Teledata Marine Solutions Ltd Directors Report

TELEDATA MARINE SOLUTIONS LIMITED ANNUAL REPORT 2009-2010 DIRECTORS REPORT To The Members Teledata Marine Solutions Ltd. Chennai 600042 Your Directors have pleasure in presenting the Fourth Annual Report of the company along with the Audited statement of Accounts for the year ended March 31,2010. The financial performance of the Company for the year ended 31st March 2010 is highlighted below: (Rs. in lacs) Particulars Period Ended Period Ended 31st March,2010 31st March,2009 Income 21014.98 50506.90 Total Revenue 21014.98 50506.90 Total Expenditure 22704.92 48470.71 Operating Profit/(Loss) PBIDT (1689.94) 2036.99 Interest 1107.73 1298.9 Depreciation/Amortization 4.58 23.14 Profit Before Tax (PBT) (1694.52) 714.15 Provision forTax - 33.36 Profit after Tax(PAT) (1694.52) 680.80 Your Directors are confident that the company can earn profits in the forthcoming years. REVIEW OF OPERATIONS: The Company total turnover aggregated to Rs. 21014.98 lacs for the period under review as against Rs. 50,506.90 lacs during the year2008-09 In view of global recession and gloom in the markets coupled with the ongoing crisis in shipping markets, the Company performance has not been to its expectations during the period under review. But, to our relief the markets show some sign of improvement and stability during the year under review. Your Directors are confident that the Company will be able to revive in the forthcoming years. * TMSLs products division spearheaded by Ship Manager TM our industry leading ship-board and enterprise management solution did take a beating over the recent market downturn. We took the opportunity to revamp the software technologically and a new version of the product. ShipManager 7.0 is now introduced in the market. * TMSLs Transport Manager (TM) product suite is not performing up to expectations. The root cause of the woes of TM appears to be the on-going struggles of the logistics market. We expect to keep a watchful eye on this market and decide on a course of action for improving the performance of our Transport Manager suite. DIRECTORS: During the year, Mr Swapan Das Sarma and Mr Nishit Kapoor, Directors, who retire by rotation and being eligible, offer themselves for re-appointment. During the year, Mr Himanshu Joshi who was associated with the Company as a Director, resigned from the services of the Company during September,2009. The Board accords its deep appreciation for his services. SUBSIDIARY OPERATIONS: The Company has applied for exemption from the Central Government under Section 212(8) of the Companies Act, 1956 with regard to attaching the Balance Sheet, Profit and loss account, and other documents of the subsidiaries for the financial year 2009-10 The summary of the key financials of the companys subsidiaries is included in this Annual Report. * TMSLs Bangkok, Thailand based Navakun fleet is continuing to do well. We have replaced one of the aging vessels and continuing to manage the remaining fleet profitably. * TMSLs Mongla, Bangladesh based LPG terminal has been brought into operation. Dredging of the terminal has just been completed and we have entered into a contract to operate the terminal. Moving forward, our Bangladesh operations are expected to operate profitably. * TMSLs US-Based Oil Pollution Compliance Services business, ECM Maritime Services, continues to outperform its peers. We currently service nearly 4,000 vessels visiting the USA for compliance with the Oil Pollution Act of 1990 and subsequent environmental mandatory compliance laws which were passed in the U S. * TMSL continues to be a market leader in the maritime education and training market. Our partnerships with many of the leading maritime education institutions continue to be in place and these relationships have blossomed into better operational synergies between the marine academies and TMSL. We recently launched our Holistic Maritime Training (HMT) platform. We are expecting to take this vision forward and capture a larger market share of the training market. STATUS OF LISTING OF SHARES: The Company after obtaining in-principle approval from Bombay Stock Exchange and National Stock Exchange and further published the statutory advertisement as per Clause 8.3.5.4 of SEBI (DIP) Guidelines 2000 and the Company is taking effective steps in listing 9,08,34,540 equity shares with stock exchanges. DIRECTORS RESPONSIBILITY STATEMENT: In accordance with the provisions of Section 217(2AA) of the Companies Act, 1956, your Directors confirm:- That in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures, That the Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent, so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period. That the Directors had taken proper and sufficient care for the maintenance of adequate accounting records, in accordance with the provisions of this Act, for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities, and That the Directors had prepared the annual accounts on a going concern basis. DIVIDEND: The Board has decided not to declare dividend for the financial year ended 31st March 2010. FIXED DEPOSITS: Your Company has not accepted any fixed deposits during the year under review. PARTICULARS OF EMPLOYEES: None of the employees of the Company are falling under the information to be furnished under section 217 (2A) of the Companies Act 1956. AUDITORS: The auditors M/s. Lodha&Co, Chartered Accountants, ChesneyTown House, 28 (Old 72-0) Ethiraj Salai, Egmore, Chennai-600008 retire at the forthcoming Annual General Meeting and being eligible offer themselves for re- appointment. