December 31, 2010.

Long-Term Incentive Plan

Currently, our company does not have a long-term incentive plan
in favor of any director, officer, consultant or employee of our company.

Directors Compensation

No director received compensation for the fiscal years December
31, 2010 and December 31, 2009. We have no formal plan for compensating our
directors for their service in their capacity as directors, although such
directors are expected in the future to receive stock options to purchase common
shares as awarded by our board of directors or (as to future stock options) a
compensation committee which may be established. Directors are entitled to
reimbursement for reasonable travel and other out-of-pocket expenses incurred in
connection with attendance at meetings of our board of directors. Our board of
directors may award special remuneration to any director undertaking any special
services on our behalf other than services ordinarily required of a
director.

Retirement or Similar Benefit Plans

There are no arrangements or plans in which we provide
retirement or similar benefits for our directors or executive officers.

Resignation, Retirement, Other Termination, or Change in
Control Arrangements

We have no contract, agreement, plan or arrangement, whether
written or unwritten, that provides for payments to our directors or executive
officers at, following, or in connection with the resignation, retirement or
other termination of our directors or executive officers, or a change in control
of our company or a change in our directors or executive officers
responsibilities following a change in control.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT AND RELATED STOCKHOLDER MATTERS.

As of April 12, 2011, there were 41,032,849 shares of our
common stock outstanding. The following table sets forth certain information
known to us with respect to the beneficial ownership of our common stock as of
that date by (i) each of our directors, (ii) each of our executive officers, and
(iii) all of our directors and executive officers as a group. Except as set
forth in the table below, there is no person known to us who beneficially owns
more than 5% of our common stock.

Title of Class
    Name and Address of Beneficial
      Owner
    Amount and Nature of Beneficial
      Ownership(1)
    Percentage of Class(2)Common Shares
    Gerald Lau(3)(4)(5)Room 1302,
      13/F, Enterprise Centre, 4 Hart Avenue, Tsim Sha Tsui,
      Kowloon, Hong Kong
    10,759,788
    25.62%Common Shares
    Sean Webster Room 1302, 13/F, Enterprise Centre, 4
      Hart Avenue, Tsim Sha Tsui, Kowloon, Hong Kong
    Nil
    Nil


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Common Shares
    Ma
      Cheng Ji Room 1302, 13/F, Enterprise Centre, 4 Hart Avenue,
      Tsim Sha Tsui, Kowloon, Hong Kong
    500,000
    1.19%Common Shares
    Michael Forster Room 1302, 13/F, Enterprise Centre, 4
      Hart Avenue, Tsim Sha Tsui, Kowloon, Hong Kong
    Nil
    NilCommon Shares
    Begonia Participation Corp.(6)Pasea Estate
      Road Town, Tortola BVI
    10,000,000(6)
    19.96% of class 46.36% of voting powerCommon Shares
    Ladix
      Properties Inc. Swiss Tower 16th Floor, World Trade Centre
      Panama City, Republic of Panama
    2,250,000
    5.61%Common Shares
    Directors and Executive Officers as a
      Group
    11,259,788
    26.81%


