ontrack systems limitedontrack systems limited ( in million) financial highlights particulars...

ONTRACK SYSTEMS LIMITED( in million)

FINANCIAL HIGHLIGHTS

Particulars 2010-2011 2009-2010 2008–2009

Export Sales 96.66 84.52 147.84

Domestic Sales 522.70 271.31 94.09

Other Income 3.51 2.88 11.26

Total Revenue 622.87 358.71 253.19

Operating Profit (EBITDA) 61.23 40.42 (37.30)

Finance Expenses 19.90 23.46 18.00

Profit / (Loss) on sale of Assets 0.07 — 0.38

Preliminary & Deferred Rev. Exp. W/O 0.28 0.28 0.28

Depreciation & Impairment Loss 7.50 12.90 18.99

Income Tax (Net) 1.97 2.12 0.78

Net Income/(Loss) after tax 31.65 1.66 (74.97)

Face Value per equity share 10/- 10/- 10/-

EPS-after tax (Rs.) 1.95 0.18 (9.43)

Dividend (%) Nil Nil Nil

Operating Income/(Loss) as % to Total Revenue (%) 9.83 11.27 (14.73)

Share Capital 193.42 91.42 79.50

Reserves & Surplus 86.77 66.37 54.46

Fixed Assets (Gross Block) 146.40 142.30 141.10

1

Turnover Operating Profit

( in million)

2008-09 2009-10 2010-11

400

350

300

250

200

150

100

50

0

- 50

Gross Block Net Block

( in million)

2008-09 2010-2011

180

160

140

120

100

80

60

40

20

0

(37.30)

253.19

358.71

40.42

141.10

93.90

142.30

82.21

622.87

61.23

450

500

550

600

2009-10

146.40

79.53

Dear shareholders,

In the backdrop of global financial turmoil, increasing financial costs and fierce

competition in all markets, your company has managed to post consolidated revenues

of 643.87 million and a PAT of 21.62 million. We now have a decent order book

position of over Rs. 100 crores and we are now preparing to rejig our operations to

make it more profitable.

Our overseas operations in 2010-11 remained challenging and we started focussing

on the Indian Market opportunities specially in e-Governance projects and in the opportunities in the MSME (Micro, Small and Medium

Enterprises ) segment.

People and talent continue to be the mainstay of our business. Our employees have shown tremendous commitment to our customers

and the company. I am glad to share that some of our high performance ex-employees have expressed interest in rejoining the

company. The company is actively engaged in developing teams for implementing eGovernance projects like Aadhaar and we are

preparing to make our presence felt across the rural areas of Eastern India in the first phase. You may recall that your company was one

of the pioneers in computerisation of electoral rolls and in generation of Voters Identity Card in the state of West Bengal and we are once

again building our teams for the UIDAI (Unique Identification Authority of India ) project of the Government of India.

In order to create industry ready professionals who can be employed in our complex and diverse projects, your company had

sponsored “First Job College” last year, to create a new breed of first time job seekers. First Job College is offering BBA and BCA degree

courses in arrangement with a leading government university. The second batch of students will commence their program from

September 2011 and we now have a Management team who are working extensively in realising the unique approach of the college

in empowering students and making a mark in the fiercely competitive education space.

M/s. R. P. Infosystems Private Limited, manufacturers of the Chirag Brand of PCs were inducted as a co-promoter in the company last

year. The Management of both the companies are engaged in nur turing the partnership and we are working towards enhancing share

holder value significantly.

I take this opportunity to thank our members, directors, customers, vendors, employees, partners, bankers, advisers, government

agencies and all our well wishers for their continued support. I look forward to your continued guidance and support in the years to

come.

With warm regards,

B. Hari

Chairman & Managing Director

Date: 28th July, 2011

Kolkata, India.

2

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Winning Business Solutions

ONTRACK SYSTEMS LIMITEDONTRACK SYSTEMS LIMITED

Operating Groups,Subsidiaries and

Associate Companies

3

Enterprise Solutions Group

Service & Support Division

tendertimes.com

ERP School

IndiaOneStop.com

FirstJob College Ontrack Systems (UAE) Ltd.*

Ontrack Systems (UK) Ltd.*

Ontrack Systems (Aus.) Pty. Ltd.*

Ontrack Global Services Ltd.*

Ontrack Systems BV., Netherlands**

Comunet Info systems (P) Ltd.**

ONTRACK SYSTEMS LIMITED

* 100% Subsidiary** Associate Company

4 ONTRACK SYSTEMS LIMITED

Ontrack Systems (UK) Ltd., UKOntrack Systems (UAE) Ltd., UAEOntrack Global Services Ltd., INDIAOntrack Systems (Aust.) Pty. Ltd.

Ontrack Systems BV., NETHERLANDSComunet Info systems (P) Ltd.FirstJob College*

ORGANISATIONAL STRUCTURE

Enterprise Solutions Group tendertimes.com IndiaOneStop.com

CHENNAI Registered Office

KOLKATA Corporate Office Global Delivery Centre

* Sponsored by Ontrack

SHAREHOLDERS

BOARD OF DIRECTORS

MANAGEMENT TEAM

ONTRACK GROUP AUDITORS

SUBSIDIARIES

OFFICES IN INDIAOPERATING GROUPS

ASSOCIATE COMPANIES

C M D & J t. M D

BOARD OF DIRECTORS

B. HariChairman & Managing Director

Vijay Kumar ChhinkwaniIndependent Director

AUDITORS

M/s. Goenka Shaw & Co., India

HAMT & Associates, UAE

H. Kroeze, Holland

Indian Bank, India

Axis Bank, India

HSBC Bank, UK & UAE

State Bank of India, India

ANZ Grindlays, Australia

Rabobank, Holland

BANKERS

LEGAL ADVISORS

Bidyut Kumar Banerjee, India

5ONTRACK SYSTEMS LIMITED

S. V. RamaniWhole-time Director & Secretary

Ramdevan V KrishnaswamyIndependent Director

Kaustuv RayJt. Managing Director

Robin GhoshIndependent Director



To focus on meeting requirements of the small

and mid size organizations in the various

eastern geographies and cater to its needs

through it ver ticalized approach. Focussing on

Telemarketing Campaigns and Road-shows

with a view to penetrating companies in verticals

that include Multilevel Marketing, Die Casting

Industry, IT Trading and Distribution, Tenancy

Management and Retail. Awareness campaigns

in Tier-II and III towns in Eastern and Central

Zone and small enterprises and helping them

grow through IT solutions.

All hardware procurement and installation

including maintenance were executed by

Service and Support Division.

The major breakthrough in orders include FSNL

– 100 User SAP Business One implementation

in India and into Government Segment; the

largest for SAP in India till date.

50 user MSD implementation at Bhutan Ferro

Alloys Limited; first customer in Bhutan for

Microsoft India followed by SKW (Tashi Group);

A back to back order with BFAL for MSD.

For an upcoming MLM company – a 100 user

NAV implementation contract; one of the largest

installations in Eastern India where industry-

ready MLM solution was delivered within record

25 days. SAP Business One implementation at

Saha Steel, a leading distributor TISCO also

completed in time.

Five new clients for ERP andConsulting

Focus on end-to-end ITconsulting and solutions

Enabling Governmententerprises for ERP readiness

FSNL - Largest SAP B1implementation in India

Entry and footprint in Bhutanmarket

Prospecting new markets:Delhi, Mumbai, Hyderabad &Overseas

Our focus on Enterprise wide solutions and the

off-shore on-site services for the overseas

market has already received good response from

customers. With the global recession behind

us, the IT market in both domestic and export

markets is surely showing signs of improvement.

With appointment of exclusive Sales Head to

Outlook for fiscal 2010-11

Highlights Strategy and Direction Review of Activities

address the International market our enterprise

and outsourced IT solutions would be the

thrust areas in addition to ERP. New

oppor tunities for high value business are

opening up due to our expertising end to end

IT consulting service.


O N T R AO N T R AO N T R AO N T R AO N T R A C KC KC KC KC KSYSTEMS (ASYSTEMS (ASYSTEMS (ASYSTEMS (ASYSTEMS (AUSTUSTUSTUSTUST.) PTY.) PTY.) PTY.) PTY.) PTY. L. L. L. L. LTDTDTDTDTD.....

Providing customers with out of the box

solution for Wholesale & Distribution and

Manufacturing Industry Vertical and offering

cost-effective IT solution for SME organization

through offshore-onshore combo model of

Project Development and deployment thereby

enabling SME organizations in cutting down IT

Managed Costs.

End to end Process Consultancy services

helping companies in streamlining business

operations.

Design and development of a B2C website

enabled BCDS to control the distributor and

end customer stock and establish improved

logistics and inventory management. Ontrack

Australia signed up Partnership Agreement with

SAP Australia for selling and implementation of

SAP Business One in various industries vertical

especially in the SMB industry segment.


Focus on offshore-onshorecombo model

Partnership with SAP Australia

SAP implementation at GammaIllumination

Construction of new B2C portalfor BCDS

New IT Managed Servicecontracts signed

Based on the success achieved during the past

year Ontrack Australia portfolio now includes

pre-configured solution for logistics, end to end

single- window service IT consultancy besides

extending SAP R/3 through cost effective SAP

remote support. Business outlook expected to



improve substantially as the GFC pressure has

waned the general market which is gradually

picking up. Most of the SME's who put their

projects on hold have started reviewing and go

for replacing their legacy software.

tendertimesTM

India’s first tender web daily .com

Analyst research has por trayed e-Procurementas an effective method to lower prices paid forgoods and services, reduce administrativecosts, shorten acquisition cycles, increase theuse of preferred suppliers, reduce off-contractspending, and improve inventory management.

e-Procurement is an universally recognized andaccepted method to reduce and manageenterprise costs. The new version of our e-tendering suite ‘Secure-T’ with Pre-tenderingand Post-Tendering modules is already makinginroads into the PSU companies. The cuttingedge service being provided is highly securedfacility and introduction of online end-to-endtender management solution keeping in mindthe market demands for such cost effectivetechnology and transparency in tendering.

The confidence shown by Eastern India basedPSUs in ‘Secure-T’ Tender ManagementSolution our suite on e-procurement with e-auction & e-Reverse auction are now offered toother regions of the country.

Successfully closed new high value annual rate

contract with two Eastern Railway units - DRM

Howrah Division and Construction Division. The

scope includes “Hosting of Tender Notice on

website for the Notice Period and subsequently

hosting of contract documents and supply of

printed version of bound tender documents as

per specification. New agreements signed with

RITES Ltd. and successful completion and

implementation of Tender Management System

at Heavy Engineering Corporation, Ranchi.

The strong order book position should keep

the implementation team busy in customer

service and support both on-site and back

office. With all-round enquiries on e-Tendering

solutions from all parts of the country newer

markets outside Eastern India would be

Highlights Review of ActivitiesStrategy and Direction

Strong Order book position

Renewed contracts with EasternRailway divisions

E-Tendering & E-Disposal projectsat HEC

Annual Contract renewal at RITESLtd.

More clients for TenderManagement Solution


addressed by strengthening marketing and

delivery teams. Implementation of E-tendering

& E-Disposal project at HEC, Ranchi and

renewal of all existing contracts that are in

the pipeline through continual improvement

in account management.


O N T R AO N T R AO N T R AO N T R AO N T R A C KC KC KC KC KSYSTEMS (UAE) LIMITEDSYSTEMS (UAE) LIMITEDSYSTEMS (UAE) LIMITEDSYSTEMS (UAE) LIMITEDSYSTEMS (UAE) LIMITED

The overall IT spends in UAE for the fiscal 2010

– 11, affecting some of the initiatives that were

launched during the year. However, client

retention and renewal of existing contracts

continued. The Google Apps initiative was

started and yielded results, with clients acquired

in UAE and the GCC region. The need to expand

and consider new markets was addressed

through delegation visits to Africa and regional

partnership augmentation. Sales and marketing

initiatives were undertaken in the region through

these partnerships, primarily in Oman.

SMS Xprez continued as a prime product

offering, with new client adapting it for business

purposes. Version updates were released to

cater to growing demands. These minor

updates are in the process of consolidation for

a major release later in the new fiscal.

Government departments and projects were the

main stay for the last fiscal. Ontrack continued

providing technical and infrastructure support

to government entities in Dubai and Abu Dhabi.

Software development projects from private and

government sectors were executed. Support

for software development was provided from

the Global Delivery Centre with the major projects

requiring onsite development and

implementation.

Expansions of markets were targeted through

visits to Nigeria and Kenya. Par tnerships for

project execution and delivery have been

identified and lead generation for promising

projects were under taken through local

partners. Regional partners in Oman and Bahrain

were identified, as well.

The Google Apps initiative started on a positive

note with clients acquired from the GCC

countries.

There is a continuation of what was undertaken

in the last fiscal, across this fiscal. Focus would

be on the following initiatives: -

(1) Expansion to MENA region through

partners. (2) Increased projects from Semi-

Government and Government department with

Highlights Review of ActivitiesStrategy and Direction


Expansion to MENA region

through partners

Increased projects from Semi-Government and Governmentdepartment with emphasis onsoftware development

Increase in Infrastructure supportprojects in UAE

Marketing initiatives to increaseGoogle Apps client base

Hardware offering throughpartners in MENA

emphasis on software development. (3) Increase

in Infrastructure support projects in UAE. (4)

Marketing initiatives to increase Google Apps

client base and (5) Hardware offering through

partners in MENA

ONTRACK SYSTEMS LIMITED 9ONTRACK SYSTEMS LIMITED

O N T R AO N T R AO N T R AO N T R AO N T R A C KC KC KC KC KSYSTEMS (UKSYSTEMS (UKSYSTEMS (UKSYSTEMS (UKSYSTEMS (UK) L IMITED) L IMITED) L IMITED) L IMITED) L IMITED

Ontrack UK is working on two POC which will

be completed in September/October 2011 and

based on the outcome of the POC and approval

by the clients it will then be converted to two

full blown onshore / offshore projects. Ontrack

The UK market is looking at matured companies

with focused offering. The area of Application

Development & Maintenance (ADM) especially

in the mid market is expanding rapidly. We can

see onshore with offshore support activities

have shown significant progress as companies

are seeking price advantage in these trying

times. Ontrack UK bagged a software services

contract with Dresser Inc a GE company for

onsite management of infrastructure support

and other bespoke developments. The final

Market launch of the UK based Pharmacy

chains POS and Web based application for a

chain of single owner pharmacy is ongoing.

This has been developed by Ontrack India

offshore team with support from Ontrack UK.

The UK market continues to struggle and fight-

ing hard to break away from the recession.

Clients are looking at cost saving activities with-

out diluting its performance. Ontrack UK in

spite of the difficult times have been positive in

its approach in looking at partnering compa-

nies to bring to them the offshore advantage of

skills and price advantage. The relationships

grown over the year will make into long term

business partners once the economy gets con-

fident and companies begin to reinvest in its IT

spend.



Fresh contracts signed despite

uncertain market conditions

Projects with Dresser Inc., in UK,

Sweden and Italy

Onsite projects at Manchester

Metropolitan University last 6

years

Software development and

deployment for a UK based

Pharmacy chain.

UK delayed their launching its Microsoft

Dynamics offshore support practice in the UK

due to the slowdown. It is looking into

launching the same in 2011/2012.


TM

.comStop

India, the emerging global super power,

witnessed one of the most significant fiscal

years in FY 2010-11 as one of the highly

attractive foreign trade and investment

destinations in the world. The country had as

much as four global leaders who matter most

in shaping up the future of world economy

visiting India: US President Barack Obama;

French President Nicolas Sarkozy, Chinese

Premier Wen Jiabao and President of the Russian

Federation Dmitry Medvedev.

While the US President assured a win-win

situation ensuring two-way trade traffic, the

Chinese Premier gave serious thoughts to

India’s concern over widening trade deficit

while hinting at his government taking measures

to promote greater Indian exports to China.

Russia signed a Trade and Investment Protocol

to increase bilateral trade to US$ 20 billion by

2015. All aimed at strengthening stronger and

closer trade ties.

As a forward linkage to efforts being made by

the global leaders during their India visit and

the initiatives being taken by the Indian

government, IndiaOneStop will expand its

international coverage, plan interviews with

global trade leaders, international trade bodies

on national, international and regional levels

like ADB, IMF, World Bank, BIMSTEC , SAARC

etc. It would shortly launch an exclusive page

on Sino-Indian trade relations.

IndiaOneStop’s Project Report wing and the

share of Google AdSense in total revenue

earnings is expected to witness significant

growth in business during fiscal 2011-12.


“India – an emerging global

superpower” – World leaders

Global focus on India increases

visitor and user traffic

Records over 4.6 million visitor

traffic monthly from over 80

countries

Google AdSense – steady

growth in revenue

Project Report – more clients

from overseas market

Overseas clients from Germany,

Libya, UAE, Saudi Arabia among

others


Visits of the global leaders have certainly been

the most significant development in India’s

growth and development perspective.

IndiaOneStop.com was keenly watching and

following through this development. To share

what Americans and Indian Americans in the

US are thinking all about India as a trade partner

and their assessment about President Obama’s

maiden India visit ( November 2010)

IndiaOneStop carried an exclusive interview

with US India Business Council (USIBC) Ron

Somers who has hugely praised the

development of Indian economy and immense

potential the country offers to raise trade level

with the US. IndiaOneStop also carried interview,

during President Obama’s India visit, interview

with Sanjay Puri, Chairman of US India Political

Action Committee (USINPAC), the most

powerful lobby of the Indian Americans. These

interviews were carried in the Face2face section.

Steps are being taken to add greater value to

the existing 2500 plus content-rich pages.

During the year under review the portal registered

around 4.5 million hits/ Month from over 80

countries.

indiaNetworking Global Business

One

ONTRACK SYSTEMS LIMITED 11ONTRACK SYSTEMS LIMITED

Comunet Infosystem Pvt. Ltd. (CIPL –www.comunetsystems.com ) an Associatecompany of Ontrack Systems Ltd. is Managedby a group of professionals thriving on the spiritof innovation; it has earned good reputation forproduct innovation, technical exper tise andoperational excellence carving its own niche inthe IT market. CIPL has achieved ISO 9001:2008 certification for design and Developmentof Public Information system.Touch screen information Kiosk was developedas a marketable product through intensive R &D in the initial years. The Product was widelyaccepted and several installations were done indifferent sectors of the market.CIPL has recently developed a multi-transactionKiosk with unique functions like biometricverification, cheque receiving with imaging, andcarrying out manifold transactions. AutomaticTicket Vending Machine is another Productwhich has been successfully launched byComunet. CIPL also plays its role in thecompetitive software development & hardwarebusinesses.

Comunet has set in motion its plan to expand

business operations significantly during the year.

Comunet has also developed a unique multi-

functional transaction Kiosk for a NBFC, with

whom negotiations are in the final stage for

procurement of a sizeable order. Also several


Touch screen ‘Information Kiosk’

enters more sectors

Turnkey engagement

Multi-transaction Kiosk launched

Sales turnover increases 8 -fold

YoY

Received awards from ISBA

and NASSCOM


Some of the customers include Indian Railways,

AMRI Hospital, Saha Institute of Nuclear

Physics, Steel Authority of India, Webel

Electronic Communication Systems, Various

Municipalities, B. M. Birla Heart Research Centre,

NIFT,WBUT, Jindal Steel & Power etc. CIPL has

successfully stepped into new areas and

entered into contract with West Bengal State

Electricity distribution Co. Ltd. to operate and

manage one hundred Automatic Bill Payment

Kiosks of spread across the state.

Apart from manufacturing Touch Screen Kiosks,

CIPL also executes project on turn-key basis.

Day-to-day operations of more than 100

Automatic Bill Payment Kiosks of West Bengal

State Electricity Distribution Co. Ltd. is being

operated and managed.

