Ltd Ontrack Systems Aus Pty Ltd Ontrack Global Services Ltd

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					                                                                              CON T ENT S

                                                                              1    Financial Highlights

                                                                              2    MD’s Message

                                                                              3    Operating Groups & Subsidiaries

                                                                              4    Organisational Structure

                                                                              5    Board of Directors

                                                                              6    Review of Business Groups

                                                                              14   Directors’ Report

                                                                              17   Management Discussion & Analysis

                                                                              19   Report on Corporate Governance

                                                                              23   Shareholders’ Information


         A Cautionary Note on Forward–looking Statements                      29   Auditors’ Report


The Annual Report contains statements regarding Ontrack’s corporate           32   Balance Sheet

strategies, objectives and views of future developments those are
                                                                              33   Profit & Loss Account
forward–looking in nature and are not simply reiterations of historical

facts. These statements are presented to inform shareholders of the           34   Cash Flow Statement
views of Ontrack’s management but should not be relied on solely in

making investment and other decisions. A number of important risk             36   Accounting Policies & Financial Notes
factors could lead to outcomes that differ materially from those presented
                                                                              51   Auditors’ Report
in the forward–looking statements. These include, but are not limited,

(i) changes in economic conditions that may lead to unforeseen                52   Consolidated Financial Statement
developments in markets for products and services rendered by Ontrack,

(ii) ability of the company to mobilize financial and human resources         73   Notice
to execute the business plan, (iii) adverse political developments that
                                                                              76   Proxy Form
may create unavoidable delays or postponement of transactions and

projects, (iv) changes in laws, regulations, or policies in any of the

countries where Ontrack conducts its operations that may affect Ontrack’s

ability to fulfill its commitments, and (v) significant changes in the

competitive environment. In the course of its operations, Ontrack adopts

measures to control these and other types of risks, but this does not

constitute a guarantee that such measures will be effective. All trademarks

and copyrights belong to their respective owners.
                                       FINANCIAL HIGHLIGHTS
                                       ONTRACK SYSTEMS LIMITED
                                                                                                                    (    in million)

   Particulars                                               2011-2012            2010-2011            2009-2010

   Export Sales                                                  80.81                96.66                 84.52
   Domestic Sales                                               951.97               522.70               271.31
   Other Income                                                   4.10                 3.51                  2.88
   Total Revenue                                               1036.88               622.87               358.71
   Operating Profit (EBITDA)                                     41.75                61.23                 40.42
   Finance Expenses                                              17.34                19.90                 23.46
   Profit / (Loss) on sale of Assets                               —                   0.07                   —
   Preliminary & Deferred Rev. Exp. W/O                           0.28                 0.28                  0.28
   Depreciation & Impairment Loss                                 3.03                 7.50                 12.90
   Income Tax (Net)                                               5.60                 1.97                  2.12
   Net Income/(Loss) after tax                                   15.50                31.65                  1.66
   Face Value per equity share                                    10/-                 10/-                  10/-
   EPS-after tax (Rs.)                                            0.80                 1.95                  0.18
   Dividend (%)                                                    Nil                  Nil                   Nil
   Operating Income/(Loss) as % to Total Revenue (%)              1.50                 9.83                 11.27
   Share Capital                                                193.42               193.42                 91.42
   Reserves & Surplus                                            86.90                86.77                 66.37
   Fixed Assets (Gross Block)                                   146.73               146.40               142.30




1200                                                               160
                                                                                              146.40                    146.73
                                               1036.88                   142.30
                                                                   140
1000

                                                                   120
 800
                                                                   100
                           622.87                                             82.21                 79.53                    76.83
 600                                                                80

       358.71                                                       60
 400
                                                                    40
 200
                                                                    20
             40.42                61.23              41.75
   0                                                                 0
        2009-10              2010-11             2011-12                   2009-10              2010-11                  2011-12

            Turnover        Operating Profit                                Gross Block       Net Block



                                                   ONTRACK SYSTEMS LIMITED                                                             1
                      Ontrack
                      s y s t e m s l i m i t e d
                      Winning Business Solutions




    Dear shareholders,

    The business scenario in India and other parts of the world where we operate continues to be very challenging. Despite the uncertainties your
    company has managed to post consolidated revenues of ` 1125.86 million and a PAT of ` 20.01 million.

    Despite a healthy order book position of your company, some of our customers deferred execution of projects due to negative market sentiments
    and various other factors . Though our Indian operations have shown top line growth, payment cycles in India continues to be very sluggish and
    margins are under severe pressure due to intense competition. Our overseas operations in 2011-12 have not shown signs of improvement and
    we have not taken up new initiatives in the overseas markets due to the recessionary trends that are still prevailing. Operational costs have gone
    up significantly which has forced us to take a fresh view of the business and the service and product offerings that we deliver to our customers .

    People and talent continue to be the core drivers and assets of our business. Our employees have once again shown tremendous commitment
    towards the customer and the company. We are strengthening our employee strength by recruiting new professionals and we are well prepared
    to take up the challenges in the market place.

    Your company is now 24 years young and as we enter the silver jubilee year , we once again reiterate our commitment to deliver value to our
    shareholders, customers and employees.

    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: 13 August 2012
    Kolkata, India.




2                                                         ONTRACK SYSTEMS LIMITED
                             Operating Groups,
                              Subsidiaries and
                            Associate Companies
   Global Delivery Centre
   o Enterprise Solutions Group
   o Service & Support Division
   o Technology Solutions Group
   o ERP
   Portals
   o tendertimes.com
   o 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.**

* 100% Subsidiary
** Associate Company


                            ONTRACK SYSTEMS LIMITED                    3
                                          ORGANISATIONAL STRUCTURE




                                                 SHAREHOLDERS




        ONTRACK GROUP                            BOARD OF DIRECTORS           AUDITORS




                                                 CMD & Jt. MD                 SUBSIDIARIES
                                                                              u   Ontrack Systems (UK) Ltd., UK
                                                                              u   Ontrack Systems (UAE) Ltd., UAE
                                                                              u   Ontrack Global Services Ltd., INDIA
                                                                              u   Ontrack Systems (Aust.) Pty. Ltd.
                                                  MANAGEMENT TEAM

                                                                              ASSOCIATE COMPANIES
                                                                              u   Ontrack Systems BV., NETHERLANDS
                                                                              u   Comunet Info systems (P) Ltd.
                                                                              u   FirstJob College*




         OPERATING GROUPS                                                 OFFICES IN INDIA
         GLOBAL DELIVERY CENTRE                                           CHENNAI
                                                                          u Registered Office
         u   Enterprise Solutions Group
         u   Service & Support Division                                   KOLKATA
                                                                          u Corporate Office
         u   Technology Solutions Group
                                                                          u Global Delivery Centre
         u   ERP
         PORTALS
         u   tendertimes.com
         u   IndiaOneStop.com




    * Sponsored by Ontrack




4                                               ONTRACK SYSTEMS LIMITED
 BOARD OF DIRECTORS




              B. Hari                                             Kaustuv Ray
              Chairman & Managing Director                        Jt. Managing Director




              S. V. Ramani                                        Robin Ghosh
              Whole-time Director & Secretary                     Independent Director




              Ramdevan V Krishnaswamy                             Vijay Kumar Chhinkwani
                                                                  Independent Director
              Independent Director




 AUDITORS


M/s. Goenka Shaw & Co., India
HAMT & Associates, UAE


LEGAL ADVISORS

Bidyut Kumar Banerjee, India


BANKERS


                   Indian Bank, India                                   State Bank of India, India



                  Axis Bank, India                                      ANZ Grindlays, Australia




                  HSBC Bank, UK & UAE




                                        ONTRACK SYSTEMS LIMITED                                      5
                                               Global Delivery Centre



    Highlights                                    Strategy and Direction                                Review of Activities

                                                 With over 6 years of presence and extensive            Offshore-Onsite Consulting Model for overseas
    n Service & Support Division (SSD)added      research and development, Ontrack built a strong       Customers working successfully. SAP B1 solution
       25 new customers                                                                                 has been successfully implemented at Ontrack
                                                 ERP (SAP B1 & Microsoft Dynamics NAV) team
    n Retention of 99% existing clients by                                                              India operations. Off-the-shelf solution for IT Service
                                                 with domain experts from industries of various
       SSD                                                                                              and Distribution has been developed for enhanced
                                                 verticals and having developed various off-the-        customer satisfaction. Vertical interactive training
    n e-governance projects of West Bengal       shelf products for different industry verticals. ERP
       bagged by SSD                                                                                    sessions for customers of ERP and Technology
                                                 teams have mitigated from time to time in re-          Solutions Group orgnised as an ongoing activity
     n Source One Email Management               modeling the implementation service approach,          – Training Calendar for Knowledge – sharing
       Archiving solution implementation for                                                            sessions with customers.
       300+ users at a leading engineering,      putting more focus on Change Management and
       procurement and construction              User Acceptance Training & Testing.                    Service & Support Division (SSD) fine-tuned,
       company
                                                                                                        modified their service delivery framework by
    n Business application based on                                                                     bringing in innovative ideas and evolved as one of
                                                 Technology Solutions Group (TSG) has invested
       virtualization and high availability                                                             the strongest support providers in the infrastructure
       project at a leading Real Estate          in deploying Green IT solutions thereby enabling
                                                                                                        space with cutting edge technology. This
       Company                                   customers reduce their carbon footprint and offer      overwhelming supremacy is evident from the
    n Storage solution provided at ABP Ltd-      environment-friendly solutions.                        impressive list of client base of SSD dedicatedly
       one of the largest media group.                                                                  built over the years with commitment to meet the
    n Team strength doubled – SAP B 1            As the service industry forms the backbone of the      customers’ need.
                                                 social and economic development of a country,          Virtualization technologies deployed by TSG has
    n Microsoft Dynamics NAV – Successful
       implementation at STC Bhutan &            the service and support division, the oldest unit      enabled many companies to convert their physical
       Webel, Kolkata                            of Ontrack, plays the same role from the company       servers into vir tual machines with 99.99%
                                                                                                        availability – thereby creating valuable space in
                                                 perspective.
                                                                                                        the datacenters, reduced consumption of energy
                                                                                                        and ease of manageability and agility of the IT
                                                                                                        Infrastructure.

                                                 Outlook for fiscal 2012-13

                                                 Global Delivery Centre (GDC) aims to double the        However, the different systems needed for these
                                                 revenue in the coming financial year with new          data types increase complexity and costs,
                                                 service offerings in the ERP space and specially       segregate management into silos, and prevent
                                                 making a footprint in the SAP ECC segment and          easy transitions as new technologies evolve. Team
                                                 added focus on extending its services to other         - TSG would focus on Virtualization & Cloud
                                                 Geographic locations in India with Microsoft           Computing, IPv6 Consulting, Deployment, Migration
                                                 Dynamics NAV and SAPB1.                                and Infra for BigData and expect maximum
                                                 Exponential data growth often drives costs up and      penetration into this the growing market for these
                                                 efficiency down. IT organizations are charged with     high ende solutions.
                                                 providing optimal infrastructure resources for         Service & Support Division plans to penetrate the
                                                 different types of applications and service levels.    Eastern & North Eastern states by opening up
                                                                                                        new state centers.
6                                                       ONTRACK SYSTEMS LIMITED
                                            O n t r ac k
                                            S y s t e m s ( a u s t. ) p t y. lt d.




Highlights                                   Strategy and Direction                              Review of Activities

                                            End to end Process Consultancy services helping      Implementation of SAP Business One at Gamma
n   Joins BNI to increase visibility and
    improve referral opportunities.         companies in streamlining business operations.       Illumination Gamma Illumination Pty Ltd. brought
                                            Providing customers with ‘out of the box’ solution   all departments under one roof and streamlined
n   Successful completion of Bradmill
    green SAP B1 development &              for Wholesale & Distribution and Manufacturing       their business & information flow across all
    integration
                                            Industry Vertical. Cost-effective IT solution for    departments in their organization. Successfully
n   SAP implementation at Gamma                                                                  Completed Bradmill’s ERP system that was
    Illumination ongoing                    SMEs through offshore-onshore combo model of
                                                                                                 developed from ground up for their manufacturing
n   Focus on offshore-onshore combo         Project Development and deployment, thereby
    model                                                                                        and warehousing process. Subsequently we
                                            enabling organizations to cut down on IT -Managed
                                                                                                 integrated with SAP B1 for accounting system.
                                            Costs.
                                                                                                 This has resulted in considerable cost savings in
                                                                                                 terms of improved process, manufacturing visibility
                                                                                                 with China, savings on AMC from Sage.




                                           Outlook for fiscal 2012-13

                                           Ontrack Australia has decided to focus on             investments. We continue to pursue this market
                                           successful SMSXprez implementations in UAE to         through master partnership agreement with Citixys.
                                           be introduced in this market so as to get regular
                                                                                                 There is potential for mobile application
                                           cash flow.
                                                                                                 development to grow and we have identified
                                           Overall due to European crises the market is very     partners in India (Chennai and Trivandrum) to do
                                           conservative in spending especially in ERP            the work for us. We plan to focus on this offering.

                                                  ONTRACK SYSTEMS LIMITED                                                                              7
                                                 O n t r ac k
                                                 Systems (UAE) Limited




    Highlights                                    Strategy and Direction                               Review of Activities

                                                 This has been a year where the market demands         With projects mainly coming from contract renewal,
    n   Continued working with Government
        departments                              and IT spend in the region hit its lowest mark. The   operational focus was on strategy re-alignment.
                                                 major investors in IT announced cut backs on          It was evident early on, that the fiscal was going
    n   Tie-ups with companies in GCC region
        for marketing opportunities outside      overall spend. The grim scenario required Ontrack     to be a difficult one. The market trends allowed
        UAE
                                                 to focus on external markets and re-engineer          for opportunities in resource augmentation projects,
    n   Partnership with established regional    marketing initiatives in the region.
        company to ease visa regulations                                                               and lesser emphasis on software development
                                                                                                       ones. To support the need for more visas,
    n   Focus on Resource Augmentation
        projects                                 The economic climate allowed the team to review       partnership with a regional company established
                                                 shor t-term strategies and to take a more             a mechanism by which visas for resources could
    n   Established leads with Government
        entities for Kiosks                      conservative approach to the pending problems.        be speeded up. The results of this tie-up are to
    n   Creation and branding of product from    This required a need to cut costs through             emerge over the next fiscal.
        existing application
                                                 consolidation, and bring in partnerships to cover
    n   Consolidated operations in the region                                                          With a tie-up in place, expenses for extra office
                                                 deficiencies that would normally affect operations.
                                                                                                       space could be reduced. The offices in Abu Dhabi,
                                                                                                       used for marketing, was removed; while the one
                                                                                                       in Fujairah was reduced in size with the option to
                                                                                                       increase when required. The new partnership
                                                                                                       allowed Ontrack to be registered with entities that
                                                                                                       were initially reluctant to award contracts to
                                                                                                       exclusively Free Zone companies.




                                                Outlook for fiscal 2012-13

                                                Abu Dhabi once again is the target market for the      projects have increased. Resource augmentation,
                                                coming fiscal. With a renewed marketing strategy       Google Apps, proprietary products for Oil field
                                                and registration with Oil Companies and                supplies, and SMS Xprez sales would be the prime
                                                Government departments the possibilities for           focus areas.




8                                                      ONTRACK SYSTEMS LIMITED
                                         O n t r ac k
                                         Systems (UK) Limited




Highlights                                 Strategy and Direction                               Review of Activities

                                          The UK market continues to struggle and fighting      Ontrack UK approach is in partnering for long term
n Projects with Dresser Inc., in UK,
  Sweden and Italy                        hard to break away from the recession. The overall    relationship with companies to bring to them the
n Onsite projects at Manchester           Euro crisis, turmoil in the banking sector and lack   offshore advantage of skills and price advantage.
  Metropolitan University last 7 years
                                          of confidence in general has made the UK market       The relationships grown over the year will make
n Software development and
  deployment for a UK based Pharmacy      very fragile. Clients are either not spending or      into long term business partners once the economy
  chain.
                                          looking at cost saving activities. However            gets confident and companies begin to reinvest
                                          everything is not gloom and dull, Companies are       in its IT spend.
                                          looking at niche cost effective solutions and are     Ontrack UK continues to service Dresser Inc a GE
                                          more open to outsourcing their entire or part of      company for onsite management of infrastructure
                                          IT functions.                                         support and other bespoke developments. The
                                                                                                final Market launch of the UK based Pharmacy
                                                                                                chains POS and Web based application for the
                                                                                                huge chain of single owner pharmacy is ongoing.
                                                                                                This has been developed by Ontrack UK and
                                                                                                Ontrack India offshore team.




                                         Outlook for fiscal 2012-13

                                         Ontrack UK is working on a few proposed POC            due to the slowdown. It is looking into launching
                                         with GE and on working on a few successful POC.        the same in 1st quarter of 2013 as there is a
                                         Ontrack UK delayed its launch ‘Microsoft               decent demand for services in Microsoft Dynamics.
                                         Dynamics’ offshore support practice in the UK




                                                ONTRACK SYSTEMS LIMITED                                                                              9
                                                     Portals
        indiaOneStop                                                                   tendertimes.com
                                                          TM
                                                                                                                                         TM



        Networking Global Business
                                                 .com                                   India’s first tender web daily




     Highlights                                     Strategy and Direction                              Review of Activities

                                                   tendertimes.com                                      tendertimes.com
     n Global focus on India increases visitor
       and user traffic to IndiaOneStop.com        Though the market is gradually shifting to e-        As in the previous tears tendertimes.com continues
                                                   tendering, total migration would take longer time    to have a strong order book position. All the top
     n Project Report – more clients from          than earlier projections since most of the tenders   clients that contributed over 90% of the total
       overseas market                             originate from Govt and PSU organisations. Despite   revenue have again placed orders - Metro Railway,
                                                   inherent advantages of Tender Management             Kolkata contract for TWO years valid till October
     n New order from Metro Railway,
       Kolkata valid till October 2013 (two        Solution like our ‘Secure-T’ important issues like   2013 and HPCL & RITES Ltd. for a period of ONE
       years).                                     manpower utilisation that have a strong bearing      year. Heavy Engineering Corporation, Ranchi
                                                   on the Indian economy are being addressed by         continues to use our ‘Secure-T’ Tender
     n Renewed orders from HPCL & RITES            tendertimes.com service model with the right         Management Solution for their e-Tendering needs.
       Ltd.
                                                   mix of Web and IT solutions along with utlisation    All the orders have been won through competitive
                                                   and skill development of manpower through            bidding and tender process.
     n All orders received through tender
       process                                     knowledge sharing training sessions.                 IndiaOneStop.com
                                                                                                        Steps are being taken to add greater value to the
                                                   IndiaOneStop.com
     n Strong order book position for                                                                   existing 2500 plus content-rich pages. During the
       tendertimes.com                             The Global recession that slowed down new            year under review the portal registered over 4.5
                                                   investments in industry in previous fiscal year      million hits per Month from over 80 countries.
     n HEC, Ranchi continues to run ‘Secure-       continued through large part of fiscal 2011-12       While earnings from Project Reports continued to
       T’ e-Tendering solution for the THIRD
       year                                        impacting revenue generation from our Projects       dominate the overall revenue generation, the portal
                                                   Reports wing.                                        is receiving encouraging response from Google
                                                                                                        AdSense Program.

                                                  Outlook for fiscal 2012-13
                                                  tendertimes.com                                       IndiaOneStop.com
                                                  The portal service looks forward to multiplying       IndiaOneStop will expand its international coverage,
                                                  its marketing activities, increasing its technical    plan interviews with global trade leaders,
                                                  bandwidth and enjoy its leadership position in the    international trade bodies on national, international
                                                  tendering domain. Promotional activities will be      and regional levels like ADB, IMF, World Bank,
                                                  strengthened further to captivate and create          BIMSTEC, and SAARC etc.
                                                  awareness about electronic tendering. With new
                                                  infrastructure projects being planned by the Indian   Broad indications are visible about Indian
                                                  Railways hectic tendering activities are lined up     government relaxing further foreign investment
                                                  for 2012-13.                                          norms for different segments of the economy.
                                                                                                        Both national and foreign investors are now
                                                  The portal division is aiming for a to growth of      increasingly focusing on sector-specific projects.
                                                  100% in terms of order book position and also         SME and infrastructure sectors are increasingly
                                                  targeting a revenue growth of                         becoming more attractive for investments.
                                                  100%.Tendertimes.com will continue to add more
                                                  value to its brand equity and enjoy its premium
                                                  and leadership position in the e-tendering domain.
10                                                        ONTRACK SYSTEMS LIMITED
Highlights                                 Strategy and Direction                             Review of Activities

                                          Success of the initial product of Touch Screen      Comunet InfoSystem Pvt. Ltd. (CIPL) has been
n NDITA Information Kiosk Project goes    Information Kiosk has set the direction for the
  live                                                                                        working in the specific field of self service kiosks
                                          company to produce more and more Kiosks and         and has created a niche market of its own.
n POC of Mahindra & Mahindra              to manage its operations providing skilled          Innovation is the Mantra of CIPL which leads to
  Transaction Kiosk completed             manpower and support service and enhance
  successfully                                                                                several achievements like ISBA Award in 2011
                                          overall revenue.
                                                                                              and also showcased by NASSCOM as an emerging
n Two more Prototypes designed for        Continuous up gradation of technology and
  Development                                                                                 company in the East for managing operations of
                                          development of new products help CIPL maintain
                                          its’ growing clientele. Apar t from the             100 nos. of energy bill payment Kiosks of
n Growth in Sales turnover                                                                    WBSEDCL. New Prototypes are also being
                                          manufacturing of Kiosk, CIPL is also offering end
                                          to end solution to customers for running Kiosk      developed constantly and tested for
n End to end solution for different
  verticals                               based information and transaction system.           commercialisation of products.


                                                                                              After successful completion of the initial phase
                                                                                              of running bill payment Kiosks, CIPL is working
                                                                                              to increase the number of transactions for
                                                                                              maximising profit margin. After completion of the
                                                                                              POC for multi-functional transaction Kiosk for
                                                                                              M/s. Mahindra & Mahindra Financial Services
                                                                                              Ltd., CIPL is planning to commercialise the product
                                                                                              by stressing on its various applications and utility
                                                                                              in different verticals. With 160 employees,
                                                                                              including 132 customer service personnel in the
                                                                                              field CIPL achieved a turnover of ` 1144 lakh.


                                         Outlook for fiscal 2012-13

                                         Equipped with the prototypes of new products and     Exper tise in digitisation and Document
                                         innovative ideas, CIPL has planned to produce        Management System, acquired in the past by
                                         Transaction Kiosks in bulk quantity and cater to     CIPL, will be applied with a new approach to
                                         the growing need of the self service Kiosk market.   capture the prospective market of Smart City
                                         R& D will be carried on to complement the up         implementation projects of civic establishments
                                         gradation of products developed by CIPL.             like NDITA and other Municipalities in West Bengal.


                                                ONTRACK SYSTEMS LIMITED                                                                              11
     Highlights                                   Strategy and Direction                                Review of Activities

                                                 Like all major IT companies Ontrack has also been      The college operates from Ontrack’s corporate
     n   First batch of BBA & BCA students to
                                                 recruiting freshers from different engineering &       office at Salt Lake, Sector V, Kolkata.
         graduate in 2012-13
                                                 management colleges since last 8 years. Each
                                                                                                        The college has visited 22 state Government &
     n   Ontrack’s special modules taught        year a few 10+2 passed students are admitted
         concurrently with University course                                                            state Government funded higher secondary
                                                 directly through psychometric & aptitude test.         schools and organized seminar during Nov-Dec
     n   Participation in Education Fair         Launched in 2010 the college conducts 3 year           2011. Around 362 HS students have appeared
                                                 full time BBA & BCA courses alongwith special          for the admission test conducted at our college.
     n   Field Project work organised for
         students in Kolkata Book Fair, Birla    corporate training as designed by our experts.         Through this seminar process direct interaction
         Industrial & Technological Museum                                                              with students, teachers and guardians too was
                                                 The BBA & BCA degree will be awarded by a UGC,
         and Science City
                                                 AICTE & DEC recognised University named Punjab         established. This helped increase awareness in

                                                 Technical University, Jalandhar, under a unique        public through word of mouth publicity. Our
                                                                                                        promotional campaign through cable TV in
                                                 University – Industry collaborative programme.
                                                                                                        Medinipur district generated multiple enquiries
                                                 This total course will enable the students to be
                                                                                                        from this part of the state. We have already
                                                 absolutely ready to take their respective positions
                                                                                                        identified a guest house in South Kolkata for
                                                 in the organization by the time they complete the      students from Medinipur and other parts of the
                                                 course and received their degree.                      state.

