Accentia Technologies

1. We have audited the attached Balance Sheet of Accentia Technologies
 Limited as at March 31,2006 and also the Profit & Loss Account and the
 Cash Flow Statement for the year ended on that date annexed thereto.
 These financial statements are the responsibility of the Companys
 Management. Our responsibility is to express an opinion on these
 financial statements based on our audit.
 
 2. We conducted our audit in accordance with auditing standards
 generally accepted in India. Those Standards require that we plan and
 perform the audit to obtain reasonable assurance about whether the
 financial statements are free of material mis-statement. An Audit
 includes examining, on a test basis, evidence supporting the amounts
 and disclosures in the financial statements. An Audit also includes
 assessing the accounting principles used and significant estimates made
 by management, as well as evaluating the overall financial statement
 presentation. We believe that our audit provides a reasonable basis for
 our opinion.
 
 3. As required by the Companies (Auditors Report) Order, 2003,as
 amended by the companies (Auditors Report) (Amendment) Order 2004,
 (together the Order) issued by the Central Government of India in
 terms of sub-section (4A) of Section 227 of The Companies Act, 1956. We
 enclose in the Annexure, a statement on the matters specified in
 paragraphs 4 and 5 of the said order.
 
 4. Further to our comments in the Annexure referred to above, we
 report that :
 
 (i) We have obtained all the information and explanations, which to the
 best of our knowledge and belief were necessary for the purpose of our
 audit.
 
 (ii) In our Opinion, the Company has kept proper books of accounts as
 required by law so far as appears from our examination of those books.
 
 (iii) The Balance Sheet, Profit & Loss Account and Cash Flow Statement
 dealt with by this report are in agreement with the books of account.
 
 (iv) In our opinion, the Balance Sheet, Profit & Loss Account and Cash
 Flow Statement dealt with by this report comply with the accounting
 Standards referred to in subsection (3C) of Section 211 of the
 Companies Act, 1956
 
 (v) On the basis of the written representation teceived from the
 directors, as on March 31, 2006, and taken on record by the Board of
 Directors, we report that none of the Directors is disqualified as on
 March 31, 2006 from being appointed as a Director in terms of clause
 (g) of sub-section (1) of section 274 of the Companies Act, 1956.
 
 (vi) In our opinion and to the best of our information and according to
 the explanation 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 and are in conformity with the accounting
 principles generally accepted in India.
 
 (a) In the case of the Balance Sheet, of the state of affairs of the
 Company as at March 31, 2006.
 
 (b) In the case of the Profit & Loss account, of the Profit for the
 year ended on that date; and
 
 (c) In the case of Cash Flow Statement, of the Cash Flows for the year
 ended on that date.
 
 ANNEXURE REFERRED TO IN PARAGRAPH 3 OF OUR REPORT OF EVEN DATE
 
 Re: Accentia Technologies Limited (Formerly: Hi tech Entertainment
 Limited)
 
 I.  (a) The Company has maintained proper records showing full
 Particulars, including quantitative details and situation, of fixed
 Assets on the basis of information available.
 
 (b) We are informed that fixed assets have been physically verified by
 the management during the year. There is a regular programme of
 verification which, in our opinion, is reasonable having regard to the
 size of the company and the nature of its assets. No material
 discrepancies were noticed on such verification.
 
 (c) In our opinion and according to information and explanation given
 to us no fixed assets has been disposed of by the company during the
 year.
 
 II. (a) In our opinion and according to the information and explanation
 given to us, the Management has conducted physical verification of
 inventory at reasonable intervals during the year.
 
 (b) In our opinion and according to the information and explanation
 given to us, the procedures of physical verification of inventory
 followed by the management are reasonable and adequate in relation to
 the size of the Company and the nature of its business.
 
 (c) In our opinion and according to the information and explanation
 given to us, the company is maintaining proper records of inventory and
 no material discrepancies were noticed on physical verifications
 
 III (a) In our opinion and according to the information and explanation
 given to us, the Company has granted interest free unsecured loans to
 companies, firms or other parties, covered in the register maintained
 under section 301 of The Companies Act, 1956. There are three parties
 covered in the register maintained under section 301 of the Companies
 Act, 1956 to which the Company has granted loans. The maximum amount
 involved including opening balances was Rs. 705 33 lacs and the
 year-end balance of loans granted to such parties was Nil.
 