Comunet received recognition and award from

NASSCOM as one of the emerging companies

in the East and also received an award as one

of the best incubated companies from ISBA

under the category of Inclusive growth.

new products have been developed during the

year which will be launched soon. Comunet is

set to further expand its business by exploring

new areas and consolidating its position in the

existing spheres in the coming year.


Since last 8 years Ontrack has been recruiting

fresh engineering & management graduates..

However the quality and sustainability of

students are not up to the mark. “FirstJob

College” awards BBA & BCA degree through

affiliation with UGC, AICTE & DEC recognised

University named Punjab Technical University,

Jalandhar, under a unique University – Industry

collaborative programme.

This is the 2nd year (academic year 2011-2012)

of operation of FirstJob College. The marketing

objective would be targeted at enhancing

awareness through word of mouth. We expect

increased response from students, parents &

admission consultants. Our main motto is to

get the FirstJob College name familiar among


First year operationsencouraging

Admissions throughPsychometric & Aptitude test

Aggressive marketing for IIndYear through Seminars

Seminars conducted at manyGovt. schools

Construction of newClassrooms, Library


The first year (2010-11) has been challenging

both in terms of administration as well as

grooming of the students. Few 10+2 passed

out students were admitted directly through a

psychometric & aptitude test for the 3 years full

time BBA & BCA courses along with special

corporate training as designed by our experts.

The college made strong marketing activities

by organising seminars at various Central and

State Govt funded higher secondary schools

during the period Oct. to Dec. 2010. These

seminars gave opportunity to directly interact

with students, teachers and in some cases

guardians too.

students, teachers, tutorial homes, consultants

etc. Our admission process will continue till

15th Sept. 2011 and we expect a considerable

number of admissions. We are in the process

of increasing our tie ups with more number of

schools.


DIRECTORS’ REPORT

ONTRACK SYSTEMS LIMITED14

ONTRACK SYSTEMS LIMITED 15

DIRECTORS’ REPORT

RESULTS OF OPERATIONS

The operation of the company significantly improved duringthis year principally due to increase in domestic business.Overseas operation continues to be sluggish except for somemarkets.

Our total revenue increased to 6229.42 Lakhs from 3587.09Lakhs in the previous year at a growth rate of 73.66%.

Profit before tax is 336.16 Lakhs during the year as against 37.80 Lakhs in the previous year.

The Net profit after tax of 316.53 Lakhs as against 16.58Lakhs in the previous year.

PERFORMANCE REVIEW OF BUSINESS UNITS


Enterprise Solutions Group has made significant breakthrough withmajor clients during this year by bagging prestigious orders frompublic and private sectors.

Focussing on Telemarketing Campaigns and Road-shows with a viewto penetrating verticals that include industries in Multilevel Marketing,Die Casting Industry, IT Trading and Distribution, Tenancy Managementand Retail. Awareness campaigns in Tier-II and III towns in Eastern andCentral Zone and small enterprises and helping them grow through ITsolutions.

DIRECTORS’ REPORT

To

The Members of Ontrack Systems LimitedYour Directors are pleased to present the Twentythird Annual Report together with the Audited Statement of Accounts and the Auditor’s Report of yourCompany for the Financial Year ended March 31, 2011. The financial highlights for the year under review are given below:

Amount AmountSl. No. Description for the year ended for the year ended

31.03.2011 31.03.2010

1. Total Income 6193.55 3558.30

2. Total Expenditure 5619.31 3185.733. Profit before interest, depreciation & tax 574.24 372.57

4. Finance Charges 198.96 234.625. Depreciation & impairment loss 74.99 128.94

6. Other income 35.16 28.797. Profit/(Loss) on sale of Assets 0.71 -

8. Profit before tax 336.16 37.809. Provision for tax 36.00 12.00

10. Deferred Tax - Asset (16.37) 9.2211. Profit after tax 316.53 16.58

12. Distributable ProfitAppropriation: –

Transfer to General Reserve - -

( in Lacs)

Tendertimes.comThe company’s offering of Secure ‘T’ tender Management solutionhas been very widely received by the customers. E-procurementswith e-auction and e-reverse auction suits are now being offered toclients on a trial basis. E-procurement has been universally recognizedas a method to reduce and manage enterprise costs.

The company has now embarked on offering on-line end to endtender management solutions keeping in mind the market demandsfor such cost effective technology for transparent tendering process.

Tendertimes will continue to add more value to its brand equity andenjoy its premium and leadership position in the e-tendering domain.

Indiaonestop.com

The revenue from sales of Project Reports maintained a healthy upwardtrend. Overseas clients were added from as far as Germany, Libya,UAE, USA, Egypt, Venezuela, Bahrain, Saudi Arabia and Sri Lanka.Indiaonestop.com is continuing its efforts to strengthen its e-platformin providing more and more valuable and updated information for itsIndian business and industry helping exchange of information, viewsbetween India and other countries. During the year under review theportal registered over 4.7 million visitors monthly from over 90countries.


DIRECTORS’ REPORT

ERP Solutions and Training

ERP implementations were closed on different platform includingSAP B1 with major clients across the country.

MS Dynamics practice has expanded by providing solution to clients’in different geographies.

Subsidiary Companies

UK: The UK market continues to struggle and fighting hard to breakaway from the recession. Clients are looking at cost saving activitieswithout diluting its performance. Ontrack UK in spite of the difficulttimes have been positive in its approach in looking par tneringcompanies to bring to them the offshore advantage of skills and priceadvantage.

The business environment in the entire Europe is very precarious andUK is no exception. The area of Application Development &Maintenance (ADM) especially in the mid market is expanding rapidly.We can see onshore with offshore support activities have shownsignificant progress as companies are seeking price advantages inthese trying times. The final market launch of the UK based Pharmacychains POS and Web based application for the huge chain of singleowner pharmacy is ongoing. This has been developed by Ontrack UKand Ontrack India offshore team.

UAE: The African crisis contributed to a large extent in the poorbusiness environment in Middle East. However, client retention andrenewal of existing contracts continued. The Google Apps initiativewas started and yielded results, with clients acquired in UAE and theGCC region. The need to expand and consider new markets wasaddressed through delegation visits to Africa and regional partnershipaugmentation. Sales and marketing initiatives were undertaken in theregion through these partnerships, primarily in Oman.

Government departments and projects were the main stay for the lastfiscal. Ontrack continued providing technical and infrastructuresupport to Government entities in Dubai and Abu Dhabi.

Software development projects from private and Government sectorswere executed. Support for software development was provided fromthe Global Delivery Centre with the major projects requiring onsitedevelopment and implementation.

Expansions of markets were targeted through visits to Nigeria andKenya. Partnerships for project execution and delivery have beenidentified and lead generation for promising projects were under takenthrough local partners. Regional partners in Oman and Bahrain wereidentified, as well.

Australia: Oz subsidiary signed Partnership agreement with SAPAustralia for selling and implementing SAP Business One in variousindustries vertical especially in the SMB industry segment. The focuswould be offshore- onshore combo model including for getting newIT Managed service contracts.

Business outlook is improved substantially, Australia subsidiaryportfolio now includes pre-configured solutions for logistics, end toend single window, service IT consultancy besides extended SAP R/3 through cost effective SAP remote support.

Associates:First Job College:

The objective of the college is to prepare +2 passed students, industry-ready by imparting hands-on training while enrolling them for full timeBBA & BCA degree course awarded by the UGC recognized StateGovt. University.

The response for enrolment in the academic year 2011-12 has beenvery encouraging. At least 100 students are likely to enroll themselvesfor the course with the college. Adequate infrastructures for bothphysical and training faculty are available in the office. The bestamongst first batch from the college is likely to be absorbed with theCompany.

Comunet Info-systems Pvt. Ltd.

Comunet Info-Systems Pvt. Ltd. has expanded its business operationssignificantly during the year. It has successfully stepped into newareas and got the contract to operate and manage one hundredAutomatic Bill Payment Kiosks of West Bengal State Electricitydistribution Co. Ltd. spread across the state.

The Co. has also developed a unique multi-functional transactionKiosk for a NBFC, with whom negotiations are in the final stage forprocurement of a sizeable order. Also several new products have beendeveloped during the year which will be launched soon.

During the Year the Co. achieved a turnover of 331 Lakh as against 39 Lakh in the previous year. Profit after Tax also increased to 9.83 lakh as compared with 1 lakh in the previous year.

The Co. is set to further expand its business by exploring new areasand consolidating its position in the existing spheres in the comingyear.

Subsidiary companies Consolidated Financial Statement

The Board of Directors by a resolution at the meeting held on30.05.2011 given consent for not attaching the Balance Sheet andFinancial statements in terms of the Central Govt. Ministry of CorporateAffairs Circular No. 2/11 dated 08.02.2011. The consolidatedfinancial statements however have full details of the financial portionof the subsidiaries as per the general approval of the Central Govt.Circular dated 08.02.2011.

Increase in Share CapitalDuring the year under review the equity capital of the company wasaugmented by fresh infusion equity by roping in strategic investorvalued at 10,20,00,000/-

CORPORATE SOCIAL RESPONSIBILITY

The company has taken initiatives in sponsoring building road con-necting two small villages to the nearest Block level offices in the Nadiadistrict of West Bengal. The Company through its Educational Societyproposes to impart skill development to at least 100 students so thatthey are industry ready and employable.

HUMAN RESOURCE DEVELOPMENT

The Company’s recruitment policy ensures suitable candidate withmerit are selected from campus. Your Company constantly strives onimprovement in the project management competency of its associatesand personnel by continuous up gradation of their skills by training anddevelopment. The Company’s expansion globally has resulted in glo-bal cultural integration since the Company employs people from vari-ous foreign countries. The Company’s HR policies and processes arealigned to effectively drive its expanding business and emerging op-portunities. Attrition during the fiscal remained within reasonable pro-portion.

QUALITY

The ISO 9001-2008 certification includes Company’s state-of-the artGlobal Delivery Centre at Salt Lake, Kolkata, Service & Support Division,Human Resource Depar tment, Accounts Depar tmentTendertimes.com, IndiaOneStop.com. Internal audit checks are con-ducted once every quarter for all the units. The software division of theCompany is continuing its efforts to be CMM level 4/5 compliant andto implement ISMS (Information Security Management System) in itssalt lake facility.

CORPORATE GOVERNANCE

The Company has complied with the requirement of Corporate Gover-nance as stipulated under clause 49 of the Equity listing agreementwith the Stock Exchanges and accordingly, the Report on CorporateGovernance forms part of the Annual Report.

The requisite certificate from the Auditors of the Company, M/s. Goenka,Shaw & CO, regarding compliances with the conditions of the Corpo-rate Governance is annexed to this Report as also the ManagementDiscussion and Analysis which is given as Annexure to this Report.

TECHNOLOGY, R & D AND FOREIGN EXCHANGE

The Company operates in various state-of-art technology areas andhas developed the necessary related skills.

The Technology Change Management Group of the Company con-tinuously scans the market for new technologies, design systems andprocesses to induct such new technologies.

The foreign exchange earnings and outgoes for the year ended 31stMarch, 2011

(Amount in ) 2011 2010

Earnings 9,66,58,922 8,45,16,251Outgoes 5,63,101 6,68,763

PERSONNEL

The Par ticulars of Employees, as per Section 217(2A) of TheCompanies Act, 1956 read with The Companies (Par ticulars ofEmployees) Rules, 1975 is Nil.

DIRECTOR’S RESPONSIBILITY STATEMENT

Pursuant to Section 217(2AA) of the companies (Amendment) Act,2000, the Directors confirm that in preparation of the annual accounts,the applicable accounting standards have been followed. Appropriateaccounting policies have been selected and applied consistently andjudgment and estimates made are reasonable and prudent so as togive true and fair view of the affairs of the Company as on 31st March,2011, and of the profit of the Company for the period 1st April 2010 to31st March, 2011. Proper and sufficient care has been taken for themaintenance of adequate accounting records in accordance with theprovisions of the Companies Act, 1956, for safeguarding the assets ofthe Company and for preventing and detecting fraud and other irregu-larities and the annual accounts have been prepared on a going con-cern basis.

FIXED DEPOSITS

The Company has not accepted any fixed deposit during the yearunder review pursuant to Rule – 4A of the Companies (Acceptance ofdeposits) Rules, 1975.

DIRECTORS

In accordance with the requirements of the Companies Act 1956 readwith the provisions of the Articles of Association of the Company, ShriKaustuv Ray has been appointed as Additional Director and desig-nated as Joint Managing Director, who holds the Office till the expiry ofAGM being eligible will be reappointed as Jt. Managing Director atAGM. Robin Ghosh retires by rotation and being eligible offers himselffor re-appointment.

AUDITORS

M/s. Goenka Shaw & Co., Chartered Accountants, the Auditors of theCompany, retire at the ensuing Annual General Meeting and have ex-pressed their willingness to continue till conclusion of next AGM of thecompany, if re-appointed.

ACKNOWLEDGEMENT

Your Directors take this opportunity to thank its customers both inIndia and abroad, investors, business partners, bankers, financial insti-tutions, business associates and advisors for their consistent supportto the Company. Your Directors place on record their appreciation ofthe contributions made by employees at all level through hard work,cooperation and dedication, which has enabled the Company to moveforward. Your Directors once again take this opportunity to thank theGovernments of India, UK, UAE, Holland, Australia & USA for theircooperation and assistance in enabling your Company to enter theglobal marketplace.

For and on behalf of the Board of Directors

Sd/- Sd/-Place : Kolkata, India S. V. Ramani B. HariDate : 30th May 2011 Whole-time Director Chairman and

and Secretary Managing Director


DIRECTORS’ REPORT


MANAGEMENT DISCUSSION AND ANALYSIS


OVERVIEW

ECONOMIC OVERVIEWAs per IMF Global Economic Outlook, December 2010 report, theWorld GDP growth for 2010 is at 5 % principally driven by the emergingEconomic growth. Global spends on IT grew by 4% outpaced byGlobal Sourcing growth of 10%. India share in the Global sourcing is55% in 2010 and IT industry accounts to 26% of the India’s exportsand 11% of services revenue (source: NASSCOM strategic review2011)

INDUSTRY OVERVIEW

IT industry directly employs 2.54 million professionals in at least 4verticals comprising BFSI , Hitech , Telecom , Manufacturing andemerging verticals like Retail , Health Care , Media utilities, transportand Life Science.

Changing economies and business conditions and rapidtechnological innovation are creating an increasingly competitivemarket environment that is driving corporations to transform theirorganizations. Consumers of products and services are increasinglydemanding accelerated delivery times at lower prices. The role oftechnology has evolved from supporting corporation to transformingtheir business. In house IT infrastructure in large Corporate is givingway to independent specialized IT service providers. Outsourcingthe development management and ongoing maintenance oftechnology platform and solutions has become increasingly importantto companies. The effective use of offshore technology servicesoffers a variety of benefits to them including lower cost of ownershipof IT infrastructure, lower labour costs, improved quality andinnovations, faster delivery of solutions and more flexibility inscheduling. Technology companies are recognizing the benefits ofoff shore service providers in software research and developmentand related support function and are outsourcing a great portion ofthese activities.

The companies major offering in the industry are broadly divided intofour groups:

i. Enterprise Solutions Group with expertise in various verticals

helps in creating and delivering customized solution to our

clients due to ever changing technologies.

ii. Web based application through the flagship por tal,

tendertimes.com and IndiaOneStop.com

iii. IT service , support and networking

iv. ERP implementation as Business associate of Microsoft , SAP

and Open Bravo1. Some of the existing software professionals are retained in new

technologies to deliver solutions to the client’s satisfaction. We usein-house tools for project management for software delivery.

2. Tender times.com continues to hold a key portion in the market bygiving solution like reverse auction, e-tendering to major Governmentand Quasi Govt. appearing across the length and breadth of thecountry. IndiaOneStop.com also continues to grow through its onlinebusiness project report across the globe.

3. The Networking and Systems integration verticals have been theCompany’s first unit of business and times to grow significantly. Thedivision has been rendering support to various e-governance withinthe locality in the state of West Bengal apart from continuing to focuson small and medium stage business segment by offering one stopsolution.

4. A Specialized Team delivers ERP solution on various packaged softwareplatform like Microsoft Dynamics, SAP B1 based on the customersrequirement across the country.

FINANCIAL CONDITION

Share Capital:

The Company’s paid up capital increased to 1934.20 Lakhs by theallotment of 90, 00,000 of equity shares on preferential basis to R PInfo-systems (P) Ltd. They were inducted as Co-promoter to theCompany. The existing promoter was also allotted 12, 00,000 equityshares on preferential basis.

Revenue:

The Company earned total revenue of 6229.42 Lakhs In the fiscal2010-11 compared to 3587.09 Lakhs In fiscal 2009-10

Share Premium A/c.

The addition to share premium A/c. was against the allotment of newequity shares amounting to 204.00 Lakhs The present sharepremium A/c. stood at 772.48 Lakhs.

Shareholders Fund:

The total shareholders fund increased to 1934.20 Lakhs as at 31st

March, 2011 as against 914.20 Lakhs in the previous year.

Net Worth : 2,648.21 Lakhs

Application of Fund:

Gross Block : 1,464.04 LakhsAddition : 48.23 Lakhs

Deduction : 7.18 Lakhs

Investments:

Subsidiary : 657.05 Lakhs

Associates : 35.74 Lakhs

Deferred Tax Assets/(Liabilities) : 61.21 Lakhs

Sundry Debtors : 2833.47 Lakhs

Loans & Advances : 760.20 Lakhs

Current Liabilities : 2117.97 Lakhs

Provisions : 10.21 Lakhs

Segment-wise performance:Separately given

Risk & Concerns:

Revenue and expenses are difficult to predict and can vary significantlyfrom period to period. Profit margin may be affected either positively or


negatively as per circumstances. Revenue are dependent on a very smallpool of clients, loss of any one or more client may affect the bottom line.Ability to retain highly paid skilled manpower in a competitive business

environment for a small company like us. Competition from large national

and international companies always with new crop of technologically

superior small & medium size companies would affect new orders book

position.

Risk Management:

The international risk environment continues to be highly volatile. Macro

economic development in the Euro zone led to high volatility in currencies

from which we have major revenue. The Middle East business environment

also remains bleak to the unstable political situation.

At the macro level the Company has devised a mechanism for identification

and prioritization of risks to include risk survey, business risk, introductory

risk, financial risk, scanning and focused on the prospective client’s

business activities.

Identified risks are used as one of the key inputs to the marketing team for

formulating the business development plan.

Outlook:

We seek to fur ther strengthen our presence in both domestic and

international by offering repertoires of service in our basket.

Details outlook for each verticals are separately given under the revised of

operating group.

Human Capital:

The total employees’ strength as on 31st March, 2011 is 220. We expect

to recruit the young trained industry ready students from the First Job

College and also to have a steady pool of nominal personnel for future

business growth to mitigate its problem of attrition. The Company also

imparts in house training programme to upgrade the skill sets of the

existing pool of executive to the new challenges in the technological field.

Quality:

The ISO 9001-2008 certification includes Company’s state-of-the art

Global Delivery Centre at Salt Lake, Kolkata, Enterprise Solutions Group,

Service & Support Division, Human Resource Department, Accounts

Department, Tendertimes.com, IndiaOneStop.com. Internal audit checks

are conducted once every quarter for all the units. The software division

of the Company is continuing its effor ts to be CMM level 4/5 compliant

and to implement ISMS (Information Security Management System) in its

salt lake facility.

Disaster Management & Recovery:

The Company has established an independent data center to mitigate

against any type of disaster against loss of any live data. The Company

has also laid out a disaster recovery and prevention plan. The Company

can replicate and maintain within shortest possible time.



