Accentia Technologies

The Directors have pleasure in presenting the Fifteenth Annual Report
 on the business and operations of the Company together with the Audited
 Statements of Accounts for the year ended March 31, 2006.
 
 1.FINANCIAL RESULTS: -                                 (All Rs. In lakh)
 
 Particulars	                               Year Ended     Year Ended
    	                                    31 March 2006   31 March 2005
 		
 Profit before Depreciation and 
 Extra-ordinary Items	                        (14.10)	       (13.13)
 
 Less: Depreciation	                          4.73	       508
 
 Less: Extra-ordinary items	                 441.01	       210.90
 
 Profit Before Tax	                         431.64	       202.85
 
 Less: Provision for Taxation	                  -0.47 	-158
 
 Profit After Tax	                         432.11	        20443
 
 Provision for Tax for earlier years	           2.00	         0.06
 
 Interim Dividend @10%	                          46.82	        70.22
 
 Corporate Dividend Tax	                           6.70	         918
 
 Transfeired to General Reserve	                   0.00	        15 33
 
 Profit Carried to Balance Sheet	                 376.59 	109.64
 
 2. COMPANYS BUSINESS GROWTH AND PROSPECTS:-
 
 During the financial year 2005-06, the company has acquired 51% stake
 in M/s. Geosoft Technologies (Trivandrum) Ltd and 51% stake in
 M/s.Iridium Technologies (India) Pvt.Ltd. Thus both the companies have
 become the subsidiaries of Accentia Technologies Ltd.
 
 Geosoft Technologies (Trivandrum) Ltd is one of the pioneers in
 Healthcare BPO segment in India. Located at Technopark, Trivandrum,
 with a BPO capacity of 675 seats and infrastructure of 8000 SFT.
 Geosoft is in BPO operations for the past 8 years and serving leading
 clients based in USA and UK.
 
 Iridium Technologies (India) Pvt.Ltd is one the premier application
 software products company specializing in BPO segment. ITIL is a
 pioneer in developing end to end global work flow automation systems
 linking healthcare organizations and insurance companies in USA to the
 service providers all across the world.
 
 Besides, ITIL has web-enabled modules to impart training in Healthcare
 BPO practice to the aspirants of BPO jobs. The product range of ITIL
 comprises iMTAS, iCMT, iCHMT, Falcon-2000, Fl HBPO Automation Software
 etc.
 
 Widi the growth potential that these two companies provide, Accentia is
 poised to have strong consolidated performance. The core performance of
 Accentia is expected to substantially improve widi the strength that
 the two subsidiary companies bring to the Parent Company, Accentia.
 
 3. Take over
 
 With Effect from 17th June 2006, the companys management has changed
 after due completion of the takeover process as per SEBI norms, by
 Mr.Pradeep Suseela Viswambharan.
 
 With the successful completion of takeover process, Mr.Pradeep Suseela
 Viswambharan has become the New Promoter of the Company with effect
 from 17th June 2006.
 
 Mr.Pradeep Suseela Viswambharan is an Engineering Graduate from
 University of Kerala and also a Masters in Business Management from
 TAPMI, Manipal. Mr.Pradeep has more than 16 years of experience in
 Software Services, Business Process Outsourcing Services and Software
 Products. He is one of the pioneers, who propagated the Healthcare BPO
 potential in India through leading Software Platforms like NASSCOM and
 lead several delegations to USA and UK. His presence on the board is a
 value addition to the company in line with its strategic stake
 acquisition plans.
 
 4. DIVIDEND :-
 
 The company has declared and paid 10% interim dividend and no final
 dividend has been declared in order to conserve the resources for
 further expansion of the business of the company. The directors propose
 the resolution for the approval of the shareholders.
 
 5. DEPOSITS :-
 
 The Company did not accept any deposits from the public and the
 provisions of Section 58A of the Companies Act, 1956 are not applicable
 to the Company.
 
 6. PERSONNEL :-
 
 None of the employees of the Company come under the provisions or
 Section 217(2A) of the Companies Act, 1956, read with the Companies
 (Particulars of Employees) Rules, 1975.
 
 7. DIRECTORS :-
 
 During the year Mr. V.S. Pradeep and Dr. Vivek Hebbar are appointed as
 Additional Directors on 28th Febtruary ,2006 and on 22nd March 2006
 Mr.C.K.Sooraj was appointed as the Additional Director. They were
 appointed as Directors in the Extra ordinary General Meeting of the
 Company held on 28th March, 2006.
 
 Pursuant to Article 145 of the Articles of Association of the Company,
 Dr. Vivek Hebbar is to retire by rotation at the Annual General Meeting
 and are eligible for re-appointment.
 
 Mr. S.M..Parande and Mr.G.K.Misra as Additional Directors were
 appointed by the Board of Directors at their meeting held on 31st July
 2006. Pursuant to Section 260 of me Companies Act, 1956, they retires
 at the conclusion of the ensuing Annual General Meeting. The Company
 has received notices in writing under Section 257 of the Companies Act,
 1956, along with the requisite deposit proposing his candidature for
 the office of Director of the Company. The Directors recommend his
 appointment as Director vide resolution no. 7, of the notice of the
 Fourteenth Annual General Meeting.
 