                                                                                                        To give more exposure to students they were
                                                                                                        exposed to outdoor project work organised in the
                                                                                                        Kolkata Book Fair, Birla Industrial & Technological
                                                                                                        Museum and Science City.



                                                Outlook for fiscal 2012-13

                                                Indian industry is facing a great challenge in hiring   students, parents & admission consultants. Our
                                                the right human resources for its day to day            motto is to get the FirstJob College name more
                                                operations and also for their growth plans. Though      familiar among students, teachers, tutorial homes,
                                                India produces millions of graduates each year, a       consultants etc. Our plan to seal tie- up agreements
                                                large section of graduates are found unfit for           with more and more schools expected to yield
                                                employment by potential employers.                      improved results, in the coming years.
                                                Gradually we are getting increased responses from

12                                                      ONTRACK SYSTEMS LIMITED
                              Photo Gallery




         Exhibition stall                                     Exhibition stall




      Comunet Awards                                        Guest lecture session




Students interact with Director                             Class in progress




                                  ONTRACK SYSTEMS LIMITED                           13
                                                                                                                          DIRECTORS’ REPORT

     DIRECTORS’ REPORT
     To
     The Members of Ontrack Systems Limited
     Your Directors are pleased to present the Twentyfourth Annual Report together with the Audited Statement of Accounts and the Auditor’s Report of your
     Company for the Financial Year ended March 31, 2012. The financial highlights for the year under review are given below:
                                                                                                                                                        (` in Lacs)
                                                                                                          Amount                           Amount
     Sl. No.                             Description                                               for the year ended               for the year ended
                                                                                                       31.03.2012                       31.03.2011
           1.         Total Income                                                                           10,327.83                     6,193.55
           2.         Total Expenditure                                                                       9,954.07                     5,604.83
           3.         Profit before interest, depreciation & tax                                                373.76                       588.72
           4.         Finance Charges                                                                           173.43                       213.44
           5.         Depreciation & impairment loss                                                             30.30                        74.99
           6.         Other income                                                                               40.98                        35.16
           7.         Profit/(Loss) on sale of Assets                                                                -                         0.71
           8.         Profit before tax                                                                         211.01                       336.16
           9.         Provision for tax                                                                          27.66                        36.00
          10.         Deferred Tax - Charge/(Credit)                                                             28.33                      (16.37)
          11.         Profit af ter tax                                                                         155.02                      316.53
          12.         Distributable Profit
                      Appropriation: –
                      Transfer to General Reser ve                                                                    -                            -


                                                                                             data, assisting them to store data securely and access efficiently. TSG
     RESULTS OF OPERATIONS
                                                                                             deployed storage efficiency solutions that helped many customers get
           l The operations of the company significantly improved during this                the most out their storage investments by improving productivity while
             year principally due to increase in domestic business. Overseas                 reducing their costs.
             operation continues to be sluggish except for some improvement                  TSG aims to provide customers with a range of consultancy services
             in Australia.                                                                   that will enable them to implement and manage IPv6 successfully and
                                                                                             migration from IPv4 technology.
           l Our total revenue increased to `10368.81 Lakhs from ` 6,229.42
             Lakhs in the previous year at a growth rate of 66.45%.                      n SAP Business One.
                                                                                           Considering the challenges for the SME organization in selecting and
           l Profit before tax is ` 211.01 Lakhs during the year as against                investing in a branded ERP, the risk for success is one of the major key
             ` 336.16 Lakhs in the previous year.                                          concerns of the decision making process SAP B1 has mitigated from
                                                                                           time to time in re-modeling the implementation service approach and
           l The Net profit after tax of ` 155.02 Lakhs as against ` 316.53                putting more focus on Change Management and User Acceptance
             Lakhs in the previous year.                                                   Training and Testing.
     Performance review of business units                                                    Some of the new Launch includes:
     n Technology Solutions Group (TSG)                                                      Configured Solution for Process Manufacturing Industry vertical, Add-
       Technology Solutions Group since its inception in the year 2005 has                   on Modules, Gate Pass Management, Discrete Manufacturing (Process
       helped its customers create a secure IT Infrastructure geared for meeting             Routing Management). Sub-Contracting and Jobbing, Localized and
       ever challenging and evolving requirements in different business                      Government Acknowledged Payroll Solution as per Localization,
       environment. The team has enabled IT to be transitioned into an asset                 Purchase/Production Indenting/Requisitions and Approvals, PF Trust
       rather than just being a cost to the business.                                        Management, Purchase Tendering, Pre-Configured Solutions for Iron
                                                                                             and Steel Industry and IT Hardware/Software Distributors, Solutions for
           TSG has invested in deploying Green IT solutions thereby enabling                 College/Campus Management integrated with SAP Business One,
           customers to reduce their carbon footprint and have environment friendly          Readymade SAP B1 solution for Healthcare Industry Vertical.
           solutions.
                                                                                         n Tendertimes.com
           Virtualization technologies deployed by TSG has enabled many companies
           to convert their physical servers into virtual machines with 99.99%               The company’s offering of Secure ‘T’ tender Management solution has
           availability – thereby creating valuable space in the data centers, reduced       been very widely received by the customers. E-procurements with e-
           consumption of energy and ease of manageability and agility of the IT             auction and e-reverse auction suits are now being offered to clients on
           Infrastructure.                                                                   a trial basis. E-procurement has been universally recognized as a
                                                                                             method to reduce and manage enterprise costs.
           TSG has helped customers design their infrastructure to support big

14                                                                     ONTRACK SYSTEMS LIMITED
                                                                                                                   DIRECTORS’ REPORT


    The company has now embarked on offering on-line end to end tender                partnerships, primarily in Oman.
    management solutions keeping in mind the market demands for such
                                                                                      Government departments and projects were the main stay for the last
    cost effective technology for transparent tendering process.
                                                                                      fiscal. We continue to provide technical and infrastructure support to
    Tender times will continue to add more value to its brand equity and enjoy        Government entities in Dubai and Abu Dhabi.
    its premium and leadership position in the e-tendering domain.
                                                                                      Expansion of markets were targeted through visits to Nigeria and Kenya.
n Indiaonestop.com                                                                    Partnerships for project execution and delivery have been identified and
  The revenue from Sales of Project reports maintained a healthy upward               lead generation for promising projects were undertaken through local
  trend. Overseas clients were added from as far as Germany, Libya, UAE,              partners. Regional partners in Oman and Bahrain were identified, as
  USA, Egypt, Venezuela, Bahrain, Saudi Arabia and Sri Lanka.                         well.
  Indiaonestop.com is continuing its efforts to strengthen its e-platform in          Australia: Oz subsidiary signed Partnership agreement with SAP Australia
  providing more and more valuable and updated information for its Indian             for selling and implementing SAP Business One in various industries
  business and industry helping exchange of information, views between                vertical especially in the SMB industry segment. The focus would be
  India and other countries. During the year under review the portal registered       offshore- onshore combo model including getting new IT Managed
  over 4.7 million visitors monthly from over 90 countries.                           service contracts.
n ERP Solutions
                                                                                      Business outlook is improved substantially, Australia subsidiary portfolio
  ERP implementations were closed on different platform including SAP                 now includes pre-configured solutions for logistics, end to end single
  B1 with major clients across the country.                                           window, service IT consultancy besides extended SAP R/3 through cost
  MS Dynamics practice has expanded providing solution to clients’ length             effective SAP remote support.
  and breadth of the country. SME segment have been targeted offerings
                                                                                  n Associates:
  different suits depending on the client’s needs. A Memorandum of
  Understanding was signed between West Bengal Industry Development                 First Job College:
  Corporation Ltd. (Webel – a nodal agency for development of IT and ITES
                                                                                      The objective of the college is to prepare +2 passed students, industry
  industry in West Bengal) and our company by offering a six months
                                                                                      ready by imparting hands on training while enrolling them full time BBA
  certificate course for training in ERP and Management practice in Microsoft
                                                                                      & BCA degree course awarded by the UGC recognized State Govt.
  Dynamics NAV and Axapta. The response has been encouraging. Some
                                                                                      University.
  of the training personnel are absorbed in the company for execution of
  various projects in hand.                                                           The response for enrolment in the academic year 20011-12 has been
n Microsoft Dynamics NAV                                                              very encouraging. Adequate infrastructures for both physical and training
  In-spite-of the not so favorable market condition this division could add           faculty are available. The best amongst first batch from the college is
  several new clients during last financial years and came out as the highest         likely to be absorbed with the Company.
  revenue contributor in the East for Microsoft.
                                                                                  n Comunet Info-systems Pvt. Ltd.
  With a vision to enter into the league of top five partners your company
  is now focused on enhancing its geographical reach both nationally and              Comunet Info-systems Pvt. Ltd. has been able to grow more than three
  internationally. Initially the target is to cover the eastern india and reach       times in terms of turnover during the year. Daily transactions made by
  out to western india. Globally UK and UAE where we already has a strong             the Automatic Bill Payment Kiosks of WBSEDCL, managed by Comunet,
  presence have been identified as potential marketplace.                             have also increased significantly.
Subsidiary Companies
                                                                                      The company has executed successfully a ‘Proof of Concepts’ on the
n UK: Ontrack UK WOS approach is partnering for long term relationship                prototype already developed by them and supplied to a NBFC. The
  with companies to bring to them the offshore advantage of skills and                product will fetch new business in the coming years. Two more prototypes
  price advantage. The relationships grown over the year will make into               of transaction machine are being designed in the laboratory of the
  long term business partners once the economy gets confident and                     company which will be developed in next year with the financial support
  companies begin to reinvest in its IT spend.                                        from MSME and Technology Development Board under Department of
    Ontrack UK WOS continues to service Dresser Inc a GE company for                  Science and Technology, Govt. of India.
    onsite management of infrastructure support and other bespoke
    developments. The final Market launch of the UK based Pharmacy chains             The company achieved a turnover of ` 1144 Lakh during the year as
    POS and Web based application for the huge chain of single owner                  against ` 331 Lakh in the previous year. Profit after Tax being ` 5.55Lakh
    pharmacy is ongoing.                                                              against that of last year’s ` 9.83 Lakh for making substantial expenses
                                                                                      in POC
Outlook for 2012-13
                                                                                      The Company has also explored new areas of ICT based services which
    Ontrack UK WOS is working on a few proposed POC with GE Ontrack UK                will contribute to the business of the co. from next year.
    has delayed launching its Microsoft Dynamics offshore support practice
    in the UK due to the slowdown. It is looking into launching the same in       n Subsidiary companies Consolidated Financial Statement
    1st quarter of 2013 as there is decent demand in MS Dynamics Axapta.            The Board of Directors by a resolution at the meeting held on 30.05.2012
n UAE: The African crisis contributed to a large extent in the poor business        given consent for not attaching the Balance Sheet and Financial statements
  environment in Middle East. However, client retention and renewal of              in terms of the Central Govt. Ministry of Corporate Affairs Circular
  existing contracts continued. The Google Apps initiative was started and          No.2/11 dated 08.02.2011. The consolidated financial statements
  yielded results, with clients acquired in UAE and the GCC region. The             however have full details of the financial portion of the subsidiaries as
  need to expand and consider new markets was addressed through                     per the general approval of the Central Govt. Circular dated 08.02.2011.
  delegation visits to Africa and regional partnership augmentation. Sales        n Increase in Share Capital
  and marketing initiatives were undertaken in the region through these
                                                                                    During the year under review the equity capital of the company has

                                                               ONTRACK SYSTEMS LIMITED                                                                             15
                                                                                                                       DIRECTORS’ REPORT


         remained unchanged since the company had not issued any new equity             n DIRECTOR’S RESPONSIBILITY STATEMENT U/s 217(2AA)
         shares.
                                                                                            The Financial statements are prepared in accordance with the accounting
     n Corporate Social Responsibility                                                      standards issued by the Institute of Chartered Accountants of India
       The company has taken initiatives in sponsoring building road connecting             and the requirements of the Companies Act, 1956, to the extent
       two small villages to the nearest Block level offices in the Nadia district          applicable to us, and guidelines issued by SEBI on the historical cost
       of West Bengal. The Company through its Educational Society proposes                 convention as a going concern and on the actual basis. There are no
       to impart skill development to at least 100 students so that they are                material departures from prescribed accounting standards in the
       industry ready and employable.                                                       adoption of the accounting standards.

     n HUMAN RESOURCE DEVELOPMENT                                                           We accept responsibility for the integrity and objectivity of these
       The Company’s recruitment policy ensures suitable candidate with merit               financial statements. The accounting policies used in the preparation
       are selected from campus. Your Company constantly strives on improvement             of the financial statements have been followed consistently except as
       in the project management competency of its associates and personnel                 otherwise stated in the notes. The estimates and judgments related
       by continuous up gradation of their skills by training and development.              to the financial statements have been made on a prudent and reasonable
       The Company’s expansion globally has resulted in global cultural integration         basis, in order that the financial statements reflect in a true and fair
       since the Company employs people from various foreign countries. The                 manner the form and substance of transactions, and reasonably present
       Company’s HR policies and processes are aligned to effectively drive its             our state of affairs and profits for the year.
       expanding business and emerging opportunities. Attrition during the fiscal       n FIXED DEPOSITS
       remained within reasonable proportion.
                                                                                            The Company has not accepted any fixed deposit and, as such, no
     n QUALITY                                                                              amount of principal or interest was outstanding as of the Balance
       The ISO 9001-2008 certification includes Company’s state-of-the art                  Sheet date.
       Global Delivery Centre at Salt Lake, Kolkata, Technology Solutions Group,
       Human Resource Department, Accounts Department Tendertimes.com                   n DIRECTORS
       and IndiaOneStop.com. Internal audit checks are conducted once every
       quarter for all the units. The software division of the Company plans to             Shri Vijay Chhinkwani retires by rotation and being eligible offers
       implement ISMS (Information Security Management System) in its salt                  himself for re-appointment.
       lake facility.
                                                                                        n AUDITORS
     n CORPORATE GOVERNANCE
       The Company has complied with the requirement of Corporate Governance                M/s. Goenka Shaw & Co., Chartered Accountants, the Auditors of the
       as stipulated under clause 49 of the Equity listing agreement with the               Company, retire at the ensuing Annual General Meeting and have
       Stock Exchanges and accordingly, the Report on Corporate Governance                  confirmed their eligibility and willingness to continue till conclusion
       forms part of the Annual Report.                                                     of next AGM of the company, if re-appointed.

         The requisite certificate from the Auditors of the Company, M/s. Goenka,       n ACKNOWLEDGEMENT
         Shaw & Co., regarding compliances with the conditions of the Corporate
         Governance is annexed to this Report as also the Management Discussion             Your Directors take this opportunity to thank its customers both in
         and Analysis which is given as Annexure to this Repor t.                           India and abroad, investors, business partners, bankers, financial
                                                                                            institutions, business associates and advisors for their consistent
     n TECHNOLOGY, R & D AND FOREIGN EXCHANGE                                               support to the Company. Your Directors place on record their
       The Company operates in various state-of-art technology areas and has                appreciation of the contributions made by employees at all level through
       developed the necessary related skills.                                              hard work, cooperation and dedication, which has enabled the Company
       The Technology Change Management Group of the Company continuously                   to move forward. Your Directors once again take this opportunity to
       scans the market for new technologies, design systems and processes                  thank the Governments of India, UK, UAE, Holland, Australia & USA
       to induct such new technologies.                                                     for their cooperation and assistance in enabling your Company to
       The foreign exchange earnings and outgoes for the year ended 31st March,             enter the global marketplace.
       2012.
                                                                                                                   For and on behalf of the Board of Directors
                                                  ( ` in lakh)
                                        2012                         2011
                                                                                                                         Sd/-                     Sd/-
        Earnings                        808.10                      966.59            Place : Kolkata, India        S. V. Ramani                B. Hari
        Outgoes                           1.18                        5.63            Date : 30.05.2012          Whole-time Director         Chairman and
                                                                                                                   and Secretary           Managing Director

       n PERSONNEL
           The Particulars of Employees, as per Section 217(2A) of The Companies
           Act, 1956 read with The Companies (Particulars of Employees) Rules,
           1975 is Nil.




16                                                                ONTRACK SYSTEMS LIMITED
                                                                                                          MANAGEMENT DISCUSSION AND ANALYSIS



 MANAGEMENT DISCUSSION AND ANALYSIS

                                                                                   4. A Specialized Team delivers ERP solution on various packaged software
n    OVERVIEW                                                                         platform like Microsoft Dynamics, SAP B1 based on the customers
     Business Overview                                                                requirement across the country. Detailed operation review is given at
     IT Spends globally has been substantially increased year after year;             Division wise reviewed.
     from USD 586 billion in 2010 it has touched USD 605 billion in 2011.          n Financial Condition
     Looking forward, the Global IT services spending are expected to grow
     at a CAGR as per NASSCOM Strategic Review Report 2012 of 4.50 %                    Share Capital:
     over 2012-13. While Global BPO services spending are expected to                   At present, we have only one class of shares- equity shares of par value
     grow at CAGR of 5.3 % during the same period. The IT outsourcing                   `10/- each. Our authorized share capital is divided into 250 Lakhs equity
     market is expected to grow a 3 year CAGR of 8 % over 2012-13 while                 shares of ` 10/-. The issued, subscribed and paid up capital stood at
     BPO outsourcing is expected to grow at CAGR of 7% over the same                    `193.42 Lakhs as at 31st March, 2012 (same as the previous year).
     period. Our company is making efforts to take a small size of the global
     market.                                                                            Revenue:
     Industry Overview                                                                  The Company earned total revenue of ` 10368.81 Lakhs in the fiscal
                                                                                        2011-12 compared to ` 6229.42 Lakhs in fiscal 2010-11
     According to the Global Tech Market Outlook for 2012 and 2013, an
     independent report published by Forrester Research Inc. in January                 Securities Premium
     2012, purchase of IT consulting, systems integration services and IT               The addition to share premium A/c. Nil as the Company had not issued
     outsourcing by global business and Governments are estimated to                    any new equity shares during the fiscal 2011-12. The present share
     grow by 6.3% in calendar year 2012, when calculated in US dollars.                 premium A/c. stood at ` 772.48 Lakhs.
     Changing economies and business conditions, evolving consumer                 Net Worth/Shareholders’ funds            :             ` 2803.24 Lakhs
     preferences and rapid technological innovation are creating an increasingly
     competitive market environment that is driving corporations to transform      Application of Fund:
     their organizations. Consumers of products and services are increasingly      Gross Block                              :             ` 1464.04 Lakhs
     demanding accelerated delivery times at lower prices. The role of
     technology has evolved from supporting corporation to transforming            Addition                                 :             ` 3.26 Lakhs
     their business. In house IT infrastructure in large Corporate is giving       Deduction                                :              -
     way to independent specialized IT service providers. Outsourcing the
     development management and ongoing maintenance of technology                  Investments:
     platform and solutions has become increasingly important to companies.        Subsidiary                               :             ` 657.05 Lakhs
     The effective use of offshore technology services offers a variety of         Associates                               :             ` 35.73 Lakhs
     benefits to them including lower cost of ownership of IT infrastructure,
     lower labor costs, improved quality and innovations, faster delivery of       Deferred Tax Assets/(Liabilities)        :             ` 32.88 Lakhs
     solutions and more flexibility in scheduling. Technology companies are        Sundry Debtors                           :             ` 4669.88 Lakhs
     recognizing the benefits of off shore service providers in software
     research and development and related support function and are                 Loans & Advances                         :             ` 40.26 Lakhs
     outsourcing a great portion of these activities.                              Current Liabilities                      :             ` 4648.37 Lakhs
     The company’s major offering in the industry are broadly divided into         Provisions                               :             ` 10.21 Lakhs
     four groups:                                                                  Segment-wise performance:
     1.    Technology Solution Group with expertise in various verticals           Separately given
           helps in create and deliver customized solution to our clients due      Risk & Concerns:
           to ever changing technologies.
                                                                                   Revenue and expenses are difficult to predict and can vary significantly from
     2.    Web based application through the flagship portal, tendertimes.com      period to period. Profit margin may be affected either positively or negatively
           and Indiaonestop.com                                                    as per circumstances. Revenues are dependent on a very small pool of clients
     3.    IT service, support and networking                                      and 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
     4.    ERP implementation as Business associate of Microsoft , SAP             small company like us. Competition from large national and international
           and Open Bravo (detail review of each division is given separately      companies always with new crop technologically superior to small & medium
           elsewhere in the report)                                                size of companies would affect climatically new orders book position.
1.   At TSG, some of the existing software professionals are trained in new        Risk Management:
     technologies to deliver solutions to the client’s dedicator demands. We       The international risk environment continues to be highly volatile. Macro
     use in-house tools for project management for software delivery.              economic development in the Euro zone led to high volatility in currencies
2.   Tendertimes.com continues to hold a key position in the market by             from which we have major revenue. The Middle East business environment
     giving solution like reverse auction, e-tendering to major Government         also remains bleak to the unstable political situation.
     and Quasi Govt. across the length and breadth of the country. India
     one-stop also continues to grow offering online business project report       At the macro level the Company has devised a mechanism for identification
     across the globe.                                                             and prioritization of risks to include risk survey, business risk, introductory
                                                                                   risk, financial risk, scanning and focused on the prospective client’s business
3.   The Networking and Systems integration verticals have been the                activities.
     Company’s first unit of business growing significantly. The division has
     been rendering support to various e-governance projects within the            Identified risks are used as one of the key inputs to the marketing team for
     locality in the state of West Bengal apart from continuing to focus on        formulating the business development plan.
     small and medium scale business segment by offering one stop
     solutions.
                                                                ONTRACK SYSTEMS LIMITED                                                                               17
                                                                                                         MANAGEMENT DISCUSSION AND ANALYSIS




 MANAGEMENT DISCUSSION AND ANALYSIS

 Outlook:                                                                           Quality:
                                                                                    The ISO 9001-2008 certification includes Company’s state-of-the art Global
 We seek to further strengthen our presence both domestically and internationally
                                                                                    Delivery Centre at Salt Lake, Kolkata, Technology Solutions Group, Human
 by offering repertoires of service in our basket.
                                                                                    Resource Depar tment, Accounts Depar tment Tender times.com,
                                                                                    IndiaOneStop.com. Internal audit checks are conducted once every quarter
 Details outlook for each verticals are separately given under the review of
                                                                                    for all the units. The software division of the Company is continuing its
 operating groups.
                                                                                    efforts to be CMM level 4/5 compliant and to implement ISMS (Information
                                                                                    Security Management System) in its salt lake facility.
 Human Capital:
                                                                                    Disaster Management & Recovery:
 The total employees’ strength as on 31st March, 2012 is 150 we expect to
 recruit the young trained industry ready students from the First Job College       The Company has established an independent data center to mitigate against
 and also to have a steady pool of nominal personnel for future business            any type of disaster against loss of any live data. The Company has also
 growth to mitigate its problem of attrition. The Company also imparts in           laid out a disaster recovery and prevention plan. The Company can replicate

 house training program to upgrade the skill sets of the existing pool of           and maintain within shortest possible time.

 executive to the new challenges in the technological field.




18                                                                ONTRACK SYSTEMS LIMITED
                                                                                                         REPORT ON CORPORATE GOVERNANCE



 REPORT ON CORPORATE GOVERNANCE

n   COMPANY’S PHILOSOPHY
    Our pursuit to achieve good governance is an ongoing process, thereby ensuring truth, transparency, accountability and responsibility in all 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 wealth generating capacity.
    The Company believes that the governance process should ensure that management of the company should be in such 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 an ideology to be
    ingrained in corporate culture. Corporate governance goes much beyond mere compliance; it is not a simple matter of creating checks and balances.
    The Company aims to develop capabilities and identify opportunity that best serve the goal of value creation, 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 is in full compliance
    with the norms and disclosures that have to be made on Corporate Governance format.

n   BOARD OF DIRECTORS

    A . Composition
           The details of the Board of your Company for the year 2011–2012 are given below :-


 Sl. No.               Name of Director                            Categor y of Directorship                               Designation

    1.                   Mr. B. Hari                                    Promoter                                   Chair man & Managing Director
    2.                Mr. Kaustuv Ray                                 Co-Promoter                                      Jt. Managing Director
    3.                Mr. S. V. Ramani                              Executive Director                            Whole-time Director & Secretar y
    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 pecuniary
or other relationship with the Company, its promoters, its management or its subsidiaries, which in the judgment of the Board may affect the
independence of judgment of Directors.

n   No of Board Meetings:
    Six Board Meetings were held during the year ended 31st March 2012. The Board Meetings were held on 10th April 2011, 30th May 2011, 28th July
    2011, 14th September, 2011, 3rd February 2012 and 5th March 2012.

