accentia technologies limitedrevenue management solutions for physicians and healthcare providers by...

1ACCENTIA TECHNOLOGIES LIMITED

2 ANNUAL REPORT 2010 - 2011


TOPIC PAGE No.

Vision and Mission 2

In Transformation Mode 3

Message from the CEO 4

Financial Overview 5

Corporate information 8

Directors’ Report 10

Report on Corporate Governance 13

Management Discussion and Analysis 21

Financial Statements 36

Auditor’s Report 37

Balance Sheet 40

Profit and Loss Accounts 41

Schedules 42

Notes to Accounts 49

Cash Flow Statement 53

Balance Sheet Abstract 54

Consolidated Financial Statements 56

Consolidated Auditor’s Report 57

Consolidated Balance Sheet 58

Consolidated Profit and Loss Accounts 59

Consolidated Schedules 60

Consolidated Notes to Accounts 66

Consolidated Cash Flow Statement 70

Notice of Annual General Meeting 72

CONTENTS


VISION AND MISSION

Vision

To become the Partner of Choice for

Integrated Practice Management and

Revenue Management Solutions for

Physicians and Healthcare Providers by

providing cutting edge technology

backed by immaculate service delivery

network that follows the Sun

Mission

A seamless integration of state of the art

technology into a single source Clinical

Data Management, Billing and Receivable

Management Solutions and acquire

clients on Software As A Service model.

Provide Total Customer Satisfaction

through simple yet powerful tools


IN TRANSFORMATION MODE...

Accentia has gone a long way from being a single

location, single service firm to a multi location,

diversified Knowledge Process Outsourcing

Company, operating from multiple locations in

India, USA, UK and the Middle East. Not resting

at being one of the fastest growing Healthcare

Receivables Cycle Management Companies, we

have now ventured into offering Software As A

Service model in the healthcare outsourcing

area, since the US administration has made

sweeping changes in the healthcare sector,

especially in the documentation area.

In 1998-1999 when the units in Trivandrum and

Bangalore were started, Medical Transcription

was a little known industry. In the decade that

followed, Accentia ventured into Coding, Billing

and Collections in HRCM, but since the change

over from traditional medical transcription to EMR

(Electronic Medical Records) is happening, we

are now looking to capitalise on the huge

opportunities that is now open for Healthcare

BPO companies by adapting to the changed

scenario.

Today Accentia is a Truly Global Company with

thousands of talented professionals and

operations in Trivandrum, Kochi, Bangalore,

Hyderabad and Bhubaneswar in India; Fort

Lauderdale, Portland, Oregon, Chicago and New

Jersey in the US, London in the UK and Raz Al

Khaima in the Middle East.


MESSAGE FROM THE CEO

Dear Shareholders,

I am happy to present before you a brief note on the accomplishments of your Company on yet another successful year.

For the year ended 31.03.2011, Accentia recorded revenues of Rs 33,124 lakhs over Rs 26,572 lakhs recorded last year, a growth of24.66%. Net profit increased from Rs 72.53 lakhs last year to Rs 75.35 lakhs this fiscal. EPS is Rs 51.50 against Rs 53.79 last year.

I would like to briefly dwell upon the activities of your Company during the last financial year.

Our company is presently going through a transformation phase for good. In the largest market place that Accentia serves, the United Statesof America, there has been a significant shift in the healthcare industry due to the introduction of the new Healthcare policy by the Obamaadministration. The US Senate passed a historic Healthcare Bill in 2010 that is set to eliminate gross inefficiencies in the system whichwas leading to wastage of billions of dollars. The new bill is totally changing the way documentation and healthcare receivables cyclemanagement has been conducted over the past 3 to 4 decades. A major mandatory requirement as per the new Obama Healthcare Bill is theusage of an Electronic Medical Records (EMR) suite to capture and record patients’ demographical, clinical and all other related data intoa database, which can be accessed anytime for future reference and analysis. Obama administration has set apart more than US$ 80 billionto offer as monetary incentives of up to US$ 44,000 per physician, payable to all physicians who adopt EMR software which is certifiedby the ONC-ATCB (Office of the National Coordinator – Authorised Testing and Certification Body).

Even though the management realised that these drastic changes in Accentia’s core area of operation would affect the normaloperations and would have an impact on the revenues and profitability of the Company in the short run, we were quick to understandthat there is a huge opportunity that was waiting to be exploited, if we can change our functioning to adapt to the new requirementsin the healthcare industry in the US. Accordingly we decided to go all out on a war footing basis to develop our own EMR softwarerather than depend on third party offerings; get the software certified at the earliest and market the same all over the US. Further, werealised that the adoption of EMR based clinical practice is opening up avenues for an integrated end-to-end SaaS model (Software asa Service) of service delivery; hence, we quickly ventured into that too. Accentia’s seamlessly integrated SaaS delivery model willfunction as a one-stop shop for a clinical provider that will manage all their healthcare documentation needs, receivables managementneeds, performance tracking and reporting.

On the 28th of July 2011, our first EMR offering for physicians got certified by ONC – ATCB in the US. We have also recentlyintroduced our SaaS offering to clients which was well received by the industry, and our software teams in different locations areworking on adding additional disciplines in the EMR software which will soon be introduced in the US market. In the back enddelivery centres, the employees are going through retraining in the use of EMR software and SaaS offerings. We are also working onincreasing the productivity per employee, leading to significant increase in the profitability of the Company.

Due to these developments in the last financial year, Accentia has invested large amount of funds in the development of EMR softwareand SaaS model, marketing of the same in the US and retraining of the workforce across all its delivery centres. Due to the need toconserve funds to meet the requirements of the new business model, the Directors felt it is desirable not to recommend dividend onequity shares for the financial year.

During the financial year, none of the Directors have resigned from the Board of the Company. I am happy to inform you that Mr KezerKharawala, an eminent lawyer, has join the Director Board as an Additional Independent Director. I am sure with his vast experiencehe will be able to add significant value to the Board and the Company.

I should mention here that the employees of the Company in the different units in India and abroad have been very supportive andunderstanding during this transition phase. Without their dedication and hard work, the Company could not have adapted to the newrequirements in this short time, and I take this opportunity to thank all the employees of the Company.

I also take this opportunity to thank all the shareholders for their continued faith in the Company and the understanding they have shownduring the past year of transformation. I am sure that with your support and faith in the management, we can scale new heights together.

Pradeep ViswambharanManaging Director & Chief Executive Officer


FINANCIAL OVERVIEW

35,000

30,000

25,000

20,000

15,000

10,000

5,000

0

Rs L

akhs

2007-08 2008-09 2009-10 2010-11

INCOME FROM OPERATIONS


8,000

7,000

6,000

5,000

4,000

3,000

2,000

1,000

0

Rs L

akhs

2007-08 2008-09 2009-10 2010-11

PROFIT AFTER TAX

40

35

30

25

20

15

10

5

0

Perc

enta

ge

2007-08 2008-09 2009-10 2010-11

EBIDTA %

FINANCIAL OVERVIEW


60

50

40

30

20

10

0

Rupe

es

2007-08 2008-09 2009-10 2010-11

EARNINGS PER SHARE

FINANCIAL OVERVIEW

RETURN ON CAPITAL EMPLOYED

45

40

35

30

25

20

15

10

5

0

2007-08 2008-09 2009-10 2010-11

Perc

enta

ge


CORPORATE INFORMATION

BOARD OF DIRECTORS

Mr S.M. ParandeChairman,Independent Director

Mr Pradeep ViswambharanManaging Director &

Chief Executive Officer

Mr Sooraj C. K.Director,

Operations & HR

Mr Ravi SankarDirector,

Corporate Planning

Mr G.K. MisraIndependent Director

Mr Kabir KewalramaniNominee Director

Mr Kezer KharawalaIndependent Director



CORPORATE INFORMATION


Company Secretary & Compliance Officer

Ms. Rolita Gupta

Auditors

M/s. DMKH & Co, Chartered Accountants

Internal Auditors

M/s. Murali & Sumeet, Chartered Accountants

Bankers

Exim Bank, ICICI Bank, Axis Bank,

Federal Bank, Dhanalakshmi Bank

Citi Bank NA, London, ICICI Bank, Hong Kong

Registered Office

D-207, Second FloorInternational Infotech CentreBelapur Railway Station ComplexCBD Belapur, Navi MumbaiMumbai 400 614

Registrar & Transfer Agents

Sharex Dynamics (India) Private Limited17-B, Dena Bank Building, 2nd FloorHorniman Circle, Fort, Mumbai 400 001

FACILITIES

Trivandrum

233/241, “NILA”Technopark CampusTrivandrum, Kerala 695 581

C – 4, “TEJASWINI”Technopark CampusTrivandrum, Kerala 695 581

Cochin

Near South OverbridgeValanjambalamCochin 682 016

No. 6, Leela InfoparkKakkanadKochi 682 030

Bhubaneswar

STPI ComplexFortune towersBhubaneswar 751 023

Bangalore

3802/B, MKB TowersHAL 2nd Stage, Bangalore 560 038

Hyderabad

Babu Khan Mall, SomajigudaHyderabad 500 016

Chaitanyapuri, DilsukhnagarHyderabad 500 035

Bhagyanagar ColonyKukatpally, Hyderabad 500 072

SUBSIDIARY COMPANIES

INDIA

Thunga Software Private LimitedMKB Towers, 7th Main,H A L 2nd Stage,Bangalore 560 038

Accentia Oak Technologies Pvt Ltd4th Floor, Babu Khan Mall,Somajiguda, Hyderabad 500 016

Accentia Education Services P LtdInternational Infotech CentreCBD Belapur, Navi MumbaiMumbai 400 614

USA

GSR Physicians Billing Services Inc.10096 Griffin Road,Cooper City, Florida 33328

GSR Systems Inc.7481 W. Oakland Park Blvd.Suite 302, Lauderhill, Florida 33319

Denmed Inc.1485 20th St SESalem, Oregon 97302

Oak Technologies Inc.50 Cragwood Road, Ste 104South Plainfield, NJ 07080-2435

UK

8 The Square, Stockley ParkUxbridge UB11 1FW,United Kingdom

UAE

RAK Free Trade ZoneP.O Box 10055, Ras Al Khaimah,United Arab Emirates


DIRECTORS’ REPORT

Dear Members,

Your Directors are pleased to present the Twentieth AnnualReport on the operations of your Company together withthe Audited Statement of Accounts for the year ended31st March 2011. The report covers all major events tillthe date of this report.

A. Performance of the Company

The healthcare segment in the US is compelledto shift from conventional Medical Transcriptionto Electronic Medical Records (EMR). Though thereforms open up tremendous opportunities forgrowth, the above mentioned transition hast e m p o ra r i l y a f fe c te d t h e p ro d u c t i v i t y.H o we ve r, t h e Co m p a ny i s c a r r y i n g o u t t h eoperational activities of the Company in a bettermanner. The financial highlights of the Companyare given below:

Financial Results (Stand Alone)

Particulars For the year For the yearended ended

31.03.2011 31.03.2010

Total Income 1,085,478,878 940,908,699

Less: Total Expenditure 868,224,495 678,194,958

Profit Before Tax &Exceptional items 217,254,383 262,713,741

Less: Exceptional Items (1,741,129) (428,534)

Profit before Tax 215,513,254 262,285,207

Less: Provision of tax 28,126,955 63,746,504

Profit after Tax 187,386,299 198,538,703

Financial Results (Consolidated)

Particulars For the year For the yearended ended

31.03.2011 31.03.2010

Total Income 3,312,366,535 2,657,159,488

Less: Total Expenditure 2,459,237,919 1,777,622,050

Profit Before Tax &Exceptional items 853,128,616 879,537,438

Less: Exceptional Items (1,741,129) (428,534)

Profit before Tax 851,387,487 879,108,904

Less: Provision of tax 97,890,072 153,778,522

Profit after Tax 753,497,415 725,330,382

B. Dividend

In view of the need to conserve funds for plough back, theDirectors feel it is desirable not to recommend any dividendon equity shares for the financial year.

C. Share Capital

As on date of this report the Authorized capital of theCompany is Rs. 20,00,00,000/-(Rupees Twenty Croreonly) divided into 2,00,00,000 equity shares of Rs. 10/- each. The total issued, subscribed and paid up capitalof the Company as on the date of the report is Rs.14,63,09,960,(Rupees Fourteen Crores Sixty Three LacsNine Thousand Nine Hundred and Sixty only) dividedinto 1,46,30,996 equity shares of Rs.10/- each.

D. Constitution of the Board

The Board of the Directors of the Company is dulyconstituted and the present structure is as follows:

Name of Directors Designation Date ofAppointment

1 S. M. Parande Chairman, 28/07/2006Independent

Director

2 Pradeep Managing 28/03/2006Viswambharan Director & CEO

3 Sooraj C. K. Whole Time 22/03/2006Director

4 Ravi Sankar Executive 26/04/2010Director

5 G. K. Misra Independent 28/07/2006Director

6 Kabir Kewalramani Nominee 19/10/2007Director

7 Kezer Abbas Independent 12/11/2010Kharawala Director

During the financial year, none of the Directors haveresigned from the Board of the Company. Mr. Kezer AbbasKharawala has joined the Board of Directors of the Companyas an Additional Director of the Company with effect from12th November, 2010 and holds office up to ensuing annualgeneral meeting of the Company. The Company hasreceived notice from a member pursuant to Section 257 ofthe Companies Act, 1956, signifying his intention to proposethe candidature of Mr. Kezer Abbas Kharawala for the officeof Director.

At the ensuing Annual General Meeting, the followingDirectors are liable to retire by rotation as per provisions ofSection 255 of the Companies Act, 1956 and clause No 145


of the articles of association of the Company and beingeligible offers themselves for reappointment:

(i) Mr. Ghanshyam Krishna Misra(ii) Mr. Ravi Sankar

E. Directors’ Responsibility Statement

Pursuant to the requirement under Section 217(2AA)of the Companies Act, 1956 with respect to Directors’Responsibility Statement, it is hereby declared that:

i. in the preparation of the annual accounts for thefinancial year ended 31st March 2011 the applicableaccounting standards have been followed along withproper explanation relating to material departures;

ii. the Directors had selected such accounting policiesand applied them consistently and madejudgments and estimates that were reasonable andprudent so as to give a true and fair view of thestate of affairs of the Company at the end of thefinancial year and of the profit or loss of theCompany for the year under review;

iii. the Directors had taken proper and sufficient care for themaintenance of adequate accounting records inaccordance with the provisions of the Companies Act,1956, for safeguarding the assets of the Company andfor preventing and detecting fraud and other irregularities;

iv. the Directors had prepared the annual accounts ona going concern basis.

F. Corporate Governance

Your Directors affirm their commitments to theCorporate Governance standards prescribed by theSecurities and Exchange Board of India (SEBI). A reporton the Corporate Governance with ManagementDiscussions and Analysis as required under Clause 49of the Listing Agreement forms part of this report.

G. Auditors

M/s. DMKH & Co, Chartered Accountants, Mumbai, theStatutory Auditors of the Company retires at theconclusion of the ensuing Annual General Meeting and iseligible for re- appointment. The Company has receivedconfirmation from the Auditors that their re-appointmentwill be within the limits prescribed under section 224(1B) of the Companies Act, 1956. The necessary resolutionis being placed before the shareholders for approval.

H. Auditor’s Report

The report of the Auditors of the Company and notes tothe accounts are self explanatory and therefore do not callfor any further comments and may be treated as adequatecompliance of Section 217(3) of the Companies Act, 1956.

I. Fixed Deposits

Your Company has not accepted any public depositwithin the meaning of provisions of section 58A of theCompanies Act, 1956 read with the Companies

(Acceptance of Deposit) Rules, 1975 and as such noamount of principal or interest are outstanding as onthe balance sheet date.

J. Particulars of Employees

During the period under review, no employee of theCompany has received remuneration at a rate, which,in the aggregate was more than Rs. 5,00,000/- or moreper month or Rs.60,00,000/- or more per annum andhence there was no requirement of a statement undersub section (2A) of the Section 217 of the CompaniesAct, 1956 read with Companies (Particulars ofEmployees) Rules, 1975.

K. Conservation of Energy

Your Company’s operations do not involve large scaleuse of energy. The disclosure of particulars under thishead is not applicable as your Company operates in theService sector. Although your Company is not a large-scale energy user, it acknowledges the concept ofconservation of energy.

L. Foreign Exchange Earnings & Outgo

The foreign exchange earnings of the Company for theyear is Rs. 1,069,026,524/- as against Rs.927,621,875/-of the previous year and the foreign exchange outgo ofthe Company for the year is Rs. 77,261,143/- as againstRs. 89,430,474/- of the previous year. Also note thatthere is a difference in the previous year forex outflowof the Company in the P&L for the current year fromthat of the Previous year's P&L Account.

M. Subsidiaries Companies

In terms of the general exemption given by the Ministryof Corporate Affairs, Government of India (MCA) throughGeneral Circular No. 2/2011 and Press Note 3/2011, theBoard of Directors has accorded their consent to theCompany not to attach the specified particulars of itsSubsidiary Companies with the balance sheet of theHolding Company.

N. Acknowledgement

Your Directors place on record their gratitude to the Centraland State Government, the Company’s Bankers for theirassistance, co-operation and encouragement they haveextended to the Company. Your Directors also wish toplace on record their sincere thanks and appreciation forthe continuing support and unstinting efforts of investors,customer, vendors and employees in ensuing an excellentall around operational performance.

By and on behalf of the BoardAccentia Technologies Limited

Pradeep Viswambharan Sooraj C. K.Managing Director & DirectorChief Executive Officer

MumbaiNovember 26, 2011


CEO Certification

I, Pradeep Viswambharan, Managing Director and ChiefExecutive Officer of M/s. Accentia Technologies Limited, tothe best of my knowledge and belief, certify that:

(a) We have reviewed the consolidated and stand aloneBalance Sheet and the Profit and Loss account for theyear ended 31.03.2011 and all its schedules, notes toaccounts as well as the cash flow statement for thatyear and the Directors’ Report for that year and to thebest of our knowledge and belief:

i) these statements do not contain any materiallyuntrue statement or omit any material fact orcontain statements that might be misleading;

ii) these statements together present a true and fairview of the Company’s affairs and are in compliancewith existing accounting standards, applicable lawsand regulations.

(b) There are, to the best of our knowledge and belief, notransactions entered into by the Company during theyear which are fraudulent, illegal or violative of theCompany’s code of conduct.