 8. AUDITORS :-
 
 M/s Durgesh Kabra & Co., Chartered Accountants, Mumbai, the Retiring
 Auditors of the Company have expressed their willingness to be
 reappointed as the Auditors of the Company. The Directors recommend
 appointment of the new auditors for the approval.
 
 9. DEPOSITORY SYSTEMS :-
 
 The Company continues with an arrangement with National Securities
 Depository limited (NSDL) and the Central Depository Services (India)
 Limited (CDSL) for dematerialization of the Companys Securities in
 accordance with the provisions of the Depositories Act 1995, which are
 now fully operational and members may avail of such facilities. With
 this, the Members have die option/discretion to hold their Demat
 shares in the Company through the National Securities Depository
 Limited or the Central Depository Services (India) Limited
 
 10. CORPORATE GOVERNANCE :-
 
 The Company has complied with all die recommendations of die Corporate
 Governance Code as provided in Clause 49 of the Listing Agreement. A
 Report on Corporate Governance is given as Annexure to this Report.
 
 A Management Discussion & Analysis R.eport also accompanies this Report
 of the Directors.
 
 11. LISTING OF SECURITIES :-
 
 The Equity shares of the Company are listed at the Stock Exchange,
 Mumbai and the Stock Exchange Mangalore. As per the approval obtained
 from the Shareholders in earlier AGM, the company has applied for
 voluntary delisting from die Stock Exchange, Mangalore. The company has
 duly paid the annual listing fees for die year 2005-2006 to the Stock
 Exchange, Mumbai.
 
 12. DIRECTORS RESPONSIBILITY STATEMENT :-
 
 As required under Section 217 (2AA) of the Companies Act, 1956, the
 Directors confirm that:
 
 (i) In the preparation of the annual accounts for the financial year
 ended 31st March 2006, the applicable accounting standards have been
 followed.
 
 (ii) The Directors had selected such accounting policies and applied
 them consistently and made judgments and estimates that are reasonable
 and prudent so as to give a true and fair view of the state of affairs
 of the Company as on 31st March 2006 and of the profit or loss of the
 Company for the year ended 31st March, 2006.
 
 (iii) The Directors have taken proper and sufficient care for the
 maintenance of adequate accounting records in accordance with the
 provisions of the Companies Act, 1956 for safeguarding the assets of
 die Company and for preventing and detecting fraud and other
 irregularities.
 
 (iv) The Directors have prepared die annual accounts for the year under
 review on a going concern basis.
 
 13. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, AND FOREIGN EXCHANGE
 EARNINGS AND OUTGO under section 217(l)(e) of the Companies Act, 1956
 read with the Companies (Disclosure of particulars in the Report of the
 Board of Directors) Rules, 1988.
 
 a) CONSERVATION OF ENERGY:
 
 As the company is in to entertainment industry, companys operations
 involve low energy consumption. However efforts are being made to
 conserve the energy and optimize the use of energy in the regular
 operations.
 
 b) TECHNOLOGY ABSORPTION:
 
 No technology has been developed, as the company is yet to set-up its R
 & D facility. No Technology has also been imported by way of foreign
 collaboration.
 
 c) FOREIGN EXCHANGE EARNINGS AND OUTGO:
 
 During the year the Company has not incurred any expenditure in foreign
 currency neither the Company has earned any foreign exchange income.
 
 12. ACKNOWLEDGMENTS
 
 The Directors wish to place on record its appreciation for the
 wholehearted and sincere cooperation and able guidance and support, the
 company received from all concerned including, Banks, Merchant Bankers,
 Stock Exchange Authorities, SEBI, Government and Semi- Government
 Bodies of the Central and State Government.
 
 The directors also with to place on record their appreciation for the
 good efforts put in by the employees of the Company and for the
 unstinted support extended by the shareholders.
 
 AUDITORS CERTIFICATE
 
 We have examined the compliance of conditions of Corporate Governance
 by Accentia Technologies Limited, for the year ended on March 31, 2006,
 as stipulated in clause 49 of the Listing Agreement of the Company with
 The Stock Exchanges.
 
 The Compliance of conditions of Corporate Governance is the
 responsibility of the Management. Our examination was limited to
 procedures and implementation thereof, adopted by the Company for
 ensuring the compliance of the conditions of the Corporate Governance.
 It is neither an audit nor an expression of opinion on the financial
 statements of the Company.
 
 In our opinion and to the best of our information and according to the
 explanations given to us, we certify that the Company has complied with
 the conditions of Corporate Governance as stipulated in the
 above-mentioned Listing Agreement.
 
 We state that no Investor Grievances are pending for a period exceeding
 one month against the Company as per the records maintained by the
 Shareholder/Investors Grievance Committee.
 
 We further state that such compliance is neither an assurance as to the
 future viability of the Company nor the efficiency or effectiveness
 with which the management has conducted the affairs of the Company.