REPORT ON CORPORATE GOVERNANCE


COMPANY’S PHILOSOPHY

Our pursuit to achieve good governance is an ongoing process, thereby ensuring truth, transparency, accountability and responsibility inall our dealings with our employees, shareholders, customers and community at large.

We believe that Corporate Governance is a systemic process by which companies are directed and controlled to enhance their wealthgenerating capacity. The Company believes that the governance process should ensure that management of the company should be insuch manner that meets stakeholders’ aspirations and societal expectations.

We view corporate governance in its widest sense, almost like a trusteeship; it is a policy to be professed, a value to be imbibed and anideology to be ingrained in corporate culture. Corporate governance goes much beyond mere compliance; it is not a simple matter ofcreating checks and balances. The Company aims to develop capabilities and identify opportunity that best serve the goal of valuecreation, thereby creating an outstanding organization.

In so far as compliance with requirements of Clause 49 of the listing Agreement with the Stock Exchanges are concerned, the Company isin full compliance with the norms and disclosures that have to be made on Corporate Governance format.

BOARD OF DIRECTORS

A. Composition

The details of the Board of your Company for the year 2010–2011 are given below :-

Sl. No. Name of Director Category of Directorship Designation

1. Mr. B. Hari Promoter Chairman & Managing Director

2. Mr. Kaustuv Ray Co-Promoter Jt. Managing Director

3. Mr. S. V. Ramani Executive Director Whole-time Director & Secretary

4. Mr. Vijay Kumar Chhinkwani Independent Non-executive Director Director

5. Mr. Robin Ghosh Independent Non-executive Director Director

6. Mr. Ramdevan V Krishnaswamy Independent Non-executive Director Director

Note: Independent Director means a director who, apart from receiving director’s remuneration, does not have any other material pecuniaryor other relationship with the Company, its promoters, its management or its subsidiaries, which in the judgment of the Board may affect theindependence of judgment of Directors.

NO OF BOARD MEETINGS:

Seven Board Meetings were held during the year ended 31st March 2011. The Board Meetings were held on 12th April 2010, 29th May 2010, 21stJuly 2010, 13th August 2010, 25th October 2010 , 3rd November 2010 and 7th February 2011.

B. Attendance at each meeting of the Board

The attendance of the Directors at the Board Meetings held during the year are given below:-

Name of Directors No. of meetings No. of meetings No. of memberships Whether attendedheld during the attended on Board of last AGM

Year during the year other companies

Mr. B. Hari 7 7 7 Yes

Mr. Kaustuv Ray 7 3 13 No

Mr. S. V. Ramani 7 7 2 Yes

Mr. Vijay Kumar Chhinkwani 7 – – No

Mr. Robin Ghosh 7 7 – Yes

Mr. Ramdevan V Krishnaswamy 7 7 – Yes



At the end of the year, none of the Directors were members in more than 5 committees or acted as Chairman of more then 5 such Committees, as requiredunder clause 49 of the Listing agreement.

INFORMATION SUPPLIED TO THE BOARDAmong others, these include the following:Review of annual operating plans of business, capital budgets, updates.

Quarterly results of the Company and its operating divisions or business segments.

Minutes of the meeting of audit committee and other committees.

Information on recruitment and remuneration of Officers just below the Board level.

Materially important show cause, demand, prosecution and penalty notices.

Any materially relevant default in financial obligations to and by the Company and substantial non payment for the goods and services provided by theCompany.

Any issues which involves potential public or product liability claims of a substantial nature.

Details of any Joint ventures or collaboration or acquisition or reconstruction by the Company.

Significant labour problems and their proposed solutions.

Significant development on the human resources and industrial relations front.

Sale or purchase of material nature, of investments, subsidiaries, assets which is not in normal course of business.

Quarterly results of foreign exchange exposure and the steps taken by management to limit the impact of adverse exchange rate movement.

Non compliance of any regulatory or statutory provision or listing requirements as well as shareholder services such as non payment of dividend and delayin share transfer.

The Board of Ontrack Systems is routinely presented with all the information under the above heads whenever applicable or materially significant. These aresubmitted either as part of agenda papers well in advance of the Board meetings or tabled in the course of Board meetings before the appropriate committeesof the Board.

MATERIALLY SIGNIFICANT RELATED PARTY TRANSACTIONSThere have been no materially significant related party transactions, pecuniary transactions or relationships between Ontrack Systems Limited and itsDirectors for the year ended 31st March, 2011 that may have the potential conflict with the interests of the Company at large.All non material related party transactions in the normal course of business and conducted at the arms length are duly recorded in the Register of Contractsmaintained by the Company pursuant to Section 301 of the Companies Act, 1956.COMMITTEES OF THE BOARDAudit Committee

The Audit Committee of the Company performs the following functions:Overseeing the Company’s financial reporting process and disclosure of the financial reports to ensure that the financial statement is correct,sufficient and credible.Recommending the appointment of Statutory auditors of the Company.Constitution and review of internal control and internal audit system.Review of accounting and financial practice.Advice on risk management policies.

COMPOSITION:The Audit Committee comprises of two Independent Non-executive Directors and one Executive Director. All the members including the Chairman haveadequate financial and accounting knowledge. The details of the Audit Committee of your Company for the year 2010–2011 are given below:-

Sl. No. Name of Member Position No. of Meetings held No. of Meetings attendedduring the year during the year

1. Mr. V. K. Chhinkwani Chairman 4 4

2. Mr. S. V. Ramani Member 4 4

3. Mr. Ramdevan V Krishnaswamy Member 4 3

4. Mr. S. Prasad Convenor 4 4

5. Mr. Saroj Swain (Statutory Auditor) Invitee 4 4



Name CategoryNo. of Meetings during

the year 2010-11

Held Attended

Mr. Robin Ghosh Independent, Non executive Director 1 1Mr. S. V. Ramani Whole-time Director 1 1Ms. Simi Hari Head Corporate HR 1 1Mr. Subhamoy Roychoudhury Convenor 1 1

Remuneration Committee

(i) The Company has a full-fledged Remuneration Committee.(ii) The broad terms of reference of the Remuneration Committee are as under:

a) To approve the Annual Remuneration Plan of the Companyb) To approve the remuneration and commission/incentive payable to the Managing Director for each financial year.c) To approve the remuneration and annual performance bonus payable to the Whole-time Director and Chief Financial Officer.d) Such other matters as the Board may from time to time request the Remuneration Committee to examine and recommend/approve.

(iii) The Composition of the Remuneration Committee and the details of meetings attended by the members of the Remuneration Committee are given below

:

(iv) A meeting of the Remuneration Committee was held on 18th Feb 2011.

(v) Remuneration Policy:

The Company’s remuneration policy is driven by performance of the employee and the Company. The Company follows a compensation mix of fixedpay, benefits and variable pay.

The Company pays remuneration by way of salary, benefits, perquisites and allowances (fixed component) to its Managing Director. Annual incre-ments are decided by the Remuneration Committee within the salary scale approved by the Members and are effective from April 1, each year.

The Company provides benefits to the Employees by way of PF, ESI, Gratuity and Mediclaim Insurance.

The Company pays sitting fee of 5000/- per meeting to its Non-executive Directors (NEDs) for attending meetings of the Board and no fees is paidfor attending meetings of other committees.

(vi) Details of Remuneration for the year ended 31st March, 2011

(a) NON EXECUTIVE DIRECTORS:

(b) WHOLE – TIME DIRECTOR:

(c) CHIEF EXECUTIVE OFFICER & MANAGING DIRECTOR

Name Commission ( ) Sitting Fees ( )

Name PF Contribution ( ) Stock OptionsCommission ( )

Name PF Contribution ( ) Stock OptionsCommission ( )

Mr. Ramdevan V Krishnaswamy Nil 15000

Mr. V. K. Chhinkwani Nil Nil

Mr. Robin Ghosh Nil 20000

Mr. B. Hari 2290000 122400 Nil Nil

Mr. S. V. Ramani 1140000 57600 Nil Nil

Remuneration ( )

Remuneration ( )



(d) Period of Contract of MD & CEO: 5 years from 4th February, 2010

(e) Period of Contract of Whole-time Director: 5 Years from 4th February, 2010

(f) Details of the shares of the Company held by Directors as on 31st March, 2011 are given below:

SHARE TRANSFER & SHAREHOLDER GRIEVANCE COMMITTEE

The Shareholder / Investor grievance committee specially looks into redressing of shareholders and Investors’ complaints such as transfer of shares,

non-receipt of shares, non-receipt of declared dividends and to ensure expeditious share transfer process. The committee consists of Mr. Robin

Ghosh (Independent and Non Executive Director), Mr. Vijay Kumar Chhinkwani (Independent and Non Executive Director) and Mr. S. V. Ramani

(Whole time Director & Secretary).

The Shareholders / Investors grievance committee met for 4 times during the year. There is no valid request pending for share transfer as on date of

the Director’s Report.

MANAGEMENT

The Management discussion and analysis Reports is dealt with elsewhere in the Report.

CMD & CFO CERTIFICATION TO THE BOARD

The CMD & CFO have certified to the Board that Financial Statement together with Cash Flow Statement for the year 2010-11 to the best of their

knowledge is true and fair.

Name No .of Shares

Mr. B. Hari 31,59,395

Mr. S.V. Ramani 3,475

Mr. Ramdevan V Krishnaswamy 206160


SHAREHOLDERS’ INFORMATION


GENERAL INFORMATION FOR SHAREHOLDERS

(a) As indicated in the Notice to our Shareholders, the 23rd Annual General Meeting of the Company will be held on Friday the 23rd day ofSeptember 2011 at 11.30 A.M. at Sabha Hall, Savera Hotel, 146, Dr. Radhakrishnan Salai, Mylapore, Chennai, India

(b) The Financial Year of the Company is April to March

(c) Date of book closure: From 13th September, 2011 to 23rd September, 2011 (both days inclusive) for the purpose of the Annual GeneralMeeting.

(d) The Shares of the Company are listed on

(1) Madras Stock Exchange Stock Code No. : OTL

(2) Calcutta Stock Exchange Script Code No. : 10025152

(3) Bombay Stock Exchange Stock Code No : 532607

(e) Share Transfer System: The Share Transfer Committee of the Company meets every Week for approving share transfers. The Transfers arenormally completed within 7 working days from the date of receipt of request.

(f) Demat Depository : NSDL / CSDL : ISIN No. INE 426B01033

(g) Dematerialisation of Shares: The Shares of the Company are compulsorily traded in demat form and are available for trading on both theDepository Systems in India – NSDL (National Securities Depository Limited) and CDSL (Central Depository Services (India) Limited). As

on 31st March, 2011, approximately 90% of shares of the Company has been dematerialized.

(h) Address for correspondence :

(i) Registered Office : Bhatad Towers, Office No.1, Third Floor, No. 30,West Cott Road, Royapettah, Chennai - 600 014Phone: +91-44-42085258,& 28411633

(ii) Compliance Office and : Plot Y-18, EP-Block,Sector-V, Salt Lake, Kolkata – 700 091Secretarial Depar tment Phone: 2357 2555/2560/, Fax : 2357 2564

Email: [email protected]

(iii) Share Registrar and : Cameo Corporate Services Ltd.Transfer Agents Subramanian Building, 1, Club House Road, Chennai – 600 002

Phone: 044-2846 0390–95, Fax : 044 2846 0129Email: [email protected]

DISCLOSUREDisclosure regarding materially significant related party transactions:No transaction of material nature has been entered into by the Company with its Promoters, Directors or the Management, their subsidiaries or relativesetc. that may have potential conflict with the interest of the Company.

DISCLOSURE OF NON–COMPLIANCE BY THE COMPANYThere were no instances of non-compliance or penalty, strictures imposed on the Company by Stock Exchanges or SEBI or any statutory authority on anymatter related to capital markets, during the last three years.

MEANS OF COMMUNICATION

The Quar terly Results of the Company were published during the financial year under review in leading national newspapers namely, The BusinessStandard and The Malaichudar (Chennai Edition) and posted in the website of the Company www.ontrackindia.com.

Management Discussion and Analysis Report forms part of this Annual Report.



PATTERN OF SHARE HOLDINGSAS ON 31ST MARCH, 2011

PHYSICAL & ELECTRONIC

DISTRIBUTION OF SHAREHOLDINGSAS ON 31ST MARCH, 2011

PHYSICAL & ELECTRONIC

Categories of No.of No.of % ofShareholders Shareholders Shares Holding

Resident 2263 2975672 15.3845

NRI 23 73651 0.3808

Body Corporate 124 3479435 17.9890

Promoters 8 12723287 65.7806

Directors / relatives 23 45960 0.2376

Clearing Members 11 43000 0.2223

Trusts 2 1000 0.0052

Total 2454 19342005 100.00

Shareholding of Share Percentage No. PercentageNominal Value of Re. 1 Holders to of of

No. Total Shares Total Shares

(1) (2) (3) (4) (5)

Upto – 100 861 35.0855 44090 0.2279

101 – 500 979 39.8940 251166 1.2985

501 – 1000 255 10.3911 201088 1.0396

1001 – 2000 123 5.0122 182176 0.9418

2001 – 3000 60 2.4449 154673 0.7996

3001 – 4000 39 1.5892 138416 0.7156

4001 – 5000 17 0.6927 81798 0.4229

5001 – 10000 53 2.1597 381120 1.9704

10001 and above 67 2.7302 17907478 92.5833

Total 2454 100.00 19342005 100.00



STOCK MARKET PRICE MOVEMENT

The monthly high and low quotations and volume of shares traded at the Bombay Stock Exchange (BSE) during the financial year 2010-11 (12 months) aregiven in the table below:

CSE

Period High Low Total No. of(Rs.) (Rs.) shares traded

April, 2010 18.25 9.30 11, 15,161

May, 2010 17.55 13.10 2, 02,003

June, 2010 17.30 13.35 1, 96,411

July, 2010 19.51 13.22 2, 40,247

August, 2010 35.25 20.10 12, 80,331

September, 2010 48.50 30.70 11, 53,563

October, 2010 50.15 41.05 6, 48,310

November, 2010 59.85 42.05 6, 88,749

December, 2010 54.90 43.25 1, 42,888

January, 2011 51.00 44.30 1,81,152

February, 2011 49.00 35.10 64,488

March, 2011 43.30 32.35 2,03,195


GENERAL BODY MEETING

(i) GENERAL MEETINGS:

(a) Annual General Meetings:

YEAR LOCATION DATE TIME

2007-2008 New Woodlands Hotel 26th September, 2008 11.30 A.M.Dr. Radhakrishna Road, MyalaporeChennai - 600 017

2008-2009 Narada Gana Sabha Trust 25th September, 2009 11.30 A.M.(Satguru Gana Sabha Hall),314(Old No.254), T.T.K. Road,Chennai - 600018

2009-2010 Hotel Savera 22nd September, 2010 11.30 A.M.146, Dr. Radhakrishnan Salai,Mylapore, Chennai - 600 017

NOMINATION FACILITY

Individual Shareholders can now avail the facility of nomination. The nominee shall be the person in whom all rights of transfer and / or amount payable

in respect of the shares shall vest-in the event of the death of shareholder (s). A minor also can be a nominee provided the name of the guardian is given

in the Nomination Form. The facility of nomination is not available to non-individual shareholders such as bodies corporate, financial institutions, Kartas

of Hindu Undivided Families and holders of Power of Attorney. In case of any assistance, please contact Cameo Corporate Services Ltd., Subramanian

Building, 1, Club House Road, Chennai - 600 001 at the R & TA of the Company.



ANNEXURE TO DIRECTORS’ REPORT

DECLARATION REGARDING COMPLIANCE BY BOARD MEMBERS ANDSENIOR MANAGEMENT PERSONNEL WITH THE COMPANY’S CODE OF CONDUCT

This is to confirm that the Company has adopted a Code of Conduct for its employees including the Managing Director. In addition, the Company has

adopted a Code of Conduct for its Non-Executive Directors. Both these Codes are available on the Company’s web site at www.ontrackindia.com

I confirm that the Company has in respect of the financial year ended March 31, 2011, received from the senior management team of the Company and

the Members of the Board a declaration of compliance with the Code of Conduct as applicable to them.

For the purpose of this declaration, Senior Management Team means the Chief Financial Officer, the Company Secretary and employees in the Vice-

President cadre as on March 31, 2011.

Place : Kolkata B. Hari

Dated : 30.05.2011 Chairman & Managing Director


SECRETARIAL COMPLIANCE CERTIFICATE

AUDITOR’S CERTIFICATE

To the Members of Ontrack Systems Limited.

We have examined the compliance of conditions of corporate governance

by Ontrack Systems Limited for the year ended March 31, 2011, as

stipulated in Clause 49 of the Listing Agreement of the Company with 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 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 GOENKA SHAW & CO.

Chartered Accountants

FR No. 319075E

Sd/-

Kolkata, India (CA Saroj Kumar Swain)

30th May, 2011 Partner

Membership No. 061912


AUDITORS’ REPORT

AUDITORS’ REPORT

1. We have audited the attached Balance Sheet of ONTRACK SYSTEMS

LIMITED as at 31st March 2011, the Profit & Loss Account and also

the Cash Flow Statement for the year ended on that date. These

financial statements are the responsibility of the Company’s

Management. Our responsibility is to express an opinion on these

financial statements based on our audit.

2. We 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. As required by the Companies (Auditor’s Report) Order, 2003, as

amended by the Companies (Auditor’s Report) (Amendment) Order,

2004 issued by the Central Government of India in terms of sub-

section (4A) of Section 227of the Companies Act 1956 and on the

basis of such checks as we considered appropriate and according

to the information and explanations given to us, we enclose in the

Annexure a statement on the matters specified in paragraphs 4 & 5

of the said Order.

4. Further to our comments in Annexure referred to in paragraphs 3

above, we report that:

(i) 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;

(ii) 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;

(iii) The Balance Sheet , Profit & Loss Account and Cash Flow

Statement dealt with by this report are in agreement with the

books of account;

(iv) In our opinion the Balance Sheet, Profit and Loss Account and

Cash Flow Statement dealt with by this report comply with the

Accounting Standards(AS) referred to in sub-section (3C) of

section 211 of the Companies Act 1956;

(v) We have no such observations, which have an adverse effect

on the functioning of the company.

(vi) On the basis of written representations received from the

Directors of the company, and taken on record by the Board of

Directors, we report that none of the Directors is disqualified

as at 31st March’2011 from being appointed as a Director of

the company in terms of clause(g) of sub-section (1) of section

274 of the companies Act,1956.

(vii) In our opinion and to the best of our information and according

to the explanations given to us the said accounts read in

conjunction with Significant accounting policies and Notes to

the accounts as referred to in Schedule “24”, subject to the

attention invited to note No. B(2) & B(7) regarding certain

advances whereby the extent of amounts recoverable there

against is not ascertainable and note no. B(4) regarding

nonprovision of the accrued leave liabilities and the overall

impact thereof if any on the financial statement for year can

not be ascertainable and commented upon by us, give the

information required by the Companies Act 1956 in the manner

so required and give a true and fair view in conformity with the

accounting principles generally accepted in India:

a. In the case of the Balance Sheet of the state of affairs of

the Company as at 31st March 2011

b. In case of the Profit and Loss Account of the profit for the

year ended on that date; and

c. In the case of Cash Flow Statement of the cash flows for

the year ended on that date.



FR No. 319075E

Sd/-




AUDITORS’ REPORT TO THE MEMBERS


ANNEXURE TO AUDITORS’ REPORT

ANNEXURE TO THE AUDITORS’ REPORT

Re.: ONTRACK SYSTEMS LIMITED

Referred to in paragraph 3 of our Report of even date

i. (a) The Company has maintained proper records showing fullpar ticulars including quantitative details and situation of itsfixed assets.