(c) We accept responsibility for establishing andmaintaining internal controls for financial reporting and

CERTIFICATIONS AND REPORTS

that they have evaluated the effectiveness of internalcontrol systems of the Company pertaining to financialreporting and they have disclosed to the auditors andthe Audit Committee, deficiencies in the design oroperation of such internal controls, if any, of which theyare aware and the steps they have taken or propose totake to rectify these deficiencies.

(d) We have indicated to the Auditors and the AuditCommittee

(i) significant changes in internal control over financialreporting during the year;

(ii) significant changes in accounting policies duringthe year and that the same have been disclosed inthe notes to the financial statements; and

(iii) instances of significant fraud of which they havebecome aware and the involvement therein, if any,of the management or an employee having asignificant role in the Company’s internal controlsystem over financial reporting.

Mumbai Pradeep ViswambharanNovember 26, 2011 Managing Director &

Chief Executive Officer


Company’s Corporate Governance Report

Accentia Technologies Limited’s philosophy on corporate governance envisages the attainment of the highest levels oftransparency, accountability and equity, in all aspects of its operations, and in all its interactions with its shareholders,employees, and the Government. Accentia Technologies Ltd. believes that all its operations and actions must serve theunderlying goal of enhancing overall shareholder value, over a sustained period of time.

Board of Directors

The Board of Directors on the date of this Report comprises of 7 Directors. The composition and category of the Board is as follows:

REPORT ON CORPORATE GOVERNANCE

Name of the Director Category

1. Pradeep Viswambharan Executive Promoter Director/Managing Director/CEO

2. Sooraj C.K Executive Promoter Director/Whole- time Director

3. Ravi Sankar Executive Director

4. G. K. Misra Independent Non executive Director

5. S. M. Parande Independent Non executive Director, Chairman

6. Kabir Kewalramani Nominee Non executive Director

7. Kezer Abbas Kharawala * Independent Non executive Director

*Mr. Kezer Abbas Kharawala was appointed as Additional Director on 12.11.2010 by the Board of Directors of the Company.

During the year under review the Board of Directors met eight times on 26.04.2010, 14.05.2010, 19.07.2010, 12.08.2010,06.09.2010, 12.11.2010, 11.02.2011 and 28.03.2011 respectively as against the minimum requirement of 4 meetings. Themaximum time gap between any two meetings was not more than 4 calendar months.

The attendance of each Director at the Board meeting, Last Annual General Meeting and number of other Directorship andChairmanship/membership of Committee held by each of the Director in other Companies are as under:

Name ofDirector

Attendance

Board LastAGM

Relationshipwith otherDirectors

No. of other Directorships/ membership

India Listed

Companies*

Companies allaround the

world (listedand unlisted)**

CommitteeMembership

***

CommitteeChairmanship***

PradeepViswambharanSuseela 8 YES None NIL 10 NIL NIL

Sooraj C K 8 YES None NIL 3 3 NIL

Ravi Sankar 7 YES None NIL 2 2 NIL

GhanshyamKrishna Misra 7 YES None NIL 1 3 3

ShreedharParande Mukund 8 NO None NIL 8 3 NIL

KabirKewalramani 6 YES None NIL 5 1 NIL

Kezer AbbasKharawala 2 NO None NIL NIL NIL NIL

* Excluding Directorship in Accentia Technologies Limited** Including Directorship in Accentia Technologies Limited and its subsidiaries*** Including Chairmanships in Accentia Technologies Limited and its subsidiaries


3. Audit committee

The audit committee of the company had beenreconstituted with the following members Mr. S. M.Parande, Mr. G. K. Misra, Mr. Pradeep Viswambharan, andMr. Sooraj .C. K The constitution of the committee alsomeets the requirements under Section 292A of theCompanies Act, 1956. The terms of reference of the AuditCommittee are as contained in the Clause 49 of the ListingAgreement. Mr. S. M. Parande is the Chairman of the AuditCommittee. The composition and attendance of theCommittee is as follows:

Name of the Position in No. of committeeDirector Audit committee meetings attended

S. M. Parande Chairman 4

G. K. MisraMember 4

PradeepViswambharan Member 4

Sooraj .C. K Member 4

During the year the Committee has met 4 times.

Sl. No. Venue Date

1 Corporate Office 14.05.2010



4. Corporate Office 11.02.2011

4. Remuneration committee

The remuneration committee of the company had beenreconstituted with the following members Mr. Sooraj .C. K,Mr. Kabir Kewalramani, and Mr. Ravi Sankar. Theremuneration committee has been constituted torecommend/review the remuneration package of thedirectors based on performance and defined criteria. Theremuneration policy is directed towards rewardingperformance based on review of achievements on aperiodical basis. The remuneration policy is in consonancewith the existing industry practice. Mr. Sooraj .C. K is theChairman of the Remuneration Committee. Thecomposition and attendance of the Committee is as follows:


Sooraj .C. K Chairman 4

KabirKewalramani Member 4

Ravi Sankar Member 4


Sl. No. Venue Date





5. Shareholders/Investor grievance committee

The shareholders’/investor grievance committee had beenreconstituted with the following members Mr. S. M.Parande, Mr. Sooraj .C. K and Mr Ravi Sankar. Mr. S. M.Parande, Independent Director, is the Chairman of theshareholders’/investor grievance committee. Thecomposition and attendance of the Committee is asfollows:


S. M. Parande Chairman 4

Mr. Sooraj .C . K Member 4

Ravi Sankar Member 4


Sl. No. Venue Date





6. Investor grievances and share transfer

We have a Board-level investor grievance committee toexamine and redress shareholders’ and investors’complaints. The status on complaints and share transfers isreported to the full Board. The details of shares transferredand the nature of complaints are provided in the additionalinformation to Shareholders section of the Annual Report.The share transfer committee of the company will meetas often as required to approve the share transfers formatters regarding shares transferred in physical form, sharecertificates, dividends, change of address, etc.Shareholders should communicate with concernedintermediaries appointed for the purpose. Sharestransacted in electronic form can be effected in a muchsimpler and faster manner. After confirmation of sale/purchase transaction from the broker, shareholders shouldapproach the depositary participant with a request to debitor credit the account for the transaction. The Depositaryparticipant will immediately arrange to complete the


transaction by updating the account. There is no need fora separate communication to the company to register theshare transfer.

7. Details of non-compliance

There has been no non-compliance of any legalrequirements nor have there been any strictures imposedby any stock exchange, SEBI or SEC, on any matters relatingto the capital market over the last three financial years.

8. General body meetings

The general meetings are the place for the shareholders toexpress their views and concerns and at Accentia we respecttheir right and privilege to a great extent. The generalmeetings of the company are being conducted in a properand transparent manner and the same has enhanced theimage of the company among investor community in a largermanner.

Location and place of the last three annual generalmeetings

Financial Venue Date & Day Time SpecialYear Resolutions

passed

2009-10 Hotel The Wednesday, 10.30 A.M. 1. Further issuePark, Navi 29.09.2010 of SharesMumbai 2. Issue of

Convertible Share Warrants

2008-09 Celebrations Tuesday, 10.30 A.M. 1. Further issueHotel, 29.12.2009 of Shares

2007-08 Hotel Days Monday, 11.00 A.M. 1. Preferential Inn, Mumbai 29.09.2008 Allotment

No special resolution was passed last year through postal ballot.

9. Whistle Blower Policy

Whistle blower policy is a mechanism which enables theemployees of the company to report about any unethicalbehavior, actual or suspected fraud, violations of our Codeof conduct or ethics policy while safeguarding theemployees who avail of the mechanism against reprisals orvictimization. The company provides the employees,customers and vendors an avenue to raise their concernsabout any actions against ethical, moral and legal businessconduct and the company’s commitment to opencommunication. Accentia Technologies Limited retains theprerogative to determine when circumstances warrant aninvestigation and in conformity with this policy andapplicable laws and regulations the appropriate investigativeprocess to be employed. And the mechanism also providesa direct access to the Chairperson of the Audit committeein exceptional cases taking into consideration the

seriousness of the issue. We further affirm that no personhas been denied the access to the audit committee duringthe fiscal 2011.

10. Code of Conduct

This Code of Conduct (The “Code”) has been adopted byour Board of Directors and summarises the standards thatmust guide our actions. While covering a wide range ofbusiness practices and procedures, these standards cannotand do not cover every issue that may arise, or every situationwhere ethical decisions must be made, but rather set forthkey guiding principles that represents the company’spolicies. The concept of code of conduct is to strive to fostera culture of honesty and accountability. The management iscommitted to the highest level of ethical conduct and thesame is reflected in all of the company’s business activitiesincluding, but not limited relationship with employees,customers, suppliers, competitors, the government and thepublic and our shareholders. All the directors must conductthemselves according to the language and spirit of this Codeand seek to avoid even the appearance of improperbehavior. The Board of Directors recognize that themanagement’s actions are the foundation of the company’sreputation and adhering to this code and applicable law isimperative.

11. Respect for our employees

The real backbone and strength of Accentia is its employees.We have created an atmosphere of caring, opencommunications and candor by treating each other withrespect. We place a great deal of emphasis on personalintegrity and believe long terms results are the best measureof the performance.

We respect individual difference in culture, ethnicity andcolor. Accentia is committed to equal opportunity in allaspects of employment for all employees and applicantswithout regard to race, color, religion, gender, sexualorientation, age, material status or any other status protectedby constitution, state or local law. We are committed toproviding workplace free from all forms of discriminationincluding sexual and other forms of harassment. We respectthe right of individuals to achieve personal and professionalbalance in their lives.

12. National Interest

We shall be in all our business actions to benefit theeconomical development of the countries in which weoperate and shall not engage in any activity that wouldadversely affect such objective. The company shall notundertake any project or activity to the detriment of thenations’ interest or those that will have any adverse impacton the social and cultural life patterns of its citizens. Thecompany shall conduct its affairs in accordance with theeconomic development and foreign policies, objectives andpriorities of the nations’ government and strive to make


appositive contribution to the achievement of such goals atthe international, national or local level as appropriate.

13. Conflicts of Interest

Our employees, officers and directors have an obligation toconduct themselves in an honest and ethical manner andat in the best interest of the company all employees, officersand directors should endeavor to avoid situation that presenta potential or actual conflict between their interest and theinterest of the company.

A “conflict of interest” occurs when a person private interestinterferes in any way, or even appears to interfere, with theinterest of the company, including its subsidiaries andaffiliates. A conflict of interest can arise when an employee,officers or directors takes an action or has an interest thatmay make it difficult for him or her to perform his or herwork objectively and effectively. Conflicts of interest mayalso arise when an employee, officers or directors (his orfamily members) receives improper personal benefits as aresult of the employee’s, officer’s or director’s position inthe company.

Although it would not be possible to describe every situationin which a conflict of interest may arise, the following arethe examples of situations which may constitute a conflictof interest:

1. Working, in any capacity, for a competitor, customer,supplier or other third party while employed by thecompany.

2. Accepting gifts of more than modest value orreceiving personal discounts (if such discounts arenot generally offer to the public) or other benefitsas result of your position in the company from acompetitor, customer or supplier.

3. Competing with the company for the purchase orsale of property, products, services or otherinterests.

4. Having an interest in a transaction involving thecompany, a competitor, customer or supplier (otherthan as an employee , officer or director of thecompany and not including routine investments inpublically traded companies).

5. Receiving a loan or guarantee of an obligation as aresult of your position with the company.

6. Directing business to a supplier owned or managedby, or which employs, a relative or friend.

7. In the event that an actual or apparent conflict ofinterest arises between the personal andprofessional relationship or activities of anyemployee, officer or Director, the employee, officeror director involved is required to handle suchconflict of interest in an ethical manner in

accordance with the provisions of this code.

14. Quality of Public Disclosures

The company has a responsibility to communicateeffectively with shareholders so that they are provided withfull and accurate information, in all material respects, aboutthe company’s financial condition and results of operations.Our reports and documents required to be filed with orsubmitted to the Stock exchange, in India, Securities andExchange Board of India, Reserve Bank of India or otherregulatory agencies and our other public communicationsshall include full, fair, accurate, timely and understandabledisclosure.

15. Compliance with Laws, Rules and Regulations

We are strongly committed to conducting our businessaffairs with honesty and integrity and in full compliancewith all applicable laws, rules, and regulations. Everyemployee, officer and director of the company shall, in hisbusiness conduct, comply with all applicable laws andregulations, both in letter and in spirit, in all the territories inwhich he operates. If the ethical and professional standardsset out in the applicable laws and regulations are belowthat of the Code then the standards of the Code shall prevail.

16. Trading on inside information

Using non public information to trade in securities orproviding a family member, friend or any other person witha “tip” is illegal. All non public information should beconsidered inside information and should never be usedfor personal gain. You are required to familiarize yourselfand comply with the company’s Code of Conduct forprevention of insider trading. You should contact thecompliance officer with any questions about your ability tobuy or sell securities.

17. Protection of Confidential ProprietaryInformation.

Confidential proprietary information generated andgathered in a business is a valuable asset. Protecting thisinformation plays a vital role in our continued growth andability to compete, and all proprietary information shouldbe maintained in strict confidence, except when disclosureis authorized by the company or required by law. Proprietaryinformation includes all non public information that mightbe useful to competitors or that could be harmful to thecompany or its customers if disclosed. Intellectual propertysuch as trade secrets, patents, trademarks and copyrights,as well as business, research and new product, plants,objectives and strategies, records, databases, salary andbenefits data, employee medical information, customeremployee and suppliers’ lists and any unpublished financialor pricing information must also be protected. Unauthoriseduse or distribution of proprietary information violates thecompany’s policy could be illegal. Such use or distribution


could result in negative consequences for both thecompany and the individuals involved, including potentiallegal and disciplinary actions. Your obligation to protect thecompany’s proprietary and confidential informationcontinues even after you leave the company, and you mustreturn all proprietary information in your possession uponleaving the company.

18. Protection and proper use of company’ assets

Protecting the Company’s assets against loss, theft, or othermisuse is the responsibility of every employee, officer andDirector. Loss, theft and misuse of the Company’s assetsdirectly impact our profitability. Any suspected loss, misuseor thefts should be reported to a manager/supervisor or theChief Financial Officer. The sole purpose of the Company’sequipments, vehicles, supplies and electronic resources(including hardware, software and the data thereon) is theconduct of our business. They may only be used for theCompany’s business consistent with the Company’sguidelines.

19. Corporate Opportunities

Employees, officers and Directors are prohibited from takingfor themselves business opportunity that arise through theuse of corporate property, information or position. Noemployee, officer or Director may use corporate property,information or position for personal gain, and no employee,officer or Director may compete with the company.Competing with the company may involve engaging in thesame line of business as the company, or any situation wherethe employee, officer or Director takes away from thecompany opportunities for sales or purchases of property,products, services or interests.

20. Fair Dealing

Each employee, officer and Director of the company shouldendeavor to deal fairly with customers, supplier,competitors, the public and one another and all times andin accordance with ethical business practices. No one shouldtake unfair advantage of anyone through manipulation,concealment, abuse of privileged information,misrepresentation of material facts or any other unfairdealing practice. No payment in any form shall be madedirectly or indirectly to or for anyone for the purpose ofobtaining or retaining business or obtaining any otherfavourable action. The company and the employee, officeror Director involved may be subject to disciplinary action aswell as potential civil or criminal liability for violation of thispolicy.

21. Financial Reporting and Records

The company shall prepare and maintain accounts fairly andaccurately in accordance with the accounting and financialreporting standards which represent the generally acceptedguidelines, principles, standards, laws and regulations of

the country in which the company conducts its businessaffairs. Internal accounting and audit procedures shall fairlyand accurately reflect all of the company’s businesstransactions and disposition of assets. All required shall beaccessible to the company auditors and other authorizedparties and government agencies. There shall be no willfulomissions of any company transactions from the book andrecords, no advance income recognition and no hiddencompany account and funds. In a willful materialmisrepresentation of and/or misinformation on the financialaccounts and reports shall be regarded as violation of thecode apart from inviting appropriate civil or criminal actionunder the relevant laws.

22. E-mail, internet and intranet

Accentia’s e –mail, internet and intranet system are to beused primarily for company business. In no event may thesystems be used: for sending or receiving discriminatory orharassing messages, chain letter, confidential information,material which is obscene or in bad taste, for commercialsolicitations, or in a way that would otherwise violate thisCODE. Accentia owns all e mail messages which are sentfrom or received through Accentia’s system. It may monitoryour messages and may be required to disclose them in thecase of litigation or any appropriate government enquiry.

23. Equal Opportunities

The company shall provide equal opportunities to all itsemployees and applicants for employment without regardto their race, caste, religion, color, anscetory, material status,sex, age, nationality, disability and veteran status. Employeepolicies and practices shall be administered in a mannerthat would ensure that in all matters equal opportunity isprovided to those eligible and the decisions are merti-based.

24. Gifts and Donations

The company and its employees shall neither receive noroffer or make directly or indirectly any illegal payments,remuneration, gifts, donations or comparable benefits whichare intended to or perceived to obtain business oruncompetitive favours for the conduct of its business.However the company and its employees may accept andoffer nominal gifts, which are customarily given and arecommemorative nature for special events.

25. Government Agencies

The company and its employees shall not offer or give anycompany funds, property as donation to any governmentagencies or their representatives, directly or throughintermediaries in order to obtain any favourableperformance of official duties.

26. Health, Safety and Environment

The company shall stive to provide a safe and healthyworking ennironment and comply in the conduct of its


business affairs with all regulations regarding thepreservation of the environment of the territory it operatesin. The Company shall be committed to prevent the wastefuluse of natural resources and minimize any hazardous impactof the development, production, use and disposal of any ofits products and services on the ecological environment.

27. Ethical Conduct

Every employee, officer or Director of the company, shalldeal on behalf of the company with professionalism,honesty, integrity as well as high moral and ethical standards.Such contacts shall be fair and transparent and be perceivedto be as such by third parties. Every employee shall beresponsible for the implementation of and compliance withthe CODE in this professional environment. Failure to adhereto the CODE could attract most severe consequencesincluding termination of employment.

28. Compliance of this Code and reporting of anyillegal or unethical behavior.

All employees, directors and officers are expected to complywith all of the provisions of this CODE. The Code will bestrictly enforced and violations will be dealt withimmediately including subjecting persons to corrective and/or disciplinary action. Employees, officers and Directorsshould promptly report any concerns about violation ofethics, laws, rules, regulations of this CODE including, byany senior executive officer or director to their supervisors/managers or the Managing Director.