    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 attended
                                            held during the               attended                    on Board of                    last AGM
                                                  Ye a r              during the year              other companies

 Mr. B. Hari                                         6                          6                             5                           Ye s
 Mr. Kaustuv Ray                                     6                          3                            16                            No
 Mr. S. V. Ramani                                    6                          6                             4                           Ye s
 Mr. Vijay Kumar Chhinkwani                          6                          3                             0                            No
 Mr. Robin Ghosh                                     6                          4                             3                           Ye s
 Mr. Ramdevan V Krishnaswamy                         6                          4                             4                           Ye s
                                                                                                                                                                  19
                                                            ONTRACK SYSTEMS LIMITED
                                                                                                               REPORT ON CORPORATE GOVERNANCE

     At the end of the year, none of the Directors were members in more than 10 committees or acted as Chairman of more than 5 such Committees, as required
     under clause 49 of the Listing agreement

     INFORMATION SUPPLIED TO THE BOARD
     Among others, these include the following:
     Review of annual operating plans of business, capital budgets, updates.
     q Quarterly results of the Company and its operating divisions or business segments.
     q Minutes of the meeting of audit committee and other committees.
     q Information on recruitment and remuneration of Officers just below the Board level.
     q Materially important show cause, demand, prosecution and penalty notices.
     q Any materially relevant default in financial obligations to and by the Company and substantial non payment for the goods and services provided by the
       Company.
     q Any issues which involves potential public or product liability claims of a substantial nature.
     q Details of any Joint ventures or collaboration or acquisition or reconstruction by the Company.
     q Significant labour problems and their proposed solutions.
     q Significant development on the human resources and industrial relations fronts.
     q Sale or purchase of material nature, of investments, subsidiaries, assets which is not in normal course of business.
     q Quarterly results of foreign exchange exposure and the steps taken by management to limit the impact of adverse exchange rate movement.
     q Non compliance of any regulatory or statutory provision or listing requirements as well as shareholder services such as non payment of dividend and
       delay in share transfer.

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

     MATERIALLY SIGNIFICANT RELATED PARTY TRANSACTIONS
     There have been no materially significant related party transactions, pecuniary transactions or relationships between Ontrack Systems Limited and its Directors
     for the year ended 31st March, 2012 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 Contracts
     maintained by the Company pursuant to Section 301 of the Companies Act, 1956.

     COMMITTEES OF THE BOARD
     Audit Committee

     The Audit Committee of the Company performs the following functions:
     q Overseeing the Company’s financial reporting process and disclosure of the financial reports to ensure that the financial statement is correct, sufficient
       and credible.
     q Recommending the appointment of Statutory auditors of the Company.
     q Constitution and review of internal control and internal audit system.
     q Review of accounting and financial practice.
     q 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 have adequate
     financial and accounting knowledge. The details of the Audit Committee of your Company for the year 2011–2012 are given below:-

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

         1.        Mr. V. K. Chhinkwani                                Chairman                           4                                  3

         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 (Statutor y Auditor)                  Invitee                          4                                  4


20                                                                ONTRACK SYSTEMS LIMITED
                                                                                                         REPORT ON CORPORATE GOVERNANCE


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 Company
      b) To approve the remuneration and commission/incentive payable to the Managing Director for each financial year.
      c) To approve the remuneration and annual per formance 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:

                                                                                                                            No. of Meetings during
                            Name                                                   Categor y                                  the year 2011-12
                                                                                                                             Held           Attended


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

(iv) A meeting of the Remuneration Committee was held on 18th Feb 2012.

(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 fixed
       pay, benefits and variable pay.

       The Company pays remuneration by way of salary, benefits, perquisites and allowances (fixed component) to its Managing Director. Annual increments
       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 Rs. 5000/- per meeting to its Non-executive Directors (NEDs) for attending meetings of the Board and no fees is paid
       for attending meetings of other committees.

(vi) Details of Remuneration for the year ended 31st March, 2012

(a)    Non Executive Directors:

                                         Name                                                     Commission (`)                    Sitting Fees (`)

       Mr. Ramdevan V Krishnaswamy                                                                       Nil                             15000
       Mr. V. K. Chhinkwani                                                                              Nil                               Nil
       Mr. Robin Ghosh                                                                                   Nil                             20000

(b)    Whole – time Director:

                     Name                   Remuneration (`)                       PF Contribution (`)         Commission (`)             Stock Options

        Mr. S. V. Ramani                           1392000                               57,600                        Nil                       Nil


(c)     Chief executive Officer & Managing Director

                     Name                  Remuneration (`)                        PF Contribution (`)         Commission (`)            Stock Options

       Mr. B. Hari                               2640000                                122400                        Nil                     Nil


                                                            ONTRACK SYSTEMS LIMITED                                                                           21
                                                                                                               REPORT ON CORPORATE GOVERNANCE



     (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, 2012 are given below:


             Name                                                                                                              No. of Shares

             Mr. B. Hari                                                                                                         31,59,395
             Mr. S.V. Ramani                                                                                                        3,475
             Mr. Ramdevan V Krishnaswamy                                                                                          2,06,160



     n     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.



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

     n     CMD & CFO CERTIFICATION TO THE BOARD
           The CEO & CFO have certified to the Board that Financial Statement together with Cash Flow Statement for the year 2011-12 to the best of their knowledge
           is true and fair.




22                                                                ONTRACK SYSTEMS LIMITED
                                                                                                             SHAREHOLDERS’ INFORMATION


SHAREHOLDERS’ INFORMATION
 GENERAL INFORMATION FOR SHAREHOLDERS

        (a)   As indicated in the Notice to our Shareholders, the 24th Annual General Meeting of the Company will be held on Friday the 28th day of
              September 2012 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 16th September, 2012 to 28th September, 2012 (both days inclusive) for the purpose of the Annual General Meeting.

        (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 are normally
              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 the Depository
              Systems in India – NSDL (National Securities Depository Limited) and CDSL (Central Depository Services (India) Limited). As on 31st March,
              2012, 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 - 600 004
                                                             Phone: +91-44-42085258,& 28411633

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

              (iii) Share Registrar and                    : Cameo Corporate Ser vices Ltd.
                    Transfer Agents                          Subramanian Building, 1, Club House Road, Chennai – 600 002
                                                             Phone: 044-2846 0390–95, Fax : 044 2846 0129
                                                             Email: cameo@cameoindia.com


DISCLOSURE

Disclosure 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 relatives etc.
that may have potential conflict with the interest of the Company.

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

MEANS OF COMMUNICATION
The Quarterly Results of the Company were published during the financial year under review in leading national newspapers namely, The Business Standard,
The Financial Express 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.

                                                                ONTRACK SYSTEMS LIMITED                                                                           23
                                                                             SHAREHOLDERS’ INFORMATION


     PATTERN OF SHARE HOLDINGS
     AS ON 31 S T MARCH, 2012

     PHYSICAL & ELECTRONIC
                        Categories of        No.of                      No.of                     % of
                        Shareholders      Shareholders                 Shares                    Holding


      Resident                                  2235                    2676211                  13.8363
      NRI                                         18                      66890                   0.3458
      Body Corporate                             118                    3826356                  19.7826
      Promoters                                    7                   12723287                  65.7806
      Directors / relatives                       23                      45960                   0.2376
      Clearing Members                             5                       2301                   0.0119
      Trusts                                       2                       1000                   0.0052

      Total                                     2408                   19342005                   100.00



     DISTRIBUTION OF SHAREHOLDINGS
     AS ON 31ST MARCH, 2012

     PHYSICAL & ELECTRONIC

       Shareholding of                   Share           Percentage          No.               Percentage
       Nominal Value of R e. 1          Holders              to               of                    of
                                          No.               To t a l        Shares            Total Shares

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

       Upto       – 1000                 860                35.71                 42976            0.22

       1001       – 5000                 946                39.29               2 42 27 9          1.25

       5001       – 10000                256                10.63               1 99 93 3          1.03

       10001 – 20000                     121                 5.03               1 79 53 3          0.93

       20001 – 30000                       59                2.45               1 52 14 1          0.79

       30001 – 40000                       36                1.50               1 25 92 3          0.65

       40001 – 50000                       16                0.66                 74503            0.39

       50001 – 100000                      48                 1.99                343438            1.78

       100001 and above                    66                2.74           17981279              92.96


                  To t a l              2408               100.00           19342005             100.00




24                                        ONTRACK SYSTEMS LIMITED
                                                                                                      SHAREHOLDERS’ INFORMATION




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 2011-12 (12 months) are
given in the table below:



                                                                                           BSE

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


    Apr, 2011                                                                47.65                     36.00                    42091

    May, 2011                                                                37.00                     27.65                    60668

    Jun, 2011                                                                32.00                     24.20                    28752

    July, 2011                                                               28.80                     23.90                    77240

    Aug, 2011                                                                29.80                     21.90                    67241

    Sept, 2011                                                               42.15                     28.70                   131425

    Oct, 2011                                                                40.20                     29.05                    20803

    Nov, 2011                                                                31.40                     24.50                    18182

    Dec, 2011                                                                28.75                     25.65                     7511

    Jan, 2012                                                                27.00                     21.60                    17527

    Feb, 2012                                                                23.20                     19.85                    27660

    Mar, 2012                                                                22.80                     17.65                     4349




                                                        ONTRACK SYSTEMS LIMITED                                                                        25
                                                                                                                    SHAREHOLDERS’ INFORMATION




     n GENERAL BODY MEETING


       (i)    General Meetings:

              (a)     Annual General Meetings:



       YEAR                      Location                                              Date                                                    Time


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

       2010-11                   Hotel Savera,                                         23rd September, 2011                                    11.30 A.M.
                                 146, Dr. Radhakrishnan Salai,
                                 Mylapore, Chennai - 600 017


       n     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.




26                                                               ONTRACK SYSTEMS LIMITED
                                                                                       ANNEXURE TO DIRECTORS’ REPORT




                      DECLARATION REGARDING COMPLIANCE BY BOARD MEMBERS AND
                 SENIOR 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, 2012, 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, 2012.




Place        :     Kolkata                                                                               B. Hari
Dated        :     30.05.2012                                                                Chairman & Managing Director




                                                    ONTRACK SYSTEMS LIMITED                                                          27
                                                                                                         SECRETARIAL COMPLIANCE CERTIFICATE




     AUDITOR’S CERTIFICATE


     To the Members of Ontrack Systems Limited.                                     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
     We have examined the compliance of conditions of corporate governance          the management has conducted the affairs of the Company.
     by Ontrack Systems Limited for the year ended March 31, 2012, as stipulated
     in Clause 49 of the Listing Agreement of the Company with Stock Exchanges.

                                                                                                                             For GOENKA SHAW & CO.
     The compliance of conditions of corporate governance is the responsibility                                               Chartered Accountants
                                                                                                                                  FR No. 319075E
     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
                                                                                                                                         Sd/-
     expression of opinion on the financial statements of the Company.
                                                                                    Kolkata, India                            (CA Saroj Kumar Swain)
                                                                                    30th May, 2012                                     Partner
     In our opinion and to the best of our information and according to the                                                   Membership No. 061912
     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.




28                                                                ONTRACK SYSTEMS LIMITED
                                                                                                                     AUDITORS’ REPORT




AUDITOR’S REPORT

TO THE MEMBERS OF ONTRACK SYSTEMS LIMITED

1.   We have audited the attached Balance Sheet of ONTRACK SYSTEMS                           been kept by the Company so far as appears from our examination
     LIMITED as at 31st March 2012, the Statement of Profit & Loss and                       of those books;
     also the Cash Flow Statement for the year ended on that date. These
     financial statements are the responsibility of the Company’s Management.           (iii) The Balance Sheet , Statement of Profit & Loss and Cash Flow
     Our responsibility is to express an opinion on these financial statements                Statement dealt with by this report are in agreement with the books
     based on our audit.                                                                      of account;

2.   We conducted our audit in accordance with the Auditing Standards                   (iv) In our opinion the Balance Sheet, Statement of Profit & Loss and
     generally accepted in India. Those standards require that we plan and                   Cash Flow Statement dealt with by this report comply with the
     perform the audit to obtain reasonable assurance about whether the                      Accounting Standards(AS) referred to in sub-section (3C) of section
     financial statements are free of material misstatement. An audit includes               211 of the Companies Act 1956;
     examining on a test basis, evidence supporting the amounts and
                                                                                        (v) We have no such observations, which have an adverse effect on
     disclosures in the financial statements. An audit also includes assessing
                                                                                            the functioning of the company.
     the accounting principles used and significant estimates made by
     Management, as well as evaluating the overall financial statement                  (vi) On the basis of written representations received from the Directors
     presentation. We believe that our audit provides a reasonable basis for                 of the company, and taken on record by the Board of Directors,
     our opinion.                                                                            we report that none of the Directors is disqualified as at 31st
                                                                                             March’2012 from being appointed as a Director of the company
3.   As required by the Companies (Auditor’s Report) Order, 2003, as
                                                                                             in terms of clause(g) of sub-section (1) of section 274 of the
     amended by the Companies (Auditor’s Report) (Amendment) Order,
                                                                                             companies Act,1956.
     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                   (vii) In our opinion and to the best of our information and according to
     such checks as we considered appropriate and according to the                            the explanations given to us the said accounts read in conjunction
     information and explanations given to us, we enclose in the Annexure                     with Notes forming part of the Financial Statements as referred to
     a statement on the matters specified in paragraphs 4&5 of the said                       in Note No. “1-37”, subject to Para 4 above and our inability to
     Order.                                                                                   ascertain and comment on the overall impact with respect to these
                                                                                              as state in Para 5 above, give the information required by the
4.   Further attention is invited to the following notes:
                                                                                              Companies Act 1956 in the manner so required and give a true
     (i)   Note No.14.01 regarding disputed advance, whereby the extent of                    and fair view in conformity with the accounting principles generally
           amounts recoverable is not ascertainable and therefore the provision               accepted in India:
           against such advance and consequential impact on the profit for
                                                                                             a. In the case of the Balance Sheet of the state of affairs of the
           the year and reserves and surplus at the year end can not be
                                                                                                Company as at 31st March 2012
           commented upon by us.
                                                                                             b. In case of the Statement of Profit & Loss of the profit for the
     (ii) Note No.25.01 regarding non-provision of the accrued leave
                                                                                                year ended on that date; and
          liabilities,(amount not ascertained) and it’s impact on the profit for
          the year, reserve & surplus and current liabilities at the year end,               c. In the case of Cash Flow Statement of the cash flows for the
          if any is currently not ascertainable and commented upon by us.                       year ended on that date.

5.   The overall impact of the adjustments to be carried out as per remarks                                                  For GOENKA SHAW & CO.
     as given in Para 4 above or otherwise has not been ascertained and                                                       Chartered Accountants
     therefore can not be commented upon by us.
                                                                                                                                   FR No. 319075E
6.   Further to our comments in Annexure referred to in paragraphs 3 above,
     we report that:                                                                                                                     Sd/-
     (i)   We have obtained all the information and explanations which to          Kolkata, India                             (CA Saroj Kumar Swain)
           the best of our knowledge and belief were necessary for the             30th May, 2012                                       Partner
           purposes of our audit;                                                                                             Membership No. 061912

     (ii) In our opinion, proper books of account as required by law have


                                                                ONTRACK SYSTEMS LIMITED                                                                              29
                                                                                                                  ANNEXURE TO AUDITORS’ REPORT




     ANNEXURE TO THE AUDITOR’S REPORT


     Re.: Ontrack Systems Limited                                                             services. Further during the course of our audit, we have neither come
     (Referred to in paragraph 3 of our Report of even date)                                  across, nor have we been informed of any continuing failure to correct
                                                                                              major weaknesses in internal control system.
     i.    (a) The Company has maintained proper records showing full particulars       v. (a) On the basis of our examination of the books of account and
               including quantitative details and situation of it’s fixed assets.              according to the information and explanations given to us, the
           (b) As informed, the fixed assets have been physically verified by the              Company has during the year entered into transaction that needs
               management at the year end and no material discrepancies are                    to be entered into the Register maintained under Section 301 of the
               repor ted to have been noticed on such verification.                            Companies Act 1956.

           (c) During the year the company has not disposed off of substantial                (b) According to the information and explanations given to us, the
               part of it’s fixed assets. Therefore the provision of the clause (ic)              transaction made in pursuance of such contract or arrangement
               of paragraph 4 of the aforesaid Order in our opinion is not applicable             have been made at prices, which are reasonable having regard to
               to the Company.                                                                    the prevailing market prices as on the date of such transaction.

     ii    (a) The inventory has been physically verified by the management             vi.   In our opinion and according to the information and explanations given
               during the year. In our opinion the frequency of verification is               to us, the Company has not accepted any deposit from the public within
               reasonable.                                                                    the meaning of section 58A and 58AA or any other relevant provisions
                                                                                              of the Companies Act, 1956 and the Companies (Acceptance of Deposits)
           (b) In our opinion and according to the information & explanations
                                                                                              Rule 1975. To the best of our knowledge and according to the information
               given to us, the procedures of physical verification of inventories
                                                                                              and explanations given to us, no order has been passed by the Company
               followed by the Management are reasonable and adequate in relation
                                                                                              Law Board or National Company Law Tribunal or Reserve Bank of India
               to the size of the Company and nature of it’s business.
                                                                                              or any other Tribunal against the company.
           (c) On the basis of our examination of records of inventory and in our
                                                                                        vii. According to the information and explanations given to us, the
               opinion, the Company is maintaining proper records of inventory.
                                                                                             Company has no internal audit system commensurate with the size and
               The discrepancies noticed on verification between the physical
                                                                                             nature of its business during the year. Further during the current financial
               stocks and the book records were not material in relation to the
                                                                                             year 2012-13, necessary steps have taken by the company to implement
               operation of the company.
                                                                                             an internal audit system.
     iii. (a) On the basis of our examination of the books of account and
                                                                                        viii. On the basis of information and explanations made available to us, we
              according to the information and explanations given to us, the
                                                                                              are of the opinion that, The Central Government has not prescribed for
              Company has during the year accepted interest free unsecured loan
                                                                                              the maintenance of any cost records under Section 209(1)(d) of the
              from a Company covered in the Register maintained under Section
                                                                                              Companies Act 1956 for the Company
               301 of the Companies Act’ 1956. The maximum amount involved
              was ` 289.00lacs and the year end balance was ` 289.00 lacs.              ix. (a) On the basis of our examination of the books of account and
                                                                                                according to the information and explanations given to us, the
           (b) In our opinion and according to the information and explanations
                                                                                                Company is regular in depositing with appropriate authorities
               given to us, the other terms and conditions of the loans taken by
                                                                                                undisputed statutory dues, except Employee state insurance,
               the company are not prima facie prejudicial to the interest of the
                                                                                                Income Tax (T.D.S.),Fringe benefit tax, Service tax and Professional
               company.
                                                                                                Tax.
           (c) On the basis of our examination of the books of account and
                                                                                                  According to the information and explanations given to us, the
               according to the information and explanations given to us, the
                                                                                                  undisputed amounts payable are Employees state insurance of
               Company has not granted any loans secured or unsecured to
               Companies, firms or other parties covered in the Register maintained               ` 16.67 lacs, Income Tax (T.D.S.) of ` 46.91lacs, Fringe benefit
               under Section 301 of the Companies Act’ 1956.                                      tax of ` 16.61 lacs, and Professional Tax of ` 7.86lacs and Service
                                                                                                  tax of ` 20.87 lacs, which were outstanding as at 31st March 2012
     iv.   In our opinion and according to the information and explanations given
                                                                                                  for a period of more than six months from the date they became
           to us there are adequate internal control procedures commensurate
                                                                                                  payable.
           with the size of the Company and the nature of its business with regard
           to purchase of inventory and fixed assets and for the sale of goods and




30                                                                    ONTRACK SYSTEMS LIMITED
                                                                                                                         ANNEXURE TO AUDITORS’ REPORT



      ( b ) According to the information and explanations given to                           x v. According to the information and explanations given to us,
            u s , t h e r e a r e n o d u e s o f s a l e s t a x , c u s t o m s d u t y,        the Company has not given any guarantee for loans taken
            e x c i s e dut y, s e r v i ce t ax, w e alt h t ax an d c e ss whic h               by others, from banks or financial institutions, the ter ms
            have not been deposited on account of any dispute,                                    & conditions whereof are prejudicial to the interest of the
            except the disputed Income tax demand. The amounts                                    Company.
            involved and the for um where the dispute is pending
                                                                                             xvi. On the basis of our examinations and according to the
            are detailed in the statement given below:
                                                                                                  information and explanations given to us, the company has
                                                                                                  during the year not raised any term loan.
     Sl.No. Name of the statute Nature of Dues      ` in lacs   Forum where dispute
     ----                                                           is pending               xvii.According to the information and explanations given to us
     01 -   Income Tax      Assessed demand           8.36          ITAT, Chennai
                                                                                                  and on an overall examination of the Balance Sheet of the
     ----                   for A.Y: 2003-04
     02 -   Income Tax      Assessed demand           2.95        CIT (A), Chennai                Company, we repor t that no fund raised during the year
     ----                   for A.Y: 2004-05                                                      on shor t-term basis have been used for long-term
     03 -   Income Tax      Assessed demand          91.60        CIT (A), Chennai                investment.
     ----                   for A.Y: 2005-06
     04 -   Income Tax      Assessed demand         171.45        CIT (A), Chennai           xviii.The Company has during the year not made any preferential
     ----                   for A.Y: 2006-07
                                                                                                  allotment of shares to a par ty covered in the register
     05 -   Income Tax      Assessed demand         460.47        CIT (A), Chennai
                                                                                                  maintained U/s.301 of the Companies Act’ 1956.
     ----                   for A.Y: 2007-08
     06 -   Income Tax      Assessed demand         306.43        CIT (A), Chennai
                                                                                             x i x The Company has not issued any debentures during the
     ----                   for A.Y: 2008-09
                                                                                                  year under audit. Accordingly, the provision of clause (xix)
     07 -   Income Tax      Assessed demand           5.84      Rectification pending
     ----                   for A.Y: 2010-011                   with CPC, Bangalore               of paragraph 4 of the aforesaid Order is not applicable to
                                                                                                  the Company.
x.     The Company has no accumulated losses during the year.                                x x The Company has not raised any money by way of public
       It has incurred no cash loss during the financial year
                                                                                                  issue during the year. Therefore the provisions of clause
       covered by our repor t and also in the immediately preceding
                                                                                                  (xx) of the paragraph 4 of the aforesaid Order are not
       financial year.
                                                                                                  applicable to the Company
xi. Based on our audit procedures and according to the
                                                                                             xxi During the course of our examination of the books of
       infor mation and explanations given to us, we are of the
                                                                                                  accounts carried out in accordance with Generally Accepted
       opinion that the Company has not defaulted in repayment
                                                                                                  A u d i t i n g Pr a c t i c e s , w e h a v e n e i t h e r c o m e a c r o s s a n y
       of dues to financial institution, banks or debenture holders
                                                                                                  instance of fraud on or by the Company nor have we been
       during the year.
                                                                                                  informed of any such case by the Management.
x i i . 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.                                                                                                          For GOENKA SHAW & CO.
                                                                                                                                               Chartered Accountants
x i i i . In our opinion the Company is not a chit fund or a nidhi /
                                                                                                                                                    FR No. 319075E
       mutual benefit fund / society, therefore the provision of
       clause (xiii) of paragraph 4 of the aforesaid Order is not                                                                                           Sd/-

       applicable to the Company.                                                            Kolkata, India                                   (CA Saroj Kumar Swain)
                                                                                             30th May, 2012                                               Partner
x i v. As per records of the Company and the infor mation and
       explanations given to us by the management, the Company                                                                                 Membership No. 061912
       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 it’s own name.



