ONTRACK SYSTEMS LIMITEDontrackindia.com/ontrackindia/templates/OSL/pdf/Annual...ONTRACK SYSTEMS LIMITED (Rs. in million) FINANCIAL HIGHLIGHTS Particulars 2008-2009 2007-2008 2006–2007

ONTRACK SYSTEMS LIMITED(Rs. in million)

FINANCIAL HIGHLIGHTS

Particulars 2008-2009 2007-2008 2006–2007

Export Sales 147.84 195.80 185.92

Domestic Sales 94.09 86.07 154.19Other Income 11.26 1.62 2.21Total Revenue 253.19 283.49 342.32Operating Profit (EBITDA) (37.30) 44.65 39.74Finance Expenses 18.00 16.46 9.82Profit / (Loss) on sale of Assets 0.38 — 0.16Preliminary & Deferred Rev. Exp. W/O 0.28 0.28 —Depreciation & Impairment Loss 18.99 24.78 14.87Income Tax (Net) 0.78 1.14 3.59

Net Income/(Loss) after tax (74.97) 1.99 11.62Face Value per equity share Rs. 10/- Rs. 10/- Rs. 10/-EPS-after tax (Rs.) — 0.26 1.55Dividend (%) Nil Nil 5Operating Income/(Loss) as % to Total Revenue (%) (14.73) 15.75 11.60Share Capital 79.50 79.50 75.00

Reserves & Surplus 54.46 77.29 54.49Fixed Assets (Gross Block) 141.10 170.43 150.17

1

Turnover Operating Profit

(Rs. in million)

2006-07 2007-08 2008-09

342.32

283.49

44.65

253.19

(37.30)

400

350

300

250

200

150

100

50

0

- 50

39.74

Gross Block Net Block

(Rs. in million)

2006-07 2007-08 2008-09

150.17

107.62

170.43

103.10

141.10

93.90

180

160

140

120

100

80

60

40

20

0

Dear shareholders,

The year 2008-2009 continued to be a very rough year for your company. Wewitnessed tremendous pressure in margins, collecting our receivables and keepingup with our financial commitments . Despite this backdrop the company continuedto acquire new customers, re-skill our teams in newer technologies and we managedto survive the economic slowdown.

It was also a time for us to introspect and prepare for the future. Your company’sinherent strength is in its impeccable track record of executing customer commitmentsand retaining customers by providing excellent support to their business. Withanother year passing by, we are well prepared to take the challenges of the marketplaceand build a sustainable business by leveraging our global presence , our global track record and the opportunities in India and othercountries that we operate.

Your company made significant progress in the skill development initiative in the form of “Ontrack ERP School” . Most of the studentswho joined our courses have been gainfully employed . We have also launched a new program called PERP ( Program for EnterpriseReady Professionals ) which is being launched in some colleges right from the second semester. We expect the skill developmentinitiatives to add significant benefits to the business.

Due to the market situation and our internal challenges, we have postponed our initiative to enter the defence sector for some moretime. We have also held back our acquisition of a US company which we announced last year.

Kant & Co, the investment arm of a leading group from Kolkata took a 13.04 percent stake in the company for which the necessaryformalities are being completed.

The consolidated revenue of your company was 296.09 million INR.Your company has booked a loss of 71.21 million INR this yearand hence no dividend is being proposed.

I take this opportunity to thank our members, directors, customers, vendors, employees, partners, bankers, advisers, governmentagencies and all our well wishers for their continued support. I seek your continued support and guidance in making Ontrack, a wellknown respected Indian multinational company.

With warm regards,

B. HariCEO & Managing Director

Date: June 30, 2009

Kolkata, India

2

OntraOntraOntraOntraOntrackckckckcks y s t e m s l i m i t e d

Winning Business Solutions

Operating Group andSubsidiaries

3

Enterprise Solutions Group

tendertimes.com

ERP School

IndiaOneStop.com

Ontrack Systems (UAE) Ltd.

Ontrack Systems (UK) Ltd.

Ontrack Systems (Aus.) Pty. Ltd.

Ontrack Systems BV., Netherlands

Ontrack Global Services Ltd.

ONTRACK SYSTEMS LIMITED

4 ONTRACK SYSTEMS LIMITED

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

ORGANISATIONAL STRUCTUREAs of July, 2009

Enterprise Solutions Group tendertimes.com IndiaOneStop.com Ontrack ERP School

CHENNAI Registered Office

KOLKATA Corporate Office Global Delivery Centre

*51% shares held by Ontrack Systems Limited

SHAREHOLDERS

BOARD OF DIRECTORS

MANAGING DIRECTOR

MANAGEMENT TEAM

ONTRACK GROUP AUDITORS

SUBSIDIARIES

OFFICES IN INDIAOPERATING GROUPS

BOARD OF DIRECTORS

BOARD OF DIRECTORS

B. HariManaging Director

Robin GhoshIndependent Director

Vijay Kumar ChhinkwaniIndependent Director

AUDITORS

M/s. N. C. Ganguli & Co., IndiaMacilvin Moore Reveres LLP, UKHAMT & Associates, UAEH. Kroeze, HollandM/s. Goenka Shaw & Co., India