29. Disclosures

a) There were no material transactions between thecompany and its directors or management or their relativesthat have any potential conflict with interests of the companyat large. Transactions with related party are disclosedelsewhere in the Annual Report. None of the transactionshave potential conflict with interest of the company at large.

b) Details of non-compliance by the company, penalties,strictures imposed on the company by Stock exchanges orany Statutory authority, or any matter related to capitalmarkets, during the last three years – None.

29. Means of Communication

The Company has promptly reported all information includingdeclaration of Quarterly Financial Results to the Stock exchangewhere the stocks of the company are listed. The company alsopublishes the Un-audited financial results in Free Press Journal,English Newspaper and in Navshakti Marathi Newspaper.

30. General Shareholder information

30.1 Annual General Meeting

Wednesday, 21.12.2011 at 10.30 A.M. at Hotel The ParkNavi Mumbai, No. 1, Sector 10, CBD Belapur, Navi Mumbai,Maharashtra-400614.

30.2 Financial Calendar

Annual General Meeting 21.12.2011

Result of First QuarterDeclared Second week of August 2010

Result of Second QuarterDeclared Second week of November

2010

Result of Third QuarterDeclared Second week of February

2011

Result of Fourth QuarterDeclared Second week of May 2011

30.3 Book closure Date : December 15, 2011 toDecember 21, 2011 (both days inclusive)

30.4 i) Listing of Equity shares on Bombay StockExchange

ii) Listing fees for the year 2011-2012 is duly paidto stock exchange as per listing agreement.

30.5 Stock Code : BSE SCRIP CODE 531897

30.6 Demat ISIN Numbers in NSDL and CDSL:INE122B01012


30.8 Registered Office : D-207, Second Floor, InternationalInfo Tech Park, Belapur Railway Station, Sector-II, CBD Belapur,Navi Mumbai – 400614, Maharashtra

30.9. Company Secretary & Compliance Officer : MsRolita Gupta

30.10. Registrar and Transfer Agents : Sharex Dynamic(India) Private Ltd Unit-1, Luthra Ind. Premises, Safed Pool,Andheri- Kurla Road, Andheri(E), Mumbai-400072

30.11. Share transfer system as per listing agreementand Companies Act, 1956

The Company’s shares are under compulsory demateriali-sation category and transfers in electronic mode are affectedonline by NSDL and CDSL. In respect of physical sharesreceived for transfer, the Company normally processes therequests within 10-15 days and affects the transfer, if all thepapers received were in order. The Company after affectingthe transfer of the shares sends dematerialisation option lettergiving an option to the transferee to convert the shares intofungible form, which option he has to exercise within 15days. Where the transferee exercises the option the sharesare converted into demat mode. In cases where the transfereewishes to have the physical shares, the same are sentimmediately upon receipt of intimation. In those cases whereoption of dematerialisation is not exercised, the physical sharesare sent to the transferee after expiry of the stipulated time.

Range Total Holders % Total Holders Holding in Rs. % Total Capital

1- 5000 4198 79.12 5873980.00 4.01

5001-10000 417 7.86 3464280.00 2.37

10001-20000 267 5.03 4069300.00 2.78

20001-30000 103 1.94 2680020.00 1.83

30001-40000 51 0.96 1823940.00 1.25

40001-50000 51 0.96 2436240.00 1.67

50001-100000 92 1.73 6727250.00 4.60

Above 100001 127 2.39 119234950.00 81.49

TOTAL 5306 100.00 146309960.00 100.00

30.7 Stock Market Data at BSE

Month High Low Close No. ofTrades

April 2010 316.95 284 286.95 11664

May 2010 314.95 214 241.55 14386

June 2010 285 221 272.75 9904

July 2010 309 264 293.45 9028

August 2010 332 276.25 290 10010

September 2010 372 291.5 334.55 14198

October 2010 365 280 282.6 6679

November 2010 309 214.45 236.75 7962

December 2010 274 143.6 206.7 10370

January 2011 210 146.2 164.35 5202

February 2011 170 134.25 134.85 4498

March 2011 149.9 74 99.25 9077

30.12. Distribution of Shareholding as on 31st March 2011


30.14. Dematerialization of Shares Trading and Liquidity

Dematerialization of Shares Trading in equity shares of the company is permitted only in dematerialized form. As on 31stMarch 2011, 99.72% of the equity shares of the company were in the dematerialized form.

30.14.1. a) Investor correspondence : Sharex Dynamic (India) Private LtdFor share transfer/dematerialization of shares Unit-1, Luthra Ind. Premises,Payment of dividend on shares, interest and Safed Pool, Andheri- Kurla Road,Redemption of debentures and any other Andheri(E), Mumbai 400072query relating to the shares and debenturesof the company.

b) Any other query : D-207, Second Floor,International Info Tech Park,Belapur Railway Station, Sector-II,CBD Belapur, Navi Mumbai 400614

Category ofShareholder

No. ofShare

holders

Total No. ofShares

Total No. of Sharesheld in dematerial-

ized Form

Total shareholding asa % of total number

of shares

Share pledged orotherwise encumbered

As – a %of A+B

As – a %of A+B+C

No. ofshares

As a % ofTotal no of

sharesA Shareholding of Promoters

And Promoter Group-Indian

1 Indian Individuals/HUFs 5 2336294 2336294 15.97 15.97 1880000 80.472 Foreign 0 0 0 0 0 0 0

Total shareholding of Promoter and 1 2336294 2336294 15.97 15.97 1880000 80.47Promoter Group (A)

B Public Shareholding1 Institutions

-Venture Capital Funds 2 100570 100570 0.69 0.69 - --Foreign Institutional Investors 5 947510 947510 6.47 6.47SUB TOTAL 7 1048080 1048080 7.16 7.16 - -

2 Non-InstitutionsBodies Corporate 264 2135999 2135999 14.60 14.60 - -Individuals-Individual shareholders holdingnominal share capital up to Rs. 1 lakh 4803 2275628 2252532 15.55 15.55 - --Individual shareholders holdingnominal share capital in excess ofRs. 1 lakh 81 3577669 3559703 24.45 24.45 - -Any othersClearing Members 59 1377921 1377921 9.42 9.42 - -Non-Resident Indians 86 1268294 1268294 8.67 8.67 - -Foreign Corporate Bodies 1 611111 611111 4.18 4.18 - -SUB TOTAL 5294 11246622 11205560 76.87 76.87 - -TotalPublic shareholding (B) 5301 12294702 12253640 84.03 84.03Total (A)+(B 5306 14630996 14589934 100.00 100.00 1880000 12.85

C Shares held by Custodians andagainst which Depository Receiptshave been issuedPromoter and Promoter Group - - - - - - -Public - - - - - - -SUB TOTAL - - - - - - -Total (A)+(B)+(C) 5306 14630996 14589934 100.00 100.00 1880000 12.85

30.13. Distribution of Shareholding as on 31st March 2011


MANAGEMENT DISCUSSION AND ANALYSIS

THE EVOLUTION - 1998 to 2006Humble beginnings...

The promoters of Accentia had initially ventured into ITESbusiness through Geosoft Technologies (Trivandrum) Ltd.Geosoft was started by a trio of enthusiastic entrepreneursled by Pradeep Viswambharan and supported by Sooraj andRajeev and was located at Technopark, Trivandrum, knownas the greenest and the oldest techno polis in India. TheCompany was set up to offer documentation services tothe Healthcare industry, basically medical transcription.Accentia right from the beginning had always believed inthe value-added service in every client engagement andthus the model designed by the team was based on a strongfoundation towards client commitment and quality.

After a rigorous selection process and interviews, Geosoftstarted with thirteen employees, who all had priorexperience working in the same field. Geosoft hired youngpeople with high calibre to fill all major areas required torun the business – namely Transcriptionist, Editor, Proofers,Quality Manager and Trainer. They also started a trainingdepartment to impart training for entire batches of freshgraduates, since there was no availability of trainedmanpower for the required skills at the time. The initial dayswere tough as the costs were high and it was not easy for astart-up Company from the hitherto unknown city ofTrivandrum in Kerala to bag orders from any major client.Accentia was initially executing work for smaller clinics andphysician groups, when it formed an association with USbased major MT Company. This association helped Accentiaput in place a lot of the delivery and training processes tohelp stabilize the back-end. Accentia invested significantlyin improving its back end delivery capabilities between 2000and 2005.

Geosoft was now firmly grounded to the roots with its visionto become the leader in the healthcare segment; workingwith firm ethics towards customer delight and commitmentwithout compromising on the focus of growth. The BPOdivision of Geosoft Technologies with its excellent customerservices positioned itself as one of the leading companiesin its segment in South India. With some of the best intellectsfrom the industry in its ranks, Geosoft Technologies soonstarted catering to the requirements of the othercompanies in the similar industry by starting a consultancydivision.

Going up the value chain

With the vast experience gained, Geosoft decided to venture

into providing consultancies to share the knowledge theaspirants starting Healthcare Documentation units in Indiaand set up its consultancy division to provide end-to-endconsultancy services to start ups. Most of these units spreadacross India which received hand holding from Geosoft, arerunning successfully now.

With the increasing requirement to match with the ongoingtechnological changes, Geosoft started a Product Divisionunder the name of Iridium. With a focused approach, theproduct team was able to come up with end-to-end globalwork flow automation systems that help in the day-to-daywork flow. Products like Iridium Medical TranscriptionAutomation Software (iMTAS), Iridium Certified Home BasedMedical Transcription (iCHMT), Iridium Certified MedicalTranscription (iCMT), Falcon-2000, F1 HBPO automationSoftware, iridium Real Time School (iRTS), iridium AccountsManagement System (iAMS), iridium Inventory ManagementSystem (iIMS), iridium Payroll Management System (iPMS),iridium Business Transcription System (iBT), iridium HospitalManagement System (iHMS) are few of the products thatgot wide acceptance among its customers.

High performance combined with six sigma standards atevery step in the SDLC process was an added advantage forour clients who have placed their confidence in theCompany. Our solutions focus on leveraging the latesttechnologies in innovative ways, which boost the bottomline of the customer and ensure that the products andservices redefine the way the industry functions.

Very soon Geosoft Technologies became one of the pioneersin Healthcare BPO and the Product Division segment in India,with a capacity of 675 seats and infrastructure of 8,000 sq ftat Technopark, Trivandrum.

THE GIANT LEAP - 2006 to 2010As part of the expansion plan, in the year 2006, the giantleap that the promoter Pradeep took was to take over aMumbai listed Company named HiTech EntertainmentLimited through an open offer. The same year, as a part ofconsolidation and Inorganic growth, HiTech EntertainmentLimited took over Geosoft and Iridium. Further the nameHiTech Entertainment was changed to Accentia TechnologiesLtd. to better represent the business activities of theCompany.

Reorganisation of Business

Having stabilised the business in the healthcaredocumentation (medical transcription) over a period of 8years, Accentia management decided to venture into


integrated Healthcare Receivables Cycle Management(HRCM), which was a logical extension of its ongoingbusiness.

In the US, a vast majority of healthcare services arereimbursed through insurance companies and it ismandatory to document, code and prepare detailed bill tobe submitted to insurance companies for reimbursement.Traditionally the above services are offered by separateservice organisations.

In the light of the Accentia’s past bitter experiences instabilising MT business from scratch which consumed ahuge amount of capital in the first 4 years from inception,the management decided to inorganically acquire the

necessary skills, professional expertise, intangible processesand systems and a set of high calibre professional employeesthrough acquisition of companies in the field of medicalcoding and medical billing & collections. The managementbelieved that acquisitions on the above lines would lead toAccentia offering end-to-end services in HRCM, which wouldreduce cost and improve the revenue cycle time andincrease the profitability of clients in the US.

Inorganic growth path

Pradeep was one of the pioneers who believed in theconcept of inorganic growth in Business Process Outsourcingin the healthcare segment. He believed that it is the fastestand easiest way to expand the business to a global scale.

The first step towards consolidation and increasing thesize through inorganic growth was taken with theacquisition of companies in the US namely GSR PhysiciansBilling Services Inc., GSR Systems Inc and Denmed Inc. Inorder to augment the capacities in the Indian back enddelivery side, Accentia zeroed in on a few stabilised andestablished healthcare BPO outfits like Asscent InfoservePvt Ltd. and Thunga Software Limited in India. Both thesecompanies were healthcare documentation outsourcingservice providers. With these acquisitions the workforce

and infrastructure grew multi-fold. This inorganic growth,accompanied by much higher organic traction after thecreation of a US based localised front-end, has helpedAccentia increase revenues significantly between FY2007 and FY 2011.

In the year 2008, as part of inorganic growth, AccentiaTechnologies Ltd acquired the US based OakTechnologies Inc, which had Indian back-end operationsat three locations in Hyderabad and one in Bhubaneswar.


THE NEW HEALTHCARE POLICY IN THE US AND ITS IMPACT – 2010 till dateThe emergence of EMR

The current incumbent President of the USA has taken keeninterest in bringing about a radical change in the healthcaresystem and as a result, the US Senate passed a historic HealthcareBill in 2010 that is set to eliminate gross inefficiencies in thesystem which was leading to wastage of billions of dollars.

The new law has paved way for a rethinking in the waydocumentation and healthcare receivables cyclemanagement has been conducted. One of the majormandatory requirements as per the new Obama HealthcareBill is the usage of an Electronic Medical Records (EMR)suite to capture and record patients’ demographical, clinicaland all other related data into a database, which can beaccessed anytime for future reference and analysis.

In order to motivate all the physicians and healthcare

organisations in the US to adopt the new EMR based clinicalmanagement, Obama administration has offered anincentive scheme. Monetary incentives of up to US$ 44,000is payable to all physicians who adopt any EMR softwarewhich is certified by the ONC-ATCB (Office of the NationalCoordinator – Authorised Testing and Certification Body).This certification does not represent an endorsement ofthe US Department of Health and Human Services norguarantee the receipt of incentive payments. Use of ONC-ATCB certified EMR software is a required first step inqualifying eligible healthcare providers for incentive fundingunder the American Recovery and Reinvestment Act(ARRA). The US government has set apart more than US$ 80billion specifically for this mission. However the physicianshave to prove meaningful use of EMR technology in theirclinical practice to claim the incentive amount.

Year in which

first meaningful

use of EMR

is demonstrated

2011

2012

2013

2014

Yearly distribution of incentives to Providers

($)

2011 2012 2013 2014 2015 2016 Total

18K 12K 8K 4K 2K 0 44K

0 18K 12K 8K 4K 2K 44K

0 0 15K 12K 8K 4K 39K

0 0 0 12K 8K 4K 24K

As explained above, EMR captures and stores all clinical anddemographic data in a database format compared to physicalreports created and maintained through the age old practiceof medical transcription which has been the major businessarea of Accentia over the years

Remodelling of Business Plan

The adoption of EMR based clinical practice has opened upavenues for an integrated end-to-end SaaS model (Softwareas a Service) of service delivery. Since August 2010,Accentia’s product development team along with theirfunctional experts and development partners have beeninvolved in the mission of designing and developing a worldclass, fully integrated, multi disciplined, cloud based hostedapplication which integrates all services from electronicmedical records(EMR)-practice management system(PMS)-code mapping/scrubbing-medical billing & receivablesmanagement system(RCM)-electronic data interchange

(EDI) with insurance companies(payer). The aboves e a m l e s s l yintegrated SaaSsystem functionsas a one-stop shopfor a clinicalprovider thatmanages all theirh e a l t h c a r edocumentationn e e d s ,r e c e i v a b l e sm a n a g e m e n tneeds, performance tracking and reporting and wouldeliminate the need to keep networking and technologypersonnel at their end to manage the software system, sinceit is served by a hosted server.


ACCENTIA’S SAAS PLATFORM

ANNUAL REPORT 2010 - 201124

27ACCENTIA TECHNOLOGIES LIMITEDACCENTIA TECHNOLOGIES LIMITED 25


Why SAAS / EMR is a game-changer for Accentia

Unique Competitive Positioning: Currently most EMRcompanies in the US provide only the software, without theback-end BPOservices of inputtinginto the EMR chart.Further, there are veryfew HRCMcompanies thatstraddle MT – Coding– Billing – ReceivableMgmt (mostspecialize in one ofthese services). Accentia is thus uniquely positioned toprovide an integrated end-to-end SAAS service offering.

Ability to grow organically: Before the requirement ofphysicians moving to EMR, there was significant inertia for

physicians to changetheir existing HRCMservice providers.Due to theincentives –penalties associatedwith EMR’s, allphysicians are nowbeing forced to lookat new alternatives

with an EMR offering. Given Accentia’s unique positioningin this offering, they are very well placed to win areasonable share of this business.

Significantly increased opportunity size: As

compared to the current model, wherein most clients use

one of Accentia’s

services --- Accentia

would be offering

the entire end-to-

end service to

doctors and

charging a fixed %

of revenues. The

revenue per doctor

will be significantly

more than that of the same doctor using only MT, with

similar / higher levels of profitability.

Strategic Partner model: Given the large shift towards

EMR which is expected to take place in the US, there are a

number of players in

the HRCM

landscape, who are

looking at tie-ups to

be able to provide an

EMR solution to their

clients (especially

EMR service

delivery). There are a

number of small /

mid / large players that Accentia is in discussions with for a

partnership model. This significantly reduces the

requirement of Accentia having to make significant upfront

investments on the sales & marketing side.

Simplicity: Unlike other EMR software’s, InstaKare is a

product that finally provides innovation, advancement and

user-friendliness in the generic world of healthcare

management. The

software is

developed in such a

way that it is not at all

complicated and is

very simple to use to

keeping non-tech

savvy people in our

mind. Our EMR

software requires

only less training to get used to its various features. InstKare

integrates with each and every existing practice systems.

Because its functionality is so intuitive, physicians and their

practices can be made more effective.