                                                                         ONTRACK SYSTEMS LIMITED                                                                                           31
                                                                                                               BALANCE SHEET



     BALANCE SHEET
     AS ON 31ST MARCH, 2012
                                                                                                  As on                   As on
                                                                                                31.03.2012              31.03.2011
                                                   NOTE NO.                                     (` in lakh)             (` in lakh)

     I.   EQUITY AND LIABILITIES

     1    Shareholders’ Fund :

          (a) Share Capital                              3                           1,934.20                                  1,934.20
          (b) Reserve & Surplus                          4                             869.04                                    714.02
                                                                                                    2,803.24                   2,648.22


     2    Non- current liabilities
          (a) Long Term Borrowings                       5                            292.59                                    296.87
          (c) Other Long term liabilities                6                            200.00                                         -
                                                                                                     492.59                      296.87
     3    Current Liabilities
          (a) Short -Term Borrowings                     7                           1,280.23                                  1,105.72
          (b) Trade Payables                             8                           3,016.90                                  1,702.52
          (c ) Other current liabilities                 9                            351.24                                     426.37
          (d) Short -Term Provisions                    10                             10.21                                      10.21
                                                                                                    4,658.58                   3,244.82


          TOTAL                                                                                     7,954.41                   6,189.91


     II   ASSETS
     1    Non-Current Assets
          (a) Fixed Assets
          (i) Tangible Assets                           11                            768.26                                     795.29
          (ii) Intangible Assets                        11                                  -                                      0.01
          (b) Non-current Investments                   12                            687.77                                     692.79
          (c) Deffered tax Assets (Net)                 13                             32.89                                      61.21
          (d)Long term Loans & Advances                 14                            681.41                                     666.52
                                                                                                    2,170.33                   2,215.82
     2    Current Assets
          (a) Current Investments                       15                               0.12                                      0.12
          (b) Inventories                               16                            974.67                                     933.47
          (c) Trade Receivables                         17                           4,669.88                                  2,833.47
          (d)Cash & Bank Balance                        18                             99.15                                     110.50
          (e) Short Term Loans & Advances               19                             40.26                                      93.68
          (f) Other Current Assets                      20                                  -                                      2.85
                                                                                                    5,784.08                   3,974.09
          TOTAL                                                                                     7,954.41                   6,189.91

          Notes forming part of financial statement 1 to 37
          The accompanying notes are an integral part of the financial statements.
          This is the Balance Sheet referred to in our report of even date.
            For GOENKA SHAW & CO.                                                                   For and on behalf of the Board
              Chartered Accountants
                       Sd/-                                               Sd/-                                    Sd/-
             (CA Saroj Kumar Swain)                                     (B. Hari)                           (S. V. Ramani)
                     Partner                                 Chairman and Managing Director       Whole-time Director and Secretar y
     Kolkata, India
     30th May, 2012
32                                                                ONTRACK SYSTEMS LIMITED
                                                                                                   PROFIT & LOSS ACCOUNT



STATEMENT OF PROFIT & LOSS ACCOUNT
FOR THE YEAR ENDED 31ST MARCH, 2012
                                                                                         Year ended              Year ended
                                                                                         31.03.2012              31.03.2011
                                                                  NOTE NO.               (` in lakh)             (` in lakh)


     INCOME
     Revenue From Operations                                             21                   10,327.83               6,193.55
     Other income                                                        22                       40.98                  35.87

    Total Revenue                                                                             10,368.81               6,229.42


     EXPENDITURE
         Purchases of Stock-in-Trade                                 23                        9,013.95              4,712.44
         Changes in inventories of stock in trade & work-in-progress 24                         (37.96)               (280.37)
         Employees benefit expense                                   25                          307.11                316.15
         Finance Costs                                               26                          173.43                213.44
         Depreciation and amortisation expense                       11                           30.30                  74.99
         Other Expenses                                              27                          665.95                856.61
         Provision for Diminution                                    12                            5.02                     —

          Total Expenses                                                                      10,157.80               5,893.26

     Profit before tax                                                                           211.01                336.16

     Tax Expenses

     Current Tax                                                                                  39.66                 36.00

     Deferred Tax charge/(credit)                                                                 28.33                (16.37)

     Earlier Provision for Tax written back                                                      (12.00)                   —

     Profit/(Loss) for the period                                                                155.02                316.53

     Earning Per Equity Share of Face Value of ` 10 each

     Basic and Diluted ( in `)                                                                     0.80                    1.95

     Notes forming part of financial statement                       1 to 37

     The accompanying notes are an integral part of the financial statements.

     This is the Statement of Profit & Loss referred to in our report of even date.




      For GOENKA SHAW & CO.                                                                    For and on behalf of the Board
      Chartered Accountants
                  Sd/-                                               Sd/-                                    Sd/-
        (CA Saroj Kumar Swain)                                     (B. Hari)                           (S. V. Ramani)
                Partner                                 Chairman and Managing Director       Whole-time Director and Secretar y
Kolkata, India
30th May, 2012




                                                              ONTRACK SYSTEMS LIMITED                                             33
                                                                                                       CASH FLOW STATEMENT


     CASH FLOW STATEMENT
     FOR THE YEAR ENDED 31ST MARCH, 2012
                                                                              31.03.2012                         31.03.2011
                                                                              (` in lakh)                        (` in lakh)
     A.  Cash flow from operating activities
         Net profit/(loss) before extraordinary items and tax                               211.01                               336.16
     Adjustment for
         – Depreciation and amortisation                                      30.30                             74.99
         – (Profit) / loss on sale / write off of assets                         –                             (0.71)
         – Finance costs (Net)                                              173.44                            198.96
         – Interest income                                                  (35.73)                           (30.20)
         – Dividend income                                                   (0.14)                            (0.12)
         – Adjustments to the carrying amount of investments                   5.02                                 –
          – Exchange difference on translation of foreign
            currency cash & cash equivalents                                 (0.24)                                –
          – Other non-cash charges (specify)                                  2.85                              2.85
            (deferred revenue exp. w/o)
                                                                                             175.50                               245.77
     Operating profit / (loss) before working capital changes                                386.51                               581.93
     Changes in working capital:
     Adjustments for (increase) / decrease in operating assets:
         – Inventories                                                      (41.20)                         (277.34)
          – Trade receivables                                            (1,836.41)                        (1,070.72)
          – Short-term loans and advances                                    51.93                          (265.73)
          – Long-term loans and advances                                    (14.19)                           (56.01)
     Adjustments for increase / (decrease) in operating
     liabilities:
            – Trade payables                                              1,314.38                            629.06
          – Other current liabilities                                         9.61                          (364.44)
          – Short-term liabilities                                          (41.34)                               –
                                                                                            (557.22)                           (1,405.18)
     Cash generated from operations                                                         (170.71)                            (823.25)
     Net income tax (paid) / refunds                                                         (26.17)                              (47.08)


     Net cash flow from / (used in) operating activities (A)                                (196.88)                            (870.33)


     B. Cash flow from investing activities
          – Capital expenditure on fixed assets, including
            capital advances                                                 (3.96)                           (48.23)
          – Proceeds from sale of fixed assets                                  –                               0.71
     Interest received
          – Others                                                          35.73                             30.20
     Dividend received
          – Others                                                            0.14                              0.12
          – Fixed Deposit placed with banks matured                         47.89                             131.70
                                                                                              79.80                               114.50
     Cash flow from extraordinary items                                                     249.83                                    -
                                                                                            329.63                                114.50
     Net income tax (paid) / refunds                                                             -                                    -
     Net cash flow from / (used in) investing activities (B)                                 329.63                               114.50

34                                                                ONTRACK SYSTEMS LIMITED
                                                                                                                  CASH FLOW STATEMENT


CASH FLOW STATEMENT (Contd....)
FOR THE YEAR ENDED 31ST MARCH, 2012
                                                                              31.03.2012                                    31.03.2011
                                                                              (` in lakh)                                   (` in lakh)

C.   Cash flow from financing activities
     – Share application money received / (refunded)                                –                                   1,224.00
     – Repayment of long-term borrowings                                   (89.03)                                      (142.50)
Net increase / (decrease) in working capital borrowings                     166.02                                            –
Repayment of other short-term borrowings                                        –                                       (131.35)
Finance cost                                                              (173.43)                                      (198.96)
                                                                                                   (96.44)                                     751.19
Cash flow from extraordinary items                                              –                      –                                          –
Net cash flow from / (used in) financing activities (C)                                            (96.44)                                     751.19
Net increase / (decrease) in Cash and cash
equivalents (A+B+C)                                                                                 36.31                                       (4.64)
Cash and cash equivalents at the beginning of the year                                               7.96                                       12.60
Effect of exchange differences on restatement of
foreign currency Cash and cash equivalents                                                            0.23                                        –
Cash and cash equivalents at end of the year                                                         44.50                                       7.96
Earmarked balances with banks                                                                        4.65                                        4.65
Short term bank deposits                                                                             50.00                                      97.89
Cash and Bank balances at the end of the year                                                       99.15                                      110.50




Notes:
(i) Figures in parenthesis represent cash outflow
(ii) These earmarked account balances with banks can be utilised only for the specific identified purposes.
(iii) Previous year figures have been regrouped/rearranged wherever found necessary to make them comparble with current year figures.




      For GOENKA SHAW & CO.                                                                                   For and on behalf of the Board
      Chartered Accountants
                   Sd/-                                             Sd/-                                                Sd/-
         (CA Saroj Kumar Swain)                                   (B. Hari)                                       (S. V. Ramani)
                 Partner                               Chairman and Managing Director                   Whole-time Director and Secretar y
Kolkata, India
30th May, 2012




                                                            ONTRACK SYSTEMS LIMITED
                                                                                                                                                         35
                                                                                                                       SCHEDULE TO ACCOUNTS

      n NOTE NO. 1                                                                       vi)    Investments:
            Corporate Inforamation
                                                                                                Long term investments are stated at cost. Provision for diminution in
            Ontrack Systems Limited and it’s subsidiaries provide a wide range                  the value of long-term investment is made only if such a decline is
            of information technology and consultancy services including system,                other than temporary in nature in the opinion of the Management. If
            hardware and software, communication and networking, software                       the value of Investment for take over of a going concern is much
            management solution etc. The Company’s registered office is at Chennai              higher than estimated cost of Net Assets Value including their intrinsic
            and it has four subsidiaries across the globe.                                      value as estimated by management, the additional payment in lieu of
                                                                                                takeover value is considered as Goodwill and if it is reverse the amount
      n NOTE NO. 2                                                                              will be transferred to Capital Reserve.

     SIGNIFICANT ACCOUNTING POLICIES AND NOTES TO THE                                    vii)   Inventories:
     ACCOUNTS                                                                                   Inventories of trading goods, spare parts and consumable stores are
                                                                                                valued at lower of cost or net realizable value. Outdated and damaged
     A. Significant accounting policies
                                                                                                stocks are written off on technical evaluation. The WIP is valued at
     i)      Accounting Convention:                                                             direct cost attributed to projects based on stages of completion as
                                                                                                certified by the management.
             The financial statement has been prepared under the historical cost
             convention in accordance with the generally accepted accounting             viii) Recognition of Revenue:
             principles as adopted consistently by the company.
                                                                                                Sales:
     ii)     Use of Estimates:
                                                                                                The sales are recognized at the point of dispatch of material to the
             The preparation of financial statements, in conformity with the generally          customers and bills are raised to them.Sales are shown net of goods
             accepted accounting principles, requires estimates and assumptions                 return, rebates, rate differences etc. Revenue from maintenance
             to be made that affect the reported amount of assets and liabilities on            contracts are recognized for in the relevant accounting year upon
             the date of financial statements and the reported amount of revenues               entering into the contract. Revenue from software development is
             and expenses during the reported year. Differences between the actual              recognized on the basis of achievement of prescribed milestone as
             results and estimates are recognized in the year in which the results              relevant to terms of contract or proportionate completion method as
             are known / materialized.                                                          applicable.
     iii)    Fixed Assets :                                                                     Income & Expenditure:
             Fixed Assets are stated at cost less accumulated depreciation.                     The Company follows mercantile system of accounting and recognizes
                                                                                                significant items of Income & Expenditure on accrual basis.
     iv)     Depreciation :
                                                                                         ix)    Deferred Revenue Expenditure:
             Depreciation on Fixed Assets has been provided on Straight Line
             Method and written off over a period as estimated by the management                Deferred revenue expenditure is amortized over a period of five years.
             Computer and its Accessories including Software                 3 Years     x)     Foreign Currencies Transactions :
             Building - freehold                                            20 Years            Foreign currency transactions are accounted for at the prevailing
                                                                                                exchange rate as on the date of execution of the transaction or of the
             Other Fixed Assets                                              5 Years
                                                                                                rate cover under forward contract as applicable. Foreign currency
             Lease hold Land & Building is amortized for the lease period.                      monetary items not covered under forward exchange contract and
     v)      Impairments:                                                                       due at the end of the year are converted at the exchange rate prevailing
                                                                                                as on that date. Exchange differences arising on the settlement of the
             At each Balance Sheet date, the Company reviews the carrying amount
                                                                                                transactions or on reporting at the year end rates are recognized as
             of its fixed Assets to determine whether there are any indications that
                                                                                                Income or as Expenses in the period in which arise, except in respect
             those assets suffered any impairment loss. If any such indication
                                                                                                of fixed assets acquired from out side India, where exchange variance
             exists, the recoverable amount of the asset is estimated in order to
                                                                                                is adjusted to the carrying amount of the respective fixed assets.
             determine the extent of impairment loss. The recoverable amount is
             the higher of an asset net selling price and value in use. In assessing     xi)    Employees Benefit:
             value in use , the estimated future cash flow expected from the                    Short Term Employees Benefits: The undiscounted amount of short
             continuing use of the assets and from its disposal are discounted to               term employee benefit expected to be paid in exchange for the services
             their present value using a pre-determined rate that reflect the current           rendered by the employees are recognized during the period when
             market assessment of time value of money and the risks specific to                 the employees render the service
             the assets . Reversal of impairment loss is recognized immediately
             as income in the Profit & Loss Account.


36                                                                     ONTRACK SYSTEMS LIMITED
                                                                                                              SCHEDULE TO ACCOUNTS




Post Employment benefit plans:                                                    xiv) Earning per Share:

  a) Defined Contribution Plan: Contribution under defined contribution               Basic earning per share are calculated by dividing the net profit or
     plan payable in keeping with the related scheme are recognized as                loss for the period attributable to equity share holders (after deducting
     expenses for the year.                                                           attributable taxes) by the weighted average number of equity shares
                                                                                      outstanding during the period. The weighted average number of equity
  b) Defined benefit plan: The Group gratuity scheme provided by the
                                                                                      shares outstanding during the period is adjusted for events of bonus
     company is a defined benefit plan. Benefit under the define benefit
                                                                                      issue, bonus element in a rights issue to existing shareholders, share
     plan are generally based on the years of service rendered and the
                                                                                      split and reverse shares split (consolidation of shares).
     employee’s eligible compensation (immediately before retirement).
     The scheme covers substantially all regular employees and the                    For the purpose of calculating diluted earning per share, the net profit
     company contributes funds to the Life Insurance Corporation of India,            or loss after tax for the period attributable to equity share holders and
     which administers the scheme on behalf of the company.                           the weighted average number of shares outstanding during the period
                                                                                      are adjusted for the effects for all dilutive potential equity shares.
     Other Long Term employment benefit (unfunded): The cost of
     providing other long term employee benefit is generally recognised           xv) Tax on Income:
     on cash basis                                                                    Current Tax represents the amount that would be payable based on
 xii) Segment Reporting:                                                              the computation of tax as per prevailing taxation laws under IT Act
                                                                                      1961. Deferred tax is recognized subject to consideration of prudence,
     The geographical segments have been identified as primary segment
                                                                                      on timing differences, being the difference between taxable income
     on the basis of location of the major customers of the Company.
                                                                                      and accounting income that originate in one period and are capable
     These segments represent a strategic business unit that offers different
                                                                                      of reversal in one or more subsequent periods. Deferred tax is calculated
     places of unit having different risk and returns. Inter-segment sales
                                                                                      using the tax rates and tax laws that has been enacted and/or
     and transfers if any are accounted for, as if the sales or transfers were
                                                                                      substantially enacted as at the Balance Sheet date. Deferred tax assets
     to third parties at current market prices. Income & expenditure and
                                                                                      are not recognized unless there is virtual certainty that sufficient future
     Assets & Liabilities not allocable to any specific geographical segment,
                                                                                      taxable income will be available against which such deferred tax assets
     are classified as unallocated. The company’s secondary segment is
                                                                                      can be realized.
     business segment and it operates only in one business segment
     namely Trading/dealing with computer hardware and software. Therefore       xvi) Contingent Liabilities & Assets:
     no separate secondary segment is identifiable as required by Accounting          Provisions involving substantial degree of estimation in measurement
     Standard 17 issued by ICAI.                                                      are recognized when there is a present obligation as a result of past
 xiii) Borrowing Costs :                                                              events and it is probable that there will be an outflow of resources.
                                                                                      Contingent Liabilities are not recognized but are disclosed in the Notes
     Borrowing costs attributable to qualifying assets are capitalized up to
                                                                                      to the Financial Statements. Contingent Assets are neither recognized
     the date when such assets are ready for their intend use,other borrowing
                                                                                      nor disclosed in the financial statements.
     cost are recognized as expenses in the period in which they are
     incurred.                                                                   xvii) Cash and cash equivalents:

                                                                                      The Company considers all highly liquid financial instruments, which
                                                                                      are readily convertible into cash and have original maturities of three
                                                                                      months or less from the date of purchase, to be cash equivalents.




                                                               ONTRACK SYSTEMS LIMITED
                                                                                                                                                                    37
                                                                                                                                  NOTES TO ACCOUNTS



     NOTES FORMING PART OF THE
     FINANCIAL STATEMENTS
                                                                                                                      As at                                As at
                                                                                                                31st March 2012                      31st March 2011
                                                                                                                 (` in Lakh)                          (` in Lakh)
     n NOTE NO. 3
       Share Capital
       Authorised:
       250,00,000 (250,00,000) Equity Shares of ` 10/- each                                                               2,500.00                            2,500.00

        Issued, subscriped and paid up:
        193,42,005 (193,42,005) Equity Shares of ` 10/- each fully paid up                                                1,934.20                            1,934.20
                                                                                                                          1,934.20                            1,934.20
        3.01 Rights and Preferences attached to Equity Shares:
                 The Company has only one class of equity shares having at par value of ` 10 each. Each shareholder is eligible to one vote per share held.
                 In the event of liquidation , the equity shareholders are eligible to receive the remaining assets of the company after distribution of all preferential
                 amounts in proportion to their shareholding.

        3.02 Aggregate number shares issued for consideration other than cash during the period of five years immediately preceding the reporting
             date:
             During the year 2007-2008, 450,000 Equity Shares were issued for acquisition of Intellisys (Aust.) Pty. Ltd, which is subsequently renamed
             as Ontrack System (Aust.) Pty Ltd.

        3.03 The details of shareholders holding more than 5% shares in the company


                                                                                       As At 31st March, 2012                            As At 31st March, 2011
                           Name of the Shareholder
                                                                                No. of Shares                % held                No. of Shares                % held

                 R. P. INFO SYSTEMS LTD.                                             9007500                46.57%                    9000000                  46.53%
                 B. HARI                                                             3159395                16.33%                    3159395                  16.33%
                 KANT & COMPANY LIMITED                                              1191705                  6.16%                   1191705                    6.16%


     n NOTE NO. 4
       Reserve & Surplus
       Securities Premium
       As Per Last Balance Sheet                                                                                            772.48                               772.48
       General Reserves
       As Per Last Balance Sheet                                                                                              94.00                               94.00
       Share Options Outstanding Account
       Employee Stock Option Outstanding                                                                                       1.26                                1.26
       Surplus in Statement of Profit & Loss
       As Per Last Balance Sheet                                                              (153.72)
       Add: Transfer from Statement of Profit and Loss for the year                             155.02
                                                                                                                              1.30                             (153.72)
         Total                                                                                                              869.04                               714.02

     n NOTE NO. 5
       LONG TERM BORROWINGS
       Secured Loans
       Vehicle Loan from SBI- Commercial Br. (Ref note : 5.01)                                                                 3.20                                7.07
       Unsecured Loans
       Vehicle Loan from other bank                                                                                           0.39                                 0.80
       From Corporate bodies                                                                                                289.00                               289.00
         Total                                                                                                              292.59                               296.87

38                                                                     ONTRACK SYSTEMS LIMITED
                                                                                                                 NOTES TO ACCOUNTS



NOTES FORMING PART OF THE
FINANCIAL STATEMENTS (...CONTD.)
5.01 Vehicle loan from SBI - Commercial Br. Salt Lake is secured by hypothecation of respective vehicle and further secured by pledge of FDR.
5.02 Terms of repayment and Rate of Interest for Long Term Borrowings
                                                                             2011-12                                        2010-11
                   Borrowings                        Terms of Repayment            Rate of Interest     Terms of Repayment        Rate of Interest

   1. Vehicle Loan From SBI                          Repayable in 36             Interest to be paid    Repayable in 36         Interest to be paid
                                                     installments starting       @9.5% p.a              installments starting   @9.5% p.a
                                                     from 28th Jan, 2011                                from 28th Jan, 2011
                                                                                Interest to be paid @                           Interest to be paid @
   2. Vehicle Loan From HDFC                         Repayable in 60            14.75% p.a              Repayable in 60         14.75% p.a
                                                     installments starting      compounded monthly      installments starting   compounded monthly
                                                     from 7th Feb , 2009                                from 7th Feb, 2009

                                                                                                     As at                            As at
                                                                                               31st March 2012                  31st March 2011
                                                                                                (` in Lakh)                      (` in Lakh)
n NOTE NO. 6
  OTHER LONG TERM LIABILITIES
  Security deposit against development of property                                                        200.00                                —


n NOTE NO. 7
  SHORT TERM BORROWINGS
  Loans Repayable on Demand (Secured)
  Working Capital loan from SBI, Commercial Br. (Ref note : 7.01 )                                        746.27                           692.21
  Working capital loan from Indian Bank, Strand Road Br.(Ref note : 7.01 &7.02 )                          447.35                           335.39
  Loans and Advances from Related Parties (Unsecured)
  Advance from Subsidiary                                                                                  36.78                           78.12
  Other Advances                                                                                           49.83                              —

   Total                                                                                                1,280.23                         1,105.72


   7.01 Working Capital Loans from bank are secured against hypothecation of stocks, book debts & other movable assets of the company,charge
        of mortgage on the basis of paripasu inter-se on the entire immovable properties of the company at Salt Lake, Rajarhat and Ekdalia Road
        and personal guarantee of Managing Director. The loan guaranteed by director : SBI ` 9.6 crore and previous year ` 6.6 crore and Indian
        Bank ` 4.53 crore and Previous year. ` 3.5 crore

   7.02 Working Capital Loan with Indian Bank is further secured by way of pledge of equity shares of the company standing in the name of Managing
        Director and his Family Members & FDR/CDR standing in the name of the company.