Indian Bank, India

Axis Bank, India

HSBC Bank, UK & UAE

State Bank of India, India

ANZ Grindlays, Australia

Rabobank, Holland

BANKERS

LEGAL ADVISORS

Bidyut Kumar Banerjee, India

5ONTRACK SYSTEMS LIMITED

S. V. RamaniWhole-time Director & Secretary

Ramdevan V KrishnaswamyDirector

ESG will challenge with best of companies inturnkey solutions . We are now providing ourcustomers with a complete range of serviceswhich facilitates them to take cost effectivedecisions for their business.

By consolidating all the services and solutionsgroup under ESG, we have been able to crosssell opportunities and also engage moremeaningfully with customers. ESG now has aunified sales team and is well positioned to offerend to end solutions for the entire needs of anyorganisation. We have added TEN newcustomers during the year. The new customerscontributed to over 90% of the groups totalrevenue.

ESG signed Microsoft Enterprise Agreementwith two major clients which is considered as amajor achievement by Microsoft.

Significant changes in project management anddelivery have been initiated which is expectedto lead to well executed projects in the localand overseas markets.

Service offerings brought underone unit- Enterprise SolutionsGroup (ESG)

Microsoft Enterprise Agreementsigned with two customers

Implemented AXAPTA , SAP B1and Navision for severalcustomers

Partnership with OpenBravo forOpen Source ERP

TEN new customers

Focus on end-to-end consultingand implementation

This year we plan to consolidate our positionas a Turnkey IT solution provider with morecustomer referrals both in India and in theoverseas markets .

We expect increasing offshore and onsiteassignments from Australia, UAE and UK forour range of services. We also are confident of

winning government contracts this year whichis also a major focus for our sales team. Otherthan the domestic markets , our Sales andMarketing team in India will also be workingclosely with our overseas offices in Australia,UK and UAE to build new customerrelationships.

Outlook for fiscal 2009-10


Highlights Strategy and Direction Review of Activities

Enterprise Solutions Group

The company continues its focus on off shoredevelopment and flexible resourcing as well ason IT Managed Services. The company hasdeveloped strong relationship with fewimportant major clients and this provides thebase to expand company’s services to similarsized companies carrying the same messagethat helped bag these accounts.

The company is working towards signing upfew major clients to provide onsite/offshoredevelopment work as well as being the externalIT arm.The company has signed up partnershipagreement with SAP for SAP B1 offering. Wegeared up for the offering by taking in pre salesmanager and set up sales force by gettingqualified as Certified Sales Personnel for SAPB1 products.

We will look to signing up of partnership withMicrosoft for MS Dynamics practice to offerNavision and Axapta to extend our capabilityon ERP for the SME market.

With the success achieved in IT ManagedServices by providing continuous support forthe last three years the company hopes to signup few more clients during current financial year.

The Australian operation during the year hassigned up partnership agreement with SAP B1and is in the process of signing up clients.The Australian facility continued to providedevelopment work to clients such as ANL,Satyam, PWRSL, BCDS and Bradmills to namea few of our client base. It has successfullydelivered THREE mission critical applicationson an OFFSHORE development & delivery modeto ANL Container Line Pty. Ltd.

Due to global financial crises business in thethird and fourth quarter of 2008-09 has beenlittle slow.


Offerings on development andflexible resource practice

Partnership agreement signedwith SAP for SAP B1

IT Managed Services to PittwaterRSL exended for the Fourth year

Successful delivery of THREEmission critical applications

Continuing relationship withBradmill textiles for developingmore applications

The IT investment in Australian market iscontinuing to grow with more and morecompanies looking to outsource their servicesto India due to skills shortage and in generalacceptance of cost savings and the benefits itbrings to ROI.

Ontrack Australia will continue to focus on growth -driving results that produce the best business

outcomes. Our priorities fall across followingkey areas:

Growing the IT off shore Developmentbusiness and Flexible resource businessGrowing SAP B 1 partnership and buildingclient base.Signing up of partnership with Micorsoftfor MS Dynamics offeringGrowing the IT Managed services business



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

Ontrack’s solution that caters to therequirements of both public and private sectorenterprises, continues to provide a user-friendlyinterface for creation and online hosting ofNotices and bid documents and offering morevalue-added features and services coveringcomplete cycle of tendering.The cutting edge service being provided is the highlysecured facility and introduction of new technologylike online tendering solutions keeping in mind themarket demands for such cost effective technologyand transparency in tendering.Based on market requirement our e-tendering suiteSecure-T has been upgraded with Pre-tenderingand Post-Tendering modules. Focus is now moreon e-procurement in e-auction & e-Reverse auction.