SERVICES:• Medical Transcription

• Discrete Reportable Transcription

• Medical Coding• ICD 9/ ICD 10

• Predictive coding

• Fail safe coding algorithms

• Certified coders

• Insurance contracts

• Billing• Billing – TAT & Quality

• Claims Processing – Electronic & Paper billing

• Communication of Non Prints

• Insurance –claims pack

• PIP Insurance process expertise

• Receivables Management• Collections - Follow Up

• Denial Management

• Structured time stamped trace processes

• Workflow Management tools

• Appeals & Attorney relations

• Demand Letters

• Attorney Settlement

• Practice Management Consulting

• Denial Management

• ARRA – ONC-ATCB incentive processing

• HIPAA consulting

• Revenue Maximization consulting

• Cross Selling & Networking of clients

• Contract Negotiation

• Software as a Service (SaaS)

PRODUCTS:• InstaKare - EMR Software

InstaKare is a web based Drummond Certified CompleteEHR (Ambulatory) software developed by Accentia. Wehave understood the necessity for Healthcare providers toutilize a "one-stop-shop" that could fulfill medicaladministrative support needs , by providing patient solutionsutilizing user friendly medical software technology createdto serve and satisfy the patient's needs. InstaKare isdeveloped as a result of this.

The application Instakare is designed with optionscustomized todeliver exactlywhat is requiredby the customer.It is a fully web-based applicationwhich iscompatible withmost of theknown OS in theindustry likeA n d r o i d ,Microsoft, IOS. Ithas beendeveloped in themost simplified and user friendly manner, yet it is a powerfulHealth Information Management system. InstaKare offersmany unique features such as Drummond certifiedcomplete EHR, Practice Management, Patient Management/portal, Disease Management, Document and ImageManagement, Medical Billing, Medical Coding, Collections,and Discrete Reportable Transcription that enhancesphysicians to become more efficient in their practice sothat they can deliverhigher quality healthcareat a lower cost.

For doctors and HCPs,instaKare means a one-stop-shop for medicaladministrative support.Put together as friendlymedical software, ONC-ATCB 2011/2012Certified & DrummondCertified for CompleteEHR Ambulatory,advanced yet easy-to-useDRT, automatic claims filing, and everything in between. Atruly holistic approach, Instakare’s 360-degree solution


addresses every touch point in the patient-clinic experience.InstaKare satisfies all federal and state regulatory andcompliance reporting, general reporting requirements, andappropriate coding documentation. This ensures eachprovider in the practice will qualify to receive all of the EMRincentives from federal and state agencies.

Capabilities

• SOAP notes

• Manage patient check-in and check-out with a fewclicks, at a glance

• Full financial reporting at the group level, by individualpractice, or by physician

• E-consultation

• Integrated Document Management

• Hospital Queue

Conveniences

• Access to radiological images on your iPhone or iPad

• Audio notes of patientmedial history

• Freehand electronicnotes

• Surgery scheduler,appointment calendar,report viewer

Utilities

• Drug interaction checker

• Prescription writer

• E&M coding guidelines

• Health education module

Technical Aspects

• All data can be encrypted

• Data backups happen each day with offsite storage

• Robust, “role-based” security

InstaPMS - Practice Management System

PMS is a web basedenterprise practicemanagement solutiondesigned to meet thebroadest possible range of amodern practice’s adminis-trative, communication and

fiscal management needs. PMS provides integrated accessacross patient demographics, scheduling, electronic medicalbilling, administrative/financial reporting and workflowmanagement, connecting front and back office operations,improving productivity and reducing A/R delays.

• Patient Portal

• Self Assessment

• Patient Demographics, historical data

• Patient Registration - No more forms

• Scheduling & Reminder System

• Payments online

• Communication to Patient - Email/Fax

• InstaEMR - Electronic Medical Records

• 100% paperless

• Medical History -allergies & pastissues

• Data input -Vitals & Tests

• Linked to SelfAssessment

• Comprehensive - Multiple data structures

• Medical records have multiple input options

• Templates - Standard & customized

• Customized Notes with sentence builder

• Q& A builder formatting

• Dictation - DRT

• Integrated functions:

• Printing and Scanning

• Labs order

• E prescription

• Tests & Scans

• InstaWeb - Physicians’ Portal

This is a web-based Java app-lication wherephysicians canlogin to dictate,see status of theirservices, and takeprintouts of theirt r a n s c r i b e dreports.


• InstaBill - Billing and Collections

• Predictive coding

• Fail safe coding algorithms

• Reference to Medical note

• Pre-billing Authorization

• Electronic and Paper billing-Primary & Secondary.

• Payment Management – Cash, Credit & DD

• Denial Management Tracking

• Linked to clearing house

• Structured Follow Up

• InstaDRT - Discrete reportable Transcription

This is a desktop application for Discrete ReportableTranscription. This application is compatible with all knownOperating systems through which the physicians can dictatetheir clinical notes as they do currently and InstaDRT willintegrate them to the existing EMR software or system.

The processing technology built into Accentia’s DRT enablesdoctors to fill in notes efficiently and accurately—and thenotes get integrated into the EMR. There is the flexibility ofthree options:

1. Dictate and get instant reports, with the most advancedvoice recognition software

2. Type within the software

3. For even more efficient and error-free reports, template-based, menu-driven chart preparation can be utilised

Using DRT brings HCPs and facilities closer to achievingmeaningful use and adoption of EMR/ EHR. We have builtthe DRT such that you get all the advantages of conventionalmedical transcription - the superior DRT allows you to

continue dictating yourreports while we take care ofthe paperwork. InstaDRT isHIPAA-compliant and HITECH-compliant. This ensures datasecurity throughout thetranscription process.Reduced costs: DRT serviceswork out less expensive thanconventional dictation

Some of the unique features of InstaDRT are:

o Custom-designed transcription templates

o Decision support

o Clinical summaries

o Patient summaries and patient lists by condition

o Vital signs tracking

o Electronic syndromic surveillance data

o Medication and allergy lists

o Problem lists

o Demographics

o Smoking status

o Medication reconciliation

• InstaScribe – Integrated speech recognitionenabled Transcription platform

InstaScribe is one of Accentia's most prestigious web-basedproducts which help processing Transcription work flowautomation. This is a web-basedapplication which can beaccessed from anywhere overinternet.

InstaScribe is another web-based product from Accentiawhich helps processingTranscription work flowautomation. Being a web-based application it can beaccessed from anywhere over internet; the files are

transmitted over the internetsecurely with 100% HIPAAcompliance. The voice filepicked by the user is fedsecurely from a remotely-hosted server directly to theuser. With adequate workflow status, SLA, allocationstatus monitoring,InstaScribe makes it

convenient for the users at both ends.

• InstaView -Exhaustive Dashboard/reportsthrough Oneview

• State-of-the-art dashboard and Reports

• In association with OneView

• List of reports

• Business Management

• Customized reports-templates

• Ad hoc reports

• Reports Triggers for management

• Report channels- Emails, tablet, mobile


THE LAUNCH OF INSTAKARE - OUR ONC-ATCB CERTIFIED EMR AT THE NATIONALCONVENTION IN ORLANDO, FL


THE LAUNCH OF SAAS - SOME ACTION FROM THE NAPLES CONVENTION


To,

The Members ofAccentia Technologies Limited

We have examined the compliance of conditions of Corporate Governance by Accentia Technologies Limited,

for the year ended on March 31, 2011, 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.

For DMKH & CO.Chartered Accountants.Firm Registration No. 116886W

CA. Durgesh KabraPartnerMembership No. : 44075

MumbaiNovember 26, 2011

AUDITOR’S CERTIFICATE


FINANCIAL STATEMENTSFor the year ended March 31, 2011

Accentia Technologies Limited


AUDITOR’S REPORT

To,

The Members of Accentia Technologies Limited

We have audited the attached balance sheet of ACCENTIATECHNOLOGIES LIMITED as at 31st March 2011 and also theprofit & loss account and the cash flow statement for theyear ended on that date annexed thereto. These financialstatements are the responsibility of the Company’smanagement. Our responsibility is to express an opinion onthese financial statements based on our audit.

We have conducted our audit in accordance with auditingstandards generally accepted in India. Those Standardsrequire that we plan and perform the audit to obtainreasonable assurance about whether the financialstatements are free of material misstatements. An auditincludes, examining on a test basis, evidence supportingthe amounts and disclosures in the financial statements. Anaudit also includes assessing the accounting principles usedand significant estimates made by management, as well asevaluating the overall financial statement presentation. Webelieve that our audit provides a reasonable basis for ouropinion.

In Accordance with the provisions of Section 227 of theCompanies Act, 1956, we report that:

1. As required by the Companies (Auditor’s Report) Order,2003, issued by the Central Government of India interms of Section 227(4A) of the Companies Act, 1956and on the basis of such checks of books and records ofthe Company as we considered appropriate andaccording to the information and explanations given tous during the course of audit, we enclose in theAnnexure a statement on the matters specified inparagraphs 4 and 5 of the said Order.

2. Further to our comments in the annexure referred toabove, we report that:

i. We have obtained all the information and explanationswhich to the best of our knowledge and belief werenecessary for the purpose of our audit.

ii. In our opinion, proper books of account as requiredby law have been kept by the Company, so far asappears from our examination of these books.

iii. The Balance Sheet and the Profit and Loss accountreferred to in this report are in agreement with thebooks of account.

iv. In our opinion the Balance Sheet and the Profit andLoss account referred to in this report comply withmandatory Accounting Standards referred to in subsection 3C of section 211 of the Companies Act,1956.

v. On the basis of the information and explanationsgiven to us, and on the basis on the writtenrepresentations received from the Directors andtaken on record, none of the directors of thecompany is disqualified as on 31st March, 2011 frombeing appointed as a Director in terms of clause (g)of sub section (1) of section 274 of the CompaniesAct, 1956.

vi. In our opinion and to the best of our informationand according to the explanations given to us, thesaid accounts read together with the SignificantAccounting Policies and other notes thereon, givethe information required by the Companies Act,1956 in the manner so required and give a true andfair view:

i) In the case of the Balance sheet, of the state ofaffairs of the Company as at 31st March 2011.

ii) In the case of the Profit & Loss Account, of theProfit of the Company for the year ended onthat date; and

iii) In the case of the cash flow statement, of thecash flows of the Company for the year endedon that date.

For DMKH & Co.Chartered Accountants

Firm Reg. No. – 116886W

CA. Durgesh KabraPlace : Mumbai PartnerDate : November 26, 2011 Membership No. : 044075


I. (a) The Company has maintained proper recordsshowing full particulars, including quantitativedetails and situation of Fixed Assets on the basis ofinformation available.

(b) As explained to us, all the fixed assets have beenphysically verified by the management during theyear. There is a regular programme of verificationwhich, in our opinion, is reasonable having regardto the size of the company and the nature of itsassets. No material discrepancies were noticed onsuch physical verification.

(c) In our opinion and according to information andexplanation given to us no substantial part of fixedasset has been disposed off by the company duringthe year and the going concern status of thecompany is not affected.

II. (a) As explained to us, the inventory of the companyhas been physically verified by the management .In our opinion, the frequency of verification isreasonable.

(b) In our opinion, and according to information andexplanation given to us the procedure of physicalverification of inventory followed by themanagement are reasonable and adequate inrelation to size of the company and the nature ofits business.

(c) In our opinion, the company is maintaining properrecords of inventory. As per the information andexplanations provided to us and having regard tothe size of the company, no material discrepancieshave been noticed on physical verification ofinventory as compared to book records.

III. (a) The Company has granted unsecured loans to foursubsidiaries covered in the register maintainedunder

Section 301 of the Companies Act, 1956. Themaximum amount involved during the year andyear end balance of such loans were Rs.13,39,69,228.

(b) In our opinion and according to the informationand explanations given to us, the rate of interestand other terms and conditions for the loans

Annexure refer to in Paragraph 1 of our report dated 26/11/2011, to the members of ACCENTIA TECHNOLOGIES LIMITED

mentioned in para (iii) (a) above, are prima facienot prejudicial to the interest of the Company.

(c) Since the loans mentioned in para (iii) (a) above arewithout any fixed repayment schedule, the questionof examining the regularity of repayment of thePrincipal amount and interest thereon, does notarise.

(d) For the same reasons given in para (iii) (c) above,the question of examining the overdue amountand

commenting on the reasonableness of the stepstaken by the Company for the recovery of suchloans does not arise.

(e) The Company has not taken loans from partycovered in the register maintained under Section301 of the Companies Act, 1956, hence para (f ) to(g) of the clause 4 (iii) of the order is not applicableto the company.

IV. In our opinion and according to the information andexplanations given to us, there are adequate internalcontrol procedures commensurate with the size of theCompany and the nature of its business with regard topurchases of inventory, fixed assets and with regard tothe sale of goods and services. Further, on the basis ofour examination of the books and records of thecompany, and according to the information andexplanation given to us, we have neither come acrossnor have been informed of any continuing failure tocorrect major weaknesses in the aforesaid internalcontrol procedures.

V. (a) In respect of transactions covered under section301 of the Companies Act, 1956. In our opinionand according to the information given to us, thereare no such transactions made in pursuance ofcontracts or arrangements that needed to beentered into in the register maintained undersection 301 of the Companies Act, 1956, hencepara (b) of the clause 4 (v) of the order is notapplicable to the company.

VI. The Company has not accepted any deposits duringthe year and consequently the provision of section 58Aand 58AA of the Companies Act, 1956 and the rules


Name of the Statute Nature of the Dues Amount Disputed Year to which Forum whereRs. amount related Dispute is pending

Service Tax Service Tax and 58,01,866/- 2003 to 2007 CESTAT, BangaloreInterest thereon

framed there under are not applicable.

VII. In our opinion, the Company has an internal audit systemcommensurate with its size and nature of business.

VII. We have been informed that the maintenance of costrecords has not been prescribed by the central governmentunder section 209(1) (d) of the Companies Act, 1956.

IX (a) According to the information and explanation givento us the Company is generally regular in depositingwith appropriate authorities undisputed statutorydues including income tax, sales tax, wealth tax,customs duty, excise duty, service tax, cess and othermaterial statutory dues applicable.

(b) According to the information and explanation given

to us no undisputed statutory dues including

income tax, sales tax, wealth tax, customs duty,

excise duty, service tax, cess and other material

statutory dues applicable were in arrears as at

31.03.2011 for a period of more than six months

from the date they became payable.

(c) According to the information and explanation given

to us, there are no dues of income tax, sales tax,

customs duty, wealth tax, service tax, excise duty

and cess which has been deposited on account of

any dispute except the below.

X. The Company does not have any accumulated losses atthe end of the year. The company has not incurred anycash losses for the year under review and immediatelypreceding such current year.

XI. According to the records of the company examined byus and the information and explanation given to us, theCompany has not defaulted in repayment of dues toFinancial Institution, Banks and debenture holder.

XII. We are informed that the company has not granted anyloans and advances on the basis of security by way ofpledge of shares, debentures and the securities.Accordingly the provisions of the clause 4 (xii) of theorder are not applicable to the company.

XIII. The Company is not a chit fund or a nidhi/mutual benefitfund/society. Accordingly the provisions of the clause4 (xiii) of the order are not applicable to the company.

XIV. According to the information and explanation given tous the company is not dealing in or trading in shares,securities, debenture and other investments.

XV. According to the information and explanation given tous the company has not given any guarantee for loanstaken by others from banks or financial institutions.

XVI. According to the information and explanation givenand based on the documents and records produced,on an overall basis, the term loans have been appliedfor the purpose for which they were obtained.

XVII. According to the information and explanations providedto us and an overall examination of the balance sheetand the cash flow statement of the Company, in ouropinion no funds raised on short term have been usedfor long term investment.

XVIII.According to the information and explanationsprovided to us the Company has not made anyPreferential allotment of equity shares during the year.

XIX. According to the information and explanations providedto us, during the year the Company has not issued anydebentures till date.

XX. According to the information and explanations providedto us, during the year the Company has not raised anymoney by way of public issues. Accordingly theprovisions of the clause 4 (xx) of the order are notapplicable to the company.

XXI. Based upon the Audit procedures performed andinformation and explanation given to us, we report thatno fraud on or by the company has been noticed orreported during the course of our audit.





BALANCE SHEET

As per our report of even date attached For Accentia Technologies Ltd

For DMKH & CO. Pradeep Viswambharan Sooraj C K Rolita GuptaChartered Accountants. Managing Director & C E O Director Company SecretaryFirm Registration No. 116886W

CA. Durgesh KabraPartner MumbaiMembership No. : 44075 26.11.2011

Amount in `

Schedule As at As atNo. 31.03.2011 31.3.2010

SOURCES OF FUNDS1. SHAREHOLDERS’ FUNDS

(a) Share Capital 1 146,309,960 146,309,960

(b) Reserves and Surplus 2 1,604,398,244 1,417,011,945

1,750,708,204 1,563,321,905

2. LOAN FUNDS 3(a) Secured Loans 445,382,557 296,099,174

(b) Unsecured Loans 7,172,882 10,957,109

452,555,439 307,056,283

3. DEFERRED TAX LIABILITY 13,260,228 9,971,443(Refer Note No. B 11 of Schedule 10)

2,216,523,871 1,880,349,631

APPLICATION OF FUNDS

1. FIXED ASSETS 4(a) Gross Block 605,282,015 519,949,284

(b) Less : Depreciation 263,772,078 196,392,126

(c) Net Block 341,509,937 323,557,158

(d) Capital Work-in-progress 45,011,891 1,482,491

386,521,828 325,039,6492. INVESTMENTS 5 1,070,264,292 927,045,705

3. CURRENT ASSETS, LOANS & ADVANCES 6(a) Receivables 391,223,117 237,949,254

(b) Cash and Bank Balances 112,876,622 161,080,872

(c) Loans and Advances 169,202,555 91,075,308

673,302,294 490,105,434

Less : CURRENT LIABILITIES AND PROVISIONS 7(a) Liabilities 102,454,977 29,055,023

(b) Provisions 89,974,140 127,785,867

192,429,117 156,840,890

Net Current Assets 480,873,177 333,264,544

4. Miscelleneous Expenditure 278,864,574 294,999,733

2,216,523,871 1,880,349,631

Significant Accounting Policies / Notes on Accounts 10


PROFIT AND LOSS ACCOUNT

Amount in `


INCOME

Sales and Services 8 1,083,127,053 940,862,351

Other Income 2,351,825 46,348

1,085,478,878 940,908,699

EXPENSES 9 800,844,543 601,909,932

Depreciation & Amortization of Goodwill 67,379,952 76,285,026

868,224,495 678,194,958

Profit before Tax and Exceptional Items 217,254,383 262,713,741

Exceptional Income / (Expense) (1,741,129) (428,534)

PROFIT BEFORE TAXATION 215,513,254 262,285,207

Provision for Taxation :

For Current Year 42,038,170 48,074,802

Income Tax of earlier years (17,200,000) -

For Deferred Tax 3,288,785 15,671,702

28,126,955 63,746,504

PROFIT AFTER TAXATION 187,386,299 198,538,703

Add : Surplus brought forward from previous year 536,372,819 412,486,717

AMOUNT AVAILABLE FOR APPROPRIATION 723,759,118 611,025,420

Appropriations

General Reserve 22,500,000 22,500,000

Dividends:

Final (Proposed) 43,892,988

Tax on Dividend 7,459,613

Earlier year dividend 800,000

Surplus Carried to Balance Sheet 701,259,118 536,372,819

Significant Accounting Policies / Notes on Accounts

EPS - Basic (on `10 per Share) 12.81 14.72

EPS - Diluted (on ` 10 per Share) 12.81 14.72

*(Refer Note B 10 of Schedule 10)





SCHEDULES FORMING PART OF THE BALANCE SHEET

Amount in `

As at As at

31.03.2011 31.3.2010

SCHEDULE 1

SHARE CAPITAL

AUTHORISED

20000000 equity shares of `10/- each 200,000,000 200,000,000

(Previous year 20000000 equity shares of `10/- each)

200,000,000 200,000,000

ISSUED, SUBSCRIBED AND PAID-UP

14630996 equity shares of ` 10/- each 146,309,960 146,309,960

(Previous year 14630996 equity shares of ` 10/- each)

146,309,960 146,309,960

Of the above, the following are for other than cash

a) 916667 Shares allotted as fully paid up to the promoters of the

foreign companies as per the FIPB approval and BSE

(b) Pursuant to the Scheme of Amalgamation of Geosoft Technologies

Ltd (GTTL) and Iridium Technologies (Pvt) Ltd (ITL) with the

Company, 4640713 shares alloted to the share holders of GTTL

and ITL as fully paid up

(c) Pursuant to the scheme of Amalgamation of Asscent Infoserve

Private Limited with company, 1188313 shares alloted to the share

holders of the Asscent Infoserve Pvt. Ltd. as fully paid up.