   7.03 The working capital loan from SBI is availed @ 15% p.a and from Indian Bank @ 15.75% p.a


   NOTE NO. 8
   TRADE PAYABLES                                                                                       3,016.90                         1,702.52

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




                                                          ONTRACK SYSTEMS LIMITED                                                                       39
                                                                                                      NOTES TO ACCOUNTS


     NOTES FORMING PART OF THE
     FINANCIAL STATEMENTS (...CONTD.)
                                                                                        As at                               As at
                                                                                  31st March 2012                     31st March 2011
                                                                                   (` in Lakh)                         (` in Lakh)
     n NOTE NO. 9
       OTHER CURRENT LIABILITIES
       Current Maturity of Long term debt :
       Term Loan from SBI ( See Note No. 9.01)                                            -                                    85.50
        Vehicle Loan from banks                                                        4.28                                     3.53
       Unexpired AMC                                                                   5.35                                     5.58
       Unpaid Dividends (See Note No. 9.02)                                            4.62                                     4.62
       Advance from Customers                                                         10.24                                    19.47
       Others :
       Payable to Subsidiaries                                     7.00                                         -
       Other Liabilities                                         319.75              326.75                307.67             307.67
       Total                                                                         351.24                                   426.37

     n NOTE NO. 9.01
       Term Loan from SBI is 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.

     n NOTE NO. 9.02
       Unpaid dividends Include amount of ` 0.74 (P.Y. ` 0.57) due to be transferred / Credited to Investor Education Protection
       Fund.

     n NOTE NO. 10
       SHORT TERM PROVISIONS
       Provision for FBT(Net Off)                                                             10.21                        10.21
       Total                                                                                  10.21                        10.21




40                                                   ONTRACK SYSTEMS LIMITED
                          NOTES FORMING PART OF THE BALANCE SHEET AND
                          PROFIT & LOSS ACCOUNT

                          n NOTES NO. 11
                                  FIXED ASSETS
                                                                                                              GROSS BLOCK                                                 DEPRECIATION & IMPAIRMENT LOSS                                          Net Block
                            Sl.                                           As On                   Addition            Deletion            As On                 Up to             For the          Deletion               Up to           As on               As on
                           No.      Description of Assets               01.04.2011              during year          during year       31.03.2012            01.04.2011            Year          during year           31.03.2012      31.03.2012          31.03.2011


                          A.TANGIBLE ASSETS

                            1.     Land                                      198.09                    1.31                —               199.40                 —                   —                       —              —             199.40              198.09

                            2.     Land & Building

                            — Leasehold                                      531.96                     —                  —                531.96              26.81                 7.04                    —            33.85            498.11             505.14

                            — Freehold                                       96.70                      —                 —                 96.70               50.55                 0.52                    —            51.07              45.63             46.15

                            3.     Computer (Plant & Machinery)              316.21                     —                   —              316.21             316.18                  0.03                    —          316.21                   —              0.03

                            4.     Computer Accessories                      124.16                   0.83                  —              124.99             118.34                  2.79                    —          121.13                3.86              5.82

                            5.     Electrical Equipments                      45.92                   0.25                  —               46.17               33.64                 4.97                 —               38.61               7.56             12.28

                            6.     Vehicles                                   16.18                     —                  —                 16.18               1.93                 3.23                    —              5.16             11.02             14.26




ONTRACK SYSTEMS LIMITED
                            7.     Furniture & Fittings                      101.41                   0.87                  —               102.28              90.72                10.27                    —           100.99               1.29             10.69

                            8.     Office Equipment                            10.39                     —                  —                10.39                7.56                1.44                    —              9.00              1.39               2.83

                                   Total                                    1,441.02                   3.26                 —             1,444.28             645.73                30.29                    —           676.02             768.26            795.29

                          B.INTANGIBLE ASSETS

                          9.Software                                           23.03                     —                  —               23.03               23.02                 0.01                    —            23.03                  —               0.01

                          Total                                                23.03                     —                  —                23.03              23.02                 0.01                    —            23.03                  —               0.01

                          Grand Total                                       1,464.05                  3.26                 —             1,467.31              668.75                30.30                 —              699.05             768.26            795.30

                          Previous Year                                     1,423.00                 48.22                7.18           1,464.04              600.94                74.99               7.18            668.75             795.29             822.06
                                                                                                                                                                                                                                                                         NOTES TO ACCOUNTS




                          11.01 Depreciation has been provided for in the Accounts on “Straight Line Method” and the assets are depreciated over the useful life of the assets based on the estimation made by the management and using the rates which are not less
                                than those prescribed in Sch-XIV to the Companies Act 1956.


                          11.02. The company has entered in to two separate agreement for the development of the Proprties at 19, Ekdalia Road, Kolkata-700019 and at Rajarhat.




41
                                                                                                       NOTES TO ACCOUNTS


     NOTES FORMING PART OF THE
     FINANCIAL STATEMENTS (...CONTD.)
                                                                                           As at                             As at
                                                                                     31st March 2012                   31st March 2011
                                                                                      (` in Lakh)                       (` in Lakh)




     n NOTE NO. 12
       NON CURRENT INVESTMENTS
       Long Term Trade Investments (At cost)               NO. OF SHARES        AMOUNT (`)        NO. OF SHARES            AMOUNT (`)
       In Equity Shares of Subsidiary Companies,
       Unquoted, fully paid up
       Ontrack Systems (UK) Ltd.                                17,50,000           131.99               17,50,000              131.99
       (100% wholly owned subsidiary)
       (Face value of 10 pence each )
       Ontrack Systems (UAE) Ltd.                                  3,000             48.65                  3,000                48.65
       (100% wholly owned subsidiary)
       (Face value of AED 150/- each )
       Ontrack Systems (Aust) Pty. Ltd.                          3,94,010           382.15                3,94,010             382.15
       (100% wholly owned subsidiary)
       (Face value of AUD 1/- each)
       Ontrack Global Services Ltd.                              9,42,594            94.26                9,42,594              94.26
       (99.99% Shares holding)
       (Face value of ` 10/- each)
       In Equity Shares of Associate Companies,
       Unquoted, fully paid up
       Comunet Info-Systems Pvt. Ltd.                             96,000             30.72                 96,000                30.72
       (48% Shares holding)
       (Face value of ` 10/- each)
       Ontrack Systems B.V. Netherland                              9256                 5.02               9256                  5.02
       (26% Shares holding)
       (Face value of Euro 1/- each fully paid )
                                                                                    692.79                                     692.79
       Less: Provision for Diminution in value of investment                             5.02                                       —


       TOTAL                                                                        687.77                                     692.79




42                                                             ONTRACK SYSTEMS LIMITED
                                                                                                                 NOTES TO ACCOUNTS


NOTES FORMING PART OF THE
FINANCIAL STATEMENTS (...CONTD.)
12.1 In view of non-functioning of business of the associate company Ontrack system B.V , Netherland due to death of it's key managerial person, the
      management is of the opinion that the book value of investmnt in Ontrack system B.V, Netherland is nil as at 31st March' 2012. Therefore provision
      for diminution in value has been made in the account.

                                                                                                     As at                                As at
                                                                                               31st March 2012                      31st March 2011
                                                                                                (` in Lakh)                          (` in Lakh)

n NOTE NO. 13
   DEFFERED TAX ASSETS
   Major components effecting deferred tax assets
   Opening Balance                                                                                         61.21                             44.85
   Add /(less) Excess created in prior years                                                             (24.27)                                —
                                                                                                           36.94                             44.85
   Add/(less):Deferred tax credit/(charge) for the year                                                   (4.06)                             16.36

  Total                                                                                                    32.89                             61.21
n NOTE NO. 14
   LONG TERM LOAN AND ADVANCES
   (Unsecured loan to body corporate considered good)
   Capital Advance                                                                                        0.70                             —
   Security Deposits                                                                                     57.03                             70.56
   Advance to Subsidiaries & Associates                                                                 111.06                            111.06
   Other Loans & Advances :
   Loan to Bodies Corporates                                                                            283.61                            255.89
   Other Trade Advances                                                                                 229.01                            229.01

                                                                                                        681.41                            666.52

   14.1 Other Trade Advances include ` 10.00 lacs (Previous Year ` 10.00 lacs) due from a party, against which the company has filed money suit and
        the matter is subject to judicial proceedings. Pending the outcome of the legal proceedings, the extent of amounts recoverable there against is not
        ascertainable and therefore no provision has been made in the accounts.
   14.2 Other Trade advances include ` 219.01 lacs(previous year ` 219.01 lacs) due from a customer on account of encashment of performance bank
        guarantee, which is subsequently settled amicably and the debt has been ackonwledged by the customer with a schedule to repay the amount over
        a period of 2 years from the end of the current financial year.

n NOTE NO. 15
  CURRENT INVESTMENTS
  Investment in Equity Instruments
  Quoted, Fully Paid Up
  Tata Consultancy Services Ltd (Face value ` 1/- each) 56 no. of equity shares                           0.12                               0.12
  (includes 28 nos. bonus shares alloted during the year 2010-11)
  Aggregate Amount of Quoted Investments                                                                  0.12                               0.12
  Market Value of Quoted Investments                                                                      0.65                               0.66

n NOTE NO. 16
  INVENTORIES
  (As taken, valued & certified by the management)
  Work-in-progress                                                                                       99.36                             67.93
  Stock-in-trade                                                                                        865.87                            859.34
  Consumables Spares                                                                                      9.44                              6.20
  Total                                                                                                 974.67                            933.47


                                                          ONTRACK SYSTEMS LIMITED                                                                             43
                                                                                                    NOTES TO ACCOUNTS


     NOTES FORMING PART OF THE
     FINANCIAL STATEMENTS (...CONTD.)
                                                                                      As at                          As at
                                                                                31st March 2012                31st March 2011
                                                                                 (` in Lakh)                    (` in Lakh)
     n NOTE NO. 17
       TRADE RECEIVABLES
       (Unsecured & Considered Good)
       Exceeding 6 Months                                                              1,123.07                           757.42
       Others                                                                          3,546.81                         2,076.05
       Total                                                                           4,669.88                         2,833.47

     n NOTE NO. 18
       CASH & BANK BALANCES
       Cash and Cash Equivalents
       (i) Balance with Banks                                                                7.07                            7.91
       (ii) Cash in Hand                                                                     1.43                            0.05
       (iii) Cheque in hand                                                                 36.00                        —
       Other Bank Balances
       (i) Earmarked Balance with Bank
            Dividend unpaid A/c                                                              4.63                          4.63
            Gratuity A/c                                                                     0.02                          0.02
       (ii) Fixed Deposit Cummulative *                                                     50.00                         97.89
       Total                                                                                99.15                        110.50
       * Fixed deposits with bank are held as margin money for both bank
       guarantee & letter of credit and also as security for borrowings.


     n NOTE NO. 19
       SHORT TERM LOANS & ADVANCES :-
       (Unsecured & Considered Good)
       Advance Income Tax / TDS (Net of Provision)                                          11.64                         13.13
       Accrued Interest                                                                      2.69                         —
       Prepaid Expenses                                                                      5.19                          4.56
       Advance to Directors                                                                  5.85                         —
       Other Advances                                                                       14.89                         75.99
                                                                                            40.26                         93.68

     n NOTE NO. 20
       OTHER NON CURRENT ASSET
       Deferred Revenue Exp.                                                                 2.85                            5.70
       1/5 written off                                                                       2.85                            2.85
                                                                                        —                                    2.85




44                                                         ONTRACK SYSTEMS LIMITED
                                                                                       NOTES TO ACCOUNTS


NOTES FORMING PART OF THE
FINANCIAL STATEMENTS (...CONTD.)
                                                                           As at                        As at
                                                                     31st March 2012              31st March 2011
                                                                      (` in Lakh)                  (` in Lakh)
n NOTE NO. 21
  REVENUE FROM OPERATIONS
  Sale of Products                                                          9,293.30                  4,764.03
  Sale of Services                                                          1,034.53                  1,429.52
                                                                           10,327.83                  6,193.55


n NOTE NO. 21.01
  PARTICULARS OF SALE OF PRODUCTS
  Software License                                                           180.04                        200.39
  Hardware                                                                 9,113.26                    4,563.64
                                                                           9,293.30                   4,764.03
n NOTE NO. 22
  OTHER INCOME
  Interest                                                                    35.73                         30.21
  Dividend                                                                     0.14                          0.11
  Other Non- Operating Income:
  Profit on Sale of Assets                                                       —                           0.71
  Miscellaneous Income                                                         5.11                          2.75
  Commission,Incentive & Discount Received                                       —                           2.09
  Total                                                                       40.98                         35.87
n NOTE NO. 23
  PURCHASES OF STOCK-IN-TRADE
  Traded Goods                                                             9,013.95                    4,712.44
  Total                                                                    9,013.95                    4,712.44
n NOTE NO. 24
  CHANGE IN INVENTORIES OF STOCK-IN-TRADE & WORK-IN-PROGRESS.
  Inventories ( AS at 01.04.2011)
  Stock-in- Trade                            859.34                                     546.72
  Work-in Progress                            67.93             927.27                  100.18          646.90


  Inventories (As at 31.03.2012)
  Stock-in- Trade                            865.87                                    859.34
  Work-in Progress                            99.36             965.23                  67.93           927.27


  TOTAL                                                         (37.96)                                (280.37)




                                             ONTRACK SYSTEMS LIMITED                                                45
                                                                                                                        NOTES TO ACCOUNTS


     NOTES FORMING PART OF THE
     FINANCIAL STATEMENTS (...CONTD.)
                                                                                                          As at                             As at
                                                                                                    31st March 2012                   31st March 2011
                                                                                                     (` in Lakh)                       (` in Lakh)
     n NOTE NO. 25
       EMPLOYEE'S BENEFIT EXPENSES
       Salaries                                                                                               285.15                         296.04
       Contribution to Provident & Other Funds :-
       Employer's Contribution to ESI                                                                            3.85                          2.59
       Provident Fund -Employer's Contribution                                                                   7.31                          9.21
       Employer's Contribution to Gratuity                                                                       3.09                          2.41
       Staff Welfare Expenses:-
       Insurance benefit to Staff                                                                                6.28                          3.39
       Staff Training & Development                                                                              0.10                          0.96
       Others                                                                                                    1.33                          1.55
                                                                                                              307.11                         316.15


        25.1    No provision has been made for the present value of leave accrued in respect of the eligible employees based on the actuarial valuation using the
                Project Unit Cost Method. The present value of the obligation is currently not determined/ ascertained. Leave benefit as per management' s policy
                is not to be accrued beyond 30 days but availed of and the employees have been advised to plan their leave in advance while in service and
                immediately before superannuation . Leave not availed of is not encashable.
        25.2    The employees’ gratuity fund scheme managed by Life Insurance Corporation of India is a defined benefit plan. The present value of the obligation
                is currently ascertained by the corporation based on the actuarial valuation using the Projected Unit Cost Method and the recommended contribution
                to the fund managed by the corporation has been provided in the accounts during the year.

        The following table sets out the funded status and amounts recognized in the Company's Financial Statements for Gratuity.


        DESCRIPTION                                                                                          2011-2012                    2010-2011
        Net Asset/(Liability) recognized in the Balance Sheet
        Present value funded obligation                                                                         (25.13)                      (22.72)
        Current service cost & others                                                                             (1.90)                       (2.31)
        Fund value as on date                                                                                     7.03                         7.14
        Net Assets/(Liabilities)                                                                                (20.00)                      (17.89)
        Expenses recognized in Profit & Loss Account
        Difference in current service cost                                                                        (0.34)                       (0.22)
        Other cost                                                                                                0.13                         0.20
        Net Actuarial (Gain)/Loss to be recognized                                                                3.30                         2.43
        Total expense recognized in the P& L Account                                                              3.09                         2.41




        Actuarial Assumptions                                                                               2011-2012                     2010-2011
        Mortality Rate                                                                                LIC (1994-96) Ultimate         LIC (1994-96) Ultimate
        Withdrawal Rate                                                                             1% to 3% depending on age      1% to 3% depending on age
        Discounted Rate                                                                                       8% p.a.                        8% p.a.
        Salary Escalation                                                                                      7.5%                             6%




46                                                              ONTRACK SYSTEMS LIMITED
                                                                                                      NOTES TO ACCOUNTS


NOTES FORMING PART OF THE
FINANCIAL STATEMENTS (...CONTD.)
                                                                                         As at                         As at
                                                                                   31st March 2012               31st March 2011
                                                                                    (` in Lakh)                   (` in Lakh)
n NOTE NO. 26
   FINANCE COST
   Bank Interest                                                                            199.37                     159.91
   Bank Charges                                                                              28.24                      39.05
   Loss on Foreign Currency Transactions and Translation (Net)                              (54.18)                       14.48
                                                                                            173.43                     213.44
n NOTE NO. 27
   OTHER EXPENSES
   Operating Expenses
   Electricity Expenses                                                                      11.92                        12.61
   Stores & Spares Cosumed                                                                   16.26                        25.86
   Professional & Consultancy Charges                                                       139.41                     260.67
   Repairs & Maintenance                                                                     11.87                        17.26
   Bandwith Charges                                                                            9.10                        8.66
   Insurance Premium                                                                           1.33                        1.35
   Expenses for (WOS) - UAE                                                                  65.33                     104.77
   Expenses for (WOS) - UK (Opt)                                                            205.50                     135.95
                                                                                            460.92                     567.13
   Administrative Expenses
   Administrative Expenses for (WOS) - UK                                                    15.91                        19.11
   Administrative Expenses for (WOS) - UAE                                                   32.81                        76.36
   Director Remuneration                                                                     42.12                        36.10
   Printing & Stationery                                                                       5.32                        5.16
   Business Promotion                                                                          2.17                        7.92
   Advertisement & Publicity                                                                   2.94                        4.38
   Office Expenses                                                                           11.26                        15.27
   Discount Allowed                                                                            2.96                        1.60
   Rent,Rates & Taxes                                                                          3.02                       11.99
   Travelling & Conveyance                                                                   54.08                        68.27
   Postage & Telephone                                                                       10.65                        14.20
   Other Charges                                                                             18.94                        22.07
   Deferred Revenue Expenditure                                                                2.85                        2.85
   Prior period Item                                                                       —                               4.20
                                                                                            205.03                     289.48
                                                                                            665.95                     856.61
27.01 Professional & Consultancy charges include payment to Auditors as follows:
       a) Statutory Audit Fees                                                                 2.25                        2.25
       b) Tax Audit Fees                                                                       0.50                        0.50
       c) Certification & others                                                               0.09                        0.31
       d) Re-imbursement of expenses                                                           0.10                        -
                                                                                               2.94                        3.06




                                                        ONTRACK SYSTEMS LIMITED                                                    47
                                                                                                                  NOTES TO ACCOUNTS


     NOTES FORMING PART OF THE
     FINANCIAL STATEMENTS (...CONTD.)
                                                                                                    As at                            As at
                                                                                              31st March 2012                  31st March 2011
                                                                                               (` in Lakh)                      (` in Lakh)

     n NOTE NO. 28
       EARNINGS PER SHARE(EPS)
       Net Profit after tax as per Statement of Profit & Loss                                          155.02                          316.53
       attributable to Equity Shareholders (Rs. )
       Weighted Average Number of equity shares used as denominator for calculating EPS                193.42                          193.42
       Basic Earnings per share(Rs.)                                                                     0.80                            1.95
       Face Value per equity shares (Rs.)                                                               10.00                           10.00

     n NOTE NO. 29
       CONTIGENT LIABILITIES:
       Contingent liabilities not provided for :
       i) Income tax demand against which appeals/rectification are
          pending or necessary steps are taken for filing of appeals/ rectification.                 1,047.10                          286.00
       ii) Bank Guarantee :
          Domestic                                                                                     145.09                          125.02
       iii) Letter of Credit :
           Domestic                                                                                    156.62                             -
     n NOTE NO. 30
       Details of Prior Period Expenses/(Incomes) :
        Employees’ Gratuity                                                                             -                                4.20
     n NOTE NO. 31
        Related Party Transaction
        Name of the Related parties and description of relationship:
        Name                                                                                         Relationship
        Ontrack Systems (UK) Ltd.                                                               Entity under common control
        Ontrack Systems (UAE) Ltd.                                                              Entity under common control
        Ontrack Systems (Aust) Pty. Ltd.                                                        Entity under common control
        Ontrack Global Services Ltd.                                                            Entity under common control
        R.P. Infosystems Ltd.                                                                   Entity under common control
        Ontrack Systems (B.V. ) Netherland                                                      Associated Enterprise
        Comunet Info-Systems Pvt. Ltd.                                                          Associated Enterprise
        Mr. B. Hari                                                                             Key Managerial Personnel
        Mr. S.V.Ramani                                                                          Key Managerial Personnel
        Mrs. Simi Hari                                                                          Relative of Key Managerial Personnel
      Particulars of Transactions and closing balances at the end of the year
                                                                                                                                     ( Rs. In Lacs)
        Nature of Transactions                      Entity under                 Associate        Key Managerial                Balance as at
                                                   Common control               Enterprises     Personnel & relatives            31.03.2012

        Remuneration                                           -                         -               48.12                          4.01
                                                             (-)                       (-)              (41.14)                        (3.68)
        Sales                                            715.06                          -                    -                    141.75
                                                        (321.75)                       (-)                  (-)                   (110.71)
        Investment                                       657.05                   30.72                       -                    687.77
                                                        (657.05)                 (35.74)                    (-)                   (692.79)

        Advance Received                                   43.77                         -                    -                        43.77
                                                            (-)                        (-)                  (-)                          (-)

        Advance Paid                                     102.22                     8.84                      -                    111.06
                                                        (119.73)                   (8.84)                   (-)                   (128.57)

      Figures in parenthesis represent for the previous year.
48                                                                 ONTRACK SYSTEMS LIMITED
                                                                                    NOTES TO ACCOUNTS


NOTES FORMING PART OF THE
FINANCIAL STATEMENTS (...CONTD.)
n   NOTE NO. 32
    Segment Information :
    Primary: Geographical Segment
    Segment wise Revenue Results
                                                                                                                 ` In lacs
    Particulars                                        Domestic        UAE      Europe & Others         Total
    Segment Revenue                                    9,519.73       583.02          225.08      10,327.83
                                                     (5,226.96)     (802.82)        (163.77)      (6,193.55)
    Segment Result                                      364.40         84.68           23.67            472.75
                                                       (363.07)     (364.21)         (-45.17)      (682.11)
    Unallocated income                                                                                    5.25
    (excluding interest income)                                                                         (5.66)
    Unallocated Expenditure                                                                              98.99
                                                                                                   (107.86)
    Finance Charges (Net)                                                                               137.70
                                                                                                   (168.76)
    Depreciations (Net)                                                                                  30.30
                                                                                                     (74.99)
    Profit/(Loss) before tax                                                                            211.01
                                                                                                   (336.16)
    Provision for Taxation                                                                               55.99
                                                                                                     (19.63)
    Profit/(Loss) af ter tax                                                                            155.02
                                                                                                   (316.53)
    Segment Assets                                     4,841.75     1,535.55          775.96       7,153.26
                                                     (1,818.49)    (1,400.97)       (435.49)      (3,654.95)
    Unallocated Assets                                                                                  801.15
                                                                                                  (2,532.90)
    Segment Liabilities                                5151.17                                      5151.17
                                                     (2,010.18)                                   (2,010.18)
    Unallocated Liabilities                                                                        2,803.24
                                                                                                  (1,531.51)
    Capital Expenditure                                                                                   3.26
                                                                                                     (48.23)
    Non cash expenditure other than depreciation                                                          2.85
                                                                                                        (2.85)
    Capital Employed                                                                               2,803.24
                                                                                                  (2,645.36)


    Figures in parenthesis represent for the previous year.



                                                   ONTRACK SYSTEMS LIMITED                                                   49
                                                                                                               NOTES TO ACCOUNTS

NOTES FORMING PART OF THE BALANCE SHEET AND
PROFIT & LOSS ACCOUNT

n NOTE NO. 33
    Disclosure under clause 32 of the Listing Agreement:
    Amount of Long term loans and advances in the nature of advnces outstanding from subsidiaries:
                                                                                                                                        Rs. in lacs

                                                                                    Outstanding as at         Maximum amount outstanding
       Subsidiary Company                                                           31 s t March 2012               during the year
                                                                                     (Amount in `)                   (Amount in `)

    Ontrack Systems Ltd. (UK)                                                                  22.43                            22.43
                                                                                             (22.43)                          (22.43)
    Ontrack Systems (Aus) Pty Ltd                                                              28.67                            28.67
                                                                                             (28.67)                          (28.67)
    Ontrack Systems Ltd. (UAE)                                                                 51.13                            51.13
                                                                                             (51.13)                          (51.13)

    Figures in parenthesis represent for the previous year.

n NOTE NO. 34
    Income in foreign currencies
    FOB value of Exports                                                                     808.10                          966.59


n NOTE NO. 35
    Expenditure in foreign currencies
    Foreign Travel                                                                              1.18                            5.63


n NOTE NO. 36
    Balance of the sundry creditors, sundry debtors and some of the loans & advances given & accepted are subject to confirmation.


n NOTE NO. 37
    Till the year ended March 31, 2011, the company was using pre-revised Schedule VI to the Companies Act, 1956, for the preparation and
    presentation of its financial statements. During the year ended March 31, 2012, the revised Schedule VI notified under the Companies Act, 1956,
    has become applicable to the company.The Company has reclassified previous year figures to conform to this year's classification.