|(1) | Regulation S-K promulgated under the Securities Exchange
      Act of 1934, defines a beneficial owner of a security as any person who,
      directly or indirectly, through any contract, arrangement, understanding,
      relationship, or otherwise, has or shares: (i) voting power, which
      includes the power to vote, or to direct the voting of shares; and (ii)
      investment power, which includes the power to dispose or direct the
      disposition of shares. Certain shares may be deemed to be beneficially
      owned by more than one person (if, for example, persons share the power to
      vote or the power to dispose of the shares). In addition, shares are
      deemed to be beneficially owned by a person if the person has the right to
      acquire the shares (for example, upon exercise of an option) within 60
      days of the date as of which the information is provided. In computing the
      percentage ownership of any person, the amount of shares outstanding is
      deemed to include the amount of shares beneficially owned by such person
      (and only such person) by reason of these acquisition rights. As a result,
      the percentage of outstanding shares of any person as shown in this table
      does not necessarily reflect the persons actual ownership or voting power
      with respect to the number of shares of common stock actually outstanding
      on April 12, 2011, and the date of this annual report.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|(2) | Calculated based on the basis of 41,032,849 issued and
      outstanding shares of common stock as of April 12, 2011 plus, for each
      person or group, any securities that person or group has the right to
      acquire within 60 days pursuant to options, warrants, conversion
      privileges or other rights.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|(3) | Gerald Lau, our President, Chief Executive Officer and
      Director, is 50% owner and controller of Legend View Holdings Ltd., which
      owns 280,000 common shares of our company.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|(4) | Gerald Lau, our President, Chief Executive Officer and
      Director, owns and controls Good Value Galaxy Limited, which owns
      7,560,000 common shares of our company.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|(5) | Gerald Lau, our President, Chief Executive Officer and
      Director, owns and controls Joyful Services Ltd, which owns 1,836,000
      common shares of our company.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|(6) | Begonia Participation Corp. owns 1,900,000 common shares,
      620,000 shares of our Series A Preferred Stock and 1,000,000 shares of our
      Series B Preferred Stock. Each share of Series A Preferred Stock and each
      share of Series B Preferred Stock is entitled to 30 votes at any meeting
      of our security holders and is convertible, at any time at the option of
      the holder, into 5 shares of our common stock. Therefore, Begonia
      Participation Corp. beneficially owns 10,000,000 shares of our common
      stock but, unless and until it elects to convert any of the Series A
      Preferred Stock or any of the Series B Preferred Stock it controls
      50,500,000 votes at any meeting of our security holders.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             

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Changes in Control

We are unaware of any contract or other arrangement the
operation of which may at a subsequent date result in a change of control of our
company.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND
DIRECTOR INDEPENDENCE.

Other than as set out below, we have not been a party to any
transaction, proposed transaction, or series of transactions during the last two
years in which the amount involved exceeded the lesser of $120,000 or one
percent of the average of our total assets at year end for the last two
completed fiscal years, and in which, to our knowledge, any of the following
persons had, or is to have, a direct or indirect material interest: a director
or executive officer of our company; a nominee for election as a director of our
company; a beneficial owner of more than five percent of the outstanding shares
of our common stock; or any member of the immediate family of any such
person.

As of December 31, 2010, $275,126 was due to Sean Webster, who
is a director, Chief Financial Officer, Secretary, Treasurer of our company.
$511,934 was due to Gerald Lau, who is a director and Chief Executive Officer of
our company. This amount represents money advanced to our company which has not
been repaid back to them. The amount is unsecured and bears no interest.

Corporate Governance

Our Board of Directors currently consists of: Gerald Lau, Sean
Webster and Michael Forster. We do not have a board member that qualifies as
independent as the term is used in NASDAQ rule 5605(a)(2).

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES.

Audit fees

The aggregate fees billed for the two most recently completed
fiscal periods ended December 31, 2010 and December 31, 2009 for professional
services rendered by Wong Lam Leung & Kwok CPA Limited and Gruber &
Company, LLC for the audit of our annual consolidated financial statements,
quarterly reviews of our interim consolidated financial statements and services
normally provided by the independent accountant in connection with statutory and
regulatory filings or engagements for these fiscal periods were as follows:

Year Ended December 31,
      2010
    Year Ended December 31,
      2009Audit Fees and
      Audit Related Fees
    34,959
    $53,554Tax Fees
    Nil
    NilAll Other Fees
    Nil
    NilTotal
    34,959
    $53,554


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In the above table, audit fees are fees billed by our
companys external auditor for services provided in auditing our companys
annual financial statements for the subject year. Audit-related fees are fees
not included in audit fees that are billed by the auditor for assurance and
related services that are reasonably related to the performance of the
audit review of our companys financial statements. Tax fees are fees billed
by the auditor for professional services rendered for tax compliance, tax advice
and tax planning. All other fees are fees billed by the auditor for products
and services not included in the foregoing categories.

Policy on Pre-Approval by Audit Committee of Services
Performed by Independent Auditors

The board of directors pre-approves all services provided by
our independent auditors. All of the above services and fees were reviewed and
approved by the board of directors before the respective services were
rendered.

The board of directors has considered the nature and amount of
fees billed by Wong Lam Leung & Kwok CPA Limited and Gruber & Company,
LLC and believes that the provision of services for activities unrelated to the
audit is compatible with maintaining Wong Lam Leung & Kwok CPA Limiteds and
Gruber & Company, LLCs independence.