Despite diff icult market conditionsTendertimes.com managed to achieve nominal3 percent YoY growth in sales with the client-base growing by 20%. The year witnessed thedivision strengthening its relationship with allits existing Clients and spreading its wingsacross the Divisional Offices of various Railwaysand other clients such as BSNL.One of the significant business developmentswas the MoU signed with Ananda BazarPatrika Private Ltd., a pioneer in Mediabusiness and one of the leading Newspaperhouses of India. The MoU is for associationwith tendertimes.com for onlinehosting, software development withimplementation related to TTC and its variousofferings including e- procurement services inthe tendering domain.tendertimes.com has initiated a StrategicTechnology Partnership with C1 India PrivateLimited, one of the pioneering Companiesengaged in e-procurement, e-tendering and e-auction business in India for implementation ofe-procurement solutions mainly e-auctions.

We are looking at enhancements by adding newtechnology to our domain and also by entering intoStrategic Technology Partnerships.Promotional activities would be multiplied withsupport from ABP marketing team to spreadawareness about benefits and cost-effectiveness ofelectronic tendering.tendertimes.com has already opened the yearwith three new orders in the first quarter fromEastern Railway, Construction Department,Kolkata, Hindustan Paper Corporation Limited,

Highlights Review of ActivitiesStrategy and Direction

Strong Orderbook position

MOU signed with ABP Group

Focus on e-procurement,e-auction & e-Reverse auction

Technology Partnership with C1India for e-procurement solutions

New Orders from Kolkata MetroRailway

Pre-tendering and Post-Tenderingmodules included in Secure-T


Kolkata, Rites Limited among others.We have bid for four e-procurement projects namelyHeavy Engineering Corporation Limited, Ranchi,Brahmaputra Valley Fertilizer Corporation Limited,Assam, Paradip Port Trust, Orissa and GardenReach Ship Builders and Engineers Limited,Kolkata.Tendertimes.com will continue to add more value toits brand equity and enjoy its premium andleadership position in the e-tendering domain.

tendertimesTM

India’s first tender web daily .com


The UAE Operations has focused on productsales, mainly SMS Xprez, and in executingprojects to Government entities. It was evidentearly on that the majority of projects expectedduring the past fiscal and the current one wouldcome from the government and semi-government sectors.

The strategy for the fiscal was to align effortswith the Government initiatives primarily in AbuDhabi. Existing relationships were nurtured andongoing projects with the government weregiven added attention. The strategy is to focuson short term to long term positioning bybuilding relations that would help Ontrackcontribute to the long term governmentobjectives as laid down by the Emirate of AbuDhabi.

The ongoing engagement with a NationalismEntity of the Government of Abu Dhabicontinued, completing more than 2 years ofassociation for Consultation, IT Support andSoftware Development.

Another long term association with a leading NationalBank continued, with Ontrack providingProfessionals in various departmentsundertaking IT related tasks.

SMS Xprez, once again, was the major productsold to Government, and private sectors. Thesales during the fiscal moved SMS Xprez frombeing just an application for sending and receivingmessages to one that integrates with coreapplications crucial to business needs oforganizations.

Long term relationship initiatives were undertakenas part of the Business Development drive to forgeassociations with E-Government departments inthe Emirate of Dubai and the Federal Government.Such associations were reached through closepartnership of local companies with Ontrackpositioned as the technical partner.

Continued R & D towards development ofa JAVA-based application that wouldintegrate with the National ID applicationand hardware, to be used in all Governmentand many private sectors.Standardisation of Job Titles through aplug-in application that could be used byvarious Recruitment and Emiratizationorganizations.

Highlights Review of ActivitiesStrategy and Direction


SAP B1 Project completed for aUAE company with executioncarried out by the Global DeliveryCentre (GDC)

Continued support toEmiratization Initiatives throughproject executions in Abu Dhabiand Sharjah

Integrated SMS Xprez solutionswith SMS Agents primed tohandle business requirements

Overall growth in turnover by30%

More than 60% of business fromexisting clients

Focus on Shariah Complaint componentsto be built as a plug in that can be used byexisting ERP usersMarketing focus on providing ERP basedsolutions in the regionPartnership with E-Government entitiesboth at Emirate and Federal level to offer ITsolutions


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

Ontrack UK will be launching its MicrosoftDynamics practice in the UK and Holland marketin fiscal 2009-10 by leveraging Ontrack India’s trackrecord in successfully delivering projects.

With cost being a major factor due to the currentslowdown, Ontrack UK will be concentrating in the

The UK market is growing and clients aremoving towards companies with focused offering.The Managed Services space and the area ofApplication Development & Maintenance (ADM)especially in the mid market are expanding rapidly.Our onshore and offshore support activities haveshown significant progress after the dip in ourbusiness in the last fiscal.

Ontrack UK bagged a software development orderfrom a UK based Pharmacy chain for developing aPOS and back office software tailored forpharmacies in UK. The application is beingdeveloped by the offshore software developmentteam in Kolkata, India.