(b) As informed, the fixed assets have been physically verifiedby the management at the year end and no materialdiscrepancies are repor ted to have been noticed on suchverification.

(c) During the year the company has not disposed off ofsubstantial par t of it’s fixed assets. Therefore the provisionof the clause (ic) of paragraph 4 of the aforesaid Order inour opinion is not applicable to the Company.

ii (a) The inventory has been physically verified by the managementduring the year. In our opinion the frequency of verificationis reasonable.

(b) In our opinion and according to the information & explanationsgiven to us, the procedures of physical verification ofinventories followed by the Management are reasonable andadequate in relation to the size of the Company and nature ofits business.

(c) On the basis of our examination of records of inventory andin our opinion, the Company is maintaining proper recordsof inventory. The discrepancies noticed on verificationbetween the physical stocks and the book records were notmaterial in relation to the operation of the company.

iii. (a) On the basis of our examination of the books of account andaccording to the information and explanations given to us,the Company has during the year accepted interest freeunsecured loan from a Company covered in the Registermaintained under Section 301of the Companies Act’ 1956.The maximum amount involved was 289.00 lacs and theyear end balance was 289.00 lacs.

(b) In our opinion and according to the information andexplanations given to us, the other terms and conditions ofthe loans taken by the company are not prima facie prejudicialto the interest of the company.

(c) On the basis of our examination of the books of account andaccording to the information and explanation given to us, theCompany has not granted any loans secured or unsecuredto Companies, firms or other par ties covered in the Registermaintained under Section 301 of the Companies’ Act, 1956.

iv. In our opinion and according to the information and explanationsgiven to us there are adequate internal control procedurescommensurate with the size of the Company and the nature of

its business with regard to purchase of inventory and fixed assetsand for the sale of goods and services. Fur ther during the courseof our audit, we have neither come across, nor have we beeninformed of any continuing failure to correct major weaknessesin internal control system.

v. (a) On the basis of our examination of the books of account andaccording to the information and explanations given to us,the Company has during the year entered into transactionthat needs to be entered into the Register maintained underSection 301 of the Companies Act 1956.

(b) According to the information and explanations given to us,the transaction made in pursuance of such contract orarrangement have been made at prices, which arereasonable having regard to the prevailing market prices ason the date of such transaction.

vi. In our opinion and according to the information and explanationsgiven to us, the Company has not accepted any deposit from thepublic within the meaning of section 58A and 58AA or any otherrelevant provisions of the Companies Act, 1956 and theCompanies (Acceptance of Deposits) Rule 1975. To the best ofour knowledge and according to the information and explanationsgiven to us, no order has been passed by the Company LawBoard or National Company Law Tribunal or Reserve Bank ofIndia or any other Tribunal against the company.

vii. According to the information & explanations given to us, theCompany has no internal audit system commensurate with thesize and nature of its business during the year.

viii. On the basis of information & explanations made available to us,we are of the opinion that, The Central Government has notprescribed for the maintenance of any cost records underSection 209(1)(d) of the Companies Act 1956 for the Company

ix. (a) On the basis of our examination of the books of account andaccording to the information & explanations given to us, theCompany is regular in depositing with appropriateauthorities undisputed statutory dues, except Provident &allied fund, Employee state insurance, Income Tax (T.D.S.),Fringe benefit tax, Service tax and Professional Tax.

According to the information and explanations given to us,the undisputed amounts payable are Provident and alliedFund of 10.90 lacs, Employees state insurance of 11.42lacs, Income Tax (T.D.S.) of 26.68 lacs, Fringe benefit tax

of 15.13 lacs and Professional Tax of 6.91 lacs which

were outstanding as at 31st March 2011 for a period of more

than six months from the date they became payable.


ANNEXURE TO AUDITORS’ REPORT

(b) According to the information and explanations given to us,

there are no dues of sales tax, customs duty, excise duty,

service tax, wealth tax and cess which have not been

deposited on account of any dispute, except the disputed

Income tax demand. The amounts involved and the forum

where the dispute is pending are detailed in the statement

given below:

Sl. Name of the statute Nature of Dues in lacs Forum where disputeis pending

01 Income Tax Assessed demand 8.36 ITAT, Chennaifor A.Y: 2003-04

02 Income Tax Assessed demand 2.95 CIT (A), Chennaifor A.Y: 2004-05



05 Income Tax Assessed demand 9.28 AO-VI Chennaifor A.Y: 2007-08

06 Income Tax Assessed demand 2.36 AO-VI, Chennaifor A.Y: 2008-09

x. The Company has accumulated losses of 153.72 lacs and it

has incurred no cash loss during the financial year covered by

our repor t and also in the immediately preceding financial year.

xi. Based on our audit procedures and according to the information

and explanations given to us, we are of the opinion that the

Company has not defaulted in repayment of dues to financial

institution, banks or debenture holders during the year.

xii. The Company has not granted any loans and advances on the

basis of security by way of pledge of shares, debentures and

other similar securities.

xiii. In our opinion the Company is not a chit fund or a nidhi / mutual

benefit fund / society, therefore the provision of clause (xiii) of

paragraph 4 of the aforesaid Order is not applicable to the

Company.

xiv. As per records of the Company and the information & explanations

given to us by the management, the Company is dealing in or

trading in shares, securities, debenture and other investments

and in our opinion, proper records have been maintained of the

transactions and contracts, and timely entries have been made

therein, also the shares, securities, debentures and the other

investments have been held by the Company in its own name.

xv. According to the information & explanations given to us, the

Company has not given any guarantee for loans taken by others,

from banks or financial institutions, the terms & conditions

whereof are prejudicial to the interest of the Company.

xvi. On the basis of our examinations and according to the information

and explanations given to us, the company has during the year

not raised any term loan.

xvii. According to the information and explanations given to us and

on an overall examination of the Balance Sheet of the Company,

we repor t that no fund raised during the year on shor t-term

basis have been used for long-term investment .

xviii.The Company has made preferential allotment of shares during

the year to a par ty covered in the register maintained U/s. 301 of

the Companies Act’1956. On the basis of record made available

and according to the information & explanations given to us, we

are of the opinion that the price at which the shares have been

issued is not prejudicial to the interest of the company.

xix The Company has not issued any debentures during the year

under audit. Accordingly, the provision of clause (xix) of

paragraph 4 of the aforesaid Order is not applicable to the

Company.

xx The Company has not raised any money by way of public issue

during the year. Therefore the provisions of clause (xx) of the

paragraph 4 of the aforesaid Order are not applicable to the

Company.

xxi During the course of our examination of the books of accounts

carried out in accordance with Generally Accepted Auditing

Practices, we have neither come across any instance of fraud

on or by the Company nor have we been informed of any such

case by the Management.



FR No. 319075E

Sd/-




32


BALANCE SHEET

As on As on31.03.2011 31.03.2010

SCHEDULE NO. (Amount in ) (Amount in )I SOURCES OF FUNDS

SHAREHOLDERS’ FUND

Capital 1 19,34,20,050.00 9,14,20,050.00

Reserves and surplus 2 8,67,73,350.00 6,63,73,350.00

28,01,93,400.00 15,77,93,400.00LOAN FUNDS

Secured loans 3 11,13,10,104.00 12,73,57,927.14

Unsecured loans 4 3,00,40,344.90 4,13,77,319.93

14,13,50,448.90 16,87,35,247.07

42,15,43,848.90 32,65,28,647.07

II APPLICATION OF FUNDSFixed Assets

Gross block 5 14,64,04,480.46 14,22,99,560.55

Less: Depreciation & impairment loss 6,68,74,006.97 6,00,93,232.73

Net block 7,95,30,473.49 8,22,06,327.82

INVESTMENTS 6 6,92,90,894.52 6,92,91,102.63

DEFERRED TAX ASSETS 7 61,21,223.00 44,84,548.00

A. Current assets, loans and advances

Inventories 8 9,33,46,668.31 6,56,13,290.35

Sundry debtors 9 28,33,47,091.70 17,62,74,906.03

Cash & Bank balances 10 1,10,49,661.58 2,46,83,541.90

Loans & advances 11 7,60,19,618.59 4,27,37,412.81

46,37,63,040.18 30,93,09,151.09

B. Less : Current liabilities & provisions

Current liabilities 12 21,17,97,238.89 18,53,35,786.44

Provisions 13 10,21,302.00 10,21,302.00

21,28,18,540.89 18,63,57,088.44

Net current assets (A-B) 25,09,44,499.29 12,29,52,062.65

Miscellaneous Expenditure 14 2,85,113.98 5,70,227.96

Profit & Loss Account 1,53,71,644.62 4,70,24,378.01

TOTAL 42,15,43,848.90 32,65,28,647.07

Significant Accounting Policies & Notes to the Accounts 24

The schedule referred to above form an integralpar t of the balance sheet

In terms of our repor t of even date

For GOENKA SHAW & CO.Chartered Accountants

Sd/- Sd/- Sd/-

Kolkata, India (B. Hari) (S. V. Ramani) (CA Saroj Kumar Swain)30th May, 2011 Chairman and Managing Director Whole-time Director and Secretary Partner

BALANCE SHEETAS ON 31ST MARCH, 2011


PROFIT & LOSS ACCOUNT

PROFIT & LOSS ACCOUNTFOR THE YEAR ENDED 31ST MARCH, 2011

Year ended Year ended31.03.2011 31.03.2010

SCHEDULE NO. (Amount in ) (Amount in )INCOME

Sales 15 61,93,54,793.90 35,58,29,997.42Other Income 16 35,87,049.40 28,78,523.55

TOTAL 62,29,41,843.30 35,87,08,520.97

EXPENDITURE

(Increase)/decrease of stock–(WIP) 17 32,26,001.68 40,79,634.44

Cost of purchases 18 43,99,81,057.29 20,30,49,642.77

Consumption of Consumables Stores 19 25,86,391.67 18,19,599.13

Operating expenses 20 5,38,51,992.93 5,05,25,453.65

Staff Cost 21 3,13,65,280.68 2,56,44,456.20

Administrative expenses 22 3,02,14,653.09 3,31,68,318.91

Finance charges 23 1,98,95,817.35 2,34,62,135.84

Deferred Revenue Expenditure 14 2,85,113.98 2,85,113.98

Depreciation & impairment loss 5 74,99,244.24 1,35,88,672.02

Prior Period Items 4,20,232.00 (6,94,207.52)

TOTAL 58,93,25,784.91 35,49,28,819.42

Profit before tax 3,36,16,058.39 37,79,701.55

Less: Provision for Tax 36,00,000.00 12,00,000.00

Deferred Tax Charge/(Credit) 7 (16,36,675.00) 9,21,996.00

Profit after tax 3,16,52,733.39 16,57,705.55

Add: Surplus of Profit & (Loss) A/c (4,70,24,378.01) (5,21,31,393.56)

Short Provision of DTA during prior period — 34,49,310.00

(1,53,71,644.62) (4,70,24,378.01)

Appropriations:

Transfer to general reserve — —

Proposed Dividend — —

Corporate Dividend Tax — —

Balance C/F to Balance Sheet (1,53,71,644.62) (4,70,24,378.01)

(1,53,71,644.62) (4,70,24,378.01)

Earning per shares(Basic & Diluted) 1.95 0.19Significant Accounting Policies & Notest to the Accounts 24

The Schedule referred to above form an integral par t of the Profit & Loss Account

In terms of our repor t of even dateFor GOENKA SHAW & CO.


Sd/- Sd/- Sd/-Kolkata, India (B. Hari) (S. V. Ramani) (CA Saroj Kumar Swain)30th May, 2011 Chairman and Managing Director Whole-time Director and Secretary Partner


CASH FLOW STATEMENT

CASH FLOW STATEMENTFOR THE YEAR ENDED 31ST MARCH, 2011

31.03.2011 31.03.2010

A. Cash flow from operating activitiesNet profit before tax and extraordinary items 3,36,16,058.39 37,79,701.55

Adjustment for– Depreciation 74,99,244.24 1,28,94,464.50– Deferred /Revenue Expenditure 2,85,113.98 2,85,113.98– (Profie)/loss on sale of Assets (71,000.00) —

– Interest & Finance Charges 1,98,95,817.35 2,34,62,135.84– Interest on Fixed Deposit (30,20,641.87) (12,35,143.97)– Dividend Income (11,675.00) 2,45,76,858.70 (4,657.00) 3,54,01,913.35

Operating Profit before Working Capital Changes 5,81,92,917.09 3,91,81,614.90

Adjustment for– Decrease/(Increase) in Trade Receivables (10,70,72,185.67) (7,93,93,660.60)– Decrease/(Increase) in Inventories (2,77,33,377.96) (4,60,69,667.50)– Decrease/(Increase) in Other Receivables (2,65,72,445.99) 21,38,341.81– Increase/(Decrease) in Trade Payables 6,29,05,703.54 7,71,55,591.72– Increase/(Decrease) in Other Payables (3,64,44,251.09) (13,49,16,557.17) (13,605,885.50) (5,97,75,280.07)Cash generated from operations (7,67,23,640.08) (2,05,93,665.17)Income Tax Paid (47,08,471.99) (11,57,394.73)Net Cash flow from Operating activities (8,14,32,112.07) (2,17,51,059.90)

B. Cash flow from Investing activities– Purchases of fixed assets (48,23,389.91) (12,02,540.42)– Sale/Purchase of Investments 208.11 (30,72,000.00)– Sale of Fixed Assets 71,000.00 -– Movement in Loan (56,01,287.80) (1,20,50,908.99)– Interest on Fixed Deposit 30,20,641.87 12,35,143.97– Dividend Income 11,675.00 4,657.00Net Cash used in investing activities (73,21,152.73) (1,50,85,648.44)

C. Cash flow from financing activities– Proceeds from increase in Share Capital 12,24,00,000.00 2,38,34,100.00– .Proceeds/(Repayment) of Bank Borrowings:– Long Term (1,42,50,000.00) (57,14,478.00)– Shor t Term (17,97,823.14) 93,00,158.39– Proceeds from Other Borrowings (1,13,36,975.03) 3,56,36,901.54– Interest paid (1,98,95,817.35) (2,34,62,135.84)Net Cash used in financing activities 7,51,19,384.48 3,95,94,546.09

Net Increase / (decrease) in cash & (1,36,33,880.32) 27,57,837.85cash Equivalents (A+B+C)

Cash and Cash equivalents - Opening balance 2,46,83,541.90 2,19,25,704.05Cash and Cash equivalents - Closing balance 1,10,49,661.58 2,46,83,541.90

Note :1. Cash & Cash Equivalents represent Cash & Bank balances2 .Figures in parenthesis represent Cash Outflow.3. Previous year figures have been regrouped/rearranged wherever found necessary.

In terms of our repor t of even dateFor GOENKA SHAW & CO.Chartered Accountants



SCHEDULES FORMING PART OF THE BALANCE SHEET ANDPROFIT & LOSS ACCOUNT (...CONTD.)

SCHEDULE TO ACCOUNTS

As at As at

31st March 2011 31st March 2010

(Amount in ) (Amount in )

SCHEDULE NO. 1

SHARE CAPITAL

Authorised:

25000000 (20000000) Equity shares of 10/- each 25,00,00,000.00 20,00,00,000.00

Issued, subscribed & paid up :

19342005 Equity shares of 10/- each fully paid up

(Previous Year 9142005 Equity shares of 10/- each) 19,34,20,050.00 9,14,20,050.00

193,420,050.00 9,14,20,050.00

SCHEDULE NO. 2

RESERVES & SURPLUS

Share Premium 7,72,47,850.00 5,68,47,850.00

General Reserves 94,00,000.00 94,00,000.00

Employee Stock Option Outstanding 1,25,500.00 1,25,500.00

8,67,73,350.00 6,63,73,350.00

SCHEDULE NO. 3

SECURED LOANSecured LoansTerm Loan from SBI- Commercial Br. (Ref note : a) 85,50,000.00 2,28,00,000.00Working Capital Term Loan from SBI, Commercial Br. (Ref note : a) — 1,12,50,000.00Working Capital Term Loan from Indian Bank, Strand Rd. Br. — 46,25,000.00(Ref note : a)Working Capital loan with SBI, Commercial Br. (Ref note : b ) 6,92,21,339.56 5,17,16,219.75Working capital loan with Indian Bank,Strand Road Br.(Ref note : b & c) 3,35,38,764.44 3,69,66,707.39

11,13,10,104.00 12,73,57,927.14Notes:

a) Secured by way of charge of mor tgage on entire immovable assets of the company at Salt Lake and Rajarhat on the basis of paripasu inter-se, hypothecation charge over entire moveable fixed assets of the company at Salt Lake and personal guarantee of Managing Director.

b) Secured against hypothecation of stocks, book debts & other moveable assets of the company, charge of mortagage on the basis of paripasuinter-se on the entire immovable proper ties of the company at Salt Lake, Rajarhat and Ekdalia Road and personal guarantee of ManagingDirector

c) Working capital loan with Indian Bank is fur ther secured by way of pledge of equity shares of the company standing in the name ofManaging Director and his family members & FDR/CDR standing in the name of the company.

SCHEDULE NO. 4

Unsecured LoansAuto Loan 11,40,344.90 1,46,448.34Loan from Body Corporate 2,89,00,000.00 4,12,30,871.59

3,00,40,344.90 4,13,77,319.93



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ears




As at As at31st March 2011 31st March 2010

(Amount in ) (Amount in )SCHEDULE NO. 6Investment (at cost) TradeLong Term ( at Cost) Quoted:Investment in equity with TCS 11,900.00 11,900.00(56 Nos. Equity shares)(includes 28 Nos. Bonus Share alloted during the year.)Market Value as at 31.03.2011 66220/- (Pr. Year 21858/-)Long Term ( at Cost) Unquoted:Investment in equity withOntrack Systems (UK) Ltd. 1,31,99,722.93 1,31,99,722.93(100% wholly owned subsidiary)(1750000 ordinary shares of 10 pence each fully paid )Investment in equity withOntrack Systems (UAE) Ltd. 48,64,972.00 48,64,972.00(100% wholly owned subsidiary)(3000 ordinary shares of AED 150/- each fully paid )Investment in equity withOntrack Systems (Aust) Pty. Ltd. 3,82,14,630.19 3,82,14,630.19(100% wholly owned subsidiary)(394010 ordinary shares of AUD 1/- each fully paid )Investment in equity withOntrack Global Services Ltd. 94,25,940.00 94,25,940.00(99.99% Shares holding)(942594 ordinary shares of 10/- each fully paid )In Other CompaniesInvestment in equity withComunet Info-Systems Pvt. Ltd. 30,72,000.00 30,72,000.00(48% Shares holding)(96000 ordinary shares of 22/-(F.V. 10/-) each fully paid )Investment in equity withOntrack Systems B.V. Netherland 5,01,729.40 5,01,729.40(26% Shares holding)(9256 ordinary shares of Euro 1/- each fully paid )Investment in equity withPersonal Medic Ltd. — 208.11(3 ordinary shares of £ 1/-each fully paid)

69,290,894.52 69,291,102.63SCHEDULE NO. 7DEFERRED TAX Assets / (Liabilities)

Opening Balance 44,84,548.00 19,57,234.00Add: Shor t provision in prior period — 34,49,310.00

44,84,548.00 54,06,544.00Adj:Deferred tax Charge/(Credit) for the year (16,36,675.00) 9,21,996.00

61,21,223.00 44,84,548.00

SCHEDULE NO. 8Stock-in-Trade(As taken,valued and certifited by Management)Work-in-progress 67,92,825.30 1,00,18,826.98Consumables Spares 6,19,609.93 9,22,870.82Trading Stock 8,59,34,233.08 5,46,71,592.55

9,33,46,668.31 6,56,13,290.35SCHEDULE NO. 9Sundry Debtors(Unsecured considered good)Debts over six months 7,57,41,858.86 3,61,99,517.47

Others 20,76,05,232.84 14,00,75,388.56

28,33,47,091.70 17,62,74,906.03




As at As at31st March 2011 31st March 2010(Amount in ) (Amount in )

SCHEDULE NO. 10Cash & Bank BalancesCash in Hand 4,931.00 46,198.28Balance with schedule banksCurrent Account 427,960.13 1,047,640.16Dividend unpaid A/c 462,100.13 462,100.13Gratuity A/c - Indian Bank 1,686.00 1,756.00Fixed Deposit Cummulative 9,789,212.00 22,959,222.00(Lien with the Bank)Asahi Bank,Kanda, Japan 117,069.37 118,172.81Indian Bank - EEFC GBP A/c 36,179.00 34,559.80Indian Bank - EEFC USD A/c 207,070.77 10,345.85SBI - EEFC USD A/c 2,513.18 2,536.87Dividend A/c - Indian Bank 940.00 1,010.00

11,049,661.58 24,683,541.90

SCHEDULE NO. 11Loans & AdvancesUnsecured loan to body corporate considered goodLoan to Bodies Corporates 2,55,89,384.29 1,99,88,096.49Advances(Recoverable in cash or in kind or value to be received) 3,04,99,303.84 94,65,122.04Deposits 70,55,455.12 34,79,727.66Advance Tax/TDS (Net of Provision of tax) 13,13,037.72 2,04,565.73Prepaid Expenses 4,56,155.52 1,22,018.79Share Application to Subsidiaries (Pending allotment) 1,11,06,282.10 94,77,882.10

7,60,19,618.59 4,27,37,412.81SCHEDULE NO. 12CURRENT LIABILITIESSUNDRY CREDITORS - For Goods Supplied 17,02,51,449.53 10,73,45,745.99

- For Expenses 3,07,67,382.87 3,28,42,805.91Dividend Unpaid Account * 4,62,100.13 4,62,100.13Interest Accrued but not due - — 3,98,647.00Advance from Customers 19,47,177.45 3,40,59,323.00Share Application Money-Pending Allotment — 69,30,000.00Other Advance 83,69,128.91 32,97,164.41

21,17,97,238.89 18,53,35,786.44* Includes amount of 56978/-(P.Y. 11078/-) due to be transferred/Credited to investor Education and protection Fund.