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO: The Company being in the business of manning and maintenance of offshore vessels, the provisions of Section 217(1) (e) read with the (Disclosures of particulars in report of Board of Directors) rules, 1988 is not applicable. Nevertheless, a separate report is annexed to the Directors Report stating the requisite particulars. DECLARATION REGARDING COMPLIANCE BY BOARD MEMBERS AND SENIOR MANAGEMENT PERSONNEL WITH THE CODE OF CONDUCT: This is to confirm that the Company has adopted a Code of Conduct for its employees including the Managing Director and Non Executive Directors. In addition, the Code of Conduct is also applicable to senior management personnel ie Members of the Management one level below the Executive Directors with effect from 11th April 2008. ACKNOWLEDGEMENTS: The Board of Directors takes this opportunity to express its sincere appreciation for the continued support and confidence received from Bankers, Customers, Suppliers, Distributors, Shareholders and other business associates. Your Directors place on record their deep appreciation of the dedicated efforts of the Employees at all levels and look forward to even further significant contributions in future as well. Your Directors look forward to the future with confidence For and on behalf of the Board of Directors Place: Chennai Sd/- Date : 30/08/2010 K Padmanabhan Managing Director ADDENDUM TO DIRECTORS REPORT Directors comments on the qualifications made by auditors in their report on standalone financial statements of the company. 1. 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 subsection (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). DC: The Company would be complying with the provisions of Accounting Standard 15 - Employee Benefits (revised 2005) with regard to disclosures and valuation in the coming years. Directors comments on the qualifications made by auditors in their report on consolidated financial statements of the company * We are unable to comment on the ultimate readability by Parent Company of investments amounting to Rs. 34.83 lakhs (P.Y. Rs. 34.83 Lakhs) in the absence of audited / unaudited financials for last three years which is the substance of the said investments as referred in Note no. 10(a) of schedule Q DC: The Board of directors are of the opinion that the investments in Teledata Marine Systems Pte Ltd Singapore of Rs 34.83 Lakhs are realizable 2. The Group has not complied in respect of prescribed method of valuation of employee benefits and required disclosures in accordance with Accounting Standard 15 - Employee Benefits (revised 2005), issued by the Central Government U/S211(c)of the Companies Act 1956 DC: The Company would be complying with the provisions of Accounting Standard 15 - Employee Benefits (revised 2005) with regard to disclosures and valuation in the comingyears. ANNEXURE TO DIRECTORS REPORT A) Conservation of Energy: The major operations of your Company are not energy intensive. The Company has, however taken adequate measures to conserve energy consumption by using efficient computer terminals and building management systems. The impact of these efforts has enhanced energy efficiency. As energy cost forms a very small part of total expenses, the financial impact of these measures is not material and not measured. B) Technology Absorption, Adaptation and Innovation: The Companys business demands constant absorption of and adaptation to changing technologies to stay competitive in the rapidly changing world. i) The Company uses latest technologies for improving the productivity and continues to keep its thrust in modern technology applications. ii) Benefits derived as a result of the above efforts The technology infrastructure has remained state-of-the-art and the Company is able to provide highly productive work environment to its employees. This has resulted in world-class product development and product improvement. C) Foreign Exchange Earnings and Outgo: Your Company is making continuous efforts to explore new foreign markets and increase its share in the market for export of software. The details of foreign exchange earned and the outgo, is as under: (Rs. in lacs) Particulars As on 31.03.2010 Foreign Exchange Earnings 13711.41 Foreign Exchange Outgo 1970.24 D) Particulars of Employees: None of the employees were receiving more than Rs.2,00,000/- a month. On behalf of the Board of Teledata Marine Solutions Ltd K Padmanabhan N Sakthivel Managing Director Director Place: Chennai Date : 30/08/2010 MANAGEMENT DISCUSSION, ANALYSIS AND 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.