With the UK market shrinking and passingthrough a recession it is great opportunity forOntrack to market its matured offshore facilityin India offering dedicated 24 x 7 servicesoffshore along with onsite services to clients inUK business.

With clients looking at cost saving activities withoutdiluting its performance the offshore practice willensure that clients in UK have the comfort of a localspecialist’s presence for its core time of operationand offshore support during the non-core time. Forthe client the Total Cost of Operation (TCO) islowered and core-management time is deployed inmore productive work.



Extending SAP Basis Remotesupport for various UK basedclients

Projects and support projectswith Vodafone UK

Major onshore and offshoredeals closed

Software development orderfrom a UK based Pharmacychain

ONTRACK SYSTEMS LIMITED1 0

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

bespoke offshore development market. There havebeen already some good gains in this sector. Inaddition the company would be starting its MicrosoftDynamics Practice in the UK based on the corestrengths of Ontrack India’s operations.

ONTRACK SYSTEMS LIMITED 11

Most investors are shaking off the worldeconomic crisis and many are willing to takemore risk as they hunt for oppor tunities,especially in China and India as revealed in asurvey by Bloomberg News. Keeping in viewthis vast potential of India as one of the world’smost attractive investment destinations,IndiaOneStop.com is continuing its efforts tostrengthen this e-platform in providing moreand more valuable and updated information forIndian business and industry.Keeping in view the government’s Look EastPolicy and the importance the portal is attachingto development of the northeastern region,IndiaOneStop is laying greater emphasis onproviding regular updates.One of major objectives of IndiaOneStop.comis to help its visitors share views of globalleaders in different segments of industry andeconomy through the Face-to-Face section.

With the opening up of Indian economy andmore and more relaxation in foreign investmentin different segments of the economy, theinvestors are now increasingly focusing onsector-specific projects. With increasing focuson SME and infrastructure sectors, the Project

Report wing is expected to witness significantgrowth in business during fiscal 2009-10. Theshare of Google AdSense in total revenueearnings in fiscal 2009-10 is expected toimprove sustantially.l


Records over 4.7 million visitortraffic monthly from over 80countries

Google AdSense – Growth inrevenue maintained

Project Report – Acquires moreclients from overseas market

Overseas clients from Germany,Libya, UAE, Saudi Arabia,Bahrain, Pakistan, USA, Egypt,Sultanate of Oman, Venezuela

india TM

.comNetworking Global BusinessNetworking Global BusinessNetworking Global BusinessNetworking Global BusinessNetworking Global Business

OneStop


Global meltdown notwithstanding, Indiaremains one of the most attractive investmentdestinations. The FDI section that was startedwith main focus on Indian infrastructure sectoris being enriched fur ther encompassing othersectors of countr y’s economy. Theinternational personalities interviewed this yearincluded Jim McDermott, Co-chair of the USCongressional Caucus on India and IndianAmericans; and Director General of theCommonwealth Business Council Dr MohanKaul. The section on Nor th East has beenenriched further and added value to the existing2500 plus content-rich pages.During the year under review the por talregistered around 4.7 million hits/ Month fromover 80 countries.

Global recession slowed down newinvestments in industry. This has impactedrevenue generation from our Projects Reportswing. While earnings from Project Reportscontinued to dominate the overall revenuegeneration, the portal is getting encouragingresponse from the new revenue-generatingsource, namely, Google AdSense Program.

ONTRACK SYSTEMS LIMITED12

DIRECTORS’ REPORT

RESULTS OF OPERATIONS

While the impact of economic recession affected all spectrumof the business, the impact on the IT has been severe to largenumber of Companies, pushing the focus cer tainly to farimpor tant area of existence –survival. Whether its small,medium or big business houses, all are reeling under thisglobal phenomena and are expecting the situation to improveby the end of the current fiscal due to the Governmentalintervention all over the globe including India.

The global economic meltdown severely affected the Company’sbusiness and UK being the primary focus of the Company,business has almost come to ground level pushing the Companyto post its first ever loss during the year under review. Not onlywere new business deal difficult to be clinched even oldoutstanding receivables became difficult to be realised.

The sales revenue of the Company registered Rs. 2419.33 lacs(previous year Rs. 2818.80 lacs) .

The Company posted a loss of Rs. 741.91 lacs (Previous YearProfit of Rs. 31.34 lacs) due to Global economic recession.