       For GOENKA SHAW & CO.                                                                             For and on behalf of the Board
       Chartered Accountants
                  Sd/-                                              Sd/-                                               Sd/-
        (CA Saroj Kumar Swain)                                    (B. Hari)                                      (S. V. Ramani)
                Partner                                Chairman and Managing Director                  Whole-time Director and Secretar y
Kolkata, India
30th May, 2012




  50                                                          ONTRACK SYSTEMS LIMITED
                                                                                                                  AUDITORS’ REPORT



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

1.     We have audited the attached Consolidated Balance Sheet of ONTRACK                    by us.
       SYSTEMS LIMITED (“the Company”), its subsidiaries and its associates
                                                                                       (iii) Note.12.01, regarding non-availability of the financial statement
       entities (the Company, its subsidiaries and its associates entities
                                                                                             of the overseas associate company “ Ontrack Systems B.V,
       constitute “the Group”) as at 31st March 2012, the consolidated
                                                                                             Netherland” and its impact, if any on the consolidated financial
       Statement of Profit & Loss and also the consolidated Cash Flow
                                                                                             statement is not ascertainable, hence not commented upon by
       Statement of the Group for the year ended on that date, both annexed
                                                                                             us.
       thereto. The Consolidated Financial Statements include subsidiaries
       accounts in accordance with Accounting Standard 21(“Consolidated           6.   The overall impact of the adjustments to be carried out as per remarks
       Financial Statements”) and investments in associates accounted on               as given in Para 5 above or otherwise has not been ascertained and
       the equity method in accordance with Accounting Standard                        therefore can not be commented upon by us
       23(“Accounting for Investments in Associates in Consolidated Financial
                                                                                  7.   Subject to the matters referred to in paragraph 4 above, we report
       Statements”). These financial statements are the responsibility of the
                                                                                       that:
       Company’s Management. Our responsibility is to express an opinion
       on these financial statements based on our audit.                               (i)   The consolidated Financial Statements have been prepared by
                                                                                             the company in accordance with the requirements of Accounting
2.     We conducted our audit in accordance with the Auditing Standards
                                                                                             Standard-21( Consolidated Financial Statement) and Accounting
       generally accepted in India. Those standards require that we plan and
                                                                                             Standard-23 ( Accounting for Investment in Associates in
       perform the audit to obtain reasonable assurance about whether the
                                                                                             Consolidated Financial Statements) as notified under the
       financial statements are free of material misstatement. An audit
                                                                                             Companies( Accounting Standard) Rule,2006.
       includes examining on a test basis, evidence supporting the amounts
       and disclosures in the financial statements. An audit also includes             (ii) Based on our audit and on consideration of the separate audit
       assessing the accounting principles used and significant estimates                   reports on individual financial statements of the Company, it
       made by Management, as well as evaluating the overall financial                      subsidiaries and associates and in our opinion and to the best of
       statement presentation. We believe that our audit provides a reasonable              our information and according to the explanations given to us the
       basis for our opinion.                                                               Consolidated Financial statements read in conjunction with the
                                                                                            Notes forming part of the Financial Statements as referred to in
3.     The financial statements of Indian and overseas subsidiaries having
                                                                                            Note No. “1-39”, subject to Para 5 above and our inability to
       total assets (Net) of `140.76 lacs as at 31st March’2012, total
                                                                                            ascertain and comment on the overall impact with respect to
       revenue net of consolidation adjustment of ` 607.31 lacs and net
                                                                                            these as state in Para 6 above, give a true and fair view in
       cash inflows amounting to ` 5.95 lacs for the year ended on 31st
                                                                                            conformity with the accounting principles generally accepted in
       March’2012 and associate companies having a carrying value of
                                                                                            India:
       Rs.38.10lacs as at 31st March’ 2012, have been audited by their
       auditors in respective countries. The reports of those auditors have                  (a) in the case of the Consolidated Balance Sheet, of the state
       been furnished to us and in our opinion, so far as it relates to the                      of affairs of the Group as at 31st March 2012.
       amounts included in respect of these subsidiaries and associates is
                                                                                             (b) in case of the Consolidated Statement of Profit and Loss,
       based solely on the reports of those auditors.
                                                                                                 of the profit of the group for the year ended on that date;
4.     As stated in Note 32, 33 and 34, in case of certain foreign subsidiaries                  and
                                                                             st
       of the Company having total assets (net) of ` 12.96 lacs as at 31
                                                                                             (c) In the case of Consolidated Cash Flow Statement, of the
       March’2012 and total revenue of ` 277.91 lacs (net of consolidation
       adjustment) and net cash inflows amounting to ` 28.99 lacs for the                          cash flows of the Group for the year ended on that date.
                         st
       year ended on 31 March’2012, the figures used for the consolidation
       are based on the managements estimates and not audited by their
       auditors in the respective countries.                                                                                 For GOENKA SHAW & CO.
5.     Further attention is invited to the following notes:                                                                    Chartered Accountants

     (i)   Note No.14.01 & 18.01, regarding trade advance and receivables,                                                      FR No. 319075E
           whereby the extent of amounts recoverable there against is not
           ascertainable and therefore the provision there against and
           consequential impact on the profit for the year and reserves and
                                                                                                                                      Sd/-
           surplus at the yearend can not be commented upon by us.
                                                                                  Kolkata, India                           (CA Saroj Kumar Swain)
     (ii) Note No.26.01,regarding non-provision of the accrued leave
          liabilities,(amount not ascertained) and it’s impact on the profit      30th May, 2012                                     Partner
          for the year, reserve & surplus and current liabilities at the year
          end, if any is currently not ascertainable and commented upon                                                     Membership No. 061912




                                                                ONTRACK SYSTEMS LIMITED                                                                          51
                                                                                                 CONSOLIDATED FINANCIAL STATEMENT


     CONSOLIDATED BALANCE SHEET
     AS ON 31ST MARCH 2012
                                                                                                As on                     As on
                                                                                             31.03.2012                31.03.2011
                                                                        NOTE NO.             (` in lakh)               (` in lakh)

     I     EQUITY AND LIABILITIES

     1.    Shareholder’s Funds
           (a) Share Capital                                                    3                  1,934.20                  1,934.20
           (b) Reser ves and Surplus                                            4                    690.47                    674.25


     2     Non- current liabilities
                (a) Long Term Borrowings                                        5                    292.59                   296.87
                (b) Deffered tax Liabilities (Net)
                (c) Other Long term liabilities                                 6                    200.00                          -
                (d) Long-Term Provisions


     3     Current Liabilities
               (a) Short -term borrowings                                       7                  1,551.05                  1,314.72
                (b) Trade Payables                                              8                   3,545.16                 1,867.78
                (c ) Other current liabilities                                  9                    573.09                   596.03
                (d) Short -Term Provisions                                     10                     10.21                    10.21
           Total                                                                                    8,796.77                 6,694.06


     II    ASSETS
           1. Non-Current Assets
            (a) Fixed Assets
                (i) Tangible Assets                                            11                    787.81                   815.48
                (ii) Intangible Assets                                         11                    442.92                   442.94
           (b) Non-current Investments                                         12                     40.46                    37.79
           (c) Deffered tax Assets (Net)                                       13                     33.83                    67.86
           (d) Long term Loans & Advances                                      14                    622.23                   874.25
           (e) Other non-current Assets                                        15                     54.96                    54.96
     2.    Current Assets
           (a) Current Investments                                             16                       0.12                     0.12
           (b) Inventories                                                     17                     974.67                   933.47
           (c) Trade Receivables                                               18                   5,525.52                 3,287.03
           (d) Cash & Bank Balance                                             19                     161.59                   149.96
           (e) Short Term Loans & Advances                                     20                     152.66                    27.35
           (f) Other Current Assets                                            21                          -                     2.85
           Total                                                                                    8,796.77                 6,694.06

           Notes forming part of the consolidated financial statement          1-39


           This is the Balance Sheet referred to in our report of even date.

           For GOENKA SHAW & CO.                                                                  For and on behalf of the Board
           Chartered Accountants
                       Sd/-                                              Sd/-                                   Sd/-
             (CA Saroj Kumar Swain)                                    (B. Hari)                          (S. V. Ramani)
                     Partner                                Chairman and Managing Director      Whole-time Director and Secretar y
     Kolkata, India
     30th May, 2012
52                                                                ONTRACK SYSTEMS LIMITED
                                                                                                CONSOLIDATED FINANCIAL STATEMENT


CONSOLIDATED PROFIT & LOSS ACCOUNT
FOR THE YEAR ENDED 31ST MARCH, 2012

                                                                                               As on                      As on
                                                                                            31.03.2012                 31.03.2011
                                                                       NOTE NO.             (` in lakh)                (` in lakh)

I.      Revenue From Operations                                              22                  11,183.93                 6438.69
II.     Other income                                                         23                      74.67                     54.61
III.    Total Revenue            (I+II)                                                          11,258.60                  6,493.30
IV      Expenses:
        Purchases of Stock-in-Trade                                          24                    9,013.94                 4,712.56
        Changes in inventories of finished goods work-in-progress            25                     (37.96)                 (280.37)
        and Stock-In-Trade
        Employees benefit expense                                            26                     544.32                    568.29
        Finance Costs                                                        27                     188.14                    235.10
        Depreciation and amortisation expense                                11                      30.93                     76.81
        Other Expenses                                                       28                    1,273.65                   941.52
        Total Expenses                                                                           11,013.02                  6,253.91
V.      Profit before exceptional and extraordinary items and tax (III-IV)                          245.58                    239.39
VI.     Exceptional Items                                                                                 -                          -
VII.    Profit before extraordinary items and tax (V-VI)                                            245.58                   239.39
VIII.   Extraordinary Items                                                                               -                          -
IX.     Profit Before tax                                                                           245.58                   239.39
        (VII-VIII)
X       Tax Expense:
        (1) Current tax
        (2) Deferred tax                                                     29                      45.52                     23.19
XI      Profit/(Loss) for the period from continuing operations ( IX-X )                            200.06                   216.20
XII     Profit/ (Loss) from discontinuing operations                                                      -                          -
XIII    Tax Expense of discontinuing operations                                                           -                          -
XIV     Profit/ (Loss) from discounting operations (after tax) (XII-XIII)
XV      Profit/(Loss) for the period (XI+XIV)                                                       200.06                    216.20
XVI     Earning Per Equity Share:
        (1) Basic                                                                                      1.03                       1.12
      (2) Diluted
Notes forming part of consolidated financial statement

This is the Statement of Profit & Loss referred to in our report of even date.


        For GOENKA SHAW & CO.                                                                    For and on behalf of the Board
        Chartered Accountants
                    Sd/-                                                Sd/-                                   Sd/-
          (CA Saroj Kumar Swain)                                      (B. Hari)                          (S. V. Ramani)
                  Partner                                  Chairman and Managing Director      Whole-time Director and Secretar y
Kolkata, India
30th May, 2012



                                                                 ONTRACK SYSTEMS LIMITED                                                 53
                                                                                                           CONSOLIDATED FINANCIAL STATEMENT

     CONSOLIDATED CASH FLOW STATEMENTS
     FOR THE YEAR ENDED 31ST MARCH, 2012
                                                                                    31.03.2012                               31.03.2011
                                                                                    (` in lakh)                              (` in lakh)

     A. Cash flow from operating activities
     Net Profit / (Loss) before extraordinary items and tax                                        245.58                                    239.39
     Adjustments for:
     Depreciation and amortisation                                               30.93                                  76.81
     Provision for impairment of fixed assets and intangibles                        –                                      –
     (Profit) / loss on sale / write off of assets                                    –                                 (0.71)
     Finance costs                                                               188.14                                220.62
     Interest income                                                             (66.75)                               (30.20)
     Dividend income                                                              (0.14)                                (0.12)
     Net (gain) / loss on sale of investments                                         –                                     –
     Share of (profit) /loss from Associates company                              (2.67)                                 1.46
     Liabilities / provisions no longer required written back                         –                                     –
     Adjustments to the carrying amount of investments                                –                                     –
     Other non-cash charges (specify) (deferred revenue exp. w/o)                  2.85                                  3.18
     Currency fluctuation profit/(Unrealised loss)                             (163.33)                                 (2.13)
                                                                                                   (10.97)                                   268.91
     Operating profit / (loss) before working capital changes                                      234.61                                    508.30
     Changes in working capital:
     Adjustments for (increase) / decrease in operating assets:

     Inventories                                                                 (41.20)                              (277.33)
     Trade receivables                                                        (2,238.49)                             (1183.01)
     Short-term loans and advances                                             (162.19)                               (214.98)
     Long-term loans and advances                                               252.02                                 (56.01)
     Adjustments for increase / (decrease) in operating liabilities:
     Trade payables                                                            1677.38                                 373.24
     Other current liabilities                                                   61.81                                 130.49
     Cash generated from operations                                                               (450.67)                                 (1227.60)
     Net income tax (paid) / refunds                                                              (216.06)                                  (719.30)
                                                                                                   (47.61)                                   (47.08)
                                                                                                   263.67                                    766.38
     Currencies transalation gain/(loss)                                                               -                                      (0.50)
     Net cash flow from / (used in) operating activities (A)                                      (263.67)                                  (766.88)

     B. Cash flow from investing activities
     Capital expenditure on fixed assets, including capital advances              (3.26)                               (48.23)
     Proceeds from sale of fixed assets                                              -                                    0.71
     Purchase of Investments                                                         -                                  (0.89)
     Interest received
     - Others                                                                    66.75                                  30.20
     Dividend received
      - Others                                                                     0.14                                  0.12
     Income from Associates                                                        2.67                                 (1.46)
     Fixed Deposit placed with bank                                               47.89                                131.70
                                                                                                   114.19                                    112.15
     Cash flow from extraordinary items                                                            249.83                                        -
                                                                                                   364.02                                    112.15
     Net cash flow from / (used in) investing activities (B)                                       364.02                                    112.15



54                                                                     ONTRACK SYSTEMS LIMITED
                                                                                                            CONSOLIDATED FINANCIAL STATEMENT

CONSOLIDATED CASH FLOW STATEMENTS (Contd...)
FOR THE YEAR ENDED 31ST MARCH, 2012
                                                                               31.03.2012                                        31.03.2011
                                                                               (` in lakh)                                       (` in lakh)


C. Cash flow from financing activities

Proceeds from equity shares issue                                               -                                       1,224.00
Proceeds from long-term borrowings                                              -                                            -
Repayment of long-term borrowings                                           (89.03)                                     (301.25)
Net increase / (decrease) in working capital borrowings                    166.03
Proceeds from other short-term borrowings                                    79.03                                       140.77
Repayment of other short-term borrowings                                    (8.73)                                      (167.57)
Finance cost                                                              (188.14)                                      (220.62)

                                                                                                   (40.83)                                     675.33
Cash flow from extraordinary items                                              -                       -                    -
Net cash flow from / (used in) financing activities (C)                                            (40.83)                                     675.33
Net increase / (decrease) in Cash and cash equivalents (A+B+C)                                      59.52                                      (20.60)
Cash and cash equivalents at the beginning of the year                                               47.42                                      26.82
Effect of exchange differences on restatement of foreign
currency Cash and cash equivalents                                                                      -                                          -
Cash and cash equivalents at end of the year                                                        106.94                                      47.42
Earmarked balances with banks                                                                         4.65                                       4.65
Short term bank deposits                                                                             50.00                                      97.89
Overdrawn Bank Balance                                                                             (17.12)                                     (25.84)
Cash and Bank balances at the end of the year                                                       144.47                                     142.12



Notes:

(i) Figures in parenthesis represent cash outflow
(ii) These earmarked account balances with banks can be utilised only for the specific identified purposes.
(iii) Previous year figures have been regrouped/rearranged wherever found necessary to make them comparble with current year figures.




         For GOENKA SHAW & CO.                                                                                For and on behalf of the Board
           Chartered Accountants
                   Sd/-                                          Sd/-                                                    Sd/-
         (CA Saroj Kumar Swain)                                (B. Hari)                                           (S. V. Ramani)
                 Partner                            Chairman and Managing Director                       Whole-time Director and Secretar y
Kolkata, India
30th May, 2012




                                                             ONTRACK SYSTEMS LIMITED                                                                     55
                                                                                                                                   CONSOLIDATED FINANCIAL STATEMENT


     n NOTE NO. 1

     SIGNIFICANT ACCOUNTING POLICIES AND NOTES TO THE ACCOUNTS
     n COMPANY OVERVIEW                                                                                       d ) The Consolidated financial statement includes three
                                                                                                                  subsidiaries incorporated outside India whose financial
          Ontrack Systems Limited along with its wholly owned and                                                 statements have been drawn up in accordance with the
          controlled subsidiaries Ontrack Systems (UK) Ltd., Ontrack                                              generally accepted accounting practices (GAAP) as
          Systems (UAE) Ltd., Ontrack Systems (Aust) Pty. Ltd. and                                                a p p l i c a b l e l o c a l l y. T h e s e f i n a n c i a l s t a t e m e n t s h a v e
          Ontrack Global Services Ltd. is a leading global Information                                            been re-stated in Indian Rupees considering them as
          Te c h n o l o g y s e r v i c e p r o v i d e r. T h e C o m p a n y h a s t w o                       non-integral par t of the Group’s operations and the
          A s s o c i a t e C o m p a n i e s n a m e l y O n t r a c k S y s t e m s B . V.                      resultant exchange gain / loss on conversion has been
          Netherland and Communet Info-Systems Pvt. Ltd. The                                                      car ried for ward as Cur rency Translation Reser ve. In
          Company has an established line of business in India, UK,                                               the opinion of the Management, based on the analysis
          UAE, Holland and Australia which mainly deals with computer                                             of the significant transaction of those subsidiaries, no
          software development both onsite and offshore. The                                                      material adjustments are required to be made to comply
          Company is headquar tered in India.                                                                     w i t h g r o u p a c c o u n t i n g p o l i c i e s / I n d i a n G A A P.

          OSL Group is for med to provide Infor mation Technology
                                                                                                              e ) The excess of cost to the company of its investments
          s o l u t i o n s a n d I n f o r m a t i o n Te c h n o l o g y c o n s u l t a n c y &                in subsidiar y companies over its share of the equity
          D e v e l o p m e n t s e r v i c e s g l o b a l l y, e n h a n c i n g c o m p e t i t i v e          of the subsidiar y companies at the dates, on which the
          advantage of its customers. The Company also provides                                                   investments in the subsidiar y companies are made, is
          both onsite as well as offshore ser vices in the area of                                                recognized as “Goodwill” being an asset in the
          internet, migration projects, data warehousing, e-commerce                                              consolidated financial statements. Alternatively, where
          and web-based solutions amongst others.                                                                 the share of equity in the subsidiar y companies as on
                                                                                                                  the date of investments is in excess of cost of
      n NOTE NO. 2                                                                                                investment of the Company, it is recognized as “Capital
                                                                                                                  Re s e r v e ” a n d s h o w n u n d e r t h e h e a d “ Re s e r v e s &
     SIGNIFICANT ACCOUNTING POLICIES                                                                              Surplus”, in the consolidated financial statements.
     n BASIS OF PREPARING
          The consolidated financial statements of Ontrack Systems                                            f)    Minority interest in the net assets of consolidated
          Limited (The Company), its subsidiaries and associates                                                    subsidiaries, consists of the amount of equity
          (“The Group”) are prepared under the historical cost                                                      attributable to the minority share holders at the dates,
          convention and in accordance with the requirements of the                                                 on which investments are made by the Company in the
          Companies Act, 1956.                                                                                      subsidiar y companies and fur ther movements in their
                                                                                                                    share in the equity, subsequent to the parent subsidiary
     n PRINCIPLES OF CONSOLIDATION                                                                                  relationship come in to existence.
       The financial statements of the subsidiar y companies used
       in the consolidated are drawn up to the same repor ting                                             n The list of subsidiaries companies, associates and joint
       date as of the company.                                                                               ventures, which are included in the consolidation and the
       The consolidated financial statement have been prepared                                               companies holdings therein are as under:
       on the following basis in accordance with Accounting                                                   Name of the               Country of % Shareholding % Shareholder
       Standard on “Consolidated Financial Statement” (AS-21),                                                 Company                Incorporation  and Voting     and Voting
       “Accounting for Investments in Associates in Consolidated
       Financial Statements” (AS-23) and “Financial Repor ting of                                                                                   Power 2012     Power 2011
       I n t e r e s t i n J o i n t Ve n t u r e s ” ( A S - 2 7 ) , n o t i f i e d u n d e r t h e                                    Subsidiary Companies
       Companies (Accounting Standard) Rules, 2006.
         a ) The financial statements of the company and its                                               a) Ontrack Systems                UK                    100                    100
                 subsidiar y companies have been combined on a line                                          (UK) Ltd.
                 – by- line basis by adding together like items of assets,                                 b) Ontrack Systems               UAE                    100                   100
                 liabilities, income & expenses. Inter – company
                 balances and transactions and unrealized profits and                                        (UAE) Ltd.
                 losses have been fully eliminated.                                                        c) Ontrack Systems            Australia                 100                    100
         b ) Interest in a jointly controlled entity is repor ted using                                      (Aust) Pty. Ltd.
                 propor tionate consolidation.                                                             d) Ontrack Global                India                99.99                  99.99
         c ) The consolidated financial statement includes the share                                         Services Ltd.
                 of profit/loss of associate companies, which are
                 accounted under the “Equity Method” as per which the                                                                             Associates
                 share of profit the associate company has been added                                      a) Comunet Info-                 India                   48                    48
                 to the cost of investment. An associate is an enterprise
                                                                                                             Systems Pvt. Ltd
                 in which the investor has significant influence and
                 which is neither a subsidiary nor a joint venture.                                        b) Ontrack Systems           Netherland                  26                    26
                                                                                                             B.V Netherland


56                                                                                   ONTRACK SYSTEMS LIMITED
                                                                                                                           CONSOLIDATED FINANCIAL STATEMENT


n USE OF ESTIMATES                                                                               evaluation. The WIP is valued at direct cost attributed to projects
                                                                                                    based on stages of completion as cer tified by the
  The preparation of financial statements, in conformity with                                       management.
  the generally accepted accounting principles, requires
  estimates and assumptions to be made that affect the                                           n RECOGNITION OF REVENUE
  repor ted amount of assets and liabilities on the date of                                           Sales:
  financial statements and the repor ted amount of revenues
  and expenses during the repor ted year. Differences between                                         The sales are recognized at the point of dispatch of material
  the actual results and estimates are recognized in the year                                         to the customers and bills are raised to them. Sales are
  in which the results are known / materialized.                                                      shown net of goods retur n, rebates, rate differences etc.
                                                                                                      Revenue from maintenance contracts are recognized on pro-
n FIXED ASSETS                                                                                        rata over the period of contract. Revenue from sof tware
  Fixed Assets are stated at cost less accumulated                                                    development is recognized on the basis of achievement of
  depreciation                                                                                        prescribed milestone as relevant to ter ms of contract or
                                                                                                      propor tionate completion method as applicable.
n DEPRECIATION
                                                                                                      Income & Expenditure:
  Depreciation on Fixed Assets has been provided on Straight
  Line Method and written off over a period as estimated by                                           The Company follows mercantile system of accounting and
  the management, except for Ontrack Systems (Aust.) Pty                                              recognizes significant items of Income & Expenditure on
  Ltd.                                                                                                accr ual basis.
  Computer and its Accessories including Sof tware                                3 Years        n PRELIMINARY EXPENSES AND DEFERRED REVENUE
                                                                                                   EXPENDITURE
  Building - freehold                                                         20 Years
  Vehicles of Ontrack Systems(UAE) Ltd.                                      4 years                Preliminar y expenses and deferred revenue expenditure are
                                                                                                    amor tized over a period of five years, except the defer red
  Other Fixed Assets                                                      5 to 6 Years              revenue expenditure of Ontrack Global Services Ltd.
  Lease hold Land & Building is amor tized over the period of                                       In respect of Ontrack Global Ser vices Ltd, Deferred Revenue
  lease.                                                                                            Expenditure includes Management expenses and Project
                                                                                                    expenses on pilot project, which will be amor tized af ter the
  In respect of Fixed assets in Ontrack Systems (Aust.) Pty.
                                                                                                    commencement of the Pilot Project.
  Ltd, the depreciation has been provided on Written Down
  Value(WDV) method and in accordance with Australian Tax                                        n FOREIGN CURRENCY TRANSACTIONS
  Ru l e . T h e d e p r e c i a t i o n c h a r g e i s n o t s i g n i f i c a n t i n t h e      Fo r e i g n c u r r e n c y t r a n s a c t i o n s a r e a c c o u n t e d f o r a t t h e
  context of the consolidated financial statements.                                                 prevailing exchange rate as on the date of execution of the
                                                                                                    transaction or of the rate cover under for ward contract as
n IMPAIRMENTS
                                                                                                    applicable. Foreign currency monetar y items due at the end
  At each Balance Sheet date, the Company reviews the                                               of the year are conver ted at the exchange rate prevailing
  car r ying amount of its fixed Assets to deter mine whether                                       as on that date. Exchange differences arising on the
  there are any indications that those assets suffered any                                          settlement of the transactions or on repor ting at the year
  impairment loss. If any such indication exists, the                                               end rates are recognized as Income or as expenses in the
  recoverable amount of the asset is estimated in order to                                          period in which arise, except in respect of fixed assets
  deter mine the extent of impair ment loss. The recoverable                                        acquired from out side India, where exchange variance is
  amount is the higher of an asset net selling price and value                                      adjusted to the carr ying amount of the respective fixed
  in use. In assessing value in use , the estimated future                                          assets.
  cash flow expected from the continuing use of the assets                                       n Employees Benefit
  and from its disposal are discounted to their present value
                                                                                                    Shor t Term Employees Benefits: The undiscounted amount
  using a pre-determined rate that reflect the current market
                                                                                                    of shor t term employee benefit expected to be paid in
  assessment of time value of money and the risks specific
                                                                                                    exchange for the ser vices rendered by the employees are
  to the assets . Reversal of impair ment loss is recognized
                                                                                                    recognized during the period when the employees render
  i m m e d i a t e l y a s i n c o m e i n t h e Pr o f i t & L o s s A c c o u n t .
                                                                                                    the ser vice.
n INVESTMENTS                                                                                    Post Employment benefits plans:
  Long ter m investments are stated at cost. Provision for                                         a)       Defined Contribution Plan: Contribution under defined
  diminution in the value of long-ter m investment is made                                                  contribution plan payable in keeping with the related
  only if such a decline is other than temporar y in nature in                                              s c h e m e a r e r e c o g n i z e d a s e x p e n s e s f o r t h e y e a r.
  the opinion of the Management. If the values of Investment                                         b) D e f i n e d b e n e f i t p l a n : T h e G r o u p g r a t u i t y s c h e m e
  for take over of a going concern are much higher than                                                     provided by the company is a defined benefit plan.
  estimated cost of Net Assets Value including their intrinsic                                              Benefits under the defined benefit plan are generally
  value as estimated by management, the additional payment                                                  based on the years of service rendered and the
  in lieu of takeover value is considered as Goodwill and if                                                employee’s eligible compensation (immediately before
  it is reverse the amount will be transferred to Capital                                                   retirement). The scheme covers substantially all regular
  Reser ve.                                                                                                 employees and the company contributes funds to the
n INVENTORIES                                                                                               Life Insurance corporation of India , which administers
                                                                                                            the scheme on behalf of the company.
  Inventories of trading goods, spare par ts and consumable
                                                                                                            Other Long Term employment benefit (unfunded): The
  stores are valued at lower of cost or net realizable value.
                                                                                                            cost of providing other long ter m employee benefit is
  Outdated and damaged stocks are written off on technical
                                                                                                            generally recognized on cash basis.
                                                                           ONTRACK SYSTEMS LIMITED                                                                                                 57
                                                                                                                         CONSOLIDATED FINANCIAL STATEMENT


