Teledata Marine Solutions Ltd Management Discussions

TELEDATA MARINE SOLUTIONS LIMITED ANNUAL REPORT 2009-2010 MANAGEMENT DISCUSSION AND ANALYSIS REVIEW A. INDUSTRY STRUCTURE AND DEVELOPMENT: The Companys lines of business include the following, -Maritime Enterprise Products and IT Solutions -Maritime Education & E Learning -Maritime Services The Company presently has a line of products including Ship Manager, a comprehensive Ship Software which is installed on board across the vessels in the globe. Your company is also engaged in conducting Marine E learning courses and has tied up with many notable institutes in United Kingdom, Malaysia, Singapore etc Under the impact of global recession, Maritime Services is the worst affected one. Current scenario gives a gloomy picture of the Shipping and Marine sector. Statistics reveals that the shipping industry in general is expected to remain negative for the next 6 months. The shipping industry can be generally classified into wet bulk, dry bulk and liners. The negative outlook applies to all three sectors: dry bulk, tankers and liners. The Companys subsidiary Navakun Transport Company owns 5 Ipg carriers in the coast of Thailand and operates within the territorial waters of Thailand. Your company also has investments in ECM Maritime LLC, a US based company engaged in the business of oil pollution compliance certification in US and Teledata Marine Solutions Ltd, Bangladesh which owns a LPG terminal, refilling and distribution plant in the port of Mongla. B. THREATS, RISKS AND CONCERNS: Amongst the cyclical industries, the shipping industry is considered to be most cyclical with shortest buoyancy and longest recessionary periods. This is reflected in volatile freight rates. Thus, aligning with the international trends, the shipping industry in India is also exposed to perceived risks of decline in charter/freight rates from time to time. Shipping Industry being highly capital intensive, there is no assurance that additional resources would be available when needed. The Company in its endeavor to minimize the risks associated with its type of business is employing competent team of professionals and is focused towards implementation of modern maritime practices. In order to mitigate the risks the Company proposes to take various steps to limit the various factors that emanate risks. These include: - Insurance - Proper credit check of the client portfolio - Ajudicious mix of time and voyage charters to hedge spurt in the freight rates. -Supporting customers, growth and competitiveness -Engaging in long term charter hires C. SEGMENT WISE PERFORMANCE: The Company operates in the following segments viz Maritime Enterprise Products and IT Solutions, Maritime Education & E Learning and Maritime Services. Under Maritime Services, Pollution Compliance, Freight Forwarding and LPG Transportation are included. D. OUTLOOK: It is expected that despite the recessionary trends, the world Shipping industry is poised for growth after achieving breakeven and will register grown after financial year 2011-12. Your Company, with some inherent advantages such as low operational costs and committed professional manpower is expected to cash on the opportunities provided. E. DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE: Despite the constraints your company had to face during financial year 2009-10, its performance has been at par. F. QUALITY & SAFETY: Your company firmly believes that pursuit of excellence is one of the critical components for competitive success in the global market. Your Directors take pleasure in informing you that your company continues to have the prestigious ISO 9001-2000 Certification and is on continuous journey towards continual improvement to make its Quality Management System more effective. G. HUMAN RESOURCES: The Company considers its employees as partners in growth. They have played a significant role and enabled the Company to deliver year after year. H. ADEQUACY OF INTERNAL CONTROLS: The Company has adequate and effective internal control systems commensurate with the size of its operations. The internal control system provides for well-documented policies, guidelines, authorizations and approval procedures and ensures optimal use of resources at its disposal. Internal audit is being carried out extensively throughout the year in areas such as Income, Expenditure, Financial Accounting and Statutory Compliances. The primary objective of such audit is to test the adequacy and effectiveness of all internal controls laid down by the Management and to suggest improvements. I. CAUTIONARY STATEMENT: Statements in the Management Discussion and Analysis describing the Companys strategies on business, projections and estimates are forward looking statements. The actual results may vary from those expressed or implied, depending upon economic conditions, Government policies, regulations, tax laws and other incidental factors.