DIRECTORS’ REPORT

To

The Members of Ontrack Systems LimitedYour Directors are pleased to present the Twentyfirst Annual Repor t together with the Audited Statement of Accounts and the Auditor’s Report of yourCompany for the Financial Year ended March 31, 2009. The financial highlights for the year under review are given below:

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

31.03.2009 31.03.2008

1. Total Income 2419.33 2,818.802. Total Expenditure 2907.73 2,391.223. Profit before interest, depreciation & tax (488.40) 427.584. Finance Charges 180.05 164.595. Depreciation & impairment loss 189.86 247.816. Other income 112.65 16.167. Profit/(Loss) on sale of Assets 3.75 —8. Profit before tax (741.91) 31.349. Provision for tax — 10.6510. Provision for Fringe Benefit Tax 4.00 4.0011. Deferred Tax - Asset 3.82 3.1912. Profit after tax (749.73) 19.8813. Distributable Profit

Appropriation: –Proposed Dividend — —Transfer to General Reserve — 2.00

(Rs. in Lacs)

PERFORMANCE REVIEW OF BUSINESS UNITS

The Offshore Global Delivery Centre (GDC) added 6 majorclients from Middle East and Australia successfully apart fromservicing domestic clients.

MS Dynamics Practice had expanded its horizon to the Northern,South Eastern and Eastern States apart from consolidating its positionlocally. The company added 12 clients during the year under review.

The Division has received the membership of the prestigious 2009Microsoft Dynamics President’s Club for the third consecutive yearfor being the best Microsoft partner in Eastern India.

SAP Business One PracticeBeing Associate business partner for SAP Business One practiceswe are primarily providing ERP solution to SME segment. We arealso educational service partner of SAP providing SAP. AG certificationin SAP Business One in both functional and technical domains.

The Company proposes to expand SAP Business One wing toAustralia. Middle East, UK, and Holland markets.

Bespoke Offshore Division continued to support the overseas officeswith timely delivery of major projects. It’s portal division also deliveredcomplex projects to various domestic and overseas clients.


DIRECTORS’ REPORT

Tendertimes.com registered 48 percent growth in revenues this yearis comparison to previous year. The client base expanded by 20percent compared with the previous year. Strategically placed as aleader in e-tenderting solution domain, the Division combines needswith innovative ideas offering authentic encrypted bid documentsgeneration saving time and cost for both bidders and tender authorities.Online payment gateway has also been implemented during the year.Tendertimes has entered into an agreement with Republic of Belarusfor exchange of information on tenders.

Enterprise Solutions Group was the result of a restructuring exercisewhere the units - TSG, SAP B1, MBS, Open Bravo and EMA & ADMwere brought under one roof with an eye to repositioning OntrackIndia as end-to-end IT Solutions Provider in the domestic market.

The Group has been providing end-to-end consulting in all round ITand ITeS - Hardware, Networking, Facilities Management, Software,Web Development, ERP etc. not only to many of its existing clientsbut have roped in TEN new customers during the year. The newcustomers contributed to over 90% of the unit’s total revenue. ESGsigned ‘Microsoft Enterprise Agreement’ with two major clients. Thesebreakthroughs were considered a major achievement by Microsoft

IndiaOneStop.com

During the year under review the portal registered in excess of 4.7million hits/ month from over 80 countries.

Due to global recession new investments in industry also were slow.This slow down has impacted revenue generation from the ProjectsReports wing. While earnings from Project Reports were affecteddue to global recessionary situation, earnings from Google AdSenseProgram maintained at last year’s level.

Subsidiary Companies

UK: With the UK market shrinking and passing through a recession itis great opportunity for Ontrack to market its matured offshore facilityin India offering dedicated 24 x 7 services offshore along with onsiteser vices to clients in UK business. Recessionar y trendnotwithstanding, Ontrack UK bagged a software development orderfrom a UK based Pharmacy chain for developing a POS and backoffice software tailored for pharmacies in UK.

UAE: Long term relationship initiatives were undertaken as part ofthe Business Development drive to forge associations with E-Government departments in the Emirate of Dubai and the FederalGovernment. Such associations were reached through closepar tnership with local companies with Ontrack positioned as thetechnical par tner. SMS Xprez, once again, was the major productsold to Government, and private sectors. The sales during the fiscalmoved SMS Xprez from being just an application to send and receivemessages to one that integrates with core applications crucial to

business needs of organizations. The ongoing engagement with aNationalism Entity of the Government of Abu Dhabi and with a leadingNational Bank continued.

Australia: The Australian facility continued to provide developmentwork to clients such as ANL, Satyam, PWRSL, BCDS and Bradmillsto name a few of our client base. It has successfully delivered THREEmission critical applications on an offshore development and deliverymode to ANL Container Line Pty. Ltd. The Australian operation duringthe year has signed up partnership agreement with SAP B1.

Holland: The investment in Holland is reduced to 26 percent andhence the status became of that of Business Associate.

SEGMENT REPORTING

The Company has followed Accounting Standard - 17 stipulated bythe Institute of Chartered Accountants of India. Geographical segmenthas been identified on the basis of location of major clients of thecompany. The geographical segments presently identified areDomestic, Europe, USA & others.

HUMAN RESOURCE DEVELOPMENT

The Company’s recruitment policy ensures candidate with meritare selected from campus. Your Company constantly strives onimprovement in the project management competency of its associatesand personnel by continuous upgradation of their skills by trainingand development. The Company’s expansion globally has resulted inglobal cultural integration since the Company employs people fromvarious foreign countries. The Company’s HR policies and processesare aligned to effectively drive its expanding business and emergingopportunities. Attrition during the fiscal remained within reasonableproportion.