SCHEDULE 2 Amount in `

As at Additions Deductions As at

01.04.2010 31.03.2011

RESERVES & SURPLUS

Capital Reserve 3,544,750 - - 3,544,750

Investment Subsidy 165,246 - - 165,246

Securities Premium Account 853,419,433 - - 853,419,433

General Reserve 23,509,697 22,500,000 - 46,009,697

Total 880,639,126 22,500,000 - 903,139,126

SURPLUS AS PER PROFIT & LOSS ACCOUNT 536,372,819 164,886,299 - 701,259,118

TOTAL 1,417,011,945 187,386,299 - 1,604,398,244


Amount in `

As at As at

31.03.2011 31.3.2010

SCHEDULE 3

LOAN FUNDS

A. SECURED LOANS

(1) Loans and Advances from Banks

(a) Exim Bank Term Loan 1,593,750 3,831,382

(b) Exim Bank Over draft 230,327,217 108,541,170

(c) ICICI Bank - Term loan - 316,947

(d) Axis Bank - Term Loan - 4,501,701

(e)Loan against FD 63,198,554 70,644,479

(F) ICICI loan against property - 23,832,058

(2) External commercial Borrowing 56,747,250 84,431,437

(3) Loan from L&T Finance 93,515,786 -

445,382,557 296,099,174

Note - Exim bank term Loan has been availed from the bank by

pledging few fixed assets and all the current assets of the company

and personal guarantee of the Directors.

Exim Bank Over Draft has been availed from the bank by pledging all

the fixed assets and the receivables of the company.

External Commercial borrowing from the ICICI bank has been secured

on the receivables of the Company, Fixed assets of the company and

personal guarantee of the Directors.

Loan from L&T Finance has been availed by pledging the property

located at the Hyderbad.

Amount in `

As at As at

31.03.2011 31.3.2010

B. UNSECURED LOANS

(1) OD from the Banks 6,872,882 10,657,109

Others 300,000 300,000

7,172,882 10,957,109



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Amount in `

As at As at31.03.2011 31.3.2010

SCHEDULE 5

Class No. Face Value

INVESTMENTS - AT COST of each

Long term investments (Fully paid) :

Trade (Unquoted)

Investment in Trans Services Equity Shares 500 USD 1 146185812 134618744

Stratgeic Tangent corporation Equity Shares 2000 USD 1 140299000 -

286484812 134618744

Investment in Subsidiary Companies:

Accentia Technologies FZE Equity Shares 1 Dhms100000 1713283 1713283

Thunga Software Pvt.Ltd Equity Shares 2304345 10 57759070 57759070

Denmed Inc. Equity Shares 1000 USD 1 122884928 122884928

GSR System Inc Equity Shares 100 USD 1 40961723 40961723

GSR PBS Inc Equity Shares 100 USD 1 102404187 102404187

Oak Technologies Inc Equity Shares 1000 USD 1 445000000 445000000

Accentia Education Services Pvt Ltd Equity Shares 10000 10 100000 -

770823191 770723191

Other Investments

Quoted

Octant Innteractive Technologies Ltd Equity Shares 149627 10 2512255 21302470

(520002 shares sold during the year)

Un Quoted

Five X Finance and Investment Ltd Equity Shares 597071 10 10042734 -

Kapol Co-Operative Bank Ltd. Equity Shares 2030 10 20300 20300

TECIL Chemicals & Hydropower Ltd Equity Shares 12,700 10 381000 381000

12956289 21703770

1070264292 927045705

Cost of Investments

Long Term

Quoted 2512255 21302470

Unquoted 1067752037 905743235

Total 1070264292 927045705

Market value of Quoted Investments 1795524 15196080




Amount in `

As at As at31.03.2011 31.3.2010

SCHEDULE 6

CURRENT ASSETS, LOANS AND

ADVANCES

(a) RECEIVABLES :

Sundry Debtors :

Debts outstanding for a period exceeding six months

- Unsecured Considered Good 8,935,166 39,561,277

8,935,166 39,561,277

Other Debts

- Unsecured Considered Good 382,287,951 198,387,977

382,287,951 198,387,977

(a) 391,223,117 237,949,254

Brought Forward 391,223,117 237,949,254

(b) CASH & BANK BALANCES :

Cash and stamp balances 63,469 39,051

Bank balances :

With Scheduled Banks :

On Current Accounts 4,172,900 3,029,264

In Deposit Accounts 108,640,253 158,012,557

112,813,153 161,041,821

(b) 112,876,622 161,080,872



Amount in `

As at As at31.03.2011 31.3.2010

c) LOANS & ADVANCES :

(Unsecured - Considered good unless otherwise stated)

Advances recoverable in cash or in kind or for value to be received :

Considered Good 13,335,538 19,998,987

13,335,538 19,998,987

Due from subsidiary companies 133,969,228 48,935,669

Mat Credit Entitlement 16,148,023 16,148,023

Other Deposits 5,749,766 5,992,629

155,867,017 71,076,321

(C) 169,202,555 91,075,308

(a)+(b)+(c ) 673,302,294 490,105,434

SCHEDULE 7

CURRENT LIABILITIES & PROVISIONS

CURRENT LIABILITIES :

Sundry Creditors

- Due to micro, small & medium enterprises - -

- Others 92,753,642 17,659,078

Other Liabilities 9,125,115 10,599,138

Interest accrued but not due 436,682 717,879

Liability towards investors Education and Protection Fund

Under Section 205C of the Companies Act 1956 -

Unpaid Dividend 139,538 78,928

102,454,977 29,055,023

PROVISIONS :

Provision for taxation 120,425,980 96,274,803

Less: Payments in advance 30,451,840 19,841,537

89,974,140 76,433,266

Dividend

Proposed Final - 43,892,988

Tax on Final Dividend - 7,459,613

- 51,352,601

89,974,140 127,785,868

192,429,117 156,840,890


SCHEDULE 8

INCOME

Sales & Services

Medical Transcription 687,114,041 638,414,556

Billing and Collections 219,088,563 171,073,685

Income From Coding 162,823,920 118,133,634

Intererst on FD 13,182,314 9,663,891

Income from Exchange Fluctuation 918,215 3,576,585

Total 1,083,127,053 940,862,351

Other Income

Others 2,351,825 46,348

Total Other Income 2,351,825 46,348

SCHEDULE 9

Expenditure

Direct Expenses

Salary and Allowances to Staff 534,010,786 415,705,845

Contribution to PF and other funds 2,211,088 1,079,032

Staff Welfare Expenses 1,547,472 1,854,398

Rent 8,109,383 7,010,328

Overseas Business Expenses 77,261,143 89,430,474

Power & Fuel 4,668,203 4,759,320

Communication charges 3,337,268 3,735,053

Postage and Courier 251,296 239,956

Travelling Expenses 4,954,655 4,081,074

Printing and Stationery 905,005 1,081,191

Amortisation of Contracts 111,157,583 23,485,253

General Expenditure 10,699,062 16,578,896

Repairs & Maintenance 2,647,139 2,837,706

Interest and finance charges 38,832,597 29,779,543

Audit Fees 251,863 251,863

Total Expenses 800,844,543 601,909,932

Exceptional Expenses

Deferred Revenue Expenses Written off - 428,534

Loss on Sale of shares 1,741,129

Total Exceptional Expenses 1,741,129 428,534

SCHEDULES FORMING PART OF THE PROFIT AND LOSS ACCOUNT

Amount in `

As at As at31.03.2011 31.3.2010


SCHEDULE 10

SIGNIFICANT ACCOUNTING POLICIES AND NOTES TOACCOUNTS FOR THE YEAR ENDED 31ST MARCH 2011

(A) Significant Accounting Policies

1. Accounting convention & concepts

The financial statements are prepared under thehistorical cost convention on accrual basis inaccordance with the Indian Generally AcceptedAccounting Principles (IGAAP) comprising theAccounting standards Notified under CompaniesAccounting Standards Rules 2006 by the CentralGovernment of India under section 211(3C) of theCompanies Act 1956, Various pronouncements ofthe Institute of Chartered Accountants of India andthe provisions of the Companies Act, 1956 andguidelines issued by the Securities Exchange Boardof India (SEBI).

Accounting policies have been consistently appliedexcept where a newly issued Accounting Standardis initially adopted or a revision to an existingAccounting Standard requires a change in theAccounting policy hitherto in use.

2. Use of Estimates

The preparation of financial statements inconformity with IGAAP requires management tomake estimates and assumptions that affect thereported amount of assets, liabilities, revenues andexpenses and disclosure of contingent liabilitieson the date of financial statements. Examples ofsuch estimates and assumptions include useful livesof fixed assets and Intangible assets, taxes,provision for doubtful debts, anticipatedobligations under employee retirement plans, etc.The recognition, measurement, classification ordisclosures of an item or information in the financialstatements have been made relying on theseestimates to a greater extent. Actual results coulddiffer from those estimates

3. Revenue Recognition

Income from Medical Transcription, Coding and Billingand collection are recognised as income on completionof the service. Interest Income is recognized based ontime proportion and on gross basis.

4. Fixed Assets

Fixed assets are stated at cost less accumulateddepreciation. Cost includes all identifiableexpenditure to bring the assets to its presentlocation and condition for intended use.

Intangible assets are stated at the consideration paid for

the purchase /acquisition less accumulated amortization.

Capital work in progress includes advances paidfor acquiring fixed assets and cost of assets notready for use before the balance sheet date.

5. Depreciation

Depreciation on Fixed Assets has been providedon written down value method at the ratesspecified in Schedule XIV of the Companies Act,1956. Depreciation on addition/deletion of assetsduring the year is provided on a pro-rata basis.

6. Investments

Investments are valued at cost of acquisition andinclude brokerage fees and incidental expenses,wherever applicable. Investments are classified aslong term and are carried at cost with an appropriateprovision of permanent diminution in value.Investments made in the wholly ownedsubsidiaries are valued at cost of acquisitionincluding the acquisition expenses relating to it.

7. Taxation

Provision for current tax is based on tax liabilitycomputed in accordance with relevant tax ratesand tax laws. Provision for deferred tax is made forall timing differences arising between taxableincomes and accounting Income at rates that haveenacted or substantively enacted as of the balancesheet date. Deferred tax assets are recognized onlyif there is a reasonable certainty that they will berealized in future.

8. Foreign Exchange Transaction

Transactions in Foreign Currency are converted atthe rates prevailing on the date of the transaction.Monetary assets and liabilities ( for eg. Cash,receivables, payables etc.) denominated in foreigncurrency are translated into Indian Rupees at the rateof exchange prevailing at the balance sheet date.

Gain/loss on realization/Payment of revenuetransactions in the same year is charged to “ExchangeFluctuation Account” in the Profit & Loss Account.

9. Impairment

The carrying amounts of assets are reviewed ateach balance sheet date to check any indication ofimpairment based on internal/external factors.Impairment Loss is recognised whenever thecarrying amount of an asset is in excess of itsrecoverable amount. The Impairment Loss isrecognised as an expense in the Statement of Profitand Loss and carrying amount of the asset isreduced to its recoverable value.


10. Deferred Revenue Expenditure

Amount paid for the purchase of contracts relatingto the medical transcription billing and codinghave been amortized and shall be written off overa period of 3 years being the period of contract.

11. Provision for Contingent Liabilities andContingent Assets

The Company recognises a provision when thereis a present obligation as a result of a past eventthat probably requires outflow of resources,which can be reliably estimated. Disclosures forcontingent liability is made, without a provisionin books, when there is an obligation that may,but probably will not (in the opinion of themanagement), require outflow of resources.Contingent Assets are neither recognised nordisclosed in the financial statements.

12. Earning per Share (EPS)

The earning considered in ascertaining theCompany’s EPS comprises the net profit after tax.The number of shares used in computing BasicEPS is the weighted average number of sharesoutstanding during the year duly adjusted foradditional shares issued during the year, if any.

The number of shares used in computingdiluted EPS comprises the weighted averagenumber of equity shares considered forderiving basic EPS, and also the weightedaverage number of equity shares that couldhave been issued on the conversion of alldilutive potential equity shares.

(B) NOTES TO ACCOUNTS

1. The company has invested in strategic TangentCorporation a software development companywhich is having expertise in development ofsoftware related to EMR and SaaS. During thecurrent year investment made for acquiring 16%of the total shares of the company.

2. Auditor’s Remuneration

(Amount in ` )

Particulars 2010-11 2009-10

Audit Fees 1,10,000 1,10,000

Internal Audit Fees 55,000 55,000

Tax Audit Fees 36,000 36,000

Tax Matters 20,000 20,000

Service Tax 22,763 22,763

Out of Pocket expenses 8,100 8,100

Total 2,51,863 2,51,863

3. Earnings in Foreign Currency(Amount in ̀ )


Medical Transcription 687,114,041 638,414,556Billing and Collection 219,088,563 171,073,685Income Coding 162,823,920 118,133,634

4. Expenditure in Foreign Currency(Amount in ̀ )


Overseas Business expenses 77,261,143 89,430,474

5. Particulars of Dividend declared and Paid toNon Residents

(Amount in ̀ )


Number of Non residentShare holders Nil 2Number of Shared held by them Nil 666,666

Dividend Nil 1,333,332

6. Disclosure as per AS 15 –Retirement Benefits:Post Retirement Employee Benefitsa) Description of Plan

i) Gratuity:Disclosures required as per theAccounting Standard is as follows;

b) Principal actuarial assumptions:

Particulars Gratuity

2011 2010

Discount Rate 8% 8%Rate of Return on Plan assets 0% 0%Salary Escalation 5% 5%Expected Average remainingworking lives of employees (Years) 29.02 29.79

c) Net Assets/(Liabilities) recognized in theBalance Sheet are as follows:

(Amount in ̀ )


2011 2010

Present Value of DefinedBenefit Obligation 3647874.00 2700340.00

Fair Value of Plan Assets 0.00 0.00

Funded Status [Surplus/(Deficit)] (3647874.00) (2700340.00)

Net Asset/(Liability) recognizedin Balance sheet (3647874.00) (2700340.00)


d) Amounts recognized in the Profit and Loss

Accounts are as fallows

(Amount in ̀ )


2011 2010

Current Service Cost 1347907.00 1255064.00

Interest Cost 253928.56 163744.44

Expected return on Plan assets 0.00 0.00

Net actuarial loss/(gain)

recognized during the year (654301.56) (111729.04)

Total included in employee

Benefit 947534.00 1307079.40

e) Reconciliation of opening and closing balances

of the present value of the obligations

(Amount in ̀ )


2011 2010

Opening defined benefit

obligation 2700340.00 1393261.00

Current Service Cost 1347947.00 1255064.00

Interest Cost 253928.56 163744.04

Net actuarial loss/(gain)

recognized during the year (654301.56) (111729.04)

Benefit Paid 0.00 0.00

Closing Defined Benefit

Obligation 3647874.00 2700340.00

7. Segment Information (AS-17)

Company has only one segment of activity namely

“healthcare Receivable Management”, therefore

segment reporting as defined in AS-17 does not

apply.

8. Related Party Transactions:

As per the accounting standards 18 on “Related Party

Disclosures” notified under Companies Auditing

Standards Rules, 2006, the related Parties of the

company and nature of relation are as follows:

RELATED PARTY NATURE OF RELATIONSHIP

C K Sooraj Key Management Personnel

Pradeep S Viswambharan Key Management Personnel

Ravi Sankar Key Management Personnel

Thunga Software Pvt Ltd Subsidiary

Accentia Technologies FZE Subsidiary

GSR PBS Inc Subsidiary

GSR Systems Inc Subsidiary

Denmed Inc Subsidiary

Oak Technologies Inc Subsidiary

Acentia Education Services Pvt Ltd Subsidiary

Nature and volume of transactions carried out with the aboverelated parties in the ordinary course of business are as follows,


Remuneration to KeyManagement Personnel 15,00,000 15,00,000

Dividend Paid to KeyManagement Personnel 70,08,882 44,39,376

Advances Given Subsidiaries 13,39,69,228 4,89,35,669

9. Erstwhile GET, has taken commercial premises underfinancial lease. The Company to recognize the leaseas an asset and a liability. This has been disclosedpursuant to Accounting Standards 19, “Leases” notifiedunder Companies Auditing Standard Rules , 2006

10. Earnings Per Share : (AS-20)


Net Profit After Tax 18,73,86,299 198,538,703

Weighted AverageNumber of shares 14630996 13483334

Basic earnings per share 12.81 14.72

Shares for the purpose ofcalculating Diluted EPS 14630996 13483334

Diluted Earnings per share 12.81 14.72

11. Deferred Tax Liability/(Asset) comprises the following


Opening balance ofDeferred Tax liability/(Asset) 99,71,443 62,92,805

Difference in WDV betweenBooks and Tax 3,288,785 36,78,637

Closing balance ofDeferred Tax liability/(Asset) 13,260,228 99,71,443


12. The company has not received any intimation fromthe suppliers regarding The Micro, Small andMedium Development Act, 2006 (the Act) andhence disclosure regarding:

a) Amount due and outstanding to suppliers as at theend of the accounting year.

b) Interest paid during the year.

c) Interest payable at the end of the accounting year.

d) Interest accrued and unpaid at the end ofaccounting year and has not been provided.