               The employees benefit if applicable to the subsidiaries                                based on the computation of tax as per prevailing taxation laws
               are recognized during the year, based on the law as                                       under IT Act 1961. Defer red tax is recognized subject to
               prevailing in their respective countr y of incorporation,                                 consideration of pr udence, on timing differences, being the
               except for Ontrack System (UK) Ltd, where the                                             difference between taxable income and accounting income
               applicability and/or the provision requirement for                                        that originate in one period and are capable of reversal in
               employees benefit is not disclosed/repor ted in it’s                                      one or more subsequent periods. Deferred tax is calculated
               Financial statement.                                                                      using the tax rates and tax laws that has been enacted
                                                                                                         and/or substantially enacted as at the Balance Sheet date.
     n SEGMENT REPORTING
                                                                                                         Deferred tax assets are not recognized unless there is vir tual
       The geographical segments have been identified as primar y                                        cer tainty that sufficient future taxable income will be
       segment on the basis of location of the major customers                                           available against which such defer red tax assets can be
       o f t h e C o m p a n y. T h e s e s e g m e n t s r e p r e s e n t a s t r a t e g i c          realized.
       business unit that offers different places of unit having
       different risk and returns. Inter-segment sales and transfers                                     In respect of Ontrack Systems (UK) Ltd., provision for
       if any are accounted for, as if the sales or transfers were                                       deferred tax is made for tax on gains arising from the
       to third par ties at current market prices. Income &                                              revaluation (and similar fair value adjustments) of fixed
       expenditure and Assets & Liabilities not allocable to any                                         assets, and gains on disposal of fixed assets that have been
       specific geographical segment, are classified as unallocated.                                     rolled over into replacement assets, only to the extent that
       The company’s secondar y segment is business segment                                              at the Balance Sheet date, there is a binding agreement to
       and it operates only in one business segment namely                                               dispose of the assets concerned. However, no provision is
       Tr a d i n g / d e a l i n g w i t h c o m p u t e r h a r d w a r e a n d s o f t w a r e .      made where, on the basis of all available evidence at the
       Therefore no separate secondar y segment is identifiable                                          balance sheet date, it is more likely that the taxable gain
       as required by accounting standard 17 issued by ICAI.                                             will be rolled over into replacement assets and charged to
                                                                                                         tax only where the replacement assets are sold. Fur ther
     n Borrowing Costs
                                                                                                         provision is made for deferred tax that would arise on
       Borrowing costs attributable to qualifying assets are                                             remittance of the retained earnings of overseas subsidiaries,
       capitalized up to the date when such assets are ready for                                         associates and joint venture only to the extent that, at the
       their intend use, other bor rowing cost are recognized as                                         balance sheet date, dividends have been accrued has
       expenses in the period in which they are incurred.                                                receivable.
     n Earning per Share                                                                              n Contingent Liabilities & Assets
       Basic ear ning per share are calculated by dividing the net
                                                                                                         Provisions involving substantial degree of estimation in
       profit or loss for the period attributable to equity share
                                                                                                         measurement are recognized when there is a present
       holders (af ter deducting attributable taxes) by the weighted
                                                                                                         obligation as a result of past events and it is probable that
       average number of equity shares outstanding during the
                                                                                                         there will be an outflow of resources. Contingent Liabilities
       period. The weighted average number of equity shares
                                                                                                         are not recognized but are disclosed in the Notes to the
       outstanding during the period is adjusted for events of
                                                                                                         ac c o unts . C o nting e nt A s s e ts are ne ithe r recogniz ed nor
       bonus issue, bonus element in a rights issue to existing
                                                                                                         disclosed in the financial statements.
       shareholders, share split and reverse shares split
       (consolidation of shares).                                                                     n Cash and cash equivalents:
       For the purpose of calculating diluted ear ning per share,                                        The Company considers all highly liquid financiall
       the net profit or loss af ter tax for the period attributable to                                  instr uments, which are readily conver tible into cash and
       equity share holders and the weighted average number of                                           have original maturities of three months or less from date
       shares outstanding during the period are adjusted for the                                         of purchase, to be cash equivalents.
       effects for all dilutive potential equity shares.
     n Tax on Income
       Cur rent Tax represents the amount that would be payable




58                                                                               ONTRACK SYSTEMS LIMITED
                                                                                                          CONSOLIDATED FINANCIAL STATEMENT


NOTES FORMING PART OF THE CONSOLIDATED
FINANCIAL STATEMENTS (...CONTD.)
                                                                                                       As at                               As at
                                                                                                 31st March 2012                     31st March 2011
                                                                                                   (` in lakh)                         (` in lakh)
n NOTE NO. 3
  Share Capital
  Authorised:
  25000000 (25000000) Equity shares of Re.10/- each                                                         2,500.00                          2,500.00

  Issued, subscriped and paid up:
  19342005 (19342005)Equity shares of Re.10/- each fully paid up                                            1,934.20                          1,934.20
                                                                                                            1,934.20                           1,934.20
  3.01 Rights and Preferences attached to Equity Shares:
       The Company has only one class of equity shares having at par value of ` 10 each. Each shareholder is eligible to one vote per share held.
       In the event of liquidation the equity shareholders are eligible to receive remaining asset of the company after distribution of all preferential
       amount in proportion to their shareholding.
  3.02 Aggregate number shares issued for consideration other than cash during the period of five years immediately preceding the reporting
       date:
       A During the year 2007-2008, 450,000 Equity Shares were issued for acquisition of Intellisys (Aust.) Pty. Ltd, which is subsequently renamed
       as Ontrack Sytem (Aust.) Pty Ltd.
  3.03 The details of shareholders holdings more than 5% shares in the company

                                                                          As At 31st March, 2012                         As At 31st March, 2011
                  Name of the Shareholder
                                                                    No. of Shares              % held              No. of Shares              % held

          R P INFO SYSTEMS PVT. LTD.                                     90,07,500             46.57%                  90,00,000               46.53%
          B. HARI                                                        31,59,395             16.33%                  31,59,395               16.33%
          KANT & COMPANY LIMITED                                         11,91,705              6.16%                  11,91,705                6.16%

n NOTE NO. 4
  RESERVES & SURPLUS
  Securities Premium
  As Per Last Balance Sheet                                                                    772.48                                          772.48
  General Reserves
  As Per Last Balance Sheet                                                                     94.00                                            94.00
  Share Options Outstanding Account
  Employee Stock Option Outstanding                                                              1.26                                             1.26
  Currency Fluctuation Reserves (Net)                                                         (368.65)                                        (209.08)
  Surplus in Statement of Profit & Loss
  As Per Last Balance Sheet                                                  15.59                                      (200.61)
  Less: Earlier Excess DTA reversed                                          24.27                                            -
                                                                             (8.68)                                     (200.61)
  Add: Transfer from Statement of Profit and Loss for the year              200.06                                       216.20
  Balance carried forward to next year                                                         191.38                                            15.59
  TOTAL                                                                                        690.47                                          674.25
n NOTE NO. 5
  LONG TERM BORROWINGS
  Secured Loans
  Vehicle Loan from SBI- Commercial Br. Salt Lake (Ref note : a)                                                            3.20                  7.07
  Unsecured Loans
  Vehicle loan from other bank                                                                                             0.39                  0.80
  From Corporate bodies                                                                                                  289.00                289.00
          TOTAL                                                                                                          292.59                296.87


                                                            ONTRACK SYSTEMS LIMITED                                                                        59
                                                                                                         CONSOLIDATED FINANCIAL STATEMENT


     NOTES FORMING PART OF THE CONSOLIDATED
     FINANCIAL STATEMENTS (...CONTD.)
                                                                                                      As at                               As at
                                                                                              31 s t March 2012                    31 s t March 2011
                                                                                                    (` in lakh)                        (` in lakh)
     n NOTE NO. 5.01
       Vehicle loan from SBI - Commercial Branch, Salt Lake is secured by hypothecation of respective vehicle and
       fur ther secured by pledge of FDR.
       Terms Of repayment and Rate of Interest for Long Term Borrowings
                       Borrowings                        Terms Of Repayment        Rate Of Interest        Terms Of Repayment        Rate Of Interest

       1. Vehicle Loan From SBI                          Repayable in 36         Interest to be paid       Repayable in 36         Interest to be paid
                                                         installments starting   @9.5% p.a                 installments starting   @9.5% p.a
                                                         from 28th Jan,2011                                from 28th Jan,2011

       2. Vehicle Loan From HDFC                         Repayable in 60         Interest to be paid @     Repayable in 60         Interest to be paid @
                                                         installments starting   14.75% p.a                installments starting   14.75% p.a
                                                         from 7th feb , 2009     compounded monthly        from 7th feb, 2009      compounded monthly

     n NOTE NO. 6
       OTHER LONG TERM LIABILITIES
       Security Deposit against Development of Proerty                                                       200.00                                  -

     n NOTE NO. 7
       SHORT TERM BORROWINGS
       Loans Repayable on Demand (Secured)
       Working Capital loan with SBI, Commercial Br. (Ref note : 7.01 )                                     746.27                            692.21
       Working capital loan with Indian Bank, Strand Road Br. (Ref note : 7.01 & 7.02)                      447.35                            335.39
       Overdrawn bank balance                                                                                17.12                             25.84
         Other Advance                                                                                      340.31                            261.28

       TOTAL                                                                                              1,551.05                         1,314.72

     n NOTE NO. 7.01
       Working Capital Loan is secured against hypothecation of stocks, book debts & other movable assets of the company,charge of mortgage
       on the basis of paripasu inter-se on the entire immovable properties of the company at Salt Lake, Rajarhat and Ekdalia Road and
       personal guarantee of Managing Director.The loan guaranteed by director : SBI ` 9.60 crore and previous year. ` 6.60 crore and Indian
       Bank ` 4.53 crore and Previous year ` 3.50 crore.

     n NOTE NO. 7.02
       Working Capital Loan with Indian Bank is further secured by way of pledge of equity shaes of the company standing in the name of
       Managing Director and his Family Members & FDR/CDR standing in the name of the company.

     n NOTE NO. 7.03
       The working capital loan from SBI is availed @ 15% p.a and from Indian Bank @ 15.75% p.a

     n NOTE NO. 7.04
       Overdrawn bank balance independently confirm by the bankers

     n NOTE NO. 8
       TRADE PAYABLES                                                                                     3,545.16                         1,867.78

     n NOTE NO. 8.01
       Sundry Creditors do not include any dues to micro, small and medium enterprises on account of principal amount together with interest
       and accordingly no additional disclosure have been made. The above information regarding micro, small and medium enterprises have
       been determined to the extent such parties have been identified on the basis of information available with the company.
60                                                           ONTRACK SYSTEMS LIMITED
                                                                                                    CONSOLIDATED FINANCIAL STATEMENT



NOTES FORMING PART OF THE CONSOLIDATED
FINANCIAL STATEMENTS (...CONTD.)

                                                                                                   As at                             As at
                                                                                             31st March 2012                   31st March 2011
                                                                                               (` in lakh)                        (` in lakh)


n NOTE NO. 9
  OTHER CURRENT LIABILITIES
  Current maturity of Term Loan from SBI ( See Note No. 9.01)                                                  -                          85.50
  Current Maturity on Vehicle Loan                                                                         4.28                            3.53
  Unpaid Dividends (See Note No. 9.02)                                                                     4.62                            4.62
  Unexpired AMC                                                                                            5.35                            5.58
  Others :
  Advance from Customers                                                                                  10.24                           19.47
  Sundry creditors for expenses                                                                          548.60                         477.33
  TOTAL                                                                                                  573.09                         596.03


n NOTE NO. 9.01
  Term Loan from SBI is 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 movable fixed assets of the company at Salt Lake and personal
  guarantee of Managing Director. The loan guaranteed by director is


n NOTE NO. 9.02
  Unpaid dividends Include amount of Rs.73757.60 (P.Y. Rs. 56978/-) due to be transferred / Credited to Investor Education
  Protection Fund.


n NOTE NO. 10
  SHORT TERM PROVISIONS
  Provision for FBT(Net Off)                                                                              10.21                           10.21
                                                                                                          10.21                           10.21




                                                         ONTRACK SYSTEMS LIMITED                                                                   61
62
                          NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS
                          (...CONTD.)


                          n NOTES NO. 11                                                                                           NOTES OF FIXED ASSETS AS ON 31ST MARCH, 2012 (` In Lakh)

                                                                                                                  GROSS BLOCK                                                  DEPRECIATION & IMPAIRMENT LOSS                                               Net Block
                               Sl.                                            As On                   Addition             Deletion            As On                 Up to            For the           Deletion               Up to            As on               As on
                           No.        Description of Assets                 01.04.2011              during year          during year        31.03.2012            01.04.2011           Year           during year           31.03.2012       31.03.2012          31.03.2011


                          A. TANGIBLE ASSETS
                               1.    Land                                        198.09                    1.31                 —               199.40                 —                  —                    —                  —               199.40            198.09

                               2.    Land & Building

                               — Leasehold                                      531.96                      —                  —                531.96               26.81                7.04                 —                33.85             498.11            505.14

                               — Freehold                                         96.70                     —                  —                  96.70              50.55                0.53                     —            51.08              45.62                46.15

                               3.    Computer (Plant & Machinery)                412.40                       -                  —              412.40              407.20                0.03                     —            407.23              5.17                 5.20

                               4.    Computer Accessories                        124.16                   0.83                   —              124.99              118.34                3.26                     —            121.60               3.39                5.82

                               5.    Electrical Equipments                        45.92                    0.25                  —               46.17               33.64                4.97                  —               38.61                7.56               12.28

                               6.    Vehicles                                     24.02                     —                   —                 24.02               9.45                3.24                     —             12.69              11.33               14.56




ONTRACK SYSTEMS LIMITED
                               7.    Furniture & Fittings                        142.95                   0.87                   —              143.82              118.26              10.43                      —            128.68              15.14               24.69

                               8.    Office Equipment                             13.32                      —                   —                13.32                9.78               1.44                     —             11.23               2.09                3.53

                                     Total                                      1,589.52                  3.26                 —              1,592.78             774.03                30.94                  —               804.97            787.81             815.48

                          B. INTANGIBLE ASSETS

                          1.         Goodwill                                     442.92                     —                  —               442.92                  —                   —                   —                   —             442.92             442.92

                          2.         Software                                      23.03                     —                   —                23.03              23.02                0.01                  —                23.03                  —                0.01

                                     Total                                        465.95                     —                   —              465.95               23.02                0.01                     —             23.03            442.92             442.93

                                     Grand Total                                2,055.47                   3.26                  —            2,058.73              797.05               30.95                     —            828.00          1,230.73           1,258.41

                                     Preceding Year                             2,014.42                  48.23                7.18           2,055.47              727.42               76.81                 7.18             797.05          1,258.41           1,286.99


                          11.01        Depreciation has been provided for in the Accounts on “Straight Line Method” and the assets are depreciated over the useful life of the assets based on the estimation made by the management and using the rates, which are not less
                                                                                                                                                                                                                                                                                CONSOLIDATED FINANCIAL STATEMENT




                                      than those prescribed in Sch-XIV to the Companies Act 1956.


                          11.02. The company has entered in to two separate agreement for the development of the Proprties at 19, Ekdalia Road, Kolkata-700019 and at Rajarhat.
                                                                                         CONSOLIDATED FINANCIAL STATEMENT



NOTES FORMING PART OF THE CONSOLIDATED
FINANCIAL STATEMENTS (...CONTD.)

                                                                             As at                              As at
                                                                       31st March 2012                    31st March 2011
                                                                         (` in lakh)                        (` in lakh)


n NOTE NO. 12
  NON CURRENT INVESTMENTS
                                                       NO. OF SHARES       (` in lakh)    NO. OF SHARES     (` in lakh)
  In Equity Shares of Associate Companies,
  Unquoted, fully paid up
  Comunet Info-Systems Pvt. Ltd.                             9,6000             38.11          96,000            35.44
  (48% Shares holding) (Face value of Rs. 10/-each)

  Ontrack Systems B.V. Netherland                                                                  -                        -
  (26% Shares holding) (Face value of Euro 1/- each)
  Investment to Domain Name                                                       2.35                            2.35


  TOTAL                                                                         40.46                            37.79




                                                         ONTRACK SYSTEMS LIMITED                                                63
                                                                                                             CONSOLIDATED FINANCIAL STATEMENT



     NOTES FORMING PART OF THE CONSOLIDATED
     FINANCIAL STATEMENTS (...CONTD.)

                                                                                                          As at                                 As at
                                                                                                  31 s t March 2012                    31 s t March 2011
                                                                                                        (` in lakh)                           (` in lakh)
     n NOTE NO. 12.01
       Due to date of the key managerial person, the financial statements of
       Ontrack Systems B.V. Netherland during the year 2011-12 is not made avail for
       consolidation. Therefore, adjustment of share of Profit/Loss in the carring amount of
       investment in the associate company is not made as per standard (AS)-23

     n NOTE NO. 13
       DEFFERED TAX ASSETS
       Opening Balance                                                                                              67.86                            53.32
       Less: Deferred tax Credit for prior years                                                                  (24.27)                            (0.02)
                                                                                                                    43.59                            53.30
       Add/(Less) : Currency Translation (loss)/gain                                                                 1.11                              0.04
       Add/(less):Deferred tax credit/(charge) for the year                                                       (10.87)                             14.52
       TOTAL                                                                                                       33.83                             67.86

     n NOTE NO. 14
       LONG TERM LOAN AND ADVANCES
       (Unsecured & Considered Good)
       Capital Advance                                                                                              0.70                                -
       Deposits                                                                                                    67.42                             81.89
       Other Loans & Advances :
       Loan to Bodies Corporates                                                                                 283.61                             255.89
       Other Trade Advances                                                                                      270.50                             536.47
       TOTAL                                                                                                     622.23                             874.25


     n NOTE NO. 14.01
        Other Trade Advances include ` 10.00 lacs (Previous Year ` 10.00 lacs) due from a party, against which the company has filed money suit and
       the matter is subject to judicial. Pending the outcome of the legal proceedings, the extent of amounts recoverable there against is not ascertainable
       and therefore no provision has been made in the accounts.

     n NOTE NO. 14.02
       Other Trade advances include ` 219.01 lacs(previous year ` 219.01 lacs) due from a customer on account of encashment of performance bank
       guarantee, which is subsequently settled amicably and the debt has been ackonwledged by the customer with a schedule to repay the amount over
       a period of 2 years from the end of the current financial year.


     n NOTE NO. 15
       OTHER NON CURRENT ASSET
       Defered Revenue Exp.                                                                                        54.96                             54.96

     n NOTE NO. 16
       CURRENT INVESTMENTS
       Investment in Equity Instruments
       Quoted, Fully Paid Up
       Tata Consultancy Services Ltd                                                                                 0.12                              0.12
       56 Nos. of equity shares
       (includes 28 nos. bonus shares alloted during the year 2010-11)
       Aggregate Amount of Quoted Investments                                                                        0.12                              0.12
       Market Value of Quoted Investments                                                                            0.65                              0.66



64                                                              ONTRACK SYSTEMS LIMITED
                                                                                                          CONSOLIDATED FINANCIAL STATEMENT


NOTES FORMING PART OF THE CONSOLIDATED
FINANCIAL STATEMENTS (...CONTD.)

                                                                                                         As at                              As at
                                                                                                 31 s t March 2012                 31 s t March 2011
                                                                                                       (` in lakh)                        (` in lakh)
n NOTE NO. 17
  INVENTORIES (as taken value and certified the management)
  Work-in-progress                                                                                              99.36                            67.93
  Stock-in-trade                                                                                              865.87                            859.34
  Consumables Spares                                                                                             9.44                              6.20
  Total                                                                                                       974.67                            933.47



n NOTE 18
  TRADE RECEIVABLES
  (Unsecured & Considered Good)
  Exceeding 6 Months                                                                                        1,675.58                         1,436.65
  Others                                                                                                    3,849.94                          1,850.38
                                                                                                            5,525.52                          3,287.03
n NOTE 18.01
  Sundry Debtors includes ` 188.99 lacs (AED 13.63 lacs) relating to account receivables of Ontrack Systems (UAE) Ltd. which have been lying
  unrealized exceeding the credit period. The management is in belief that the concentration of credit risk is being mitigated by high credit worthiness
  and financial stability of its trade customers.
n NOTE 19
  CASH & BANK BALANCES
  Cash and Cash Equivalents
  (i) Balance with Banks                                                                                        65.15                            43.56
  (ii) Cheques in Hand                                                                                          36.00                                 -
  (iii) Cash in hand                                                                                             5.79                              3.86
  Other Bank Balances
  (i) Earmarked Balance with Bank
  Dividend unpaid A/c                                                                                            4.63                              4.63
  Gratuity A/c                                                                                                   0.02                              0.02
  (ii) Fixed Deposit Cummulative *                                                                              50.00                            97.89
    Total                                                                                                     161.59                            149.96
  * Fixed deposits with bank are held as margin money for both bank guarantee & letter of credit and also as security for borrowings.
n NOTE 20
  SHORT TERM LOANS & ADVANCES :-
  (Unsecured & Considered Good)
  Adv IT / TDS (Net of Provision)                                                                              23.01                             10.06
  Accrued Interest                                                                                              2.69                                 -
  Prepaid Expenses                                                                                             35.71                              8.45
  Advance to Directors                                                                                          5.85                                 -
  Advance to Associates                                                                                         8.84                              8.84
  Other Advances                                                                                               76.56                                 -
                                                                                                              152.66                             27.35


                                                            ONTRACK SYSTEMS LIMITED                                                                        65
                                                                                      CONSOLIDATED FINANCIAL STATEMENT


     NOTES FORMING PART OF THE CONSOLIDATED
     FINANCIAL STATEMENTS (...CONTD.)