QUALITY

The ISO 9001-2000 certification includes Company’s state-of-the-art Global Delivery Centre at Salt Lake, Kolkata. ISO internal auditchecks are conducted once every quarter for all divisions includingaccounts department that was brought under the purview of ISO Auditlast year. The Company has taken initiatives to become CMM level 4/5 compliant and to implement ISMS (Information SecurityManagement System).

CORPORATE GOVERNANCE

A report on Corporate Governance as per Clause 49 of the ListingAgreement with the Stock Exchanges is provided elsewhere in thereport.

TECHNOLOGY, R & D AND FOREIGN EXCHANGE

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


DIRECTORS’ REPORT

The Technology Change Management Group of the Companycontinuously scans the market for new technologies, design systemsand processes to induct such new technologies.

The foreign exchange earnings and outgoes for the year ended 31st

March, 2009

(Amount in Rs.)

2009 2008

Earnings 14,78,41,514 19,58,04,764

Outgoes 6,72,627 19,28,201

PERSONNEL

The Particulars of Employees, as per Section 217(2A) of The

Companies Act, 1956 read with The Companies (Par ticulars of

Employees) Rules, 1975 is Nil.

DIRECTOR’S RESPONSIBILITY

Pursuant to Section 217(2AA) of the companies (Amendment) Act,2000, the Directors confirm that in preparation of the annual accounts,the applicable accounting standards have been followed. Appropriateaccounting policies have been selected and applied consistently andjudgment and estimates made are reasonable and prudent so as togive true and fair view of the affairs of the Company as on 31stMarch, 2009, and of the profit of the Company for the period 1stApril 2008 to 31st March, 2009. Proper and sufficient care has beentaken for the maintenance of adequate accounting records inaccordance with the provisions of the Companies Act, 1956, forsafeguarding the assets of the Company and for preventing anddetecting fraud and other irregularities and the annual accounts have

been prepared on a going concern basis.

FIXED DEPOSITS

The Company has not accepted any fixed deposit during the year

under review pursuant to Rule – 4A of the Companies (Acceptance

of deposits) Rules, 1975.

DIRECTORS

Mr. Robin Ghosh and Mr. V. K. Chhinkwani will retire by rotation atthe ensuing Annual General Meeting and being eligible offerthemselves for re-appointment.

AUDITORS

M/s. Goenka Shaw & Co., Chartered Accountants, proposed to beappointed as the Auditors of the Company in place of M/s. N. C.Ganguli & Co., Chartered Accountant who resigned from the office of

Auditor of the Company due to other preoccupations.

ACKNOWLEDGEMENT

Your Directors take this opportunity to thank its customers both inIndia and abroad, investors, business partners, bankers, financialinstitutions, business associates and advisors for their consistentsupport to the Company. Your Directors wishes to express its specialappreciation to the outgoing Auditor Mr. N. C. Ganguly for his unstintedsupport and guidance during his decade long association with theCompany. Your Directors place on record their appreciation of thecontributions made by employees at all level through hard work,cooperation and dedication, which has enabled the Company to moveforward. Your Directors once again take this opportunity to thank theGovernments of India, UK, UAE, Holland, Australia & USA for theircooperation and assistance in enabling your Company to enter theglobal marketplace.

For and on behalf of the Board of Directors

Sd/- Sd/-Place : Kolkata, India S. V. Ramani B. HariDate : 30th June, 2009 Whole-time Director Managing Director

and Secretary


MANAGEMENT DISCUSSION AND ANALYSIS


OVERVIEW

ECONOMIC OVERVIEW

The global economic melt down during the 2nd half of 2008-09adversely affected the IT business prospects across the continents.Considerable reductions in IT spends across geographies haveresulted in sharp decrease in the new business. Companies reducedIT spending either by delaying the decision or by putting somediscretionary spending on new IT projects on hold. This in turn led

to both pricing and volume pressure for IT service providers.

INDUSTRY OVERVIEW

As per the NASSCOM Strategic Review 2009 the global technologyspent is expected to increase to US$ 2000 billion by 2012 at aCAGR of 5.2 percent. The Repor t also indicates that IT servicessourcing market is expected to grow substantially globally with IToutsourcing and the BPO sub-segment expected to grow at 8.8percent CAGR by 2012. The ability to design, develop, implementand maintain advance technology platform and solution to addressbusiness and client needs has become priority for Corporations worldwide.

The effective use of offshore technology services offers a variety ofbenefits, including lower cost of ownership of IT infrastructure, lowerlabor costs, improved quality and innovation, faster delivery oftechnology solutions and more flexibility in scheduling. In addition,companies are also recognizing the benefits of offshore technologyservice providers in software research and development and relatedsupport functions, and are outsourcing a greater portion of these

activities. The range of services delivered offshore is also increasing.

