Teledata Marine Solutions Ltd Auditor Reports

TELEDATA MARINE SOLUTIONS LIMITED ANNUAL REPORT 2009-2010 AUDITORS REPORT TO THE MEMBERS TELEDATA MARINE SOLUTIONS LTD Chennai 1. We have audited the attached Balance Sheet of TELEDATA MARINE SOLUTIONS LTD as at 31 st March 2010 and the Profit and Loss Account for the year ended on that date and also the Cash Flow Statement for the year ended on that date annexed thereto, in which are included the returns of the foreign offices at USA and Dubai, which are audited by another firm of Chartered Accountants. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit. 2. We have conducted our audit in accordance with the auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. 3. Attention is invited to the following: 3.1 Investments in Teledata SBC Logistics and Solutions Ltd (formerly SBC Data Ireland) of 100 equity shares amounting to Rs.76.31 Lakhs and Al Nahda Forwarding and Clearing Company LLC of Rs.967.44 Lakhs representing 95% of the Equity Shares of AED 1000 has been written of because of consistent non performance by the subsidiaries. (Ref note No. 10(a) of Schedule-Q) 3.2 We are unable to comment on the ultimate realisability of investments amounting to Rs 34.83. lakhs in the absence of audited/unaudited financials for the last three years which is the substance of the said investments as referred to in Note no 10(b) of Schedule Q. 3.3 Bank has not charged any Interest relating to the period from Sep-09 to March-2010 subsequent to the advances being classified as NPA .Hence the same has not been accounted in the books of account. (Ref note No.3 of Schedule-Q) 3.4 Some of the Fixed Deposits and Current Account which are held in the name of Sirius Shipping Company Ltd. are yet to be changed into the resulting Companys name. (Ref Note No. 11 (a) of Schedule-Q) Subject to the above: 4. We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit; 5. In our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of those books and proper returns adequate for the purpose of our audit have been received in respect of offices not visited by us and the report of the foreign office auditors have been considered by us in preparation of the report 6. In our opinion, the Balance Sheet, Profit and Loss account and Cash Flow Statement dealt with by this report comply with the accounting standards issued by the Institute of Chartered Accountants of India referred to in sub section (3C) of section 211 of the Act, to the extent applicable except for non compliance in respect of the prescribed method of valuation of employee benefits and required disclosures in accordance with the Accounting Standard on Employee benefits(AS-15). 7. On the basis of written representations received from directors as on March 31, 2009 and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31 st March, 2009 from being appointed as a director of the Company in terms of clause (g) of sub- section (1) of Section 274 of the Act. 8. In our opinion and to the best of our information and according to the explanations given to us, the said accounts read together with Significant Accounting Policies contingent liabilities and Notes to Accounts appearing in Schedule Q and subject to Para 3 mentioned above, give the information required by the Act, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India: i) In the case of the Balance Sheet, of the state of affairs of the Company as at 31st March 2010; ii) in the case of the Profit and Loss Account, of the PROFIT of the Company for the year ended on that date; iii) in the case of the Cash Flow Statement, of the Cash Flows for the year ended on that date. 9. As required by the Companies [Auditors Report] Order 2003 and other amendments to the order, issued by the Central Government in terms of Section 227(4A) of the Companies Act, 1956 and on the basis of such checks as we considered appropriate and information and explanations given to us, we further report that: (I)(a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets. (b) We were informed that the physical verification of assets was carried out during the year, and no material discrepancies between book records and physical inventory have been noticed on such verification and in our opinion the frequency of verification is reasonable. (ii) In our opinion, the company does not have any inventories and as such the clauses relating to inventory, valuation etc., under the Order is not applicable (iii) According to the information and explanations given to us, the company has granted interest free unsecured loans to 3 parties covered in the register maintained u/s 301 of the Companies Act, 1956. The maximum balance outstanding during the year including those given during the year is Rs 8183.18 lakhs and the balance as at the year end is Rs 7311.03 lakhs. (iv) As explained by the management, the terms and conditions of the above are not prejudicial to the interests of the company (v) The principal amount has not fallen due and the same is repayable on demand (vi) According to the information and explanations given to us, the company has taken interest free unsecured loan from two parties in the register maintained u/s 301 of the companies Act, 1956.The maximum balance outstanding during the year was Rs.25,692.77 Lakhs and the year end balance of the loans was Rs.22754.56 Lakhs. (vii) In our