Teledata Informatics

The directors have pleasure in presenting the Seventeenth annual
 report of the company along with the audited statement of Accounts for
 the period ended March 31, 2008. The Report also includes the
 Management Discussion and Analysis Report in accordance with the
 Guidelines on Corporate Governance. The financial year has witnessed
 identification of potential revenue generating projects for the company
 in diverse arenas.
 
 Financial Performance (on consolidated basis) Rs in Crores
 
 Particulars                                 Year ended      year ended
                                        31st March 2008 31st March 2007
 
 Income from operations                        6576.05        3135.57
 
 Other income                                    59.74          19.57
 
 Total Revenue                                 6635.79        3155.14
 
 Total expenditure before Interest 6 
 Depreciation                                  6246.12        2707.17
 
 Operating profit/Loss PBIDT                    389.67         447.97
 
 Interest                                        45.12          30.85
 
 Depreciation / Amortization                     13.84          34.88
 
 Profit before tax                              330.71         382.24
 
 Provision for tax                               40.93          23.23
 
 Profit after tax (PAT)                         289.78         359.01
 
 Add: Expenditure transferred to CWIP             0.09           0.78
 
 surplus brought forward                        209.72         226.10
 
 Profit / (Loss) available for appropriation    499.59         544.24
 
 Dividend                                          -            (2.01)
 
 Transfer to general reserve on Demerger           -          (286.77)
 
 Transfer to general reserve
 
 Minority Interest                             (29.55)         (45.74)
 
 Cost of Control                                   -              -
 
 Dividend on Equity shares subsidiary              -              -
 
 Balance carried to Balance sheet              470.04          209.72
 
 SCHEME OF ARRANGEMENT
 
 MARINE DIVISION AND TECHNOLOGY DIVISION HIVED OFF AS SEPARATE ENTITIES
 
 The Honourable High Court of Madras, Chennai vide its order dt
 12.10.2007 has sanctioned the composite scheme of Arrangement between
 Teledata Informatics Ltd and Teledata Marine solutions Ltd and Teledata
 Technology Solutions Ltd and Sirius Shipping Company
 Limited.Accordingly, Marine Division and Technology Division were hived
 off into Teledata Marine Solutions Ltd and Teledata Technology
 Solutions Ltd respectively.
 
 Lines of business in post demerger scenario:
 
 1. Software Solutions & Services
 
 Teledata Informatics Ltd has started to provide software solutions and
 services for Education, Utility/Energy verticals for over a decade.
 Based on customers requirements and feed back, Teledata team could
 improve and add on more features and developed robust ERP software
 products in these verticals. Continuous R&D work on real time
 applications, helps to improve the usability of these added features.  
 
 a.Education: Teledatas domestic focuses on education projects to state
 governments & e-Governance software to schools, colleges, universities
 and education departments at district and state levels. The company has
 exclusively developed software for this purpose and provides extensive
 e-Governance support to the administration.
 
 The software solutions offered in the education vertical consists of:
 
 i. Formal Education
 
 ii. Continuing Education
 
 b.  Utility: Teledata has targeted this vertical as one of the key
 areas of growth in our Utilities division, which provides software
 solutions to Power Generation, Electric and Gas Distribution companies.
 In addition, the company is working towards establishing itself in the
 alternate energy sources segment by owning and operating windmills.
 
 c. Others: Teledata works on industry and serviceable to convert their
 business processes into valuable business processess. Other than
 Education and Utility, we manage pioneering software solutions and
 services across industries such as,
 
 i. Contraktsoft
 
 ii. Fuel Station Manager
 
 iii. Platform for Fin. Exchange
 
 2.  Networking & Communication
 
 Teledata has a long history of significant contributions in the field
 of communications and networking. Its current and past research
 activities explore wide-ranging issues in optical networking, wireless
 networking, routing, QoS and policy networking, network control and
 management, and network security.
 
 Directors Comments on Auditors Qualification.
 
 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 referred to in sub-section (3C) of Section 211 of the
 Companies Act, 1956 except for non compliance 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 Institute of Chartered Accountants of India.
 
 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.
 