The NASSCOM Strategic Review 2009 indicates that the large and

growing pool of skilled professionals has been a key driver of therapid growth in the Indian IT-ITES sector and that India accounts forover 28 percent of the total suitable talent pool available to work inthe IT-BPO sector across all the potential global sourcing low-cost

locations.

The Company’s major offering in the Industry includes:

1. IT Solutions and Offshore Remote Infrastructure ManagementServices

2. Online Web application through the flagship por talTendertimes.com & IndiaOneStop.com

3. IT Services, Support and Technology solutions offering endto end solutions to clients

4. Multimedia and Web Services

5. Enterprise Mobile applications

6. Industry Vertical ERP implementation being business partners

of Microsoft, SAP, Oracle and Open Bravo.

OPPORTUNITIES & THREATS

Opportunities :

The Indian domestic market though highly competitive and pricesensitive is presently better placed than many other geographiesand offers immense oppor tunities for growth in business .Ourexpertise helps our clients improve their own efficiencies; createbetter value for their end customers and to become more competitive.Our comprehensive, end-to-end technology-based solutions enablesus to offer services through our broad network of relationships,increase our dialog with key decision makers within each client, andincrease the points of sale for new clients. As a result, we believewe are able to capture a greater share of our clients’ technologybudgets.

Numerous developments in the domestic market are also likely toresult in higher demand for IT services particularly in e-governance,banking and customer service support system, IT education andresearch.

In the coming years, Ontrack is trying to substantiate its position inthe global markets such as US, Australia etc., consequent uponintegration of the Australian entity as a wholly owned subsidiary of

the Company.

Threats :

India has so far been the favoured destination for IT services for itshuge talent pipeline as well as effective servicing capabilities.Increased competitive pressures are driving costs higher as a resultof wage inflation due to the intense competition for skilled humanresources. Pricing pressures are also increasing due to heightenedcompetition from global and Indian IT companies. Attrition, as wellas managing salary expectations, are challenges. Competition fromother developing countries may create downward pressure on pricesas service providers in other parts of the world, including China,Malaysia, Brazil, Mexico, Russia and Eastern Europe enter the IT

service market.

FINANCIAL PERFORMANCE

The Company has earned total revenue of Rs. 2419.33 lacs in fiscal

2009 compared to Rs. 2818.80 lacs in fiscal 2008.



NET WORTH

The Company’s total net worth stood at Rs. 809.73 lacs against Rs.

1556.61 lacs in the previous year.

SEGMENT–WISE PERFORMANCE

Separately given

RISK & CONCERNS

The Company which is mainly concentrating on international markets,is exposed to the risk of the highly volatile technology businessenvironment. It is not a position to perceive what kind of risks it may

have to confront in future which is a major cause of concern.

RISK MANAGEMENT

The Company has started a process of risk assessment for everyproject it executes and that gets constantly monitored by the

management.

OUTLOOK

Mentioned in details for every operating in the section “Review by

Operating Groups”

DISASTER PREVENTION & RECOVERY

Your company has developed a well laid-out disaster recovery andprevention plan. The Company can replicate any project within the

shortest possible time.

QUALITY

The ISO 9001-2000 certification includes company’s state-of-the-art Global Delivery Centre at Salt Lake, Kolkata. ISO internal auditchecks are conducted once every quar ter for all divisions includingaccounts department that was brought under the purview of ISOAudit since 2006. The Company has taken initiatives to becomeCMM level 4/5 compliant and to implement ISMS (Information

Security Management System).

MANPOWER & HRD

The total employee strength on 31st March 2009 is 149. During theyear 45 new recruitments were done. HR initiatives, policies andstrategies were undertaken in the area of recruitment, training and

motivation to help the Company emerge as an employer of choice.


REPORT ON CORPORATE GOVERNANCE


COMPANY’S PHILOSOPHY

At Ontrack Systems Limited, 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 at Ontrack Systems Limited believe that Corporate Governance is a systemic process by which companies are directed and controlled to enhancetheir wealth generating capacity. The Company believes that the governance process should ensure that management of the company should be insuch manner that meets stakeholders’ aspirations and societal expectations.

At Ontrack Systems Limited, we view corporate governance in its widest sense, almost like a trusteeship; it is a policy to be professed, a value to beimbibed and an ideology to be ingrained in corporate culture. Corporate governance goes much beyond mere compliance; it is not a simple matterof creating checks and balances. The Company aims to develop capabilities and identify oppor tunity 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 fullcompliance with the norms and disclosures that have to be made on Corporate Governance format.

BOARD OF DIRECTORS

A. Composition

The details of the Board of your Company for the year 2008–2009 are given below :-

Sl. No. Name of Director Category of Directorship Designation

1. Mr. B. Hari Promoter Managing Director

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

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

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

5. 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 otherrelationship with the Company, its promoters, its management or its subsidiaries, which in the judgement of the Board may affect the independence ofjudgement of Directors.