SCHEDULE NO. 13

PROVISIONSProvision for FBT(Net of Advance FBT) 10,21,302.00 10,21,302.00

10,21,302.00 10,21,302.00

SCHEDULE NO. 14DEFERRED REVENUE EXPENDITUREDefered Revenue Expenditure-Brand Building 5,70,227.96 8,55,341.94Less: 1/5 written off 2,85,113.98 2,85,113.98

2,85,113.98 5,70,227.96



(Amount in ) (Amount in )SCHEDULE NO. 15SALESDomestic Sales / Services 52,26,95,871.51 27,13,13,745.98

(TDS of 36.33 Lacs P.Y. 9.20 Lacs)Export Sales / Services 9,66,58,922.39 8,45,16,251.44

61,93,54,793.90 35,58,29,997.42

SCHEDULE NO. 16OTHER INCOME

Miscellaneous Income 2,75,194.53 1,40,884.58Profit on sale of Assets 71,000.00 —

Interest Received 30,20,641.87 12,35,143.97(TDS of 2.75 Lacs P.Y. 2.38 Lacs)

Dividend on Shares 11,675.00 4,657.00Incentive & Discount Received 2,08,538.00 14,97,838.00

35,87,049.40 28,78,523.55

SCHEDULE NO. 17INCREASE/DECREASE IN W.I.P.

Opening Stock-WIP 1,00,18,826.98 1,40,98,461.42Closing Stock 67,92,825.30 1,00,18,826.98

32,26,001.68 40,79,634.44

SCHEDULE NO. 18COST OF PURCHASEOpening stocks 5,46,71,592.55 39,66,203.48

Add: Purchase 47,12,43,697.82 25,37,55,031.84Less: Closing Stock 8,59,34,233.08 5,46,71,592.55

43,99,81,057.29 20,30,49,642.77SCHEDULE NO. 19CONSUMPTION OF CONSUMABLE STORESOpening Stock 9,22,870.82 14,78,957.95

Add: Purchase 22,83,130.78 12,63,512.00Less : Closing Stock 6,19,609.93 922870.82

25,86,391.67 18,19,599.13

SCHEDULE NO. 20OPERATING EXPENSESElectricity expenses 12,61,218.00 12,92,840.95Professional and consultancy charges 2,57,91,534.13 1,56,32,119.93Repairs & Maintenance 17,25,944.68 18,95,028.70Bandwith charges 8,66,153.64 12,99,019.93Insurance premium 1,34,835.89 1,39,211.54Expenses for (WOS) UAE 1,04,76,957.47 1,73,87,315.01Expenses for (WOS)-UK 1,35,95,349.12 1,28,79,917.59

5,38,51,992.93 5,05,25,453.65





SCHEDULES FORMING PART OF THE BALANCE SHEET ANDPROFIT & LOSS ACCOUNT


(Amount in ) (Amount in )

SCHEDULE NO. 21

STAFF COST

Salaries 2,96,04,066.64 2,43,12,552.78Employer's Contribution to ESI 2,59,362.13 1,24,912.14

Employer's Contribution to Gratuity 2,41,108.00 50,000.00Employer's Contribution to Provident Fund 9,21,401.53 11,56,991.28

Employer's Contribution to Group Medical Insurance 3,39,342.38 —

3,13,65,280.68 2,56,44,456.20

SCHEDULE NO. 22ADMINISTRATIVE EXPENSESAdministrative Expenses for (WOS) - UK 19,11,184.80 22,20,670.59Administrative Expenses for (WOS) - UAE 76,35,706.90 92,14,967.00Director Remuneration 36,10,000.00 31,80,000.00Printing & Stationary 5,16,170.80 4,75,027.10Business Promotion 7,91,805.11 2,29,159.00Adver tisement & Publicity 4,38,489.00 3,26,868.00Office Expenses 15,26,454.95 11,02,320.90Remunaration to Auditors 2,75,000.00 2,75,000.00Staff Training & Development 94,956.00 19,500.00Discount Allowed 1,59,578.10 9,13,177.29Currency Fluctuation Loss 14,48,194.94 79,08,180.52Rent, Rates & Taxes 11,98,450.00 3,95,214.00Travelling & Conveyance 68,26,590.69 45,25,956.44Postage & Telephone 14,20,242.11 11,66,539.34Staff Welfare Expenses 1,54,552.75 91,630.40Other Charges 22,07,276.94 11,24,108.33

3,02,14,653.09 3,31,68,318.91

SCHEDULE NO. 23FINANCE CHARGESBank Charges 39,04,925.29 59,26,329.66Bank Interest 1,59,90,892.06 1,75,35,806.18

1,98,95,817.35 2,34,62,135.84


SCHEDULE NO. 24

SIGNIFICANCT ACCOUNTING POLICIES AND NOTES TO THEACCOUNTSA. Significant accounting policies

i) Accounting Convention:

The financial statement has been prepared under the historical costconvention in accordance with the generally accepted accountingprinciples as adopted consistently by the company.

ii) Use of Estimates:

The preparation of financial statements, in conformity with thegenerally accepted accounting principles, requires estimates andassumptions to be made that affect the repor ted amount of assetsand liabilities on the date of financial statements and the reportedamount of revenues and expenses during the repor ted year.Differences between the actual results and estimates are recognizedin the year in which the results are known / materialized.

iii) Fixed Assets :

Fixed Assets are stated at cost less accumulated depreciation

iv) Depreciation :

Depreciation on Fixed Assets has been provided on Straight LineMethod and written off over a period as estimated by themanagement

Computer and its Accessories including Software 3 Years

Building - freehold 20 Years

Other Fixed Assets 5 Years

Lease hold Land & Building is amortized for the lease period.

v) Impairments:

At each Balance Sheet date, the Company reviews the carryingamount of its fixed Assets to determine whether there are anyindications that those assets suffered any impairment loss. If anysuch indication exists, the recoverable amount of the asset isestimated in order to determine the extent of impairment loss. Therecoverable amount is the higher of an asset net selling price andvalue in use. In assessing value in use , the estimated future cashflow expected from the continuing use of the assets and from itsdisposal are discounted to their present value using a pre-determinedrate that reflect the current market assessment of time value ofmoney and the risks specific to the assets . Reversal of impairmentloss is recognized immediately as income in the Profit & LossAccount.

vi) Investments:

Long term investments are stated at cost. Provision for diminutionin the value of long-term investment is made only if such a declineis other than temporary in nature in the opinion of the Management.If the value of Investment for take over of a going concern is much


higher than estimated cost of Net Assets Value including their intrinsicvalue as estimated by management, the additional payment in lieuof takeover value is considered as Goodwill and if it is reverse theamount will be transferred to Capital Reserve.

vii) Inventories:

Inventories of trading goods, spare parts and consumable storesare valued at lower of cost or net realizable value. Outdated anddamaged stocks are written off on technical evaluation. The WIP isvalued at direct cost attributed to projects based on stages ofcompletion as cer tified by the management.

viii) Recognition of Revenue:

Sales:

The sales are recognized at the point of dispatch of material to thecustomers and bills are raised to them. Sales are shown net ofgoods return, rebates, rate differences etc. Income from maintenancecontracts are accounted for in the relevant accounting year uponentering into the contract. Revenue from software development isrecognized on the basis of achievement of prescribed milestone asrelevant to terms of contract as proportionate completion methodas applicable.

Income & Expenditure:

The Company follows mercantile system of accounting andrecognizes significant items of Income & Expenditure on accrualbasis.

ix) Deferred Revenue Expenditure:

Deferred revenue expenditure is amortized over a period of fiveyears.

x) Foreign Currency Transactions :

Foreign currency transactions are accounted for at the prevailingexchange rate as on the date of execution of the transaction or ofthe rate cover under forward contract as applicable. Foreign currencymonetary items not covered under forward exchange contract anddue at the end of the year are conver ted at the exchange rateprevailing as on that date. Exchange differences arising on thesettlement of the transactions or on reporting at the year end ratesare recognized as Income or as expenses in the period in whicharise, except in respect of fixed assets acquired from out side India,where exchange variance is adjusted to the carrying amount of therespective fixed assets.

xi) Employees Benefit:

Short Term Employees Benefits: The undiscounted amount ofshor tterm employee benefit expected to be paid in exchange forthe services rendered by the employees are recognized during theperiod when the employees render the service.



Post Employment benefit plans:

a) Defined Contribution Plan: Contribution under defined contributionplan payable in keeping with the related scheme are recognized asexpenses for the year.

b) Defined benefit plan: The Group gratuity scheme provided by thecompany is a defined benefit plan. Benefit under the defined benefitplan are generally based on the years of service rendered and theemployee’s eligible compensation (immediately before retirement).The scheme covers substantially all regular employees and thecompany contributes funds to the Life Insurance Corporation ofIndia, which administers the scheme on behalf of the company.

Other Long Term employment benefit (unfunded): The cost ofproviding long term employee benefit is generally recognised oncash basis.

xii) Segment Reporting:

The geographical segments have been identified as primary segmenton the basis of location of the major customers of the Company.These segments represent a strategic business unit that offersdifferent places of unit having different risk and returns. Inter-segment sales and transfers if any are accounted for, as if the salesor transfers were to third parties at current market prices. Income& expenditure and Assets & Liabilities not allocable to any specificgeographical segment, are classified as unallocated. The company’ssecondary segment is business segment and it operates only inone business segment namely Trading/dealing with computerhardware and software. Therefore no separate secondary segmentis identifiable as required by Accounting standard 17 issued byICAI.

xiii) Borrowing Costs :

Borrowing costs attributable to qualifying assets are capitalized upto the date when such assets are ready for their intend use ,otherborrowing cost are recognized as expenses in the period in whichthey are incurred.

xiv) Earning per Share:

Basic earning per share are calculated by dividing the net profit orloss for the period attributable to equity share holders (afterdeducting attributable taxes) by the weighted average number ofequity shares outstanding during the period. The weighted averagenumber of equity shares outstanding during the period is adjustedfor events of bonus issue, bonus element in a rights issue to existingshareholders, share split and reverse shares split (consolidation ofshares).

For the purpose of calculating diluted earning per share, the netprofit or loss after tax for the period attributable to equity shareholders and the weighted average number of shares outstanding

during the period are adjusted for the effects for all dilutive potentialequity shares.

xv) Tax on Income:

Current Tax represents the amount that would be payable based onthe computation of tax as per prevailing taxation laws under IT Act1961. Deferred tax is recognized subject to consideration ofprudence, on timing differences, being the difference betweentaxable income and accounting income that originate in one periodand are capable of reversal in one or more subsequent periods.Deferred tax is calculated using the tax rates and tax laws that hasbeen enacted and/or substantially enacted as at the Balance Sheetdate. Deferred tax assets are not recognized unless there is virtualcertainty that sufficient future taxable income will be available againstwhich such deferred tax assets can be realized.

xvi) Contingent Liabilities & Assets:

Provisions involving substantial degree of estimation in measurementare recognized when there is a present obligation as a result of pastevents and it is probable that there will be an outflow of resources.Contingent Liabilities are not recognized but are disclosed in theNotes to the accounts. Contingent Assets are neither recognizednor disclosed in the financial statements.

B. Notes to the accounts

1. Contingent liabilities not provided for :

( in lacs)

31.03.2011 31.03.2010a) Income Tax Demand against

which Appeals are pending/ 286.00 286.00Necessary steps are takenfor filing of appeals.

b) Bank Guarantee :

Foreign — 539.76

Domestic 125.02 43.69

2. Loans and Advances include 10.00 lacs (Previous Year: 10.00lacs) due from a par ty, against which the company has filedmonetary suit and the matter is subjudice. Pending the outcome ofthe legal proceedings, the extent of amounts recoverable thereagainst is not ascertainable and therefore no provision has beenmade in the accounts.

3. The employees’ gratuity fund scheme managed by Life InsuranceCorporation of India is a defined benefit plan. The present value ofthe obligation is currently ascertained by the corporation based onthe actuarial valuation using the Projected Unit Cost Method andthe recommended contribution to the fund managed by thecorporation has been provided in the accounts during the year.

43

Note: Total expenses for the year 2008-09 & 2009-10 have beenrecognised during the year as Prior period items.

Actuarial Assumptions 2010-11 2009-10

Mortality Rate LIC (1994-96) Ultimate

Withdrawal Rate 1% to 3% depending on age

Discounted Rate 8% P.a. 8% p.a.

Salary Escalation 6% 6%

4. No provision has been made for the present value of leave accruedin respect of the eligible employees based on the actuarial valuationusing the Projected Unit Cost Method. The present value of theobligation is currently not determined/ascer tained

Leave benefit as per management’s policy is not to be accruedbeyond 30 days but availed of and the employees have been advisedto plan their leave in advance while in service and immediately beforesuperannuation. Leave not availed of is not encashable.

5. Sundry Creditors do not include any dues to micro, small andmedium enterprises on account of principal amount together withinterest and accordingly no additional disclosure have been made.The above information regarding micro, small and mediumenterprises have been determined to the extent such parties havebeen identified on the basis of information available with thecompany.

6. Depreciation has been provided for in the Accounts on “StraightLine Method” and the assets are depreciated over the useful lifeof the assets based on the estimation made by the managementand using the rates which are not less than those prescribed inSch-XIV to the Companies Act 1956.

7. Loans and advances include 219.01 lacs due from a customeron account of encashment of performance bank guarantee, whichis disputed and the company has taken necessary step to refer thematter for arbitration. Pending the outcome of arbitrationproceedings, it is considered good and recoverable.

8. Major Components of Deferred Tax Assets/(Liabilities) as at

31.03.2011 are as follows:( in lacs)

Items As at During As at

01.04.2010 the Year 31.03.2011

Depreciation difference 57.86 1.99 59.85

Expenses disallowed under 40(a) (12.13) 14.44 2.31

Amortization of Deferred

Revenue Expenses (0.88) (0.07) (0.95)

44.85 16.36 61.21

9. Calculation of Earning per share :

( in lacs)

Particulars 31.03.2011 31.03.2010

Net profit after tax attributable to

shareholders 316.53 16.58

Weighted avg. number of equity

shares outstanding (No.) 162,40,087 86,81,648

Nominal value of equity shares 10/- 10/-

Basic/Diluted earning per share 1.95 0.19



The following table sets out the funded status and amounts recognised in the Company's financial statements for gratuity.

( in lacs)

DescriptionSl. NO. 2010-11 2009-10 2008-09 2007-08

Net Asset/(Liability) recognised in the Balance Sheet

Present value funded obligation

Current service cost & others

Fund value as on date

Net Assets/(Liabilities)

Expenses recognised in Profit & Loss Account

Difference in current service cost

Difference in other cost

Net Actuarial (Gain)/Loss to be recognised

Other Prior Period adjustments

Total expense recognised in the P& L Account

1

2

(22.72)

(2.31)

7.14

(17.89)

(0.22)

(0.05)

2.68

—

2.41

(20.05)

(2.57)

5.14

(17.48)

(0.45)

(0.05)

2.07

—

1.57

(17.99)

(3.07)

4.74

(16.32)

0.21

(0.03)

4.30

(1.85)

2.63

(13.69)

(2.89)

4.36

(12.22)

—

—

—

—

—


10. Details of Prior Period Expenses/(Incomes) :

( in lacs) ( in lacs)Year ended 31.03.2011 Year ended 31.03.2010

Employees’ Gratuity 4.20 —Depreciation — (6.94)

4.20 (6.94)

11. Sundry Debtors Include:

( in lacs) Maximum AmountBalance as on 31.03.2011 Outsanding at any time

During the year

Due from Companies in which Directors are DirectorsR.P. Infosystems (P) Ltd. 31.07 69.61

(—) (—)Comunet Infosystems (P) Ltd. 10.32 10.32

(—) (—)

Figures in Parenthesis represent for the previous year.

12. Payment to Auditors :


Statutory Audit fees 2.25 2.25Tax Audit fee 0.50 0.50

Certification & others 0.31 —3.06 2.75

13. Remuneration to Chairman & Managing Director and Whole time Director


Remuneration 34.30 30.00

Contribution to Provident & allied fund 1.80 1.8036.10 31.80

Computation of Net Profit Under Section 309(5) of the companies Act’1956 as under

Particulars 2011

Profit before tax as per profit and loss account 336.16Add:Whole-time director's remuneration 36.10Director fees 0.44Gratuity provision 2.41Prior Period Items (Gratuity) 4.20

Sub-total 379.31Less:Profit on sale of fixed assets credited to profit and loss account 0.71

—Sub-total 0.71Profit as per section 349 of the Companies Act, 1956 378.60Directors' Remuneration payableMaximum allowed as per Companies Act, 1956 at 10% 37.86Directors' Remuneration approved by the Board 36.10

14. Related Party Transaction

Name of the Related parties and description of relationship:

Name Relationship

Ontrack Systems (UK) Ltd. Entity under common controlOntrack Systems (UAE) Ltd. Entity under common controlOntrack Systems (Aust) Pty. Ltd. Entity under common controlOntrack Global Services Ltd. Entity under common controlR.P. Infosystems Pvt. Ltd. Entity under common controlOntrack Systems (B.V. ) Netherland Associated EnterpriseComunet Info-Systems Pvt. Ltd. Associated EnterpriseMr. B. Hari Key Managerial PersonnelMr. S.V.Ramani Key Managerial PersonnelMrs. Simi Hari Relative of Key Managerial Personnel

Particulars of Transactions and closing balances at the end of the year

( In Lacs)

Nature of Transactions Entity under Associate Key Managerial Balance as atCommon control Enterprises Personnel & relatives 31.03.2011

Remuneration - - 41.14 3.68(-) (-) (36.00) (23.80)

Sales 321.75 - - 110.71

(444.49) (-) (-) (284.02)

Investment 657.05 35.74 - 692.79

(657.05) (35.74) (-) (692.79)

Advance Received - - - -

(-) (-) (91.01) (91.01)

Advance Paid 119.73 8.84 - 128.57

(102.49) (8.84) (-) (111.33)

Figures in parenthesis represent for the previous year.