 2.  We draw attention to Notes No. 20 of Schedule Q on booking of
 revenue on sale of products to marketing agents. Though the amounts are
 received in the normal course of the business, the quantification and
 evaluation of amount lying unsold cannot be determined.
 
 DC:The Company has agreement with marketing agents in various countries
 through whom products are sold. As there has been no sales return in
 past years, the revenue is normally recognised by the Company on sale
 of products to marketing companies and this policy is being followed by
 the company consistently over past years which is in tune with the
 agreement entered into by the Company with respective parties.
 
 3.  We are unable to comment on the ultimate realisability of
 investments amounting to Rs 110.33 Crore in Rainforest trading Limited
 and amount advanced to Baytech Inc BVl of Rs 126.13 Crore in the
 absence of audited financials for last two years of their ultimate
 subsidiaiy Esys Technologies Pte Limited which is the substance of the
 said investments/advances as referred in Note no. 14 (a) of Schedule
 Q.
 
 DC:The Board of directors are of the opinion that the investments in
 Rainforest trading Limited and amount advanced to Baytech Inc BVI of Rs
 126.13 Crore are realizable. The company would take necessary steps to
 get the audited reports of eSys Technologies Pvt Ltd , Singapore
 immediately.
 
 4) We draw attention to :
 
 i) Note no. 17 of Schedule Q  wherein debtors amounting to Rs 451.97
 crores which are outstanding for considerable period of time as on the
 date of this report are considered good and recoverable.
 
 DC:The Board of Directors are also of the opinion that they are good
 and recoverable.
 
 5.  i)NoteNo 19 of Schedule Q  regarding sales done during the year
 with respect to which the bank guarantees amounting to Rs 253.89 crores
 from its customers have been revoked subsequent to the close of the
 year with regard to which no provision or adjustment has been made as
 the same considered good and recoverable in the opinion of management
 
 We are unable to express an opinion on the ultimate realisability of
 the said amounts.  DC:The Board of Directors are of the opinion that
 they are good and recoverable and they are taking necessary steps to
 recover the amounts from the customers.
 
 6.  Subject to the comments made in paragraph 5 above and the effect in
 respect of which on the profit and loss account of the Company for the
 period under consideration is not ascertainable, in our opinion and to
 the best of our information and according to the explanations given to
 us, the said accounts read together with the notes thereon and in
 particular Note no. 9 of Schedule Q on business of demerged companies
 being carried out in the overseas branches till the end of the year,
 Note no. 16 of Schedule Qon confirmation of balances from parties,
 Note no.21(b) of Schedule Qon valuation of p/antations, give a true
 and fair view in conformity with the accounting principles generally
 accepted in India :-
 
 DC:The Company has allotted 1,77,00,000 Equity shares equivalent to
 value of property purchased by the Company as per valuation report
 given by the approved valuer. Further the company has duly complied
 with necessary provisions of the Companies Act 1956 with regard to said
 allotment.
 
 The company is in the process of opening a separate branch for Teledata
 Marine Solutions Ltd, Chennai in both the places and necessary steps
 are being initiated.
 
 7.  In our opinion and according to the information and explanations
 given to us. there are adequate internal control system commensurate
 with the size of the Company and the nature of the business, with
 regard to purchase of fixed assets except in case of the 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.
 
 Directors Comments on the Qualifications made by Auditors in their
 report on Consolidated Financial Statements of the company
 
 1.  We report that certain subsidiaries as disclosed in Note no. 4(b)
 of Schedule Q have been consolidated on the basis of unaudited
 financial statements which reflect total assets (net) of Rs. 2203.13
 Crore as at March 31st, 2008, total revenues of Rs. 5318.93 Crore and
 profit (net of losses) after tax of Rs. 40.10 Crore for the year ended
 on that date. The financial statements of these subsidiaries have been
 certified by the Management and have been furnished to us, and in our
 opinion, in so far as it relates to the amounts included in respect of
 the subsidiaries are based solely on certified unaudited financial
 statements. We have relied on management certifications for elimination
 of inter company transactions of the group in the absence of any
 confirmation from the directors/auditors of group companies.
 