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PART IV

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES.

|Exhibit |                                                                                                                                                                                                                                                                                                                                              
|------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Number  | Description                                                                                                                                                                                                                                                                                                                                  
|        |                                                                                                                                                                                                                                                                                                                                              
|(2)     | Plan of Purchase, Sale,
      Reorganization, Arrangement, Liquidation or Succession                                                                                                                                                                                                                                                         
|        |                                                                                                                                                                                                                                                                                                                                              
|2.1     | Share exchange agreement dated
      February 8, 2007 between our company, Roots Biopack Group, Good Value
      Galaxy Limited, Joyful Services Ltd., Legend View Holdings Ltd, Erich
      Muller Holding AG, and Eddie Chou and Ricky Chiu (incorporated by
      reference from our Current Report on Form 8-K filed on January 11, 2007)
|        |                                                                                                                                                                                                                                                                                                                                              
|(3)     | Articles of Incorporation
      and Bylaws                                                                                                                                                                                                                                                                                                   
|        |                                                                                                                                                                                                                                                                                                                                              
|3.1     | Articles of Incorporation
      (incorporated by reference from our Current Report on Form 8-K filed on
      May 9, 2001)                                                                                                                                                                                                                   
|        |                                                                                                                                                                                                                                                                                                                                              
|3.2     | Bylaws (incorporated by
      reference from our Current Report on Form 8-K filed on May 9, 2001)                                                                                                                                                                                                                                            
|        |                                                                                                                                                                                                                                                                                                                                              
|3.3     | Certificate of Amendment of
      Articles of Incorporation (incorporated by reference from our Current
      Report on Form 8-K filed on May 9, 2001)                                                                                                                                                                                       
|        |                                                                                                                                                                                                                                                                                                                                              
|3.4     | Articles of Merger
      (incorporated by reference from our Current Report on Form 8-K filed on
      May 9, 2001)                                                                                                                                                                                                                          
|        |                                                                                                                                                                                                                                                                                                                                              
|3.5     | Certificate of Designation
      (incorporated by reference from our Current Report on Form 8-K filed on
      May 9, 2001)                                                                                                                                                                                                                  
|        |                                                                                                                                                                                                                                                                                                                                              
|3.6     | Articles of Merger filed with
      the Secretary of State of Nevada on November 21, 2006 effective
      on  November 26, 2006 (incorporated by reference from our
      Current Report on Form 8-K filed on November 28, 2006)                                                                                                             
|        |                                                                                                                                                                                                                                                                                                                                              
|3.7     | Articles of Merger filed with
      the Secretary of State of Nevada on February 21, 2007 effective on
      February 26, 2007 (incorporated by reference from our Current Report on
      Form 8-K filed on February 27, 2007)                                                                                                              
|        |                                                                                                                                                                                                                                                                                                                                              
|3.8     | Certificate of Correction filed
      with the Secretary of State of Nevada on June 27, 2007 (incorporated by
      reference from our Annual Report on Form 10-KSB filed on April 15, 2008)                                                                                                                                                 
|        |                                                                                                                                                                                                                                                                                                                                              
|3.9     | Certificate of Designation
      filed with the Secretary of State of Nevada on July 27, 2007 (incorporated
      by reference from our Annual Report on Form 10-KSB filed on April 15,
      2008)                                                                                                                                          
|        |                                                                                                                                                                                                                                                                                                                                              
|3.10    | Certificate of Change filed
      with the Secretary of State of Nevada on June 6, 2008 (incorporated by
      reference from our Current Report on Form 8-K filed on June 11, 2008)                                                                                                                                                         
|        |                                                                                                                                                                                                                                                                                                                                              
|(10)    | Material Contracts                                                                                                                                                                                                                                                                                                                           
|        |                                                                                                                                                                                                                                                                                                                                              
|10.1    | Technology License and
      Materials Purchase Agreement with Glory Team Industrial Ltd., Starmetro
      Group Limited dated December 7, 2005 (incorporated by reference from our
      quarterly report on Form 10-QSB filed on November 20, 2006)                                                                                        
|        |                                                                                                                                                                                                                                                                                                                                              
|10.2    | Agreement dated effective
      November 13, 2006 with Glory Team Industrial Ltd. and Eddie Chou S.
      Hou  (incorporated by reference from our Current Report on Form
      8-K filed on November 17, 2006)                                                                                                                              
|        |                                                                                                                                                                                                                                                                                                                                              
|10.3    | Share Exchange Agreement dated
      January 5, 2007 among our company, Roots, the Stockholders, Chou and Chiu
      (incorporated by reference from our Current Report on Form 8-K filed on
      January 10, 2007)                                                                                                                         