15. SEGMENT INFORMATION :

Primary: Geographical SegmentSegment wise Revenue Results

In lacs

Particulars Domestic UAE Europe & Others Total

Segment Revenue 5226.96 802.82 163.77 6193.55

(2713.14) (674.36) (170.80) (3558.30)

Segment Result 363.07 364.21 (-) 45.17 682.11

(197.45) (408.33) (19.80) (625.58)

Unallocated income 5.66

(excluding interest income) (16.43)

Unallocated Expenditure 107.86

(253.00)

Finance Charges (Net) 168.76

(222.27)

Depreciations (Net) 74.99

(128.94)

Profit/(Loss) before tax 336.16

(37.80)

Provision for Taxation 19.63

(21.22)

Profit/(Loss) after tax 316.53

(16.58)

Segment Assets 1818.49 1400.97 435.49 3654.95

(1621.92) (841.37) (103.75) (2567.04)

Unallocated Assets 2532.10

(2085.87)

Segment Liabilities 2010.18 2010.18

(1401.88) (1401.88)

Unallocated Liabilities 1531.51

(2149.04)

Capital Expenditure 48.23

(12.02)

Non cash expenditure other than depreciation 2.85

(2.85)

Capital Employed 2645.36

(1101.99)





16. Additional information pursuant to the Provisions of Clauses 3, 4C and 4D of par t II of Schedule VI of the Companies Act, 1956.

Year ended 31.3.2011 Year ended 31.3.2010( in lacs) ( in lacs)

1. Licensed Capacity 4000.00 4000.00

As per SIA registration with Govt. of India

2. Installed Capacity 4000.00 4000.00

3. PRODUCTION CAPACITY Not applicable Not applicable

4. ACTUAL PRODUCTION Not applicable Not applicable

5. A. IMPORTS - 50.94

B. EXPORTS 966.59 845.16

6. TURNOVER

Sales 6193.55 3558.30Other income 35.87 28.79

7. COST OF PURCHASES & CONSUMABLES

a. Imported - 50.94

b. Indigenous 4425.67 1997.75

TOTAL 4425.67 2048.69

8. PERCENTAGE OF CONSUMPTION % age % age

a. Imported - 2.49

b. Indigenous 100.00 97.51

100.00 100.00

9. EXPENDITURE IN FOREIGN CURRENCIES

CIF Value of import - 50.94

Foreign Travel 5.63 6.69

10. EARNINGS IN FOREIGN EXCHANGE

FOB value Exports 966.59 845.16

No specific license is required for manufacture of products, in terms of the New Industrial Policy of the Govt. of India except those which are inthe restricted list. As per SIA approval received from Govt. of India, the annual capacity of the Company works out to 4000.00 lacs.Software development, system integration and networking cannot be expressed in term of any generic unit, therefore it is not practicable to givethese details in quantitative figures. Fur ther in view of the nature of the business, variety of items, volume of transactions and different units of salecomputer hardware items, it is not possible to furnish quantitative details for all the goods traded by the company.

17. Balance of the sundry creditors, sundry debtors and some of the loans & advances given & accepted are subject to confirmation

18. Previous year figures have been regrouped/rearranged/recast wherever found necessary.

As per our repor t of even dateFor GOENKA SHAW & CO.






SCHEDULE NO : 25

GENERAL BUSINESS PROFILE

I. Registration details

Registration no. : 18—15370Registration date : 15.02.1988Balance Sheet date : 31.03.2011

II. Capital raised during the year ( in thousand)

Public issue Rights issueNil Nil

Private placement/Preferential Allotment Bonus issue102000 Nil

III. Position of mobilisation and deployment of funds ( in thousand)

Total Liabilities Total Assets634363 634363

Source of funds ( in thousand)Share Capital Reserve & Surplus

193420 86773Secured loans Unsecured loans

111310 30040

Application of funds ( in thousand)

Net Fixed Assets Investment79530 69291

Deferred tax Assets Net Current Assets6121 250944

Deferred Revenue Expenditure Accumulated Loss285 15372

IV. Performance of Company ( in thousand)

Turnover Total Expenditure622942 589326

Profit/(Loss) before tax Profit/(Loss) after tax33616 31653

EPS after extra ordinary item and deferred tax Dividend rate in %1.95 Nil

V. Generic names of principal product/services of Company

Item code no. Product description847190 Computer Hardware

Not applicable IT Services85249009 Software development.

As per our repor t of even dateFor GOENKA SHAW & CO.




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AUDITORS’ REPORT

AUDITORS’ REPORT TO THE BOARD OF DIRECTORS ON THE CONSOLIDATED FINANCIALSTATEMENTS OF ONTRACK SYSTEMS LIMITED AND ITS SUBSIDIARIES

AUDITORS’ REPORT

5. Subject to the matters referred to in paragraph 4 above, werepor t that:

(i) The consolidated Financial Statements have been preparedby the company in accordance with the requirements ofAccounting Standard-21( Consolidated Financial Statement)and Accounting Standard-23 (Accounting for Investment inAssociates in Consolidated Financial Statements) as notifiedunder the Companies( Accounting Standard) Rule,2006.

(ii) Based on our audit and on consideration of the separateaudit repor ts on individual financial statements of theCompany, its subsidiaries and associates and in our opinionand to the best of our information and according to theexplanations given to us the Consolidated Financialstatements read in conjunction with Significant accountingpolicies and Notes to the accounts as referred to in Schedule“25”, subject to the attention invited to note No. B(2), B(3),B(7), regarding certain advances and trade debtors, wherebythe extent of amounts recoverable there against is notascertainable and note no. B(5) regarding non provision ofthe accrued leave liabilities and overall impact thereof if anyon the consolidated financial statement for the year can notbe ascertainable and commented upon by us, give a trueand fair view in conformity with the accounting principlesgenerally accepted in India:

a. in the case of the Consolidated Balance Sheet, of thestate of affairs of the Group as at 31st March 2011

b. in case of the Consolidated Profit and Loss Account, ofthe profit of the group for the year ended on that date;and

c. In the case of Consolidated Cash Flow Statement, ofthe cash flows of the Group for the year ended on thatdate.

For GOENKA SHAW & CO.Chartered AccountantsFR No. 319075E

Sd/-Kolkata, India (CA Saroj Kumar Swain)30th May, 2011 Partner


1. We have audited the attached Consolidated Balance Sheet ofONTRACK SYSTEMS LIMITED (“the Company”), its subsidiaries,its associates entities (the Company, its subsidiaries, itsassociates entities constitute “the Group”) as at 31st March2011, the consolidated Profit & Loss Account and also theconsolidated Cash Flow Statement of the Group for the yearended on that date, both annexed thereto. The ConsolidatedFinancial Statements include subsidiar ies accounts inaccordance with Accounting Standard 21(“ConsolidatedFinancial Statements”), and investments in associates accountedon the equity method in accordance with Accounting Standard23 (“Accounting for Investments in Associates in ConsolidatedFinancial Statements”). These financial statements are theresponsibility of the Company’s Management. Our responsibilityis to express an opinion on these financial statements based onour audit.

2. We conducted our audit in accordance with the AuditingStandards generally accepted in India. Those standards requirethat we plan and per form the audit to obtain reasonableassurance about whether the financial statements are free ofmaterial misstatement. An audit includes examining on a testbasis, evidence suppor ting the amounts and disclosures in thefinancial statements. An audit also includes assessing theaccounting principles used and significant estimates made byManagement, as well as evaluating the overall financialstatement presentation. We believe that our audit provides areasonable basis for our opinion.

3. The financial statements of Indian and overseas subsidiarieshaving total assets (Net) of 128.42 lacs as at 31st March’2011, total revenue of 157.73 lacs and net cash inflowsamounting to 1.91 lacs for the year ended on 31stMarch’2011 and associate companies having a carrying valueof 35.44 lacs as at 31st March’ 2011, have been audited bytheir auditors in respective countries. The repor ts ofthose auditors have been furnished to us and our opinion in sofar as it relates to the amounts included in respect of thesesubsidiaries and associates is based solely on the repor ts ofthose auditors.

4. As stated in Note B(8), B(9), B(10) of Schedule-25, in case ofcer tain foreign subsidiaries of the Company having total assets(net) of 36.52 lacs as at 31st March’2011 and total revenueof 250.02 lacs (net of consolidation adjustment) and net cash

inflows amounting to 84.17 lacs for the year ended on 31stMarch’2011 and in the case of an associate company, Ontrack

Systems BV Nether lands having a car r y ing value of

Nil as at 31st March’ 2011, the figures used for theconsolidation are based on the managements estimates andnot audited by their auditors in their respective countries.


CONSOLIDATED FINANCIAL STATEMENT

CONSOLIDATED BALANCE SHEETAS ON 31ST MARCH 2011

As on As on31.03.2011 31.03.2010

SCHEDULE NO. (Amount in ) (Amount in )

I SOURCES OF FUNDSShareholder’s Funds

Capital 1 19,34,20,050.00 9,14,20,050.00Reserves and Surplus 2 6,74,24,597.33 4,56,87,713.94

26,08,44,647.33 13,71,07,763.94

Loan FundsSecured Loans 3 11,13,10,104.00 12,73,57,927.14Unsecured Loans 4 3,00,40,344.90 4,13,77,319.93

14,13,50,448.90 16,87,35,247.07

TOTAL 40,21,95,096.23 30,58,43,011.01

II APPLICATION OF FUNDSFixed AssetsGross Block 6 20,55,46,688.55 20,14,41,768.64Less: Depreciation & Impairment loss 7,97,05,237.98 7,27,42,417.42

Net Block 12,58,41,450.57 12,86,99,351.22

INVESTMENTS 7 37,90,871.79 3,70,21,97.66

DEFERRED TAX ASSETS 5 67,86,079.00 53,32,220.30

A. Current Assets, Loans and AdvancesStock–In–Trade 8 9,33,46,668.31 6,56,13,290.35Sundry Debtors 9 32,87,03,207.28 21,04,02,213.49Cash & Bank Balances 10 1,49,96,379.62 2,61,06,114.01Loans & Advances 11 9,01,59,691.76 6,21,30,061.28

52,72,05,946,97 36,42,51,679.13B. Less : Current Liabilities & Provisions

Current Liabilities 12 26,61,89,438.57 22,12,27,279.94Provisions 13 10,21,302.00 10,21,302.00

26,72,10,740.57 22,22,48,581.94

Net Current Assets (A-B) 25,99,95,206.40 14,20,03,097.19Misc. Expenditure 14 57,81,488.46 60,99,443.45Profit & Loss Account — 2,00,06,701.19TOTAL 40,21,95,096.23 30,58,43,011.01Significant Accounting Policies & Notes to the Account 25

The schedules referred to above from an integral par t of the Balance Sheet

In terms of our repor t of even dateFor GOENKA SHAW & CO.





CONSOLIDATED PROFIT & LOSS ACCOUNTFOR THE YEAR ENDED 31ST MARCH, 2011

As on As on31.03.2011 31.03.2010

SCHEDULE NO. (Amount in ) (Amount in )INCOME

Sales 15 64,38,68,590.21 39,76,52,608.79Other Income 16 54,61,858.93 30,44,853.70

64,93,30,449.14 40,06,97,462.49

EXPENDITURE(Increase)/ decrease of Stock ( WIP ) 17 32,26,001.68 40,79,634.44Cost of Purchase 18 43,99,93,557.29 20,30,49,642.77Consumtion of Consumable Stores 19 25,86,391.67 18,19,599.13Operating Expenses 20 5,60,13,004.19 2,87,53,361.11Staff Cost 21 5,65,79,432.92 8,28,89,218.76Administrative Expenses 22 3,65,11,962,60 3,80,31,975.65Finance Charges 23 2,20,61,609.27 2,54,12,234.80Deferred Revenue Expenditure 14 3,17,954.98 3,17,954.98Prior period Item 4,20,232.00 (6,94,207.52)Depreciation & Impairment Loss 6 76,81,290.56 1,38,38,849.76Total 62,53,91,437.16 39,74,98,263.88Profit Before Tax 2,39,39,011.98 31,99,198.61Provision for Tax 24 23,18,769.50 23,56,997.19

Profit After Tax 2,16,20,242.48 8,42,201.42

Profit/(Loss) brought forward (2,00,06,701.19) (2,08,48,902.61)

Less: Deferred Tax for earlier years (54,572.70) -

15,58,968.59 (2,00,06,701.19)

Appropriations:Transfered to General Reserve - -Proposed Dividend - -Corporate Dividend Tax - -Balance C/F to Balance Sheet 15,58,968.59 (2,00,06,701.19)

15,58,968.59 (2,00,06,701.19)

Earning per share (Basic/Diluted) 1.33 0.09Significant Accounting Policies & Notes to the Accounts

Significant Accounting Policies and Notes to the Account 25

The schedules referred to above from an integral par t of the Profit & Loss Account





CONSOLIDATED CASH FLOW STATEMENTSFOR THE YEAR ENDED 31ST MARCH, 2011

31.03.2011 31.03.2010

A Cash flow from operating activitiesNet Profit before tax and EOI 2,39,39,011.98 31,99,198.62Adjustment forDepreciation 76,81,290.56 1,38,38,849.75Deferred Rev. Exp. w/o 3,17,954.98 3,17,954.98Interest Paid 2,20,61,609.27 2,54,12,234.80Interest received (30,20,641.87) (12,35,143.97)Dividend received (11,675.00) (4,657.00)(Income)/Loss from Associates 1,46,427.63 (1,16,360.15)Currency fluctuation profit/ (Unrealised loss) (2,13,085.20) (44,65,020.44)(Profit)/loss on sale of assets (71,000.00) -

2,68,90,880.37 3,37,47,857.98Operating profit before working capital changes 5,08,29,892.35 3,69,47,056.59Adjustment forInventories (2,77,33,377.97) (4,60,69,667.50)Trade Receivables (11,83,00,993.80) (9,69,05,586.64)Other Receivables (2,14,97,550.69) (2,58,88,276.27)Trade Payables 3,73,24,441.02 8,32,48,702.14Other Payables 1,30,48,747.42 (11,71,58,734.02) (88,68,941.41) (9,44,83,769.68)

(6,63,28,841.67) (5,75,36,713.09)

Cash Generated from OperationsTax (paid)/Refund (Net ) (47,08,471.99) (11,57,394.73)Net cash from operating activities before (7,10,37,313.66) (5,86,94,107.82) Extra ordinary & prior period itemsDepreciation - (6,94,207.52)Currencies translation gain/(loss) (49,520.89) 6,45,979.82Net cash from operating activities before Extra ordinary (7,10,86,834.55) (5,87,42,335.52)

B Cash flow from Investing activitiesPurchases of fixed assets (48,23,389.91) (12,02,540.42)Sale of fixed assets 71,000.00 -

Adjustment/(Purchases) of investment(Including accrued income) (88,674.13) (31,88,360.15)Income/(loss) from Associates (1,46,427.63) 1,16,360.15Movement in Loan (56,01,287.80) 2,06,36,533.59Dividend received 11,675.00 4,657.00Interest received 30,20,641.87 12,35,143.97Net cash used in investing activities (75,56,462.60) 1,76,01,794.14

C Cash flow from financing activitiesProceeds from increase in Capital 12,24,00,000.00 2,38,34,100.00Proceeds/(Repayment) of Bank BorrowingsLong Term (3,01,25,000.00) (57,14,478.00)Shor t Term 1,40,77,176.86 92,16,559.79Proceeds/(Repayment) of Other Borrowings (1,13,36,975.03) 3,56,36,901.54Interest Paid (2,20,61,609.27) (2,54,12,234.80)Net Cash from financing acitivities 7,29,53,592.56 3,75,60,848.53Net Increase/(decrease) in cash & cash (56,89,704.58) (35,79,692.85)Equivalent (A+B+C)Cash & cash equivalents-Opening balance 1,81,01,779.08 2,16,81,471.93Cash & cash equivalents-Closing balance 1,24,12,074.51 1,81,01,779.08Cash & cash equivalentsCash & Bank balances 1,49,96,379.62 2,61,06,114.01Overdrawn Bank balance (25,84,305.11) (80,04,334.93)

1,24,12,074.51 1,81,01,779.08Notes:1. Cash & Cash Equivalents represent Cash & Bank balances ( Including over draft balances)2 .Figures in parenthesis represent Cash Outflow.3. Previous year figures have been regrouped/rearranged whereever found necessary.






(Amount in lacs) (Amount in lacs)SCHEDULE NO. 1Share CapitalAuthorised:25000000 (20000000) Equity shares of 10/- each 25,00,00,000.00 20,00,00,000.00Issued, subscriped and paid up:19342005 Equity shares of 10/- eachfully paid up 19,34,20,050.00 9,14,20,050.00(Previous year 9142005 Equity shares of 10/- each)

19,34,20,050.00 9,14,20,050.00

SCHEDULE NO. 2Reserve & SurplusShare Premium 7,72,47,850.00 5,68,47,850.00General Reserves 94,00,000.00 94,00,000.00Employee Stock Option Outstanding 1,25,500.00 1,25,500.00Profit & Loss A/C brought forward 15,58,968.59 -C/Fluctuation Reserves (2,09,07,721.26) (2,06,85,636.06)

6,74,24,597.33 4,56,87,713.94

SCHEDULE NO. 3SECURED LOANTerm Loan from SBI- Commercial Br. (Ref note : a) 85,50,000.00 2,28,00,000.00Working Capital Term Loan from SBI, Commercial Br. (Ref note : a) - 1,12,50,000.00Working Capital Term Loan from Indian Bank, Strand Rd. Br. - 46,25,000.00(Ref note : a)Working Capital loan with SBI, Commercial Br. (Ref note : b ) 6,92,21,339.56 5,17,16,219.75Working capital loan with Indian Bank,Strand Road Br.(Ref note : b & c) 3,35,38,764.44 3,69,66,707.39

11,13,10,104.00 12,73,57,927.14

a) Secured by way of charge of mortgage on entire immovable assets of the companyat Salt Lake and Rajarhat on the basis of paripasu inter-se, hypothecation charge overentire moveable fixed assets of the company at Salt Lake and personal guaranteeof Managing Director.b) Secured against hypothecation of stocks, book debts & other moveable assets of the company, charge of mortagage on the basis of paripasu inter-se onthe entire immovable properties of the company at Salt Lake, Rajarhat and Ekdalia Roadand personal guarantee of Managing Directorc) Working capital loan with Indian Bank is further secured by way of pledge ofequity shares of the company standing in the name of Managing Director and hisfamily members & FDR/CDR standing in the name of the company.

SCHEDULE NO. 4UNSECURED LOANSAuto Loan 11,40,344.90 1,46,448.34From Corporate Bodies 2,89,00,000.00 4,12,30,871.59

3,00,40,344.90 4,13,77,319.93SCHEDULE NO. 5Deferred Tax (Liabilities) / AssetsOpening Balance 53,32,220.30 35,56,117.31Add: Deferred tax Credit for prior years (2,555.80) 34,49,310.00Add/(Less) : Currency Translation gain for earlier year 3,584.00 (6,45,979.82)Add/(Less) : Deferred tax (Charge)/Credit for the year 14,52,830.50 (10,27,227.19)Total 67,86,079.00 53,32,220.30

SCHEDULES FORMING PART OF THE CONSOLIDATED BALANCE SHEET ANDPROFIT & LOSS ACCOUNT (...CONTD.)