 (b) In our opinion and according to information and explanation given
 to us the other terms and conditions on which loans have been granted
 to the companies are prima-facie not prejudicial to the interest of the
 company except to the extent of interest on such loans
 granted.
 
 (c) In our opinion and according to the information and explanation
 given to us, the Company is regular in receipt of the principal amounts
 as stipulated
 
 (d) In our opinion and according to the information and explanation
 given to us, there are no overdue amounts of loan granted to companies,
 firms or other parties listed in the register maintained under section
 301 of the Companies Act, 1956.
 
 (e) In our opinion and according to information and explanation given
 to us the company has not taken any loans secured or unsecured from
 companies, firms or other parties covered in the register maintained
 under section 301 of the companies Act, 1956.
 
 (f) Since the company has not taken any loans secured or unsecured from
 companies, firms of other parties covered in the register maintained
 under section 301 of the companies Act, 1956, Clause 4(iii) (f) & (g)
 of the Companies Auditors Report order, 2003 are not applicable.
 
 IV. In our opinion and according to the information and explanation
 given to us, there are adequate internal control procedures
 commensurate with the size of the Company and the nature of its
 business, for the purchase of inventory and fixed assets and for the
 sale of goods and services. During the course of our audit, we have
 neither come across nor have been informed of any continuing failure to
 correct major weaknesses in the aforesaid internal control system.
 
 V. (a) According to the information and explanations given to us we are
 of the opinion that the transactions that need to be entered into the
 register maintained under section 301 of the Companies Act, 1956, have
 been so entered.
 
 (b) In our opinion and according to the information and explanations
 given to us, the company has not entered into any transaction exceeding
 five lakhs in respect of any party referred to under section 301 of the
 Companies Act, 1956
 
 VI. The Company has not accepted any deposits from the Public during
 the year & consequently the provision of section 58A and 58AA of the
 Companies Act 1956 and the rules framed there under are not applicable.
 
 VII. In our opinion, the Company has an internal audit system,
 commensurate with the size of the Company and the nature of its
 business.
 
 VIII. The Central Government has not prescribed maintenance of cost
 records by the Company under section 209(1)(d) of the Act.
 
 IX. (a) According to the information and explanation given to us and
 the records of the Company examined by us , the Company is generally
 regular in depositing with appropriate authorities undisputed statutory
 dues including provident fund, Investor Education Protection Fund,
 employees state insurance, income tax, sales tax, wealth tax, service
 tax, custom duty, Excise duty, Cess and other material statutory dues
 applicable to it.
 
 (b) According to the information and explanation given to us, there are
 no dues of sales tax, income tax, customs duty, wealth tax, excise duty
 and cess, which have not been deposited on account of any dispute.
 
 X. The Company has no accumulated losses at the end of the financial
 year and has not incurred any cash loss in the current and immediately
 preceding financial year.
 
 XI. Based on our audit procedures and on the information and
 explanation given by the management, we are of the opinion that the
 Company has not defaulted in repayment of dues to financial
 institution, bank or debenture holders.
 
 XII. According to the information and explanations given to us and
 based on the documents and records produced before us, the Company has
 not granted loans and advances on the basis of security by way of
 pledge of shares, debentures and other securities._
 
 XIII. The provision of any special statute applicable to chit
 fund/nidhi/mutual benefit fund/society are not applicable to the
 Company.
 
 XIV. In our opinion, the Company is not dealing in or trading in
 shares, securities, debentures and other investments.
 
 XV. According to the information and explanation given to us, the
 Company has not given any guarantee of loans taken by others from bank
 or financial institutions.
 
 XVI. The company has not accepted any term loan during the year.
 
 XVII. According to the information and explanations given to us and on
 an overall examination of the Balance Sheet of the Company, In our
 opinion that no funds raised on a short-term basis have been used for
 long-term investment.
 
 XVIII. According to information and explanations given to us, the
 Company has not made any preferential allotment of shares to parties
 and companies covered in register maintained under section 301 of the
 Act during the year.
 
 XIX. The company has not issued any debentures till date.
 
 XX. The Company has not raised any funds by way of Public Issue during
 the year.
 
 XXI. Based upon the audit procedures performed for the purpose of
 reporting the true and fair view of the financial statements and as per
 the information and explanations given by the management, we report
 that no fraud on or by the Company has been noticed or reported during
 the course of our audit.