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|10.4  | Agreement for Transfer of State-Owned Land Usage Right
      (incorporated by reference from our Current Report on Form 8-K filed on
      April 2, 2007)                                                                                                                                   
|----- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|      |                                                                                                                                                                                                                                                                                             
|10.5  | Factory Leasing Agreement  Translation (incorporated by
      reference from our Current Report on Form 8-K filed on April 2,
    2007)                                                                                                                                                    
|      |                                                                                                                                                                                                                                                                                             
|10.6  | Roots Tenancy Agreement (incorporated by reference from
      our Current Report on Form 8-K filed on April 2, 2007)                                                                                                                                                                       
|      |                                                                                                                                                                                                                                                                                             
|10.7  | Sales and Purchase of Machinery, Technical Assistance and
      Factory Management Agreement dated August 19, 2007 between our company and
      Tayna Environmental Technology Co. Limited (incorporated by reference from
      our Quarterly Report on Form 8-K filed on August 21, 2007)
|      |                                                                                                                                                                                                                                                                                             
|10.8  | Distribution Agreement dated July 26, 2007 between our
      wholly owned subsidiary, Roots Biopack Limited and Packagegroup Moonen
      (incorporated by reference from our Current Report on Form 8-K filed on
      August 27, 2007)                                                    
|      |                                                                                                                                                                                                                                                                                             
|10.9  | Boiler Project Contract dated June 28, 2007 between our
      wholly owned subsidiary, Jiangmen Roots Biopack Limited and Dongguan
      Hongyuan Boiler Equipments Co., Ltd. (incorporated by reference from our
      Current Report on Form 8-K filed on August 27, 2007)                
|      |                                                                                                                                                                                                                                                                                             
|10.10 | Construction Project Agreement dated June 11, 2007
      between our wholly owned subsidiary, Jiangmen Roots Biopack Limited and Li
      Bailia (incorporated by reference from our Current Report on Form 8-K
      filed on August 27, 2007)                                             
|      |                                                                                                                                                                                                                                                                                             
|10.11 | Compressor Project Contract dated June 6, 2007 between
      our wholly owned subsidiary, Jiangmen Roots Biopack Limited and Sky Blue
      (incorporated by reference from our Current Report on Form 8-K filed on
      August 27, 2007)                                                  
|      |                                                                                                                                                                                                                                                                                             
|10.12 | Debt Settlement and Subscription Agreement dated August
      1, 2007 between our company and Begonia Participation Corp. (incorporated
      by reference from our Quarterly Report on Form 8-K filed on August 20,
      2007)                                                            
|      |                                                                                                                                                                                                                                                                                             
|10.13 | Share Cancellation Agreement dated February 17, 2008
      between our company and Eddie Chou (incorporated by reference from our
      Current Report on Form 8-K filed on March 5, 2008)                                                                                                  
|      |                                                                                                                                                                                                                                                                                             
|10.14 | Share Cancellation Agreement dated February 17, 2008
      between our company and Ricky Chiu (incorporated by reference from our
      Current Report on Form 8-K filed on March 5, 2008)                                                                                                  
|      |                                                                                                                                                                                                                                                                                             
|10.15 | Share Cancellation Agreement dated February 17, 2008
      between our company and Legend View Holdings Limited (incorporated by
      reference from our Current Report on Form 8-K filed on March 5,
    2008)                                                                            
|      |                                                                                                                                                                                                                                                                                             
|10.16 | Land Purchase Settlement Agreement dated April 8, 2008
      (incorporated by reference from our Annual Report on Form 10-KSB filed on
      April 15, 2008)                                                                                                                                
|      |                                                                                                                                                                                                                                                                                             
|10.17 | Cancellation Agreement dated March 30, 2008 between Roots
      Biopack Group Limited and Tayna Environmental Technology Co. Limited
      (incorporated by reference from our Current Report on Form 8-K filed
      on April 3, 2008)                                                     
|      |                                                                                                                                                                                                                                                                                             
|10.18 | Loan Agreement dated March 30, 2008 between Roots Biopack
      Group Limited and Tayna Environmental Technology Co. Limited (incorporated
      by reference from our Current Report on Form 8-K filed on April 3,
      2008)                                                             
|