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(Amount in lacs) (Amount in lacs)SCHEDULE NO. 7Investment (at cost) TradeLong Term ( at Cost) Quoted:Investment in equity with TCS 11,900.00 11,900.00(28 Nos. Equity shares of 425/- each fully paid)

Market Value as at 31.03.2011 21858/- (Pr. Year 15120/-)Investment in equity withComunet Info-Systems Pvt. Ltd. 35,43,661.92 30,72,000.00(48% Shares holding)(96000 ordinary shares of 22/-(F.V. 10/-) each fully paid )

Investment in equity withOntrack Systems B.V. Netherland - 6,18,089.55(26% Shares holding)(9256 ordinary shares of Euro 1/- each fully paid )

Investment in equity withPersonal Medic Ltd. - 208.11(3 ordinary shares of £ 1/-each fully paid)Investment to Domain Name 2,35,309.87 -

37,90,871.79 37,02,197.66

SCHEDULE NO. 8Stock-in-Trade(As taken,valued and certifited by Management)

Work-in-progress 67,92,825.30 1,00,18,826.98Consumables Spares SSD 6,19,609.93 9,22,870.82Trading Stock 8,59,34,233.08 5,46,71,592.55

9,33,46,668.31 6,56,13,290.35

SCHEDULE NO. 9Sundry DebtorsDebts over six months 14,36,65,331.28 3,74,33,609.37Others 18,50,37,876.00 17,29,68,604.12

32,87,03,207.28 21,04,02,213.49

SCHEDULE NO. 10Cash & Bank BalancesCash in hand 3,86,854.22 3,06,411.23Balance with Schedule BankCurrent Account 4,27,960.13 10,47,640.16Dividend unpaid A/c 4,62,100.13 4,62,100.13Gratuity A/c 1,686.00 1,756.00Fixed Deposit Cummulative 97,89,212.00 2,29,59,222.00(Lien with the Bank)Asahi Bank, Japan 1,17,069.37 1,18,172.81Indian Bank - EEFC GBP A/c 36,179.00 34,559.80Indian Bank - EEFC USD A/c 2,07,070.77 10,345.85SBI - EEFC USD A/c 2,513.18 2,536.87Dividend A/c - Indian Bank 940.00 1,010.00ANZ Bank 16,08,555.94 -HSBC UK 18,82,738.00 11,58,368.00Axis Bank India 73,500.88 3,991.16

1,49,96,379.62 2,61,06,114.01





(Amount in lacs) (Amount in lacs)SCHEDULE NO. 11Loans & AdvancesUnsecured loan to body corporate considered goodLoan to Bodies Corporates 2,55,89,384.29 1,99,88,096.49Advances (Recoverable in cash or in kind or for value to be received) 5,36,46,720.24 3,61,63,517.61Deposits 81,88,771.71 45,74,558.46Adv. IT and TDS-By Customer 10,05,587.72 74,795.73Prepaid Expenses 8,45,144.30 4,45,009.49Advance to Subsidiaries (Pending allotment) 8,84,083.50 8,84,083.50

9,01,59,691.76 6,21,30,061.28SCHEDULE NO. 12CURRENT LIABILITIESSundry Creditors- For Goods Supplied 18,67,77,913.72 11,43,62,700.63- For Expenses 4,77,32,925.22 5,12,60,253.51

Dividend Unpaid Account 4,62,100.13 4,62,100.13Other Advance 2,61,27,315.16 72,77,253.87Advance from Customers 19,47,177.46 3,40,59,323.00Share Application Money-Pending Allotment - 54,02,666.87Overdrawn bank balance 25,84,305.11 80,04,334.93Interest Accrued but not due - 3,98,647.00Unexpired Service Income 5,57,701.77 -

26,61,89,438.57 22,12,27,279.94* Includes amount of 56,978/- (P.Y. 11,078/-) due to be transferred/credited

to investor Education and Protection Fund

SCHEDULE NO. 13ProvisionsProvision for FBT(Net Off) 10,21,302.00 10,21,302.00

10,21,302.00 10,21,302.00

SCHEDULE NO. 14MISCELLANEOUS EXPENDITUREA. Preliminary & preoperative Expenses 32,841.00 65,682.00Less: Written Off 1/5th 32,841.00 32,841.00

- 32,841.00B. Defered Revenue Exp. 60,66,602.44 6,351,716.43

1/5 written off 2,85,113.98 285,113.98

Misc Expenditure 57,81,488.46 60,66,602.45

Total : (A+B) 57,81,488.46 60,99,443.45





(Amount in lacs) (Amount in lacs)SCHEDULE NO. 15SalesDomestic Sales 52,29,42,754.51 27,13,13,745.98Export Sales 12,09,25,835.70 12,63,38,862.81

64,38,68,590.21 39,76,52,608.79

SCHEDULE NO. 16OTHER INCOMETotal of Miscellaneous Income 16,78,342.14 1,90,854.58Profit on sale of Assets 71,000.00 -Interest Received 30,20,641.87 12,35,143.97Dividend on Shares 11,675.00 4,657.00Income from Comunet 4,71,661.92 -Income from Holland - 1,16,360.15Commission,Incentive & Discount Received 2,08,538.00 14,97,838.00

54,61,858.93 30,44,853.70

SCHEDULE NO. 17Increase/Decrease in Stock (WIP)Opening Stock-WIP 1,00,18,826.98 1,40,98,461.42Closing Stock 67,92,825.30 1,00,18,826.98

32,26,001.68 40,79,634.44

SCHEDULE NO. 18Cost of Purchase - TradingOpening Stock 5,46,71,592.55 39,66,203.48Add: Purchase 47,12,56,197.82 25,37,55,031.84Less: Closing Stock 8,59,34,233.08 5,46,71,592.55

43,99,93,557.29 20,30,49,642.77

SCHEDULE NO. 19CONSUMPTION OF CONSUMABLE STORESOpening Stock 9,22,870.82 14,78,957.95Add: Purchase 22,83,130.78 12,63,512.00

Less : Closing Stock 6,19,609.93 9,22,870.82

25,86,391.67 18,19,599.13

SCHEDULE NO. 20

OPERATING EXPENSESElectricity Expenses 12,61,218.00 13,27,759.82Professional & Consultancy Charges 2,57,82,212.78 1,37,83,875.37Repairs & Maintenance 17,25,944.68 18,95,028.70Bandwith Charges 8,66,153.64 51,04,617.18Insurance Premium 1,34,835.89 2,14,539.94OSL Aust. 64,64,702.15 -Expenses fo (WOS) - UAE 67,39,000.93 52,57,316.01Expenses for (WOS) - UK (Opt) 1,30,38,936.12 11,70,224.09

5,60,13,004.19 2,87,53,361.11


59





(Amount in lacs) (Amount in lacs) SCHEDULE NO. 21

Staff CostSalaries 5,48,18,218.88 8,15,57,315.34Employer's Contribution to ESI 2,59,362.13 1,24,912.14Employer's Contribution to Gratuity 2,41,108.00 50,000.00Provident Fund -Employer's Contribution 9,21,401.53 11,56,991.28Insurance benefit to Staff 3,39,342.38 -

5,65,79,432.92 8,28,89,218.76

SCHEDULE NO. 22

ADMINISTRATIVE EXPENSESAdministrative Expenses for (WOS) - UK 11,20,680.80 4,21,580.29Administrative Expenses for (WOS) - UAE 55,77,540.90 2,40,029.00Administrative Expenses for (WOS) - Australia 31,32,901.98 -Administrative Expenses for (WOS) - OGSL 9,22,359.73 -Director Remuneration 36,10,000.00 31,80,000.00Printing & Stationary 5,16,170.80 5,16,973.36Business Promotion 7,91,805.11 13,72,781.36Advertisement & Publicity 4,38,489.00 3,40,596.30Office Expenses 15,26,454.95 18,65,202.88Staff Training & Development 94,956.00 19,500.00Discount Allowed 1,59,578.10 9,16,239.79Currency Fluctuation Loss 14,48,194.94 79,08,180.52Share of loss in associates 6,18,089.55 -Rent,Rates & Taxes 11,98,450.00 87,11,998.66Travelling & Conveyance 1,09,88,829.45 77,62,695.78Postage & Telephone 14,20,242.11 20,34,780.37Staff Welfare Expenses 1,54,552.75 4,32,373.12Remuneration to Auditors 3,45,650.00 3,46,250.00Other Charges 24,47,016.44 19,62,794,22

3,65,11,962.61 3,80,31,975.65

SCHEDULE NO. 23

FINANCE CHARGESBank Charges 60,70,717.21 78,76,428.62

Bank Interest -Working Capital 1,59,90,892.06 1,75,35,806.18

2,20,61,609.27 2,54,12,234.80

SCHEDULE 24

TAXESCurrent Tax 37,71,600.00 13,29,770.00Deferred Tax Charge/ (Credit) (14,52,830.50) 10,27,227.19

23,18,769.50 23,56,997.19


SCHEDULE NO. 25

SIGNIFICANT ACCOUNTING POLICIES AND NOTES TO THE ACCOUNTSOVERVIEW

Ontrack Systems Limited along with its wholly owned andcontrolled subsidiaries Ontrack Systems (UK) Ltd., OntrackSystems (UAE) Ltd., Ontrack Systems (Aust) Pty. Ltd. and OntrackGlobal Services Ltd. is a leading global Information Technologyservice provider. The Company has two Associate Companiesnamely Ontrack Systems B.V. Netherland and Communet Info-Systems Pvt. Ltd. The Company has an established line ofbusiness in India, UK, UAE, Holland and Australia which mainlydeals with computer software development both onsite andoffshore. The Company is headquar tered in India.

OSL Group is formed to provide Information Technology solutionsand Information Technology consultancy & Development servicesglobally, enhancing competitive advantage of its customers. TheCompany also provides both onsite as well as offshore servicesin the area of internet, migration projects, data warehousing, e-commerce and web-based solutions amongst others.

A. SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PREPARING THE FINANCIAL STATEMENTS

The consolidated financial statements of Ontrack Systems Limited(The Company), its subsidiaries and associates (“The Group”)are prepared under the historical cost convention and inaccordance with the requirements of the Companies Act, 1956.

PRINCIPLES OF CONSOLIDATIONThe financial statements of the subsidiary companies used inthe consolidated are drawn up to the same repor ting date as ofthe company.The consolidated financial statement have been prepared on thefollowing basis in accordance with Accounting Standard on“Consolidated Financial Statement” (AS-21), “Accounting forInvestments in Associates in Consolidated Financial Statements”(AS-23) and “Financial Repor ting of Interest in Joint Ventures”(AS-27), notified under the Companies (Accounting Standard)Rules, 2006.a) The financial statements of the company and its subsidiary

companies have been combined on a line –by- line basisby adding together like items of assets, liabilities, income& expenses. Inter – company balances and transactionsand unrealized profits and losses have been fully eliminated.

b) Interest in a jointly controlled entity is repor ted usingpropor tionate consolidation

c) The consolidated financial statement includes the share ofprofit/loss of associate companies, which are accountedunder the “Equity Method” as per which the share of profitthe associate company has been added to the cost ofinvestment. An associate is an enterprise in which theinvestor has significant influence and which is neither asubsidiary nor a joint venture.

d) The Consolidated financial statement includes threesubsidiaries incorporated outside India whose financialstatements have been drawn up in accordance with thegenerally accepted accounting practices (GAAP) asapplicable locally. These financial statements have been

NOTES TO CONSOLIDATED FINANCIAL STATEMENT

re-stated in Indian Rupees considering them as non-integralpar t of the Group’s operations and the resultant exchangegain / loss on conversion has been carried forward asCurrency Translation Reser ve. In the opinion of theManagement, based on the analysis of the significanttransaction of those subsidiaries, no material adjustmentsare required to be made to comply with group accountingpolicies/Indian GAAP.

e) The line-by-line consolidation of expenses are made in theProfit & Loss account of the Group, except cer tain expenseswhich are clubbed under Operating & Administrativeexpenses of each subsidiary and do not corroborate to anypar ticular expense of the Company. Such expenses areshown as the Operating and Administrative expenses ofthe respective subsidiaries under the respective heads inthe Group.

f) The excess of cost to the company of its investments insubsidiary companies over its share of the equity of thesubsidiary companies at the dates on which the investmentsin the subsidiary companies are made, is recognized as“Goodwill” being an asset in the consolidated financialstatements. Alternatively, where the share of equity in thesubsidiary companies as on the date of investments is inexcess of cost of investment of the Company, it is recognizedas “Capital Reserve” and shown under the head “Reserve &Surplus” , in the consolidated financial statements.

g) Minority interest in the net assets of consolidatedsubsidiaries consists of the amount of equity attributable tothe minority share holders at the dates on which investmentsare made by the Company in the subsidiary companies andfur ther movements in their share in the equity, subsequentto the parent subsidiary relationship come in to existence.

THE LIST OF SUBSIDIARY COMPANIES, ASSOCIATES AND JOINTVENTURES, WHICH ARE INCLUDED IN THE CONSOLIDATIONAND THE COMPANIES HOLDINGS THEREIN ARE AS UNDER:

Name of the Country of % Shareholding % ShareholderCompany Incorporation and Voting and Voting

Power 2011 Power 2010

Subsidiary Companies

a) Ontrack Systems UK 100 100(UK) Ltd.

b) Ontrack Systems UAE 100 100(UAE) Ltd.

c) Ontrack Systems Australia 100 100(Aust) Pty. Ltd.

d) Ontrack Global India 99.99 99.99Services Ltd.

Associates

a) Comunet Info- India 48 48Systems Pvt. Ltd

b) Ontrack Systems Netherland 26 26B.V Netherland



USE OF ESTIMATES

The preparation of financial statements, in conformity with thegenerally accepted accounting principles, requires estimates andassumptions to be made that affect the reported amount of assetsand liabilities on the date of financial statements and the reportedamount of revenues and expenses during the repor ted year.Differences between the actual results and estimates arerecognized in the year in which the results are known /materialized.

FIXED ASSETS

Fixed Assets are stated at cost less accumulated depreciation

DEPRECIATION

Depreciation on Fixed Assets has been provided on Straight LineMethod and written off over a period as estimated by themanagement, except for Ontrack Systems (Aust.) Pty Ltd.

Computer and its Accessories including Software 3 Years

Building - freehold 20 Years

Vehicles of Ontrack Syatems(UAE) Ltd 4 years

Other Fixed Assets 5 to 6 Years

Lease hold Land & Building is amor tized over the period of lease.

In respect of Fixed assets in Ontrack Systems (Aust.) Pty. Ltd,the depreciation has been provided on Written Down Value(WDV)method and in accordance with Australian Tax Rule. Thedepreciation charge is not significant in the context of theconsolidated financial statements.

IMPAIRMENTS

At each Balance Sheet date, the Company reviews the carryingamount of its fixed Assets to determine whether there are anyindications that those assets suffered any impairment loss. Ifany such indication exists, the recoverable amount of the assetis estimated in order to determine the extent of impairment loss.The recoverable amount is the higher of an asset net selling priceand value in use. In assessing value in use , the estimated futurecash flow expected from the continuing use of the assets andfrom its disposal are discounted to their present value using apre-determined rate that reflect the current market assessmentof time value of money and the risks specific to the assets .Reversal of impairment loss is recognized immediately as incomein the Profit & Loss Account.

INVESTMENTS

Long term investments are stated at cost. Provision for diminutionin the value of long-term investment is made only if such a declineis other than temporary in nature in the opinion of theManagement. If the values of Investment for take over of a goingconcern are much higher than estimated cost of Net Assets Valueincluding their intrinsic value as estimated by management, theadditional payment in lieu of takeover value is considered asGoodwill and if it is reverse the amount will be transferred toCapital Reserve.

INVENTORIES

Inventories of trading goods, spare parts and consumable stores

are valued at lower of cost or net realizable value. Outdated anddamaged stocks are written off on technical evaluation. The WIPis valued at direct cost attributed to projects based on stages ofcompletion as cer tified by the management.

RECOGNITION OF REVENUE

Sales:

The sales are recognized at the point of dispatch of material tothe customers and bills are raised to them. Sales are shown netof goods return, rebates, rate differences etc. Income frommaintenance contracts are accounted for in the relevantaccounting year upon entering into the contract. Revenue relatingto the provision of services is recognized on the basis ofachievement of prescribed milestone as relevant to terms ofcontract or propor tionate completion method as applicable.

Income & Expenditure:

The Company follows mercantile system of accounting andrecognizes significant items of Income & Expenditure on accrualbasis.

PRELIMINARY EXPENSES AND DEFERRED REVENUEEXPENDITURE

Preliminary expenses and Deferred revenue expenditure areamortized over a period of five years, except the Deferred revenueexpenditure of Ontrack Global Services Ltd.

In respect of Ontrack Global Services Ltd, Deferred RevenueExpenditure includes Management expenses and Projectexpenses on pilot project, which will be amor tized after thecommencement of the Pilot Project.

FOREIGN CURRENCY TRANSACTIONS

Foreign currency transactions are accounted for at the prevailingexchange rate as on the date of execution of the transaction or ofthe rate cover under forward contract as applicable. Foreigncurrency monetary items due at the end of the year are convertedat the exchange rate prevailing as on that date. Exchangedifferences arising on the settlement of the transactions or onreporting at the year end rates are recognized as Income or asexpenses in the period in which arise, except in respect of fixedassets acquired from out side India, where exchange variance isadjusted to the carrying amount of the respective fixed assets.

EMPLOYEES BENEFIT

Employees Benefit:

Shor t Term Employees Benefit: The undiscounted amount of shortterm employee benefit expected to be paid in exchange for theservices rendered by the employees are recognized during theperiod when the employees render the service

Post Employment benefits plans:

a) Defined Contribution Plan: Contribution under definedcontribution plan payable in keeping with the relatedscheme are recognized as expenses for the year.

b) Defined benefit plan: The Group gratuity scheme providedby the company is a defined benefit plan. Benefits underthe defined benefit plan are generally based on the years ofservice rendered and the employee’s eligible compensation(immediately before retirement). The scheme covers

substantially all regular employees and the companycontributes funds to the Life Insurance corporation of India,which administers the scheme on behalf of the company.

Other Long Term Employment benefit (unfunded) : The costof providing long term employee benefit is generallyrecognised on cash basis

The employees benefit if applicable to the subsidiaries arerecognized during the year, based on the law as prevailingin their respective country of incorporation, except forOntrack Systems (UK) Ltd, where the applicability and/orthe provision requirement for employees benefit is notdisclosed/repor ted in it’s Financial statement.

SEGMENT REPORTING

The geographical segments have been identified as primarysegment on the basis of location of the major customers of theCompany. These segments represent a strategic business unitthat offers different places of unit having different risk and returns.Inter-segment sales and transfers if any are accounted for, as ifthe sales or transfers were to third par ties at current marketprices. Income & expenditure and Assets & Liabilities notallocable to any specific geographical segment, are classifiedas unallocated. The company’s secondary segment is businesssegment and it operates only in one business segment namelyTrading/dealing with computer hardware and software. Thereforeno separate secondary segment is identifiable as required byaccounting standard 17 issued by ICAI.

BORROWING COSTS

Borrowing costs attributable to qualifying assets are capitalizedup to the date when such assets are ready for their intend use,other borrowing cost are recognized as expenses in the periodin which they are incurred.

EARNING PER SHARE

Basic earning per share are calculated by dividing the net profitor loss for the period attributable to equity share holders (afterdeducting attributable taxes) by the weighted average number ofequity shares outstanding during the period. The weightedaverage number of equity shares outstanding during the periodis adjusted for events of bonus issue, bonus element in a rightsissue to existing shareholders, share split and reverse sharessplit (consolidation of shares).