The Company is making efforts to get theconfirmations from the suppliers as regards theirstatus under the Act.

13. Contingent Liability and Capital Commitments notprovided for


Claims against company notacknowledged as debts-Demand raised by IncomeTax and Service Tax Authorities 5,801,866 5,05,45,223

Bank Guarantees 13,41,076 13,41,076

Capital Commitments inrespect to capital work inprogress 18,25,00,000 4,65,09,000

14. In the opinion of the Board, the Current Assets,loans and Advances have a value on realization inthe ordinary course of business at least equal to theamount at which they are stated in the financialstatements and provision made for all known anddetermined liabilities are adequate and not inexcess of the amount stated.

15. General Expenses includes the Directors sitting feespaid ` 30,000/- (Previous year ` 30,000/-)

16. Previous year figures have been regrouped,reclassified and rearranged wherever necessary toconfirm to this year’s classification. Figures withprevious year are not comparable due to mergingof the company during the current year.

17. Figures are rounded off up to nearest rupee.

18. Balance sheet Abstract & Companies generalbusiness profile as required by Part IV Schedule VI tothe Companies Act 1956 is enclosed in Annexure ‘A’.





CASH FLOW STATEMENT FOR THE YEAR ENDED 31.03.2011

Amount in ̀

As at As at31.03.2011 31.3.2010

A CASH FLOWS FROM OPERATING ACTIVITIESNet Profit before taxes and exceptional items 217,254,383 262,713,741Depreciation 67,379,952 76,285,026Interest Expense 38,832,597 29,779,543Exchange Fluctuation Income (918,215) (3,576,585)Interest and Dividend Income (13,182,314) (9,663,891)Amortisation of Contracts 111,157,583 23,485,253Operating profit/(loss) before Working capital changes 420,523,986 379,023,087Decrease/(Increase) in Sundry Debtors (153,273,865) 75,997,731Decrease/(Increase) in Loans & Advances (82,892,588) (32,650,912)Increase/(Decrease) in Current Liabilities & Provisions 62,789,656 (11,656,119)Purchase of Contracts (98,022,159) (315,056,720)

NET CASH FROM OPERATIONS (A) 149,125,030 95,657,067

B CASH FLOWS FROM INVESTING ACTIVITIESPurchase of Fixed Assets (128,862,131) (8,497,053)Investements (151,866,068) (62,023,230)Sale of Investment 7,006,352 20,781,343Interest Expense (38,395,915) (29,061,664)Interest and Dividend Income 13,182,314 9,330,109

NET CASH FROM INVESTING ACTIVITIES (B) (298,935,448) (69,470,495)

C CASH FLOWS FROM FINANCING ACTIVITIESNet Loan received from the banks 145,499,156 (9,579,996)Dividend Paid (43,892,988) (26,885,366)

NET CASH FROM FINANCING ACTIVITIES © 101,606,168 (36,465,362)

NET INCREASE IN CASH AND CASH EQUIVALENT (A+B+C) (48,204,250) (10,278,790)

CASH AND CASH EQUIVALENT AS AT BEGINNING OF THE YEAR 161,080,872 171,359,662

CASH AND CASH EQUIVALENT AS AT THE END OF THE YEAR 112,876,622 161,080,872

Notes to the Cash Flow Statement for the year ended 31st March 2011

1. Previous year's figures have been regrouped wherever necessary to conform to this year's classification.





BALANCE SHEET ABSRACT AND COMPANY’S GENERAL BUSINESS PROFILE

SCHEDULE 11

1. Registration Details :

State Code : 11 Registration No. L99999MH1991PLC062885

Balance Sheet Date 31.03.2011

2. Capital Raised during the year (Rupees in Thousands)

Public Issue Nil Right Issue Nil

Bonus Issue Nil Private Placement Nil

3. Position of Mobilisation and Deployment of Funds (Rupees in Thousands)

Total Liabilities 2216524 Total Assets 2216524

Source of Funds

Paid up Capital 146310 Reserves & Surplus 1604398

Secured Loan 445383 UnSecured Loan 7173

Deferred Tax 13260

Application of Funds

Net Fixed Assets 386522 Investments 1070264

Net Current Assets 480873 Misc. Expenditure 278865

Performance of Company (Rupees in Thousands)

Turnover 1085479 Total Expenditure 869966

Profit before Tax 215513 Profit after Tax 187386

Earning per. Share in Rs. 12.81 Dividend Nil

4. Generic Name of three Principal Products/ Services of the Company (as per Monetory terms)

Item Code No. (ITC Code) Service Product Description Not applicable

Item Code No. (ITC Code) Software Product Description 892.20

For Accentia Technologies Ltd

Pradeep Viswambharan Sooraj C K Rolita GuptaManaging Director & C E O Director Company Secretary

Mumbai26.11.2011


CONSOLIDATED FINANCIAL STATEMENTSFor the year ended March 31, 2011

Accentia Technologies Limited


AUDITOR’S REPORT ON CONSOLIDATED FINANCIAL STATEMENTS

To,

The Board of Directors of ACCENTIA TECHNOLOGIESLIMITED

1. We have audited the attached Consolidated BalanceSheet of ACCENTIA TECHNOLOGIES LIMITED and itssubsidiaries (the group), as at March 31,2011, and alsothe Consolidated Profit & Loss Account and theConsolidated Cash Flow Statement for the year endedon that date annexed thereto. These Consolidatedfinancial statements are the responsibility of theCompany’s Management. Our responsibility is toexpress an opinion on these financial statements basedon our audit.

2. We conducted our audit in accordance with auditingstandards generally accepted in India. Those Standardsrequire that we plan and perform the audit to obtainreasonable assurance about whether the financialstatements are free of material mis-statement. An Auditincludes examining, on a test basis, evidencesupporting the amounts and disclosures in the financialstatements. An Audit also includes assessing theaccounting principles used and significant estimatesmade by management, as well as evaluating the overallfinancial statement presentation. We believe that ouraudit provides a reasonable basis for our opinion.

3. We did not audit the Financial Statement of Subsidiaries,whose financial statement reflect the group’s share ofnet assets of Rs. 17,292.99 lakhs as at March 31, 2011and group share of net profit of Rs 5661.11 Lakhs forthe year ended on that date, which are considered inthe Consolidated Financial Statements. This FinancialStatement and other financial information have beenaudited by other auditor whose reports have beenfurnished to us, and our opinion, in so far as it relates tothe amounts included in respect of the subsidiaries isbased solely on the report of the other auditors.

4. We report that the Consolidated Financial Statementshave been prepared by the Company’s managementin accordance with the requirements of AccountingStatement-21, “Consolidated Financial Statement”notified under Companies Accounting Standards Rules2006.

5. Based on our audit, and on consideration of the reportof the other auditors on the separated financialstatement of the Subsidiaries and other financialinformation of its components, in our opinion and tothe best of our information and according to theexplanations given to us, the attached ConsolidatedFinancial Statement give a true and fair view inconformity with the accounting principles generallyaccepted in India:

(a) In the case of the Consolidated Balance Sheet, ofthe state of affairs of the Group as atMarch 31, 2011.

(b) In the case of the Consolidated Profit & Lossaccount, of the Profit of the Group for the yearended on that date; and

(c) In the case of Consolidated Cash Flow Statement,of the Cash Flows of the Group for the year endedon that date.





CONSOLIDATED BALANCE SHEET

Amount in `


SOURCES OF FUNDS1. SHAREHOLDERS’ FUNDS

(a) Share Capital 1 146,309,960 146,309,960(b) Reserves and Surplus 2 3,333,596,861 2,552,473,563

3,479,906,821 2,698,783,523

2. LOAN FUNDS 3(a) Secured Loans 445,382,557 296,099,174(b) Unsecured Loans 7,172,882 10,957,109

452,555,439 307,056,283

3. DEFERRED TAX LIABILITY 15,673,615 11,448,416(Refer note no B 8 of schedule 10 of the Notes to accounts)

3,948,135,875 3,017,288,222APPLICATION OF FUNDS1. Goodwill on consolidation 711,511,737 711,511,7372. FIXED ASSETS 4

(a) Gross Block 946,413,273 742,702,669(b) Less : Depreciation 409,442,074 284,047,503(c) Net Block 536,971,199 458,655,166(d) Capital Work-in-progress 384,940,366 25,982,491

921,911,565 484,637,657

3. INVESTMENTS 5 436,101,439 156,322,514

4. CURRENT ASSETS, LOANS & ADVANCES 6(a) Receivables 1,202,172,222 980,364,753(b) Cash and Bank Balances 122,757,817 231,629,939(c) Loans and Advances 245,765,704 116,891,441

1,570,695,743 1,328,886,133Less : CURRENT LIABILITIES AND PROVISIONS 7

(a) Liabilities 1,56,176,372 98,402,929(b) Provisions 101,308,061 131,413,539

257,484,433 229,816,468

Net Current Assets 1,313,211,310 1,099,069,665

5. Miscellaneous Expenditure to the extent not 565,399,824 565,746,649 written off - Deferred Revenue Expenditure

3,948,135,875 3,017,288,222









CONSOLIDATED PROFIT & LOSS ACCOUNT

Amount in `


INCOME

Income from operations 8 3,307,514,710 2,647,345,950

Other Income 4,851,825 9,813,538

3,312,366,535 2,657,159,488

EXPENSES 9 2,333,843,348 1,688,392,272

Depreciation & Amortization of Goodwill 125,394,571 89,123,766

Preliminary Expenses written off - 106,012

2,459,237,919 1,777,622,050

Profit Before Taxation and Exceptional Items 853,128,616 879,537,438

Exceptional Income / (Expense) (1,741,129) (428,534)

PROFIT BEFORE TAXATION 851,387,487 879,108,904

Provision for Taxation :

For Current Year 110,864,873 140,874,457

Income Tax of Earlier Years (17,200,000)

For Deferred Tax 4,225,199 12,904,065

97,890,072 153,778,522

PROFIT AFTER TAXATION 753,497,415 725,330,382

Add : Surplus brought forward from previous year 1,696,434,150 1,114,064,968

Adjustment on Amalgamation - (68,308,599)

AMOUNT AVAILABLE FOR APPROPRIATION 2,449,931,565 1,771,086,751

General Reserve 22,500,000 22,500,000

Final (Proposed) - 43,892,988

Tax on Dividend - 7,459,613

Earlier year dividend - 800,000

Surplus Carried to Balance Sheet 2,427,431,565 1,696,434,150

EPS - Basic (on `10 per Share) 51.50 53.79

EPS - Diluted (on `10 per Share) 51.50 53.79

(Refer Note No B 7 of Schedule 10)



SCHEDULES FORMING PART OF THE CONSOLIDATED BALANCE SHEET

Amount in `

As at As at31.03.2011 31.3.2010

SCHEDULE 1

SHARE CAPITAL

AUTHORISED

20,000,000 equity Shares of `10/- 200,000,000 200,000,000

200,000,000 200,000,000

ISSUED, SUBSCRIBED AND PAID-UP

14630996 equity shares of ` 10/- each 146,309,960 146,309,960

(Previous year 146,309,960 Equity shares of ` 10/- each)

146,309,960 146,309,960

Of the above, the following are for other than cash

a) 916667 Shares allotted as fully paid up to the promoters of the

foreign companies as per the FIPB approval and BSE

(b) Pursuant to the Scheme of Amalgamation of Geosoft

Technologies Ltd (GTTL) and Iridium Technologies (Pvt) Ltd (ITL)

with the Company, 4640713 shares alloted to the share holders

of GTTL and ITL as fully paid up

(c) Pursuant to the scheme of Amalgamation of Asscent Infoserve

Private Limited with the company, 1188313 shares alloted to

the share holders of the Asscent Infoserve pvt ltd as fully paid up.

SCHEDULE 2 Amount in `

As at Additions Deductions As at31.03.2010 31.03.2011

RESERVES & SURPLUS

Investment Subsidy 165,246 165,246

Securities Premium Account 853,419,433 853,419,433

General Reserve 23,509,697 22,500,000 46,009,697

Capital Reserve 3,544,750 3,544,750

Foreign Currency Translation Reserve (24,599,713) 27,625,883 - 3,026,170

Total 856,039,413 50,125,883 - 906,165,296

SURPLUS AS PER PROFIT & LOSS ACCOUNT 1,696,434,150 730,997,415 2,427,431,565

TOTAL 2,552,473,563 781,123,298 - 3,333,596,861


Amount in `As at As at

31.03.2011 31.3.2010

SCHEDULE 3

A. SECURED LOANS

(1) Loans and Advances from Banks

(a) Exim Bank Term Loan 1,593,750 3,831,382

(b) Exim Bank Over draft 230,327,217 108,541,170

(c) ICICI Bank - Term loan - 316,947

(d) Axis Bank - Term Loan - 4,501,701

(e) Loan against FD 63,198,554 70,644,479

(F) ICICI loan against property - 23,832,058

(2) External commercial Borrowing 56,747,250 84,431,437

(3) Loan From L&T Finance 93,515,786 -

445,382,557 296,099,174

Note - Exim bank term Loan has been availed from the bank by

pledging few fixed assets and all the current assets of the company

and personal guarantee of the Directors.

Exim Bank Over Draft has been availed from the bank by pledging all

the fixed assets and the receivables of the company.

External Commercial borrowing from the ICICI bank has been secured

on the receivables of the Company, Fixed assets of the company and

personal guarantee of the Directors.

Loan from L&T Finance has been availed by pledging the property

located at the Hyderbad.Amount in `

As at As at

31.03.2011 31.3.2010

B. UNSECURED LOANS

Working Capital Facility from Banks (OD) 6,872,882 10,657,109

Others 300,000 300,000

7,172,882 10,957,109



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5,16

6

Capi

tal W

ork-

in-P

rogr

ess

( c)

384,

940,

366

25,9

82,4

91

Prev

ious

Year

441,

630,

040

301,

072,

629

742,

702,

669

194,

923,

737

89,1

23,7

6628

4,04

7,50

345

8,65

5,16

6



Amount in ̀

As at As at31.03.2011 31.3.2010

SCHEDULE 5Class No. Face Value

INVESTMENTS - AT COST of each

Long term investments (Fully paid) :TRADE (Un quoted)Investment in Trans Services Inc Equity Shares 500 USD 1 146185812 134618744Stratgeic Tangent corporation Equity Shares 2000 USD 1 140299000Alpine Technologies Inc Equity Shares 2250 USD 1 136660338

423145150 134618744

Investment In Subsidiary Companies

OTHER INVESTMENTSQuotedOctant Innteractive Technologies Ltd Equity Shares 149627 10 2512255 21302470(520002 shares sold during the year)

Un quoted

Five X Finance and Investment Ltd Equity Shares 597071 10 10042734

Kapol Co-Operative Bank Ltd. Equity Shares 2030 10 20300 20300

TECIL Chemicals & Hydropower Ltd Equity Shares 12,700 10 381000 381000

12956289 21703770

436101439 177624984

Cost of InvestmentsLong Term

Quoted 2512255 21302470Unquoted 433589184 135020044Total 436101439 156322514

Market value of Quoted Investments 1795524 15196080

SCHEDULE 6

CURRENT ASSETS, LOANS AND ADVANCES

(a) RECEIVABLES :Debts outstanding for a period exceeding six months- Unsecured Considered Good 8,935,166 39,561,277

8,935,166 39,561,277Other Debts- Unsecured Considered Good 1,193,237,056 940,803,476

1,193,237,056 940,803,476

(a) 1,202,172,222 980,364,753



Amount in `

As at As at31.03.2011 31.3.2010

Schedule 6 (contd...)

Brought Forward 1,202,172,222 980,364,753

(b) CASH & BANK BALANCES :Cash and stamp balances 355,159 40,063Bank balances :With Scheduled Banks :On Current Accounts 4,919,628 3,245,643In Deposit Accounts 108,682,726 158,012,557

113,957,513 161,298,263Other Bank Accounts 8,800,304 70,331,676

(b) 122,757,817 231,629,939

(c) LOANS & ADVANCES :(Unsecured - Considered good unless Otherwise stated)Advances recoverable in cash or inkind or for value to be received :Considered Good 223,572,531 94,452,855

223,572,531 94,452,855

MAT Credit Entitlement 16,148,023 16,148,023

Other Deposits 6,045,150 6,290,563

22,193,173 22,438,586

(C) 245,765,704 116,891,441

(a)+(b)+(c ) 1,570,695,743 1,328,886,133

SCHEDULE 7

CURRENT LIABILITIES & PROVISIONSCURRENT LIABILITIES :

Sundry Creditors- Due to Small scale industries - -- Others 133,848,931 71,033,565

Other Liabilities 21,751,221 26,572,557Interest accrued but not due 436,682 717,879Liability towards investors Education and ProtectionFund Under Section 205Cof the Companies Act 1956 - Unpaid Dividend 139,538 78,928

(a) 156,176,372 98,402,929PROVISIONS :

Provision for taxation 132,083,229 184,339,289Less: Payments in advance 30,775,168 104,278,351

101,308,061 80,060,938DividendProposed Final - 43,892,988Tax on Final Dividend - 7,459,613

- 51,352,601

(b) 101,308,061 131,413,539

(a+b) 257,484,433 229,816,468


Amount in `

As at As at31.03.2011 31.3.2010

SCHEDULE 8SALES & SERVICES

Medical Transcription 1,925,547,695 1,640,652,139Billing And Collection 887,837,722 699,247,611Coding 449,635,820 296,690,343EMR 30,421,556 -Other Operational Income 14,071,917 10,755,257Total Operational Income 3,307,514,710 2,647,345,950Other IncomeOthers 4,851,825 9,813,538

4,851,825 9,813,538

SCHEDULES FORMING PART OF THE CONSOLIDATED PROFIT AND LOSS ACCOUNT

SCHEDULE 9Direct ExpenditureSalary and Allowances to Staff 1,737,621,017 1,321,183,236Contribution to PF and other funds 2,495,343 1,727,852

Overseas Business Expenses 154,058,728 100,026,261

Staff Welfare Expenses 4,771,905 10,408,103Recruitment & Training Expenses 15,813,141 -

Rent 20,556,992 20,041,070

Medical Transcription Expenses 16,419,583 42,087,524Power & Fuel 6,929,933 7,194,020

Advertisement Expenses 2,111,955 2,271,129

Amortisation of Contracts 190,140,490 72,079,431Bad Debts - 352,186

Postage and Courier 3,396,286 3,607,852

Communication Expenses 12,506,343 10,068,606Insurance 1,368,045 1,724,204

Traveling Expenses 21,485,956 14,151,289

Office Expenses 14,656,091 6,288,045Professional Charges 5,306,046 4,114,336

General Expenditure 21,353,261 28,562,779

Repairs & Maintenance 6,363,128 5,767,387Rates and Taxes and Renewals 3,777,264 4,193,877

Interest and finance charges 39,172,614 29,893,942

Bank Charges 1,652,022 1,609,357Audit Fees 1,127,840 1,039,786

Marketing Expenses 50,759,365

Total Expenses 2,333,843,348 1,688,392,272Exceptional ExpensesDeferred Revenue Expenses Written off - 428,534

Loss On Sale of Shares 1,741,129 -

Total Exceptional Expenses 1,741,129 428,534


SCHEDULES TO AND FORMING PART OF THE CONSOLIDATEDBALANCE SHEET AS AT 31.03.2011 AND CONSOLIDATEDPROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED ON31.03.2011.