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|10.19 | Form of Subscription Agreement between our company and
      LAU Kin Chung (Gerald Lau), CHENG King Hung (King Cheng), CHAN Kam Fai
      (Edwin Chan) and CHU Wei Ling Hilary (Hilary Chu) (incorporated by
      reference from our Current Report on Form 8-K filed on May 30,
  2008)
|----- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|      |                                                                                                                                                                                                                                                                                          
|10.20 | Consulting Agreement with San Diego Torrey Hills Capital,
      Inc. (incorporated by reference from our Current Report on Form 8-K filed
      on October 10, 2008)                                                                                                                     
|      |                                                                                                                                                                                                                                                                                          
|10.21 | Loan Amendment Agreement with Tayna Environmental
      Technology Co. Limited (incorporated by reference from our Current report
      on Form 8-K filed on March 31, 2009)                                                                                                             
|      |                                                                                                                                                                                                                                                                                          
|10.22 | Demand Promissory Note with Lainey Advisors Inc. dated
      July 1, 2008 (incorporated by reference from our Current report on Form
      8-K filed on March 31, 2009)                                                                                                                  
|      |                                                                                                                                                                                                                                                                                          
|10.23 | Demand Promissory Note with Creative Mind Assets Limited
      dated July 1, 2008 (incorporated by reference from our Current report on
      Form 8-K filed on March 31, 2009)                                                                                                          
|      |                                                                                                                                                                                                                                                                                          
|10.24 | Demand Promissory Note with Lainey Advisors Inc. dated
      July 20, 2008 (incorporated by reference from our Current report on Form
      8-K filed on March 31, 2009)                                                                                                                 
|      |                                                                                                                                                                                                                                                                                          
|10.25 | Demand Promissory Note with Kuo-Hsien Chen dated
      September 15, 2008 (incorporated by reference from our Current report on
      Form 8-K filed on March 31, 2009)                                                                                                                  
|      |                                                                                                                                                                                                                                                                                          
|10.26 | Demand Promissory Note with Creative Mind Assets Limited
      dated December 31, 2008 (incorporated by reference from our Current report
      on Form 8-K filed on March 31, 2009)                                                                                                     
|      |                                                                                                                                                                                                                                                                                          
|10.27 | Demand Promissory Note with Kuo-Hsien Chen dated December
      31, 2008(incorporated by reference from our Current report on Form 8-K
      filed on March 31, 2009)                                                                                                                    
|      |                                                                                                                                                                                                                                                                                          
|10.28 | Subscription Agreement with Manzanis Business Inc. dated
      April 8, 2010 (incorporated by reference from our Current Report on Form
      8-K filed on April 9, 2009)                                                                                                                
|      |                                                                                                                                                                                                                                                                                          
|10.29 | Subscription Agreement with K.A. Erdmann dated May 15,
      2010 (incorporated by reference from our Current Report on Form 8-K filed
      on May 20, 2009)                                                                                                                            
|      |                                                                                                                                                                                                                                                                                          
|10.30 | Subscription Agreement with Scharfe Holdings Inc. dated
      May 15, 2010 (incorporated by reference from our Current Report on Form
      8-K filed on May 20, 2009)                                                                                                                   
|      |                                                                                                                                                                                                                                                                                          
|10.31 | Consulting Agreement with San Diego Torrey Hills Capital,
      Inc. (incorporated by reference from our Current Report on Form 8-K filed
      on June 12, 2009)                                                                                                                        
|      |                                                                                                                                                                                                                                                                                          
|10.32 | Subscription Agreement with Keiand Capital Corp.
      (incorporated by reference from our Quarterly Report on Form 10-Q filed on
      August 14, 2009)                                                                                                                                 
|      |                                                                                                                                                                                                                                                                                          
|10.33 | Promissory Note dated September 1, 2009 with Creative
      Mind Assets Ltd. (incorporated by reference from our Current Report on
      Form 8-K filed on September 2, 2009)                                                                                                            
|      |                                                                                                                                                                                                                                                                                          
|10.34 | Promissory note dated June 25, 2010 with Trilane Limited
      (incorporated by reference from our Current Report on Form 8-K filed on
      June 29, 2010)                                                                                                                              
|      |                                                                                                                                                                                                                                                                                          
|10.35 | Share Purchase Agreement dated July 9, 2010 between
      Biopack Environmental Limited and Well Talent Technology Limited
      (incorporated by reference from our Quarterly Report on Form 10-Q filed on
      August 12, 2010)                                                       
|      |                                                                                                                                                                                                                                                                                          
|10.36 | Loan Agreement dated April 22, 2010 between Biopack
      Environmental Limited, Well Talent Technology Limited, Gerald Lau
      (incorporated by reference from our Quarterly Report on Form 10-Q filed on
      August 12, 2010)                                                      