For the purpose of calculating diluted earning per share, the netprofit or loss after tax for the period attributable to equity shareholders and the weighted average number of shares outstandingduring the period are adjusted for the effects for all dilutivepotential equity shares.

TAX ON INCOME

Current Tax represents the amount that would be payable basedon the computation of tax as per prevailing taxation laws underIT Act 1961. Deferred tax is recognized subject to considerationof prudence, on timing differences, being the difference betweentaxable income and accounting income that originate in one periodand are capable of reversal in one or more subsequent periods.Deferred tax is calculated using the tax rates and tax laws thathas been enacted and/or substantially enacted as at the BalanceSheet date. Deferred tax assets are not recognized unless thereis vir tual cer tainty that sufficient future taxable income will beavailable against which such deferred tax assets can be realized.


In respect of Ontrack Systems (UK) Ltd., provision for deferredtax is made for tax on gains arising from the revaluation (andsimilar fair value adjustments) of fixed assets, and gains ondisposal of fixed assets that have been rolled over intoreplacement assets, only to the extent that at the Balance Sheetdate, there is a binding agreement to dispose of the assetsconcerned. However, no provision is made where, on the basisof all available evidence at the balance sheet date, it is morelikely that the taxable gain will be rolled over into replacementassets and charged to tax only where the replacement assetsare sold. Fur ther provision is made for deferred tax that wouldarise on remittance of the retained earnings of overseassubsidiaries, associates and joint venture only to the extent that,at the balance sheet date, dividends have been accrued hasreceivable.

CONTINGENT LIABILITIES & ASSETS

Provisions involving substantial degree of estimation inmeasurement are recognized when there is a present obligationas a result of past events and it is probable that there will be anoutflow of resources. Contingent Liabilities are not recognizedbut are disclosed in the Notes to the accounts. Contingent Assetsare neither recognized nor disclosed in the financial statements.

B. NOTES TO THE ACCOUNTS1. Contingent liabilities not provided for : ( in lacs)

31.03.2011 31.03.2010a) Income Tax Demand against

which Appeals are pending 286.00 286.00 b) Bank Guarantee :

Foreign 5.24 545.05Domestic 125.02 43.69

2. Loans and Advances include 10.00 lacs due from a par ty,against which the company has filed monetary suit and thematter is subjudice. Pending the outcome of the legalproceedings, the extent of amounts recoverable there against isnot ascer tainable and therefore no provision has been made inthe accounts.

3. Sundry Debtors include 260.37 lacs (AED 21,46,523) relatingto account receivables of Ontrack Systems (UAE) Ltd. which havebeen lying unrealized over year. Necessary action and persuasionhas been taken for the realization of the debts. Pending theoutcome of the persuasive and action, the extent of amountrecoverable there against is not ascer tainable and therefore noprovision has been made in the accounts. Fur ther themanagement is in belief that the concentration of credit risk isbeing mitigated by high credit wor thiness and financial stabilityof its trade customer.

4. The employees’ gratuity fund scheme managed by Life InsuranceCorporation of India is a defined benefit plan. The present valueof the obligation is currently ascer tained by the corporation basedon the actuarial valuation using the project unit cost method andthe recommended contribution to the fund managed by thecorporation has been provided in the accounts during the year.

5. No provision has been made for the present value of leaveaccrued in respect of the eligible employees based on theactuarial valuation using the Projected Unit Cost Method. Thepresent value of the


obligation is currently not determined / ascer tained.

However in respect of Ontrack Systems Ltd, India, leave benefitas per management’s policy is not to be accrued beyond 30days but availed of and the employees have been advised toplan their leave in advance while in service and immediatelybefore superannuation. Leave not availed of is not encashable.

6. The estimated amounts required to cover employees’ end ofservice indemnity as at the date of financial statement of OntrackSystems (UAE) Limited are computed in pursuance to the UnitedArab Emirates Federal Labour Law No. 8 of 1980 based on theemployees’ accumulated period of ser vice and currentremuneration. However the management is of the opinion thatno significant difference would have arisen had the liability beencalculated on an actuarial basis, as salary inflation and discountrates are likely to have approximately equal and opposite effects.

7. Loans and advances include 219.01 lacs due from a customeron account of encashment of performance bank guarantee, whichis disputed and the company has taken necessary step to referthe matter for arbitration. Pending the outcome of arbitrationproceedings, it is considered good and recoverable.

8. The accounts of Ontrack Systems (UK) Ltd is exempted fromstatutory audit in terms of Sec 248 of the UK Companies Act.,1985. Therefore it’s unaudited financial statement as approvedby the board of directors of the company are considered for theconsolidation of the accounts.

9. The Audited accounts of Ontrack Systems (Australia) Pty. Ltd. isnot available. The unaudited financial statement as approved bythe board of directors and compilation repor t issued thereon interms of Australian Professional Ethic Standard (APES)-315 hasbeen considered in the consolidation of the accounts.

10. The financial statement of following subsidiaries have beenconsidered on Unaudited basis. Details of the same are as under:

Ontrack Systems Ontrack Systems(UK) Ltd. (Aust) Pty. Ltd

As at March 31, 2011 ( in lacs) ( in lacs)Net Worth 265.31 (228.79)

For the year ended March 31, 2011Total Revenue 14.90* 235.12Net Increase/(Decrease) in Cash &Cash Equivalent 6.70 77.47

* Net of consolidation adjustments.

11. Major Components of Deferred Tax Assets/(Liabilities) as at31.03.2011 are as follows:

( in lacs)Items As at During As at

01.01.2010 the Year 31.03.2011Depreciation difference 57.88 1.88 59.76Expenses disallowedunder 40(a) (12.13) 14.44 2.31Amor tization of DeferredRevenue Expenses (0.88) (0.07) (0.95)Unadjusted Losses 8.45 (1.29) 7.16Others - (0.42) (0.42)

---------- --------- ----------53.32 14.54 67.86

---------- --------- ----------



12. Calculation of Earning per shares :( in lacs)

Par ticulars 31.03.2011 31.03.2010Net profit/(loss) after taxattributable to shareholders 215.66 8.42Weighted avg. number of equityshares outstanding (No.) 1,62,40,087 86,81,648Nominal value of equity shares 10/- 10/-Basic/Diluted earning per share 1.33 0.10

13. Details of prior period expenses / (income):( in lacs)

Par ticulars 31.03.2011 31.03.2010Employees’ Gratuity 4.20 -Depreciation - (6.94)14. Sundry Debtors include:

( in lacs)Par ticulars Balance as on Maximum

31.03.2011 amountoutstandingat any timeduring the

YearDue from companies in whichDirectors are Directors inR. P. Infosystems (P) Ltd. 31.07 69.61

(-) (-)Comunet Infosystems (P) Ltd 10.32 10.32

(-) (-)Figures in Parenthesis represent for the previsous year

15. Related Party TransactionName of the Related par ties and description of relationship:

Name Relationship

Ontrack Systems (B.V. ) Netherland Associated EnterpriseComunet Info-Systems Pvt. Ltd. Associated EnterpriseR. P. Infosystems Pvt. Ltd. Entity under common controlMr. B. Hari Key Managerial PersonnelMr. S.V.Ramani Key Managerial PersonnelMrs. Simi Hari Relative of Key Managerial

Personnel

Par ticulars of Transactions and closing balances at the end of theyear

Nature of Entity under Associate Key Managerial Balance as atTransactions Common Enterprises Personnel 31.03.2011

Control & relativesRemuneration - - 41.14 3.68

(-) (-) (36.00) (23.80)Investment - 35.44 - 35.44

(-) (36.90) (-) (36.90)Advance Received - - - 25.23

(-) (-) (94.01) (94.01)Advance Paid - 8.84 - 8.84

(-) (8.84) (-) (8.84)Sales 35.47 - - 41.39

(-) (-) (-) (-)




16. SEGMENT INFORMATION FOR THE YEAR ENDED 31ST MARCH 2011

Primary : Geographical Segment

CONSOLIDATED SEGMENT-WISE REVENUE RESULTS ( In Lacs)

PARTICULARS DOMESTIC UAE EUROPE & OTHERS TOTAL

Segment Revenue 5229.43 803.14 406.12 6438.69

(2713.14) (670.02) (594.53) (3977.69)

Segment Result 369.22 364.53 (-) 107.54 626.21

(197.45) (273.45) (8.46) (479.36)

Unallocated income 24.41

(excluding interest income) (16.94)

Unallocated Expenditure 144.01

(91.09)

Finance Charges (Net) 190.41

(241.77)

Depreciations (Net) 76.81

(131.45)

Profit/(Loss) before tax 239.39(31.99)

Provision for Taxation 23.19

(23.57)

Profit/(Loss) after tax 216.20

(8.42)

Segment Assets 3281.44 1348.36 122.85 4752.65

(1698.99) (234.06) (1000.93) (2933.98)

Unallocated Assets 1883.60

(2085.87)

Segment Liabilities 3466.70 106.38 83.57 3656.65

(1407.50) (105.21) (248.09) (1760.80)

Unallocated Liabilities 428.96

(2149.04)

Capital Expenditure 48.23

(12.03)

Non cash expenditure other than depreciation 3.18

(3.18)

Capital Employed 2550.64

(1110.02)


17. Figures per taining to the subsidiary companies have been reclassified wherever necessary to bring them in line with the Company’s financialstatements

18. Previous year figures have been regrouped/rearranged/recast wherever found necessary.As per our repor t of even date attached

For GOENKA SHAW & CO.Chartered Accountants



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11


NOTICE

NOTICENotice is hereby given that the 23rd Annual General Meeting of the

Shareholders of the Company will be held at 11.30 A.M. on Friday, 23rd

September 2011 at Savera Hotel, 146, Dr. Radhakrishnan Salai, Mylapore,

Chennai, India to transact the following business:

ORDINARY BUSINESS

1. To receive, consider and adopt

a) The Audited balance Sheet as at 31.03.2011:

b) The Audited Profit and Loss account for the year ended as on that

date;

c) Directors’ report for the year 2010-2011 and

d) The Auditors’ report, thereon.

2. To appoint a Director in place of Mr. Robin Ghosh who retires by

rotation, being eligible offers, himself for reappointment

3. To appoint Goenka Shaw & Co., Chartered Accountants as the Auditors

of the Company who retires at the conclusion of this Annual General

Meeting and who has consented to continue as Auditors, if re-

appointed, to hold office for the period commencing from the

conclusion of this meeting till the conclusion of next annual general

meeting and to fix their remuneration.

SPECIAL BUSINESS

4. TO CONSIDER IF THOUGHT FIT, TO PASS WITH OR WITHOUT

MODIFICATION, THE FOLLOWING RESOLUTION AS AN ORDINARY

RESOLUTION:-

“RESOLVED THAT pursuant to provisions of section

175,198,269,309,310 and Schedule XIII and other applicable provisions,

if any, of the Companies Act, 1956, approval of the company is accorded

hereby for re-designation of Sri. B. Hari who was appointed as Managing

Director of the Company, as Chairman cum Managing Director upon

the same terms and conditions at the time of re-appointment of Mr.B.Hari

as Managing Director of the Company.”

“RESOLVED FURTHER THAT Mr. S. V. Ramani, Whole-time Director of

the Company be and is hereby authorized to do necessary acts and deeds

in this regard and also authorized to intimate to all the statutory authorities

including Register of Company, Stock Exchange, etc.”



RESOLUTION:-

“RESOLVED THAT Mr. Kaustuv Ray who was appointed as an additional

Director of the company on 03.11.2010 by the Board of Directors and

who ceases to hold office under section 260 of the Companies Act, 1956,

and in respect of whom the company has received notice in writing under

section 257 proposing his candidature for the office of Director, be and

is hereby appointed as a Director of the Company.”



RESOLUTION:-

“RESOLVED THAT in accordance with the provisions of sections 198,

269, 385 and also other applicable provisions, if any, of the Companies

Act, 1956, (including any statutory modification(s) or re-enactment

thereof, guidelines issued by the Central Government from time to time)

and shareholders of the company be and is hereby accorded their consent

to the appointment of Mr. Kaustuv Ray, as Joint Managing Director with

effect from 03.11.2010 without remuneration for the time being and to

be reviewed by the Board in future within the limit of Schedule XIII of the

Act”

“RESOLVED FURTHER THAT notwithstanding anything herein above

stated, in the event of absence or inadequacy of profits in any financial

year, Mr. Kaustuv Ray, Joint Managing Director, shall be paid the same

remuneration (if any) as stated herein above, as minimum remuneration

but subject to the upper limit, if any, prescribed under Schedule XIII to

the Companies Act, 1956 (including any statutory modification or re-

enactment thereof, for the time being in force), as may be applicable

from time to time.”

“FURTHER RESOLVED THAT Mr. S. V. Ramani, Whole-time Director of

the Company be and is hereby authorised to file necessary form with the

Registrar of Companies, Chennai and to do all other necessary acts in

this regard.”

By Order of the Board of Directors of the Company.

SD/-

Place: Chennai (S.V. Ramani)

Dated: 28th July, 2011 Whole-time Director and Secretary


NOTICE

NOTES

1. The relevant Explanatory Statement pursuant to Section 173(2) of

the Companies Act, 1956 is annexed hereto.

2. A member entitled to attend and vote at the meeting is entitled to

appoint a proxy to attend and vote on his behalf and proxy need not

be a member. The instrument appointing a proxy should be deposited

at the Registered Office of the Company, not later than 48 hours before

the meeting.

3. The Register of members and share transfer books will remain closed

from 13th Septembe,r 2011 to 23rd September, 2011 (both days

inclusive).

4. Members are requested to bring their copies of the Report and

Accounts to the meeting. Please bring the attendance slip with you

duly filled in and hand over the same at the entrance of the meeting

hall.

5. Members are requested to notify any changes in their address

immediately.

6. Members desirous of getting any information about the accounts and

operations of the Company are requested to address their queries to

the Company Secretary at least seven days in advance of the meeting

so that information required can be made readily available at the

meeting. Members may also login to the Company’s Website: http://

www.ontrackindia.com for details information on the financial

performance of the Company.

7. Members holding shares in physical form are requested to

dematerialize the shares into electronic form to facilitate faster transfer

and avoid rejections for bad deliveries. The share certificates may be

sent directly to our Share Transfer Agent: Cameo Corporate Services

Ltd., No. 1, Club House road, Chetpet, Chennai -600002

8. Pursuant to the provisions of Section 109A of the Companies Act.

1956, Shareholders are requested to file Nomination Form in respect

of their shareholdings. Any shareholder wishing to avail of this facility

may submit to the Company Statutory Form 2B.

9. Members wishing to claim their dividend, which remain unclaimed,

are requested to correspond with Company Secretary at the Corporate

Office in Kolkata with a copy to the R & TA, Cameo Corporate Services

Ltd., Chennai. Members are requested to note that dividend not

encashed or claimed within 7 years from the date of transfer to the

Company’s unpaid dividend account, will as per 205A of the

Companies Act, 1956, be transferred to the Investors Education and

Protection Fund.

10. Members are requested to address all communications including

dividend mandates to the Register and Share Transfer Agent: Cameo

Corporate Services Ltd., Subramanian Building, 1, Club House road,

Chetpet, Chennai -600002, India, E-mail : [email protected]


ITEM NO.4

Sri. B. Hari, Managing Director of the Company, is re designated as Chairman cum Managing Director upon the same terms and conditions at the time of re-

appointment of Mr.B. Hari as Managing Director of the Company vide AGM held on 22.09.2010. Considering his experience and valuable services rendered

to the Company, it is proposed to appoint him as Chairman cum Managing Director so that the Company could reap maximum benefits under his leadership.

The board feels that the re- designation would be in the overall benefit of the Company.

Accordingly the same are being placed before the share holders for their approval.

None of the Directors are interested except himself in the resolution.

ITEM NO.5

Mr. Kaustuv Ray who was appointed as Additional Director of the company vide Board Meeting dated 03.11.2010. According to the provisions of section 260

of the Companies Act, 1956, he holds that office up to the date of this meeting. As required by section 257 of the Act, a notice has been received from a

member signifying his intention to propose his appointment as Director, along with a deposit of rupees five hundred.

The Board of the Directors recommends the resolutions in item No.5 of the Notice for your approval.

None of the Directors except Mr. Kaustuv Ray, himself is interested in the resolution.

ITEM NO.6

Mr. Kaustuv Ray who was appointed as Joint Managing Director, of the company with effect from 03.11.2010 for the period of 5 years in the Board Meeting

held on 03.11.2010. Fur ther his appointment requires the approval of the shareholders of the company under section 269 and pursuant to Schedule XIII of

the Companies Act, 1956.

Hence this resolution to be passed as an ordinary resolution.

This may also be treated as an abstract of the terms of the contract and memorandum of interest in relation to appointment of Mr. Kaustuv Ray as Joint

Managing Director of the company with effect from 03.11.2010 for the period of 5 years pursuant to Section 302 of the Companies Act, 1956.

Your Directors recommends the Resolutions in item No. 6 of the Notice for acceptance of the members

None of the Directors are interested except Mr. Kaustuv Ray, himself in the resolution.

By Order of the Board of Directors.

Sd/-

Place : Kolkata (S.V. Ramani)

Dated : 28th July, 2011 Whole-time Director & Secretary

NOTICE

Explanatory statement pursuant to section 173(2) of the Companies Act, 1956and Clause 23(a) of the Articles of Association of the Company.

TWENTY THIRD ANNUAL GENERAL MEETING

DP ID/Client-ID No. of Shares

Note : (i) The proxy must be returned so as to reach the Investor Service Centre, Ontrack Systems Limited, ew No. - 48, Old No.30, Second Floor, Dr. Madhavan NairRoad, Mahalingapuram, Chennai - 600 034, India, not less than FORTY-EIGHT HOURS before the commencement of the aforesaid meeting.

(ii) Please mark the envelope ‘ONTRACK SYSTEMS-PROXY’.

Signed by the saidAffix

1 RupeesRevenue Stamp

DP ID/Client-ID No. of Shares

ONTRACK SYSTEMS LIMITEDRegistered Office: Bhatad Towers, Office No.1, 3rd Floor, No.30, West Cott Road, Royapettah, Chennai-600014, India

Phone:+91-44-42085258,& 28411633

P R O X Y F O R M

ONTRACK SYSTEMS LIMITEDRegistered Office: Bhatad Towers, Office No.1, 3rd Floor, No.30, West Cott Road, Royapettah, Chennai-600014, India

Phone:+91-44-42085258,& 28411633

A D M I S S I O N S L I PDATE : VENUE : TIME :

23rd September, 2011 Savera Hotel, 146, Dr. Radhakrishnan Salai, Mylapore, Chennai, India 11.30 A.M.

I hereby record my presence at the Twentythird Annual General Meeting of the Compqny on 23rd September, 2011. Please tick in the appropriate box.

Member Proxy

Name of the Proxy in Block Letter Member’s Signature Proxy’s Signature

NOTE :1. Member/Proxyholder wishing to attend the meeting must bring the Admission Slip to the meeting and hand over at the entrance duly signed.2. Representatives of body(ies) corporate to bring to the meeting Board Resolution authorising their presence together with proof of identity.

I/We...........................................................................................................................................................................................................................................................of ............................................................................................................................................................................ being a Member/Members of Ontrack SystemsLimited,hereby appoint...............................................................................................................................................................................................................................of................................................................................... or failing him......................................................................................................................................................of.................................................................................. or failing him....................................................................................................................................................of...............................................................................as my/our proxy to attend and vote for me/us on my/our behalf at the Twenty Third Annual General Meeting of the Company to be held on Wednesday, the 23rd day ofSeptember, 2011 and at any adjournment thereof.

As witness my/our hand (s) this day of ......................................................... 2011........................

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