 DC: The board of Directors of the Company felt that as financial year
 of subsidiaries are not in coincidence with the financial of the parent
 Company, the parent company is not in a position of giving consolidated
 audited financial statement and such accounting treatment are in
 agreement with provisions of the Companies Act 1956. However the
 Company is taking necessary steps to bring uniformity in the financial
 year of all companies.
 
 2.  We report that the Group has not consolidated the results of an
 Subsidiary company i.e., PT Teledata Energy Services Ltd., Indonesia in
 accordance with AS 21 on Consolidated Financials Statements [Refer
 Note no.2(i) of Schedule QJ in the absence of any financials to this
 effect. Effectively the profit and loss account and balance sheet is
 understated to the extent of financials of the subsidiary;
 
 DC: The company was incorporated only during the year and full year has
 not been completed. Hence Board of Directors are of the opinion that
 financials of PT Teledata Energy Services Ltd., Indonesia can be
 prepared during the year 2008-09. The board of Directors are also of
 the opinion that it will not materially affect the financials of the
 company on a consolidated basis.
 
 3.  We draw attention to Note no. 19 of Schedule Q on booking of
 revenue on sale of products to marketing agents by the Parent Company.
 Though the amounts are received in the normal course of the business,
 the quantification and evaluation of amount lying unsold cannot be
 determined.
 
 DC: The Company has agreement with marketing agents in various
 countries through whom products are sold. As there has been no sales
 return in past years, the revenue is normally recognised by the Company
 on sale of products to marketing companies and this policy is being
 followed by the company consistently over past years which is in tune
 with the agreement entered into by the Company with respective parties.
 
 4.  We are unable to comment on the ultimate realisability of
 investments made by the Parent Company amounting to Rs 110.33 Crore in
 Rainforest trading Limited and amount advanced to Baytech Inc BV1 of Rs
 126.13 Crore in the absence of audited financials for last two years of
 their ultimate subsidiary Esys Technologies Pte Limited which is the
 substance of the said investments/advances as referred in Note no. 14
 (a) of Schedule Q  whose financials have been considered for
 consolidated results.
 
 DC: The Board of directors are of the opinion that the investments in
 Rainforest trading Limited and amount advanced to Baytech Inc BVI of Rs
 126.13 Crore are realizable. The company would take necessary steps to
 get the audited reports of eSys Technologies Pvt Ltd , Singapore
 immediately.
 
 We draw attention to :
 
 5. i) Noteno. 16 of Schedule Q  wherein debtors amounting to Rs
 451.97 crores which are outstanding for considerable period of lime as
 on the date of this report are considered good and recoverable.
 
 DC: The Board of Directors are also of the opinion that they are good
 and recoverable.
 
 ii) NoteNo 18 of Schedule  Q regarding sales done during the year
 with respect to which the bank guarantees amounting to Rs 253.89 crores
 from its customers have been revoked subsequent to the close of the
 year in with regard to which no provision or adjustment has been made
 as the same considered good and recoverable in the opinion of
 management.
 
 We are unable to express an opinion on the ultimate realisability of
 the said amounts.
 
 DC:The Board of Directors are of the opinion that they are good and
 recoverable and they are taking necessary steps to recover the amounts
 from the customers.
 
 6.  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 Institute of Chartered Accountants of India.
 
 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.
 
 7.  Based on our audit and on consideration of reports of other
 auditors on separate financial statements and on the other financial
 components and Management certified financial statements of
 subsidiaries mentioned above, and to the best of our information and
 according to the explanations given to us, subject to the comments made
 in paragraphs 3,4,5,6,7.8 &9 above, we are of the opinion that, the
 attached group financial statements read together with the notes
 thereon and in particular Note no. 2 (It) on Valuation of investments
 of Rs 245.22 crores, and Note no. 20 of Schedule Qon valuation of
 plantations, give a true and fair view in conformity with the
 accounting principles generally accepted in India :-
 
 DC:The Company has allotted 1,77,00,000 Equity shares equivalent to
 value of property purchased by the Company as per valuation report
 given by the approved valuer. Further the company has duly complied
 with necessary provisions of the Companies Act 1956 with regard to said
 allotment.
 
 The Board of directors are of the opinion that the investments are
 realizable.