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|10.37 | Loan Agreement dated June 3,
      2010 between Biopack Environmental Limited, Well Talent Technology
      Limited, Gerald Lau (incorporated by reference from our Quarterly Report
      on Form 10-Q filed on August 12, 2010)
|----- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|      |                                                                                                                                                                                                                                  
|(14)  | Code of Ethics                                                                                                                                                                                                                   
|      |                                                                                                                                                                                                                                  
|14.1  | Code of Business Conduct and
      Ethics (incorporated by reference from our Annual Report on Form 10- KSB
      filed on April 15, 2003)                                                                                       
|      |                                                                                                                                                                                                                                  
|(21)  | Subsidiaries                                                                                                                                                                                                                     
|      |                                                                                                                                                                                                                                  
|      | Roots Biopack (Intellectual
      Property) Limited, incorporated in Hong Kong                                                                                                                                                   
|      |                                                                                                                                                                                                                                  
|      | Roots Biopark Limited,
      incorporated in Hong Kong                                                                                                                                                                           
|      |                                                                                                                                                                                                                                  
|      | Jiangmen Roots Biopack Ltd.,
      incorporated in the Peoples Republic of China                                                                                                                                                
|      |                                                                                                                                                                                                                                  
|      | Starmetro Group Limited,
      incorporated in British Virgin Islands                                                                                                                                                            
|      |                                                                                                                                                                                                                                  
|      | Biopack Environmental Limited
      (f/k/a E-ware Corporation Limited), incorporated in Hong Kong                                                                                                                                
|      |                                                                                                                                                                                                                                  
|(31)  | Rule 13a-14(a)/15d-14(a)
      Certifications                                                                                                                                                                                    
|      |                                                                                                                                                                                                                                  
|31.1* | Section 302 Certification under
      Sarbanes-Oxley Act of 2002 of Gerald Lau                                                                                                                                                   
|      |                                                                                                                                                                                                                                  
|31.2* | Section 302 Certification under
      Sarbanes-Oxley Act of 2002 of Sean Webster                                                                                                                                                 
|      |                                                                                                                                                                                                                                  
|(32)  | Section 1350
      Certifications                                                                                                                                                                                                
|      |                                                                                                                                                                                                                                  
|32.1* | Section 906 Certification under
      Sarbanes-Oxley Act of 2002                                                                                                                                                                 

* Filed herewith

- 69 -

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the registrant has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized.

BIOPACK ENVIRONMENTAL SOLUTIONS INC.By: /s/
Gerald Lau
Gerald LauPresident, Chief Executive Officer and Director
(Principal Executive Officer) Date: April 15, 2011By: /s/ Sean
Webster
Sean Webster Chief Financial Officer, Chief Technology Officer,
Secretary, Treasurer and Director(Principal Financial Officer and
Principal Accounting Officer) Date: April 15, 2011

Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons on behalf of
the registrant and in the capacities and on the dates indicated.

By: /s/ Gerald Lau
  Gerald LauPresident, Chief Executive
Officer and Director (Principal Executive Officer) Date: April 15,
2011By:/s/ Sean Webster
Sean Webster Chief Financial Officer,
Chief Technology Officer, Secretary, Treasurer and Director(Principal
Financial Officer and Principal Accounting Officer) Date: April 15,
2011By:/s/ Michael Forster
Michael Forster Director Date:
April 15, 2011

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