We have audited the attached Balance Sheet of M/s. Gold Earth Biotech
Limited (Formerly known as Flexi Circuits India Limited) as at 31st
March, 2006 together with the Profit and Loss Account of the Company
and the cash flow statement for the year ended on that date annexed
thereto. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on
these financial statements based on our audit.
1. We conducted our audit in accordance with the accounting standards
generally accepted in India. These standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free from any material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall presentation of the
financial statements. We believe that our audit provides a reasonable
basis for our opinion.
3. As required by the Companies (Auditor's Report) Order, 2003 issued
by the Central Government of India in terms of Sub-section (4A) of
Section 227 of the Companies Act, 1956, we enclose in the Annexure a
statement on the matters specified in paragraphs 4 and 5 of the said
Further to our comments in the Annexure referred to above, we report
a) We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purposes of our
b) In our opinion, the company has kept proper Books of Accounts as
required by law, have been kept by the company so far as appears from
our examination of these books.
c) The Balance Sheet, the Profit and Loss Account and cash flow
statement referred to in this report are in agreement with the books of
d) In our opinion the Balance Sheet, Profit and Loss Account dealt with
by this report comply with the Accounting Standards referred to In
sub-section (3C) of Section 211 of the Companies Act, 1956.
e) During the year ended 31st March, 2006 the erstwhile management had
paid an excess amount of Rs.16,43,424/- (Previous year Rs.16,43,424/-)
to a then director. We are informed that no prior approval of the
Central Government u/s. 295 of the Companies Act 1956 Had been obtained
for the same. No interest has been charged on such amount. In our
opinion the recovery of such amount is doubtful. No provision for
doubtful debts has been made in the books for the said amount.
f) On the basis of written representation received from the directors,
as on 31st March, 2006 and taken on record by the Board of Directors,
we report that none of the directors is disqualified as on 31st March,
2006 from being appointed as a director in terms of clause (g) under
sub-section (1) of section 274 of the Companies Act, 1956.
g) In our opinion, and to the best of our information and according to
the explanations given to us, the said accounts give the information
required by the Companies Act, 1956 in the manner so required and give
a true and fair view in conformity with the accounting principles
generally accepted in India :
i) In the case of Balance Sheet, of the state of affairs of the Company
as at 31st March,^006:
ii) In the case of the Profit and Loss Account, of the Loss for the
year ended on that rate, and
iii) In the case of the cash flow statement, of the cash flows for the
year ended on that date.
For ARVIND & COMPANY
G. A. Patel
Place : MUMBAI
Date : 1st September, 2006.
ANNEXURE TO THE AUDITOR'S REPORT
Referred to in Paragraph (3) of our report of even date
1. a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets. The Fixed Assets have been physically verified by the
management during the year, which in our opinion is not reasonable
having regard to the size of the Company and nature of its assets. No
Material discrepancies were noticed on such verification as compared
with the book records.
b) The Company has a policy of physically verifying its fixed assets
periodically, which in our opinion is reasonable having regard to the
size of the Company and the nature of its business. During the year,
some of the fixed assets have been physically verified by the
management and no material discrepancies were noticed on such
c) During the year, there was no disposal of Fixed Assets.
2.a) The Company has not taken loans from directors, and Associate
Concerns and Companies under the same management covered in the
Register maintained under Section 301 of the Companies Act, 1956
regarding other loans. In our opinion, terms and conditions on which
these loans have been taken are not prima facie prejudicial to the
interest of the Company. The maximum amount involved during the year
and year-end balance in respect of these loans was Rs.45,80,000/- and
b) The Company has granted a loans to former Director, and others. In
our opinion, the terms and conditions against which the loan has been
granted is prima facie prejudicial to the interest of the Company. In
respect of this loan granted to the maximum amount involved during the
year and year end balance was Rs.38,23,111.32/- and Rs.38,23,111.32/-
3. In our opinion and according to the information and explanations
given to us, there are generally adequate internal control procedures
commensurate with the size of the Company and the fixed assets. During
the course of audit, no major weakness has been noticed in these
4. In our opinion and according to the information and explanations
given to us, that there are no transactions that need to be entered in
the Register in pursuance of Section 301 of the Companies Act, 1956
have been entered. Clause (iv-b) of paragraph 4 of the Order is not
5. The Company has accepted deposits from the Public to which the
directives issued by Reserve Bank of India and the provisions of
section 58 A of the Act and the rules frame there under Apply.
6. In our opinion, the Company has an internal audit system
commensurate with its size and the nature of its business.
7. The Central Government has not prescribed maintenance of cost
records under Section 209(1)(d) of the Companies Act, 1956 for any of
the produce of the Company.
8. a) According to the records of the Company, no undisputed Wealth
Tax, Sales Tax, Custom Duty, Excise Duty except Income Tax were
outstanding as at 31st March, 2006, for a period of more than six
months from the date they became payable.
b) According to the records of the Company, there are no disputed
statutory on Account dues of Sales Tax, Income Tax, Wealth Tax, Custom
Duty, Excise Duty and Cess that have been deposited with the
appropriate authorities on account of dispute. To Company does have
accumulated losses at the end of the financial year and has not
incurred cash losses in the current and not in the immediately
preceding financial year.
9. According to the information and explanations given to us and based
on our observations during the audit, the Company has not defaulted in
repayment of dues to any financial institution or bank or debenture
10. The Company has not granted any loans and advances on the basis of
security by way of pledge of shares, debentures and other securities.
11. In our opinion, the Company is not a Chit fund and Nidhi/Mutual
benefit fund/society. Therefore the provisions of the Clause 4 (xii) of
the order are not applicable to the Company.
12. In our opinion and according to the information and explanations
given to us, the Company is not a dealer or trader in shares,
securities, debentures or other investments. Accordingly, the
provisions of Clause 4(xiv) of the order are not applicable to the
13. According to the information and explanations given to us and the
representations made by the management, the Company has not given any
guarantee for loans taken by others from banks or financial
14. During the year, the Company has not obtained any long term loans
that were not applied.
15. According to the information and explanations given to us and on an
overall examination of the Balance Sheet of the Company, we report that
no funds raise^, on short term basis which have been used for long term
investment and vice versa.
16. The Company has not made preferential allotment of shares to
parties and companies covered in the Register maintained under Section
301 of the Companies Act, 1956, during the year.
17. The Company has not issued any debentures.
18. The Company has not raised any more through a public issue during
19. According to the information and explanations given to us and based
on out audit, no fraud on or by the Company has been noticed or
reported by the Company during the year.
For ARVIND & COMPANY
G. A. Patel
Place : MUMBAI
Dated : 1st September, 2006