                                                                                        As at                    As at
                                                                                31 s t March 2012        31 s t March 2011
                                                                                      (` in lakh)              (` in lakh)
     n NOTE NO. 21
       OTHER CURRENT ASSET
       A. Preliminary & Preoperative Exp                                                    2.85                      0.33
       B. Defered Revenue Exp.                                                              2.85                      5.70
                                                                                            2.85                      6.03
       Less: Written off                                                                    2.85                      3.18
                                                                                                -                     2.85
     n NOTE NO. 22
       REVENUE FROM OPERATIONS
       Sale of Product                                                                  9,293.30                  4,764.03
       Sale of Services                                                                 1,890.63                  1,674.66
                                                                                       11,183.93                  6,438.69
     n NOTE NO. 22.1
       PARTICULARS OF SALE OF PRODUCTS
       Software License                                                                   180.04                    200.39
       Hardware                                                                         9,113.26                  4,563.64
                                                                                        9,293.30                  4,764.03
     n NOTE NO. 23
       OTHER INCOME
       Interest                                                                            66.76                     30.21
       Dividend                                                                             0.13                      0.11
       Other Non- Operating Income:
       Profit on Sale of Assets                                                                 -                     0.71
       Miscellaneous Income                                                                 5.11                     16.78
       Commission,Incentive & Discount Received                                                 -                     2.08
       Income from Comunet                                                                  2.67                      4.72
                                                                                           74.67                     54.61
       n NOTE NO. 24
       PURCHASES OF STOCK-IN-TRADE
       Traded Goods                                                                     9,013.94                  4,712.56
                                                                                        9,013.94                  4,712.56
       n NOTE NO. 25
       CHANGE IN INVENTORIES OF STOCK-IN-TRADE & WORK-IN-PROGRESS.
       Inventories ( As at 01.04.2011)
       Stock-in- Trade                                  859.34                            546.72
       Work-in Progress                                  67.93       927.27               100.18                    646.90
       Inventories (As at 31.03.2012)
       Stock-in- Trade                                  865.87                            859.34
       Work-in Progress                                  99.36        965.23               67.93                   927.27
       TOTAL                                                         (37.96))                                     (280.37)

66                                                 ONTRACK SYSTEMS LIMITED
                                                                                           CONSOLIDATED FINANCIAL STATEMENT


NOTES FORMING PART OF THE CONSOLIDATED
FINANCIAL STATEMENTS (...CONTD.)

                                                                                            As at                         As at
                                                                                    31 s t March 2012             31 s t March 2011
                                                                                          (` in lakh)                   (` in lakh)
n NOTE NO. 26
  EMPLOYEE'S BENEFIT EXPENSES
  Salaries                                                                                     522.35                        548.18
  Contribution to Provident & Other Funds :-
  Employer's Contribution to ESI                                                                 3.85                          2.59
  Provident Fund -Employer's Contribution                                                        7.31                          9.22
  Employer's Contribution to Gratuity                                                            3.09                          2.41
  Staff Welfare Expenses:-
  Insurance benefit to Staff                                                                     6.28                          3.39
  Staff Training & Development                                                                   0.11                          0.95
  Others                                                                                         1.33                          1.55
                                                                                               544.32                        568.29


n NOTE NO. 26.01
  No provision has been made for the present value of leave accrued in respect of the eligible employees based on the actuarial
  valuation using the Project Unit Cost Method. The present value of the obligation is currently not determined/ ascer tained.
  However inrespect of Ontrak Systems Ltd, India,leave benefit as per management' s policy is not to be accr ued beyond 30
  days but availed of and the employees have been advised to plan their leave in advance, while in ser vice and immediately
  before superannuation . Leave not availed of is not encashable.


n NOTE NO. 26.02
  The employees’ gratuity fund scheme managed by Life Insurance Corporation of India is a defined benefit plan. The present
  value of the obligation is currently ascer tained by the corporation based on the actuarial valuation using the Projected Unit
  Cost Method and the recommended contribution to the fund managed by the corporation has been provided in the accounts
  during the year.


n NOTE NO. 26.03
  The estimated amounts required to cover employees’ end of service indemnity as at the date of financial statement of Ontrack
  Systems (UAE) Ltd. are computed in pursuant to the United Arab Emirates federal labour law No. 8 of 1980 based on the
  employees’ accumulated period of ser vice and current remuneration. However the management is of the opinion that no
  significant difference would have arisen had the liability been calculated on an actuarial basis, as salary inflation and discount
  rates are likely to have approximately equal and opposite affects.


n NOTE NO. 27
  FINANCE COST
  Bank Interest                                                                                199.37                        159.91
  Bank Charges                                                                                  42.69                         60.71
  Loss on Foreign Currency Transactions and Translation (Net)                                  (53.92)                        14.48
                                                                                               188.14                        235.10




                                                        ONTRACK SYSTEMS LIMITED                                                        67
                                                                             CONSOLIDATED FINANCIAL STATEMENT


     NOTES FORMING PART OF THE CONSOLIDATED
     FINANCIAL STATEMENTS (...CONTD.)

                                                                               As at                    As at
                                                                       31 s t March 2012        31 s t March 2011
                                                                             (` in lakh)              (` in lakh)
     n NOTE NO. 28
       OTHER EXPENSES
       Operating Expenses
       Electricity Expense                                                        11.92                     12.61
       Stores & Cosumable spares                                                  16.26                     25.87
       Professional & Consultancy Charges                                        975.17                    495.51
       Repairs & Maintenance                                                      11.88                     17.26
       Bandwith Cgarges                                                            9.10                      8.66
       Insurance Premium                                                           1.33                      4.23
                                                                               1,025.66                    564.14
       Administrative Expenses
       Director Remuneration                                                      42.12                     36.10
       Printing & Stationary                                                       6.04                      7.82
       Business Promotion                                                          2.53                      7.92
       Advertisement & Publicity                                                  10.00                      9.05
       Office Expenses                                                            15.16                     36.56
       Discount Allowed                                                            2.96                      1.60
       Share of loss in associates                                                     -                     6.18
       Rent,Rates & Taxes                                                         30.13                     61.68
       Travelling & Conveyance                                                   101.80                    151.51
       Postage & Telephone                                                        12.79                     23.26
       Other Charges                                                              21.61                     28.34
       Deferred Revenue Expenditure                                                2.85                      3.18
       Prior period Item                                                               -                     4.20
                                                                                 247.99                    377.38
       Total                                                                   1,273.65                    941.52
     n NOTE NO. 28.01
       Professional & Consultancy charges include payment to
       Auditors as follows:
       a) Statutory Audit Fees                                                     3.09                      2.96
       b) Tax Audit Fees                                                           0.60                      0.50
       c) Certification & others                                                   0.09                      0.32
       d) Re-imbursement of expenses                                               0.10                         -
                                                                                   3.88                      3.77




68                                               ONTRACK SYSTEMS LIMITED
                                                                                                    CONSOLIDATED FINANCIAL STATEMENT


NOTES FORMING PART OF THE CONSOLIDATED
FINANCIAL STATEMENTS (...CONTD.)

                                                                                                    As at                          As at
                                                                                            31 s t March 2012              31 s t March 2011
                                                                                                  (` in lakh)                   (` in lakh)
n NOTE NO. 29
   TAX EXPENSES
   Current Tax                                                                                         46.65                           37.72
   Earlier year tax / (reversal)                                                                     (12.00)                                 -
   Deferred Charges / (Credit)                                                                         10.87                         (14.53)
   Total                                                                                               45.52                           23.19
n NOTE NO. 30
   EARNINGS PER SHARE(EPS)
   Net Profit after tax as per Statement of Profit & Loss                                               200.06                          216.20
   attributable to Equity Shareholders (Rs. )
   Weighted Average Number of equity shares used as denominator for calculating EPS                    193.42                           193.42
   Basic Earnings per share(Rs.)                                                                          1.03                            1.12
   Face Value per equity shares (Rs.)                                                                    10.00                           10.00


n NOTE NO. 31
   CONTIGENT LIABILITIES:
   Contingent liabilities not provided for :
   i) Income tax demand against which appeals/rectification are pending or necessary                  1,047.10                          286.00
      steps are taken for filing of appeals/rectification.
   ii) Bank Guarantee :
      Domestic                                                                                         145.09                           125.02
      Foreign                                                                                                 -                           5.24
   iii) Letter of Credit :
      Domestic                                                                                          156.62                                -
n NOTE NO. 32
  The accounts of Ontrack System (UK) Ltd is exempted from statutory audit in term of Sec 248 of the UK Companies Act., 1985.
  Therefore it’s unaudited financial statement as approved by the board of directors of the company are considered for the consolidation
  of the accounts.
n NOTE NO. 33
   The Audited accounts of Ontrack Systems (Australia) Pty. Ltd. is not available. The unaudited financial statement as approved by the
   board of directors and compilation report issued thereon in terms of Australian Professional Ethic Standard (APES)-315 has been
   considered in the consolidation of the accounts
n NOTE NO. 34
   The financial statement of following subsidiaries have been considered on Unaudited basis. Details of the same are as under:
                                                                                       Ontrack System (UK) Ltd.   Ontrack System(Aust) Pty. Ltd
   As at 31st March' 2012                                                                           (` in lakh)                   (` in lakh)
   Net Worth                                                                                            310.75                       (297.79)
   For the year ended on 31st March' 2012
   Total Revenue                                                                                         12.18                          265.73
   Net Increase/(Decrease) in Cash & Cash Equivalent                                                     15.96                           13.03
   * Net of Consolidation adjustment

                                                             ONTRACK SYSTEMS LIMITED                                                              69
                                                                                                     CONSOLIDATED FINANCIAL STATEMENT


     NOTES FORMING PART OF THE CONSOLIDATED
     FINANCIAL STATEMENTS (...CONTD.)
     n NOTE NO. 35
        Details of Prior Period Expenses/(Incomes) :                                              (` in lakh)                       Rs. In Lacs
        Employees’ Gratuity                                                                            -                               4.20


     n NOTE NO. 36
       Related Party Transaction
         Name of the Related parties and description of relationship:

         Name                                                                                Relationship

         Ontrack Systems (UK) Ltd.                                                           Entity under common control
         Ontrack Systems (UAE) Ltd.                                                          Entity under common control
         Ontrack Systems (Aust) Pty. Ltd.                                                    Entity under common control
         Ontrack Global Services Ltd.                                                        Entity under common control
         R.P. Infosystems Pvt. Ltd.                                                          Entity under common control
         Ontrack Systems (B.V. ) Netherland                                                  Associated Enterprise
         Comunet Info-Systems Pvt. Ltd.                                                      Associated Enterprise
         Mr. B. Hari                                                                         Key Managerial Personnel
         Mr. S.V.Ramani                                                                      Key Managerial Personnel
         Mrs. Simi Hari                                                                      Relative of Key Managerial Personnel



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

                                                                                                                                    ( ` In Lakh)

       Nature of Transactions                      Entity under                Associate          Key Managerial               Balance as at

                                                 Common control                Enterprises     Personnel & relatives            31.03.2012


       Remuneration                                         -                       -                   48.12                         4.01
                                                          (-)                      (-)                 (41.14)                       (3.68)


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


       Investment                                           -                    38.10                       -                       38.10
                                                          (-)                   (35.44)                     (-)                     (35.44)


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


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


       Figures in parenthesis represent for the previous year.

70                                                               ONTRACK SYSTEMS LIMITED
                                                                                CONSOLIDATED FINANCIAL STATEMENT

NOTES FORMING PART OF THE CONSOLIDATED
FINANCIAL STATEMENTS (...CONTD.)

n NOTE NO. 37
  Segment Information :
  Primary: Geographical Segment
  Segment wise Revenue Results
                                                                                                                  ` In lacs
   Particulars                                        Domestic         UAE        Europe & Others        Total
   Segment Revenue                                    10015.05       686.13             482.75        11,183.93
                                                     (5,229.43)     (803.14)           (406.12)      (6,438.69)
   Segment Result                                        395.69       68.22              22.84          486.75
                                                       (369.22)     (364.53)          (-107.54)        (626.21)
   Unallocated income                                                                                        8.00
   (excluding interest income)                                                                           (24.41)
   Unallocated Expenditure                                                                                 96.76
                                                                                                        (144.01)
   Finance Charges (Net)                                                                                 121.48
                                                                                                        (190.41)
   Depreciations (Net)                                                                                     30.93
                                                                                                          (76.81)
   Profit/(Loss) before tax                                                                              245.58
                                                                                                        (239.39)
   Tax expense                                                                                            45.52
                                                                                                         (23.19)
   Profit/(Loss) after tax                                                                               200.06
                                                                                                        (216.20)
   Segment Assets                                       5,298.68     1,685.33             493.24        7,477.25
                                                      (3,281.44)   (1,348.36)           (122.85)       (4,752.65)
   Unallocated Assets                                                                                   1,319.52
                                                                                                       (1,883.60)
   Segment Liabilities                                  5,404.88       133.07            634.15          6,172.10
                                                      (3,466.70)     (106.38)            (83.57)       (3,656.65)
   Unallocated Liabilities                                                                              2,624.67
                                                                                                         (428.96)
   Capital Expenditure                                                                                      3.26
                                                                                                          (48.23)
   Non cash expenditure other than depreciation                                                             2.85
                                                                                                           (3.18)
   Capital Employed                                                                                     2,569.71
                                                                                                       (2,550.64)

   Figures in parenthesis represent for the previous year.




                                                  ONTRACK SYSTEMS LIMITED                                                     71
                                                                                                            CONSOLIDATED FINANCIAL STATEMENT

     NOTES FORMING PART OF THE CONSOLIDATED
     FINANCIAL STATEMENTS (...CONTD.)

     n NOTE NO. 38
         Figures pertaining to the subsidiary companies have been reclassified/regrouped, wherever necessary to bring them in line with the Company’s financial
         statements.


     n NOTE NO. 39
         Till the year ended March 31, 2011, the company was using pre-revised Schedule VI to the Companies Act, 1956, for the preparation and presentation
         of its financial statements. During the year ended March 31, 2012, the revised Schedule VI notified under the Companies Act, 1956, has become applicable
         to the company.The Company has reclassified previous year figures to conform to this year's classification.


           For GOENKA SHAW & CO.                                                                              For and on behalf of the Board
           Chartered Accountants
                       Sd/-                                            Sd/-                                                Sd/-
             (CA Saroj Kumar Swain)                                  (B. Hari)                                       (S. V. Ramani)
                     Partner                              Chairman and Managing Director                   Whole-time Director and Secretar y
     Kolkata, India
     30th May, 2012




72                                                              ONTRACK SYSTEMS LIMITED
                                                                                                                             NOTICE



NOTICE
Notice is hereby given that the 24th Annual General Meeting of the Shareholders of the Company will be held at Hotel Savera, No.146,Dr.Radhakrishnan Road,
Chennai – 600 004 on Friday 28/09/2012 at 11.30 A.M to transact the following business:


ORDINARY BUSINESS
1. To receive, consider and adopt


  a) The Audited balance Sheet as at 31.03.2012:
  b) The Audited Profit and Loss account for the year ended as on that date;
  c) Directors’ report for the year 2011-2012 and
  d) The Auditors’ Report, thereon.


2. To appoint a Director in place of Mr.Vijay Kumar Chhinkwani, 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 retire 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.


                                                                                                                      SD/-
Place: Chennai                                                                                                   (S.V. Ramani)
Dated: 13.08.2012                                                                                      Whole-time Director and Secretary




                                                             ONTRACK SYSTEMS LIMITED                                                                               73
                                                                                                                             NOTICE



     NOTES                                                                                or claimed within 7 years from the date of transfer to the Company’s

     1. A member entitled to attend and vote at the meeting is entitled to appoint        unpaid dividend account, will as per 205A of the Companies Act, 1956,

         a proxy to attend and vote on his behalf and proxy need not be a                 be transferred to the Investors Education and Protection Fund.

         member. The instrument appointing a proxy should be deposited at the         9. Members are requested to address all communications including dividend
         Registered Office of the Company, not later than 48 hours before the             mandates to the Register and Share Transfer Agent: Cameo Corporate
         meeting.                                                                         Services Ltd., Subramanian Building, 1, Club House Road, Chetpet,

     2. The Register of members and share transfer books will remain closed               Chennai -600002, India, E-mail : cameo@cameoindia.com

         from 26.09.2012 to 28.09.2012 (both days inclusive).
                                                                                      10. Pursuant to sections 205A and 205C and other applicable provisions,
     3. Members are requested to bring their copies of the Report and Accounts            if any, of the act, all unclaimed/unpaid dividend and application money,
         to the meeting. Please bring the attendance slip with you duly filled in         remaining unclaimed/unpaid for a period of seven years from the date
         and hand over the same at the entrance of the meeting hall.                      they became due for payment, have been transferred to IEPF established

     4. Members are requested to notify any changes in their address immediately.         by the Central Government. No claim shall lie against the IEPF or the
                                                                                          Company for the amounts so transferred nor shall any payment be made
     5. Members desirous of getting any information about the accounts and                in respect of such claim.
         operations of the Company are requested to address their queries to
         the Company Secretary at least seven days in advance of the meeting          11. Members who have not yet encashed their dividend warrant(s) for the

         so that information required can be made readily available at the meeting.       financial years 2004-05 onwards, are requested to make their claims

         Members may also login to the Company’s Website:                                 without any delay to CAMEO CORPORATE SERVICES LIMITED. It may

         http://www.ontrackindia.com for detail information on the financial              be noted that the unclaimed dividend for the financial year 2004-05

         performance of the Company.                                                      declared on 11/08/2005 can be claimed by the shareholders by August
                                                                                          10, 2012. Members’ attention is particularly drawn to the “Corporate
     6. Members holding shares in physical form are requested to dematerialize            Governance” section of the Annual Report in respect of unclaimed
         the shares into electronic form to facilitate faster transfer and avoid          dividend.
         rejections for bad deliveries. The share certificates may be sent directly
         to our Share Transfer Agent: Cameo Corporate Services Ltd., No. 1,           12. The Ministry of Corporate Affairs (vide circular nos. 17/2011 and 18/2011

         Club House road, Chetpet, Chennai -600002                                        dated April 21, 2011 and April 29, 2011 respectively), has undertaken
                                                                                          a ‘Green Initiative in Corporate Governance’ and allowed companies to
     7. Pursuant to the provisions of Section 109A of the Companies Act. 1956,            share documents with its shareholders through an electronic mode. A
         Shareholders are requested to file Nomination Form in respect of their           recent amendment to the Listing Agreement with the stock exchanges
         shareholdings. Any shareholder wishing to avail of this facility may             permits companies to send soft copies of the Annual Report to all those
         submit to the Company Statutory Form 2B.                                         shareholders who have registered their e-mail address for the said

     8. Members wishing to claim their dividend, which remain unclaimed, are              purpose. Members are requested to support this Green Initiative by

         requested to correspond with Company Secretary at the Corporate                  registering/updating their e-mail addresses for receiving electronic

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

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




74                                                                  ONTRACK SYSTEMS LIMITED
                                                                                     NOTICE




                   Details of the Director seeking Appointment/Re-appointment
                          in the Annual General Meeting dated 23.09.2011



Name of Director                                                    Mr. Vijay Kumar Chhinkwani


Date of Birth                                                              13.03.1961

Date of Appointment                                                        27.09.2006

Experience in Specific Functional areas


Qualification


List of Outside Directorship held                                              N.A

Chairman/Membership of the Committee of Directors


Chairman/Membership of the Committee of Directors of Other
Companies in which he/she is a Director




                                          ONTRACK SYSTEMS LIMITED                                75
                                                                         TWENTY FOURTH ANNUAL GENERAL MEETING


                                          ONTRACK SYSTEMS LIMITED
                                    Registered 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

                                                                                                                                                   No. of Shares
         DP ID/Client-ID




     I/We...........................................................................................................................................................................................................................................................
     of ............................................................................................................................................................................ being a Member/Members of Ontrack Systems
     Limited,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 Fourth Annual General Meeting of the Company to be held on Friday, the 28th day of September,
     2012 and at any adjournment thereof.
     As witness my/our hand (s) this                                                                   day of .........................................................         2012........................

     Signed by the said                                                                                                                                                              Affix
                                                                                                                                                                                 1 Ru p e e s
                                                                                                                                                                             Re v e n u e S t a m p


     Note :         (i)  The proxy must be returned so as to reach the Investor Service Centre, Ontrack Systems Limited, Bhatad Towers, Office No.1, 3rd Floor, No.30, West Cott Road, Royapettah,
                         Chennai-600014, India, not less than FORTY-EIGHT HOURS before the commencement of the aforesaid meeting.
                    (ii) Please mark the envelope ‘ONTRACK SYSTEMS-PROXY’.


                                          ONTRACK SYSTEMS LIMITED
                                    Registered 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 P
                             DATE :                                                                                        VENUE :                                                                                             TIME :
                 28th September, 2012                                      Savera Hotel, 146, Dr. Radhakrishnan Salai, Mylapore, Chennai, India                                                                             11.30 A.M.


                                                                                                                                                   No. of Shares
         DP ID/Client-ID




     I hereby record my presence at the Twenty Four th Annual General Meeting of the Compqny on 28th September, 2012. 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 . R epresentatives of body(ies) corporate to bring to the meeting Board R esolution authorising their presence together with proof of identity.




76                                                                                                    ONTRACK SYSTEMS LIMITED
                                        Proposed Development Centre at Ekdalia, Kolkata



                                            COMPANY DATA
                                                    as on March 31, 2012

ONTRACK SYSTEMS LIMITED                      SHARE TRANSFER AGENT                         ASSOCIATE COMPANIES
Registered Office:                           Cameo Corporate Services Ltd.                Ontrack System BV, Netherland
Bhatad Towers, Office No.1,                  Subramanian Building, 1 Club House Road      Leyenseweg 111D
3rd Floor, No.30,                            Chennai - 600 002, India                     3721 BC Bilthoven
West Cott Road, Royapettah,                  Phone: +91 (44) 2846 0390-95                 Netherland
Chennai-600014, India                        Fax: +91 (44) 2846 0129                      Phone: +31 (0) 30 228 7319
Phone:+91-44-42085258,& 28411633                                                          Fax: +31 (0) 30 274 0240
                                             Email: Cameo@cameoindia.com
                                                                                          Mob: +31 (0) 6 4544 0311
Corporate Office & Global Delivery Centre
                                             Overseas subsidiaries                        Email: info@ontracksystems.nl
Plot Y-18, EP Block, Sector - V
                                             Ontrack Systems (UK) Limited                 website: http://www.ontracksystems.nl
Salt Lake, Kolkata - 700 091, India
Phone: +91 (33) 2357 2555/2556/              Abbey House
2560/2561, 98318 98561/98562                 18-24 Stoke Road, Slough                     Comunet Info-systems Pvt. Ltd.
Fax: +91 (33) 2357 2564                      Berks SL2 5AG                                AQ 13/1, Sector V, Salt Lake City
Email: info@ontrackindia.com                 Phone: 01753 722160                          Kolkata - 700 091
                                             Fax: 01753 722165                            Phone: + 91-33 6450 6416
Ontrack Systems Limited                      Email: info@ontrackuk.net                    Email: info@comunetsystems.com
Level 6, Pentagon P-2                        Web: www.ontrackuk.com                       For additional copies of this Annual Report
Magarpatta City, Hadapsar
                                                                                          and other information contact:
Pune – 411013, India
                                             Ontrack Systems (Aust) Pty. Ltd.             S. V. Ramani
Email: sachin.n@ontrackuk.com
Web: www.ontrackindia.com                    Level 14, 309 Kent Street                    Ontrack Systems Limited
Fax : +91 20 6628 0011                       Sydney, NSW 2000                             Plot Y-18, EP Block, Sector - V
                                             Phone: + 61 2 9248 0162                      Salt Lake, Kolkata - 700 091, India
Year of Establishment                        Fax: + 61 2 9232 1799                        Phone: +91 (33) 2357 2555/2556/
15th February, 1988                          Email: info@ontrackus.com                    Fax: +91 (33) 2357 2564
                                             Web: www.ontrackaus.com                      Email: ramani@ontrackindia.com
Stock Exchange Listings
Bombay Stock Exchange                        Ontrack Systems (UAE) Limited                Design and Editorial supervision:
Madras Stock Exchange
                                             P.O. Box 3153, Fujairah, UAE
Calcutta Stock Exchange                                                                   C. V. Aiyar, Head - Corporate
                                             Phone: +971 (9) 228 1464                     Communication
Number of Offices                            Fax: +971 (9) 228 1465
India      :     4                           Email: info@ontrackuae.com                   Printed at:
Overseas :       4                           Website: www.ontrackuae.com                  Sajit Print, Kolkata



                                              ONTRACK SYSTEMS LIMITED

				
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