opinion and according to the information and explanations given to us, and having regard to the explanations that purchases of certain items of contents and consumables for projects are for the companys specialized requirements for which suitable alternative sources are not available to obtain comparable quotations, there is an adequate internal control systems commensurate with the size of the company and nature of its business with regard to purchases of contents through approval by the technical committee and with regard to sale of services. During the year, the management has taken steps to strengthen certain weakness in general controls in technical department to make this commensurate with the size and nature of the business. In our opinion, there is not continuing failure to correct the major weakness in the internal control systems except in case of sale of goods and services, wherein the company does not keep the details of the end users of the software licenses sold through the agents. (viii) The transactions made in pursuance of contracts or arrangements entered into the register maintained in pursuance of Section 301 of the Act and exceeding the value of Rupees five lakhs in respect of any party during the year, which have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time (ix) According to the information and explanations given to us, contracts or arrangements that are required to be referred to in Section 301 of the Act, have been entered in the register maintained under that Section. (x) In our opinion and according to the information and explanations given to us, the Company has not accepted any public deposits under the provisions of the Section 58A and 58AA of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975. (xi) In our opinion, the Company has an internal audit system commensurate with the size of the Company and nature of its business. (xii) The Company is regular in depositing with the appropriate authorities the undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, State Insurance, Income tax, Sales tax, Wealth tax, Service tax, Custom Duty, Excise Duty, Cess and other material statutory dues applicable to it. There are no undisputed amounts payable in respect of the aforesaid statutory dues were outstanding as at the last day of the financial year for a period of more than six months from the date they became payable. (xiii) According to the records of the Company, there are no dues in respect of Sales tax, Income tax, Customs duty, Wealth tax, Service tax, Excise duty, Cess which have not been deposited on account of any dispute (xiv) The Company does not have any accumulated losses as at 31 -03-2009 and has not incurred cash losses both in the current financial yearas well as in the immediately preceding financial year. (xv) The Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities (xvi) In our opinion, the Company is not a chit fund or a nidhi/ mutual benefit fund/ society. Therefore, the provisions of clause 4(xiii) of the Companies (Auditors Report) Order, 2003 are not applicable to the Company. (xvii) ln our opinion and according to the information and explanations given to us, the company is not dealing or trading in shares, securities, debentures and other securities. The Investments shown in the accounts are held in the name of the company except in the case of certain foreign subsidiaries in respect of which we are unable to comment whether the same is in the name of the company in the absence of share certificates as referred in note no 11 C (xviii) According to the information and explanations given to us, the Company has given corporate guarantee to bank on behalf of associate company for loans taken by them from banks, the terms and conditions of which are not prejudicial to the interest of the company (xix) According to the information and explanations given to us, the company has not borrowed any term loans from any bank or financial institution except working capital demand loan, which has been used for the purpose for which the same has been taken during the year (xx) On the basis of the overall examination of the Balance Sheet of the Company, in our opinion, there are no funds raised on short term basis which have been used for long term investments. (xxi) According to the information and explanations given to us, the Company has not made any preferential allotment of shares to parties and companies covered in the register maintained under Section 301 of the Act. (xxii) The Central Government has not prescribed maintenance of cost records under Section 209(1 )(d) of the Act for the company (xxiii) According to the information and explanations given to us, the Company has not issued any debentures and hence the question of creating the security does not arise. (xiv) According to the information and explanations given to us, the Company has not raised any money through public issues. (xv) During the course of our examination of the books and records of the Company, carried out in accordance with generally accepted auditing practices and according to the information and explanations given to us, we have neither come across any fraud on or by the Company nor have we been informed of any such case by the management. For LODHA & COMPANY Chartered Accountants FRN:301051E -sd- G. SUB RAMAN IASARMA Partner, [M. No 21756] Chennai, 30.08.2010