SCHEDULE 10

A. Significant Accounting Policies

1. Accounting convention & concepts

The financial statements are prepared under thehistorical cost convention on accrual basis inaccordance with the Indian Generally AcceptedAccounting Principles (IGAAP) comprising theAccounting standards Notified under CompaniesAccounting Standards Rules 2006 by the CentralGovernment of India under section 211(3C) of theCompanies Act 1956, Various pronouncements ofthe Institute of Chartered Accountants of India andthe provisions of the Companies Act, 1956 andguidelines issued by the Securities Exchange Boardof India (SEBI).

Accounting policies have been consistently appliedexcept where a newly issued Accounting Standardis initially adopted or a revision to an existingAccounting Standard requires a change in theAccounting policy hitherto in use.

2. Use of Estimates

The preparation of financial statements inconformity with IGAAP requires management tomake estimates and assumptions that affect thereported amount of assets, liabilities, revenues andexpenses and disclosure of contingent liabilities onthe date of financial statements. Examples of suchestimates and assumptions include useful lives offixed assets and Intangible assets, taxes, provisionfor doubtful debts, anticipated obligations underemployee retirement plans, etc. The recognition,measurement, classification or disclosures of an itemor information in the financial statements have beenmade relying on these estimates to a greater extent.Actual results could differ from those estimates

3. Basis of Preparation

The consolidated financial statements are preparedin accordance with Accounting standard 21on Consolidated Financial Statements Notified underCompanies Accounting Standards Rules 2006

i) The financial statements of the holding company &all subsidiaries are prepared according to uniformaccounting policies, in accordance with generallyaccepted accounting policies in India.

ii) The financial statements of the holding companyand its subsidiary companies have been combinedon a line-by-line basis by adding together like itemsof assets, liabilities, income and expenses. The intra-

group balances, intra-group transactions andunrealized profits or losses thereon have been fullyeliminated

iii) In case of foreign subsidiaries, being non-integralforeign operations, revenue items are consolidatedat the average rate prevailing during the year. Allassets and liabilities are converted at rates prevailingat the end of the year. Any exchange differencearising on consolidation is recognised in the ForeignCurrency Translation Reserve

iv) The financial statements of the subsidiaries are usedin consolidation are drawn up to the same reportingdate as that of the Holding Company

v) The excess value of the consideration given overthe net value of the identifiable assets acquired inthe subsidiary companies is recognized as “Goodwill”under fixed assets and is not being amortized. Goodwill is tested for the impairment on a periodic basisand written off, if found impaired.

vi) Minority Interest’s share of net profit of consolidatedsubsidiaries for the year is identified and adjustedagainst the income of the group in order to arrive atthe net income attributable to shareholders of thecompany.

vii) Minority Interest’s share of net assets of consolidatedsubsidiaries is identified and presented in theconsolidated balance sheet separate from liabilitiesand equity of the company’s shareholders.

viii) Subsidiaries included in Consolidation

Name of the Country of Nature of ShareEnterprise Incorporation Business holding/

ControllingInterest

Thunga Software India Health Care 100%Pvt Ltd BPO

GSR Systems Inc U.S Health Care 100%BPO

GSR PBS Inc U.S Health Care 100%BPO

DENMED Transcription U.S Health Care 100%Services Inc BPO

Accentia Technologies U.A.E Health Care 100% FZE BPO

OAK Technologies Inc U.S Health Care 100%BPO

Accentia Education India Consultancy 100%Services Pvt Ltd Services in

educationsector


4. Revenue Recognition

Income from Medical Transcription, Coding andBilling and collection are recognized as income oncompletion of the service. Interest Income isrecognized based on time proportion and on grossbasis.

5. Fixed Assets

Fixed assets are stated at cost less accumulateddepreciation. Cost includes all identifiableexpenditure to bring the assets to its presentlocation and condition for intended use.

Intangible assets are stated at the consideration paidfor the purchase /acquisition less accumulatedamortization.

Capital work in progress includes advances paid foracquiring fixed assets and cost of assets not readyfor use before the balance sheet date.

6. Depreciation

Depreciation on Fixed Assets has been providedon straight-line method and for certain fixed assetsat written down value method at the rates specifiedin Schedule XIV of the Companies Act, 1956.Depreciation on addition/deletion of assets duringthe year is provided on a pro-rata basis.

7. Investments

Investments are valued at cost of acquisition andinclude brokerage fees and incidental expenses,wherever applicable. Investments are classified aslong term and are carried at cost with an appropriateprovision of permanent diminution in value.Investments made in the wholly/partly ownedsubsidiaries are valued at cost of acquisitionincluding the acquisition expenses relating to it.

8. Taxation

Provision for current tax is based on tax liabilitycomputed in accordance with relevant tax ratesand tax laws. Provision for deferred tax is made forall timing differences arising between taxableincomes and accounting Income at rates that haveenacted or substantively enacted as of the balancesheet date. Deferred tax assets are recognized onlyif there is a reasonable certainty that they will berealized in future.

9. Foreign Exchange Transaction

Transactions in Foreign Currency are converted atthe rates prevailing on the date of the transaction.Monetary assets and liabilities (for eg. Cash,receivables, payables etc) denominated in foreign

currency are translated into Indian Rupees at therate of exchange prevailing at the balance sheetdate.

Gain/loss on realization/Payment of revenuetransactions in the same year is charged to“Exchange Fluctuation Account” in the Profit & LossAccount.

10. Impairment

The carrying amounts of assets are reviewed at eachbalance sheet date to check any indication ofimpairment based on internal/external factors.Impairment Loss is recognised whenever thecarrying amount of an asset is in excess of itsrecoverable amount. The Impairment Loss isrecognised as an expense in the Statement of Profitand Loss and carrying amount of the asset is reducedto its recoverable value.

11. Deferred Revenue Expenditure

Amount paid for the purchase of contracts relatingto the medical transcription and coding have beenamortized and shall be written off over a period of3 years being the period of contract. The expenditureincurred for the training of the new employees hasbeen amortized and shall be written off over a periodof 5 years.

12. Provision for Contingent Liabilities and ContingentAssets

The Company recognises a provision when there isa present obligation as a result of a past event thatprobably requires outflow of resources, which canbe reliably estimated. Disclosures for contingentliability is made, without a provision in books, whenthere is an obligation that may, but probably willnot (in the opinion of the management), requireoutflow of resources. Contingent Assets are neitherrecognised nor disclosed in the financial statements.

13. Earning per Share (EPS)

The earning considered in ascertaining theCompany’s EPS comprises the net profit after tax.The number of shares used in computing Basic EPSis the weighted average number of sharesoutstanding during the year duly adjusted foradditional shares issued during the year, if any.

The number of shares used in computing dilutedEPS comprises the weighted average number ofequity shares considered for deriving basic EPS, andalso the weighted average number of equity sharesthat could have been issued on the conversion ofall dilutive potential equity shares.


B. NOTES TO ACCOUNTS:

1. The company has invested in strategic TangentCorporation a software development companywhich is having expertise in development ofsoftware related to EMR and SaaS. During thecurrent year investment made for acquiring 16%of the total shares of the company.

2. The company invested in Alpine Technologies Incthrough its subsidiaries during the year. AlpineTechnologies Inc is a software developmentcompany which is having expertise indevelopment of software. During the current yearinvestment made for acquiring 18% of the totalshares of the company.

3. Contingent Liability and Capital Commitments notprovided for

(Amount in ` )


Claims against company notacknowledged as debts-

Demand raised by Income Taxand Service Tax Authorities 58,01,866 5,05,45,223

Bank Guarantees 15,91,076 15,91,076

Capital Commitments inrespect to capital work inprogress 75,00,00,000 9,12,78,000

4. Auditor’s Remuneration(Amount in ` )


Audit Fees 8,50,000 8,10,000

Internal Audit fees 55,000 55,000

Tax Audit Fees 57,500 57,500

Tax Matters 60,000 30,000

Service Tax 49,650 32,600

Out of Pocket Expenses 55,690 54,686

Total 11,27,840 10,39,786

5. Segment Information (AS-17)Company has only one segment of activity namely“Healthcare Receivable Management”, thereforesegment reporting as defined in AS-17 does not apply.

6. Related Party TransactionsAs per the accounting standards 18 on “RelatedParty Disclosures”, the related Parties of thecompany and nature of relation are as follows:

RELATED PARTY NATURE OF RELATIONSHIP

Pradeep V S Key Management Personnel

C K Sooraj Key Management Personnel

Dileep V Key Management Personnel

V S Rajeev Key Management Personnel

Ravi Sankar Key Management Personnel

Thunga Software Pvt Ltd Subsidiary

Accentia Technologies FZE Subsidiary

GSR PBS Inc Subsidiary

GSR Systems Inc Subsidiary

Denmed Inc Subsidiary

OAK Technologies Inc Subsidiary

Accentia Education

Services Pvt Ltd Subsidiary

Nature and volume of transactions carried out with the aboverelated parties in the ordinary course of business for theyear ended March 31, 2011.

(Amount in ` )


Remuneration to KeyManagement Personnel 33,00,000 24,89,148

Dividend Paid to KeyManagement Personnel 70,08,882 45,41,538

7. Earnings Per Share : (AS-20)(Amount in ` )


Net Profit After Tax afterminority Interest 753,497,415 725,330,382

Weighted AverageNumber of shares 14630996 13483334

Basic earnings per share 51.50 53.79

Shares for the purpose ofcalculating Diluted EPS 14630996 13483334

Diluted Earnings per share 51.50 53.79

8. Deferred Tax Liability/(Asset) comprises the following(Amount in ` )


Opening balance ofDeffered Tax liability/(Asset) 11,448,416 (14,55,649)

Difference in WDV betweenBooks and Tax 42,25,199 12,904,065

Closing balance ofDeffered Tax liability/(Asset) 1,56,73,615 11,448,416





9. In the opinion of the Board, the Current Assets,loans and Advances have a value on realization inthe ordinary course of business at least equal to theamount at which they are stated in the financialstatements.

10. Previous year figures have been regrouped,reclassified and rearranged wherever necessary toconfirm to this year’s classification. Figures arerounded off up to nearest rupee.





Amount in `

As at As atParticulars 31.03.2011 31.3.2010

A CASH FLOWS FROM OPERATING ACTIVITIES

Net Profit before taxes and exceptional items 853,128,615 879,537,438

Depreciation 125,394,571 89,123,766

Interest Expense and Finance Charges 39,172,614 29,893,943

Exchange Fluctuation (889,603) (10,755,857)

Interest and Dividend Income (13,182,314) (9,813,538)

Non Cash Expenses 190,140,490 72,079,431

Operating profit/(loss) before Working capital changes 1,193,764,373 1,050,065,183

Increase in Miscellaneous Assets to the extent of not (179,800,000) (631,527,420)

written off

Decrease/(Increase) in Sundry Debtors (221,807,469) 101,253,814

Increase in Loans & Advances (99,570,337) (37,532,225)

Increase/(Decrease) in Current Liabilities & Provisions 48,926,068 (29,776,592)

Income Tax paid during the year (80,775,168) (167,296,112)

NET CASH FROM OPERATIONS (A) 660,737,467 285,186,648

B CASH FLOWS FROM INVESTING ACTIVITIES

Purchase of Fixed Assets (573,229,583) (142,449,333)

Purchase of Investements (279,778,925) (62,023,230)

Sale of Investment 7,006,352 20,781,343

Interest Expense (38,395,915) (29,061,664)

Interest and Dividend Income 13,182,314 9,330,109

NET CASH FROM INVESTING ACTIVITIES (B) (871,215,757) (203,422,775)

C CASH FLOWS FROM FINANCING ACTIVITIES (C)

Net loan from the banks 145,499,156 (9,579,996)

Dividend Paid (43,892,988) (26,885,366)

NET CASH FROM FINANCING ACTIVITIES 101,606,168 (36,465,362)

NET INCREASE IN CASH AND CASH EQUIVALENT (A+B+C) (108,872,122) 45,298,511

CASH AND CASH EQUIVALENT AS AT BEGINNING OF THE YEAR 231,629,939 186,331,428

CASH AND CASH EQUIVALENT AS AT THE END OF THE YEAR 122,757,817 231,629,939

Notes to the Cash Flow Statement for the year ended 31st March 2011

1. Previous year’s figures have been regrouped wherever necessary to conform to this year’s classification.

CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 31.03.2011


NOTICE IS HEREBY GIVEN THAT the Twentieth AnnualGeneral Meeting of the members of AccentiaTechnologies Limited will be held on Wednesday, 21stday of December, 2011 at Hotel The Park Navi Mumbai,No. 1, Sector 10, CBD Belapur, Navi Mumbai, Maharashtra-400614 at 10.30 A.M. to transact the following business:

ORDINARY BUSINESS

1. To receive and consider and adopt the AuditedBalance Sheet as at 31st March 2011, the Profit andLoss Account for the period ended on that date andthe Directors’ Report and Auditors’ Report thereon.

2. To appoint a Director in place of Mr. GhanshyamKrishna Misra, who retires by rotation at the TwentiethAnnual General Meeting and being eligible, offershimself for re-appointment.

3. To appoint a Director in place of Mr. Ravi Sankar, whoretires by rotation at the Twentieth Annual GeneralMeeting and being eligible, offers him for re-appointment.

4. To appoint Statutory Auditors from the conclusion ofthe Twentieth Annual General Meeting to theconclusion of the Twenty First Annual General Meetingon a remuneration to be fixed by the Board ofDirectors. The retiring auditors of the Company, M/s.DMKH & Co, Chartered Accountants who are eligiblefor re-appointment have expressed their willingnessto continue in office.

SPECIAL BUSINESS

Item No. 5. Appointment of Mr. Kezer AbbasKharawala as Director of the Company

To consider and, if thought fit, to pass with or withoutmodification, the following resolution as an OrdinaryResolution

"RESOLVED THAT pursuant to the provisions of Section255 and other applicable provisions of the CompaniesAct, 1956 and the relevant clauses of Articles ofAssociation, Mr. Kezer Abbas Kharawala who wasappointed as an Additional Director of the Company bythe Board of Directors on 12th November 2010 and whoceases to hold office on the date of this Annual GeneralMeeting as per section 260 of the Companies Act, 1956

NOTICE OF ANNUAL GENERAL MEETING

be and is hereby appointed as a Director of the Companywhose office shall be liable to retire by rotation.”

Item No. 6. Further Issue of Shares

To consider and, if thought fit, to pass with or withoutmodification, the following resolution as SpecialResolution

“RESOLVED THAT in accordance with the provisions ofSection 81(1A) of the Companies Act, 1956( includingany statutory modification(s) or re-enactment thereof forthe time being in force) and relevant provisions of theMemorandum and Articles of Association of company,The Foreign Exchange Management Act, 1999 and theIssue of Foreign Currency Convertible Bonds, GlobalDepository Receipts and Ordinary shares ( throughDepository Receipts Mechanism) Scheme 1993,Guidelines prescribed by the Securities and ExchangeBoard of India (SEBI) and subject to such approval(s),consent(s), permission and/or sanction of theGovernment of India, Reserve Bank of India and any otherappropriate authorities, institutions or bodies as may benecessary and subject to such terms and conditions,modifications and alterations, as may be prescribed andspecified by any of them in granting such approval,consent, permission or sanction, the consent, authorityand approval of the company be and is hereby accordedto the Board of Directors ( hereinafter referred to as theBoard which term shall deemed to include anyCommittee thereof ) to offer, issue and allot, in the courseof offers, in domestic and/or one or more foreign marketsany securities including Equity shares, Global DepositoryReceipts and/or American Depository Receipts, ForeignCurrency Convertible Bonds, Convertible Bonds, Euro-convertible Bonds/Shares/Debentures, Preference shareswhether Cumulative/Redeemable/Partly Convertible/convertible at the option of the company and/or at theoption of the holders of the Security(ies), Securities partlyor fully convertible into Equity shares and/or securitieslinked to Equity shares and/or any instruments orsecurities with or without detachable warrants, securedor unsecured or such other types of securitiesrepresenting either Equity shares or ConvertibleSecurities (hereinafter referred to as “Securities”) toCompanies in the process of acquiring companies eitherby way of swap of equity shares or by way of cashpayments, or a mix of both swap and cash, to Foreign/


Domestic Investors, Non Residents, Foreign InstitutionalInvestors/Foreign Companies/NRIs/Foreign National(s)/Banks/Mutual Funds/Financial Institutions or such otherentities or persons as may be decided by the Board,whether or not such persons/entities/investors areMembers of the company, through Prospectus, OffersLetter, Circular to the general public and/or through anyother mode or on private placement basis as the casemay be from time to time in one or more trenches asmay be deemed appropriate by the Board on such termsand conditions as the Board may in its absolute discretiondeem fit for the unissued portion of the capital of theCompany, including green shoe option on such termsand conditions, as the Board may in its sole discretiondecided including pricing, the form and the persons towhom such securities may be issued and all other termsand conditions and matters connected therewith.

RESOVLED FURTHER THAT without prejudice to thegenerality of the above, the aforesaid issue of theSecurities may have all or any term or combination ofterms in accordance with normal practice including butnot limited to conditions in relation to payment ofinterest, dividend, premium or redemption or earlyredemption at the option of the company and/or of theholder(s) of the Securities and other debt service paymentwhatsoever and all such terms as are provided in theoffers of this nature including terms for Issue of additionalEquity shares, variation of interest payment, variation ofthe price or period of conversion of securities into Equityshares, Issue of equity shares on Swap Basis for theacquisition of company/companies whether wholly orpartly in whatever manner whatsoever equation the saidacquisition may be worked out whether partly/fullytransacted by way of swap of shares and/or cash payableor issue of equity shares during the duration of thesecurities of terms pertaining to voting rights or optionfor early redemption of securities.

RESOLVED FURTHER THAT the Board be and is herebyauthorized to issue and allot such number of equity sharesas may be required to be issued and allotted uponconversion of any such securities referred to above or asmy be in accordance with the terms of the offer(s) andthat the said equity shares shall be subject to theMemorandum and Articles of Association of the companyand shall rank in all respects pari passu with the existingequity shares of the company.

RESOLVED FURTHER THAT such of these securities to beissued as are not subscribed may be disposed of by theBoard to such person(s)/entity(s) in such manner and onsuch terms as the Board in its absolute discretion thinksfit, in the best interest of the company and as ispermissible in law.

RESOLVED FURTHER THAT the company may enter intoany arrangement with any agency or body for issue ofDepository Receipts representing underlying Equityshares/Preference shares/GDRs and other securitiesissued by the company in registered or bearer form withsuch features and attributes as are prevalent ininternational capital markets for instruments of this natureand to provide for the tradability or free transferabilitythereof as per the international practices and regulationsand under the forms and practices prevalent.

RESOLVED FURTHER THAT the securities issued in Foreignmarkets shall be deemed to have been made abroad and/or in the market and/or at the place of issue of thesecurities in the international market and may begoverned by applicable foreign laws.

RESOLVED FURTHER THAT for the purpose of giving effectto any issue or allotment of securities or instrumentsrepresenting the same, the Board be and is herebyauthorized to determine the forms, terms and timings ofthe offer(s) including the class of investors to whom thesecurities are to be allotted, number of securities to beallotted in such tranches, issue price, face value, premiumamount and on issue/conversion of securities, Exerciseof Warrants/redemption of securities, rate of interest,redemption period, listings on one or more stockexchanges as the Board in its absolute discretion deemsfit and to make and accept any modification in theproposal as may be required by the authorities involvedin such issues and on behalf of the company to do allsuch acts, deeds, matters and things as it may at itsdiscretion deem necessary or desirable for such purpose,including without limitation, the Appointment ofRegistrar, Book-runner, Lead Managers, Trustees/Agents,Bankers, Global coordinators, Custodians,/Depositories,Consultants, Solicitors, Accountants and entering intoarrangements for underwriting, marketing, listing,trading, depository and such other arrangements andagreements as may be necessary and to issue any offerdocument(s) and sign all deed, documents and to pay


and remunerate all agencies/intermediaries by way ofcommission, brokerage, fees, charges, out of pocketexpenses and the like as may be involved or connectedin such offers of securities of securities and also to seeklisting of the securities or securities representing thesame in any Indian and/or in one or more internationalstock exchanges with power on behalf of the companyto settle any questions, difficulties or doubts that mayarise in regard to any issue, offer or allotment of securitiesand in complying with any regulations as it may in itsabsolute discretion deem fit without being required toseek any further clarification, consent or approval of themembers or otherwise to the end and intent that themembers shall be deemed to have given their approvalthereto expressed by the authority of this resolution.

RESOLVED FURTHER THAT the Board be and is herebyauthorized to delegate all or any of the powers hereinconferred to any Committee of Directors or CompanySecretary/Compliance Officer or any other Officer orOfficers of the Company to give effect to the aforesaidresolution.

Item No. 7. Increase in the Authorized Share Capitalof the Company

To consider and if thought fit to pass with or withoutmodification(s) the following resolution as an ORDINARYRESOLUTION:

“RESOLVED THAT pursuant to the provisions of section94, 97 and other applicable provisions of the CompaniesAct, 1956, the Authorized Share Capital of the Companybe increased from Rs. 200,000,000/- (Rupees TwentyCrore only) consisting of 20,000,000 (Two crore) equityshares of Rs.10/- each to Rs.250,000,000/- (RupeesTwenty Five Crore only) consisting of 25,000,000 (TwoCrore Fifty Lakhs) equity shares of Rs.10/- each, newshares ranking Pari Passu with the existing shares of theCompany.”

“RESOLVED FURTHER THAT the Clause V of theMemorandum of Association of the Company shall bealtered and following clause shall be substituted in placeof the existing one as follows:

V. The Authorized Share Capital of the Company isRs.250,000,000/- (Rupees Twenty Five Crore only)

consisting of 25,000,000 (Two Crore Fifty Lakhs)equity shares of Rs.10/- each (Rupees Ten only) eachwith power to increase, reduce or reorganize theshare capital in accordance with the provisions ofthe Companies Act, 1956.”

Item No. 8. Re-appointment of Mr. PradeepViswambharan Suseela as Managing Director of theCompany


“RESOLVED THAT pursuant to the provisions of section198, 269, 309, 310, 311 and all other applicableprovisions, if any, read with Schedule XIII of theCompanies Act, 1956 including any statutorymodifications or re-enactments thereof, for the timebeing in force, Mr. Pradeep Viswambharan Suseela beand is hereby re-appointed as the Managing Director ofthe Company for a further period of 5 years with effectfrom 21st December, 2011 on existing terms andconditions agreed between him and the Board ofDirectors of the Company.”

Item No. 9. Re-appointment of Mr. Sooraj C.K asWhole-time Director of the Company


“RESOLVED THAT pursuant to the provisions of section198, 269, 309, 310, 311 and all other applicableprovisions, if any, read with Schedule XIII of theCompanies Act, 1956 including any statutorymodifications or re-enactments thereof, for the timebeing in force, Mr. Sooraj C.K be and is hereby re-appointed as the Whole-time Director of the Companyfor a further period of 5 years with effect from 21stDecember, 2011 on existing terms and conditions agreedbetween him and the Board of Directors of the Company.”

For and on behalf of the BoardAccentia Technologies Limited

Mumbai Pradeep Viswambharan26.11.2011 Managing Director & CEO


Notes

1. A member entitled to attend and vote at the meetingis entitled to appoint a proxy to attend and vote on apoll instead of himself and the proxy need not be amember of the Company. For appointing the proxythe enclosed proxy form duly filled, stamped andsigned must be deposited at the Registered Officeof the Company not less than 48 hours before thecommencement of the meeting.

2. Members/Proxies should bring the Attendance Slipsent here with, duly filled in and signed and handover the same at the entrance of the hall forattending the meeting.

3. Relevancy of question and the order of speakers willbe decided by the Chairman. Members are requestedto forward in writing to the Company any question onthe Accounts, so as to reach the Registered Office one

week before the date of the Annual General Meeting.

4. The Register of Members and the Transfer Books ofthe company will remain closed from 15.12.2011 to21.12.2011 ( both days inclusive)

5. The copies of the relevant registers can be inspectedat the Registered Office of the Company on anyworking day between 11.00 am and 1.00 pm

6. Members whose shareholding is in the electronicmode are requested to intimate the change in addressand updation of bank account details to theirrespective Depository Participants

7. The Company’s shares are presently listed at BombayStock Exchange.

8. Explanatory Statement pursuant to Sec. 173(2) of theCompanies Act, 1956 is annexed hereto.


Item No. 5. Reappointment of Mr. Kezer AbbasKharawala as Director of the Company

Mr. Kezer Abbas Kharawala was inducted into the Boardof the Company as an Additional Director at the Boardmeeting held on 12th November 2010 and as perprovisions of Section 260 of the Companies Act, 1956the additional directors shall hold office only up to thedate of the next Annual General Meeting of the Company.The office of Mr. Kezer Abbas Kharawala will beautomatically vacated on the date of this Annual GeneralMeeting pursuant to provisions of the Act and theCompany has received a notice under section 257 of theAct proposing Mr. Kezer Abbas Kharawala as a candidatefor the office of Director of the Company. After qualifyingin B Com and LL M from Mumbai University, Kezer is apracticing lawyer in Mumbai, specialised in CorporateLaw. He has over 10 years experience and is on panelwith various Nationalised Banks and Financial Institutionshandling their various matters including due diligences,legal reports & documentations. He is also a memberand legal consultant to Small Investors Redressal Forum.Hence the resolution and your directors recommendappointment of Mr. Kezer Abbas Kharawala as a Directorof the Company.

None of the Directors except Mr. Kezer Abbas Kharawalais interested in the resolution.

Item No. 6. Further Issue of shares

The company is envisaging a rational fund raisingprogram along with augmenting the present and futureworking capital needs and also keeping in view futureacquisitions in near future which might be way of swapof shares or by way of cash payment or a mix of bothswap and/or cash payment. The fund raising programwould be through a mix of debt/equity relatedinstruments, as may be appropriate, which would beworked out in consultation with Advisors, Lead Managers,and other intermediate agencies. The fund raisingprogram is subject to the approval of Government of India,Reserve Bank of India, Securities and Exchange Board ofIndia and other authorities wherever applicable. It isproposed to issue appropriate securities for the balanceof the unissued capital of the company in such form andon such terms and conditions and in such manner, at

such prices or prices, at such time as may be consideredappropriate by the Board of Directors to the variouscategories of investors in the domestic/internationalmarkets as set out in the resolution.

Section 81 (1A) of the Companies Act, 1956, requiresthat approval of members of the company by way ofspecial resolution is required for further issue of equityshares or any other instrument being a potential equityshare. Accordingly, item no.6 deals with the requisiteapproval under Section 81 (1A) of the Companies Act,1956. Your direc tors recommend the proposedresolution in Item no. 6 to be passed as a specialresolution.

Disclosure as required under SEBI (Guidelines ofPreferential Issue) under SEBI (Issue of Capital andDisclosure Requirements.) Regulations, 2009 are asunder:

a) Objects of the Issue

To finance the expansion plans and meeting theworking capital requirements of the company

b) Intention of Promoter to subscribe to theoffer.

The promoters and persons acting in concert ifany are participating in the preferential issue.

c) Shareholding Pattern before and after thepreferential allotment

The shareholding pattern after the present issuewill undergo change, which will result in theincrease in the shareholding of the Directors,shareholders, relatives, friends and associatesby the percentage of newly allotted shares.

d) Proposed time within which allotment maybe completed

The present allotment as proposed under specialresolution of the notice will be completed withina period of 12 months from the date of passingthe special resolution or such other time as maybe prescribed under SEBI’s Guidelines onPreferential Issues.

EXPLANATORY STATEMENT PURSUANT TO SECTION 173(2) OF THE COMPANIES ACT, 1956


e) Identity of allottees with percentage ofexpanded capital to be held by them

Section 81 of the Companies Act, 1956 providesinter alia, that when it is proposed to increasethe issued capital of the company by allotmentof further shares etc. such further shares will beoffered to the existing shareholders of theCompany in the manner laid down in Section 81unless the shareholders in general meetingdecided otherwise by passing a special resolution.Hence consent of shareholders by way of specialresolution is being sought pursuant to theprovisions of Section 81 and all other applicableprovisions of the Companies Act, 1956 and interms of the provisions of the SEBI (Issue of Capitaland Disclosure Requirement) Regulations, 2009Guidelines and the listing agreement executedby the Company with the Stock Exchange wherethe Company’s shares are listed.

f) Change in Management

The proposed allotment will not result in anychange in management and control of thecompany. Voting rights shall change according tothe change in shareholding pattern.

g) Pricing

The price will be determined in compliance withthe SEBI Guidelines for Preferential Issues.

h) Relevant date

The relevant date for this purpose is 21stDecember, 2011, i.e. 30 days prior to the date ofthe meeting of the members of the Company.

i) Auditor’s Certificate

A copy of the certificate of the Auditors of thecompany certifying the adherence to SEBI’sGuidelines for Preferential Issues, to the SEBI(Issue of Capital and Disclosure Requirement)Regulations 2009 by the proposed issue shall belaid before the shareholders at the ensuingAnnual General Meeting.

j) Lock in

The equity shares to be allotted to all applicants

stated above on preferential basis shall be lockedin for a period of three years from the date ofallotment as per SEBI (Issue of Capital andDisclosure) Regulations 2009. In terms of theprovisions of the Companies Act, 1956 consentof the members is required for issue of equityshares to persons other than the existingmembers. Hence consent is sought u/s 81(1A)of the Companies Act, 1956 for the offer issueand allotment of the said shares, as stated in theresolution. The Board may be authorized to issuethe equity shares in accordance with the termsof offer, as detailed in the resolution and to takeall necessary actions without any limitation forimplementing the resolution.

The Board recommends the resolution forapproval of the shareholders.

None of the Directors are interested/concernedin the resolution.

Item No. 7. Increase in the Authorized Share Capitalof the Company

The Authorized Share Capital of the Company presentlystands at Rs. 200,000,000/- (Twenty Crore Only) dividedinto 20,000,000 (Two Crore) equity shares of Rs.10/-each. In order to improve the Company’s businessactivities and to increase the net owned funds of theCompany, it is considered necessary to increase theAuthorized Share Capital of the Company from200,000,000/- (Twenty Crore Only) to Rs.250,000,000/- (Rupees Twenty Five Crore only) consisting of25,000,000 (Two Crore Fifty Lakhs) equity shares ofRs.10/- each by creation of additional 5,000,000 (FiftyLakhs) equity shares of Rs. 10/- each which will rankpari passu in all respects with the existing equity sharesin the Company. The proposed increase of theauthorized share capital of the Company requires theapproval of the members in a general meeting by wayof an ordinary resolution. Consequent to the proposedincrease of the authorized share capital of the Company,its Memorandum require alteration so as to reflect theenhancement of capital, hence the resolution asrecommended by the board.

None of the Directors is interested or concerned in theproposed resolution.

Item No. 8. Re -appointment of Mr. PradeepViswambharan Suseela as Managing Director of theCompany

The Board meeting held on 26th November, 2011,considered the fact that the term of appointment of Mr.Pradeep Viswambharan Suseela as Managing Director ofthe Company will expire on 18th April, 2012. The Boardconsidered and taken on record the valuablecontributions made by Mr. Pradeep towards the growthof the Company and the Board was unanimous in theopinion that he may be reappointed as the ManagingDirector of the Company for a further period of 5 yearson the existing terms and conditions agreed betweenhim and the Company. However as per section 269 andother applicable provisions of the Act, appointment of aManaging Director have to be approved by the membersat their General Meeting, hence the resolution.

None of the Directors except Mr. Pradeep ViswambharanSuseela is interested in the resolution and your Board ofDirectors recommend the same to be passed as anordinary resolution.

The terms of appointment of Mr. Pradeep ViswambharanSuseela as stated in this notice may be treated as theabstract under section 302 of the Companies Act, 1956.

Item No. 9. Re-appointment of Mr. Sooraj C.K. asWhole-time Director of the Company

The Board meeting held on 26th November, 2011,considered the fact that the term of appointment of Mr.Sooraj .C.K as Whole- time Director of the Company will

expire on 18th April, 2012. The Board considered andtaken on record the valuable contributions made by Mr.Sooraj towards the growth of the Company and the Boardwas unanimous in the opinion that he may bereappointed as the Whole- time Director of the Companyfor a further period of 5 years on the existing terms andconditions agreed between him and the Company.However as per section 269 and other applicableprovisions of the Act, appointment of a Whole-timeDirector have to be approved by the members at theirGeneral Meeting, hence the resolution.

None of the Directors except Mr. Sooraj C. K. is interestedin the resolution and your Board of Directors recommendsthe same to be passed as an ordinary resolution.

The terms of appointment of Mr. Sooraj C. K. as stated inthis notice may be treated as the abstract under section302 of the Companies Act, 1956.

For and on behalf of the BoardAccentia Technologies Limited

Mumbai Pradeep Viswambharan26.11.2011 Managing Director & CEO

ACCENTIA TECHNOLOGIES LIMITEDRegistered office:

D-207, Second Floor, International Infotech Centre, Belapur Railway Station, Sector II, CBD Belapur, Navi Mumbai, Mumbai 400 614

PROXY FORMTwentieth Annual General Meeting - 21st December, 2011

Regd. Folio No/ DP Client ID: _______________________________

I / We ___________________________________________________________, of ______________________________in the district

of ___________________________ being a member / member(s) of the Company, hereby appoint _________________of

_______________________ in the district of __________________ or failing him/ her __________________ of __________________in

the district of _______________________________ as my / our proxy to vote for me / us on my/ our behalf at the Twentieth

Annual General Meeting of the Company to be held at Hotel The Park Navi Mumbai, No 1, Sector 10, CBD Belapur, Navi Mumbai

400 614, Maharashtra, India at 10.30 A.M on Wednesday, December 21, 2011 and at any adjournment(s) thereof.

Signed this ……………day of…………….., 2011

SIGNATURE________________________________

Note :

A member entitled to attend and vote at the meeting is entitled to appoint a proxy to attend and vote instead of himself and the proxy need notbe a member of the Company. If used, it should be returned to the Registered Office of the Company duly completed not later than forty-eighthours before commencing the meeting.

ACCENTIA TECHNOLOGIES LIMITEDRegistered office:

D-207, Second Floor, International Infotech Centre, Belapur Railway Station Complex, CBD Belapur, Navi Mumbai, Mumbai 400 614

ATTENDANCE SLIP

Twentieth Annual General Meeting - 21st December, 2011

Regd. Folio No/ DP Client ID: ___________________________________

No. of shares held ___________________________________________

I certify that I am a member / proxy for the member of the Company.

I hereby record my presence at the Twentieth Annual General Meeting of the Company to be held at Hotel The Park Navi Mumbai,No 1, Sector 10, CBD Belapur, Navi Mumbai 400 614, Maharashtra, India at 10.30 A.M on Wednesday, December 21, 2011.

_______________________________ _____________________________

Name of the member / proxy Signature of the member/ proxy(in BLOCK letters)

Note: please fill up this attendance slip and hand it over at the entrance of the meeting hall. Members are requested to bring their copy of theAnnual Report to the meeting.

✄

Affix Re.1

Revenue

Stamp

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