NO OF BOARD MEETINGS:

Four Board Meetings were held during the year ended 31st March 2009. The Board Meetings were held on 30th June 2008, 30th July 2008, 30thOctober 2008 and 22nd January 2009

B. Attendance at each meeting of the Board

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

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

Year during the year other companies

Mr. B. Hari 4 4 6 Yes

Mr. S. V. Ramani 4 3 1 No

Mr. Vijay Kumar Chhinkwani 4 4 – No

Mr. Robin Ghosh 4 4 – Yes

Mr. Ramdevan V Krishnaswamy 4 1 – Yes



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

INFORMATION SUPPLIED TO THE BOARD

Among others, these includes the following:

Review of annual operating plans of business, capital budgets, updates.

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

Minutes of the meeting of audit committee and other committees.

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

Materially important show cause, demand, prosecution and penalty notices.Any materially relevant default in financial obligations to and by the Company and substantial non payment for the goods and services provided by theCompany.

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

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

Significant labour problems and their proposed solutions.

Significant development on the human resources and industrial relations fronts.

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

Quarterly results of foreign exchange exposure and the steps taken by management to limit the impact of adverse exchange rate movement.Non compliance of any regulatory or statutory provision or listing requirements as well as shareholder services such as non payment of dividend anddelay in share transfer.

The Board of Ontrack Systems is routinely presented with all the information under the above heads whenever applicable or materially significant. Theseare submitted either as part of agenda papers well in advance of the Board meetings or tabled in the course of Board meetings before the appropriatecommittees 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 itsDirectors for the year ended 31st March, 2009 that may have the potential conflict with the interests of the Company at large.

All non material related party transactions in the normal course of business and conducted at the arms length are duly recorded in the Register of Contractsmaintained by the Company pursuant to Section 301 of the Companies Act, 1956.

COMMITTEES OF THE BOARD

Audit Committee

The Audit Committee of the Company performs the following functions:

Overseeing the Company’s financial reporting process and disclosure of the financial reports to ensure that the financial statement is correct,sufficient and credible.

Recommending the appointment of Statutory auditors of the Company.

Constitution and review of internal control and internal audit system.

Review of accounting and financial practice.

Advice on risk management policies.

COMPOSITION:The Audit Committee comprises of two Independent Non-executive Directors and one Executive Director. All the members including the Chairman haveadequate financial and accounting knowledge. The details of the Audit Committee of your Company for the year 2008–2009 are given below:-

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

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

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

3. Mr. Ramdevan V Krishnaswamy Member 4 3

4. Mr. S. Prasad Convenor 4 4

5. Mr. A. K. Ganguli (Statutory Auditor) Invitee 4 4



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 performance bonus payable to the Whole-time Director and Chief Financial Officer.

d) Such other matters as the Board may from time to time request the Remuneration Committee to examine and recommend/approve.

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

:

(iv) A meeting of the Remuneration Committee was held on 10th November, 2008

(v) Remuneration Policy:

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

The Company pays remuneration by way of salary, benefits, perquisites and allowances (fixed component) to its Managing Director. Annual incrementsare 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 paidfor attending meetings of other committees.

(vi) Details of Remuneration for the year ended 31st March, 2009

(a) NON EXECUTIVE DIRECTORS:

(b) WHOLE – TIME DIRECTOR:

(c) CHIEF EXECUTIVE OFFICER & MANAGING DIRECTOR

Name CategoryNo. of Meetings during

the year 2008-09

Held Attended

Mr. Robin Ghosh Independent, Non executive Director 1 1

Mr. S. V. Ramani Whole-time Director 1 1Ms. Simi Hari Head Corporate HR 1 1

Mr. Saswat Kumar Convenor 1 1

Name Commission (Rs.) Sitting Fees (Rs.)

Name PF Contribution (Rs.) Stock OptionsCommission(Rs.)

Name PF Contribution (Rs.) Stock OptionsCommission(Rs.)

Mr. Ramdevan V Krishnaswamy Nil 5000

Mr. V. K. Chhinkwani Nil 20000

Mr. Robin Ghosh Nil 20000

Mr. B. Hari 2040000 122400 Nil Nil

Mr. S. V. Ramani 960000 57600 Nil Nil

Remuneration (Rs.)

Remuneration (Rs.)



(d) Period of Contract of MD & CEO: 5 years from August 17, 2005

(e) Period of Contract of Whole-time Director: 5 Years from August 17, 2005

(f) Details of the shares of the Company held by Directors as on 31st March, 2009 are given below:

SHARE TRANSFER & SHAREHOLDER GRIEVANCE COMMITTEE

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

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

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

(Whole time Director & Secretary).

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

the Director’s Report.

MANAGEMENT

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

CEO & CFO CERTIFICATION TO THE BOARD

The CEO & CFO have certified to the Board that Financial Statement together with Cash Flow Statement for the year 2008-09 to the best of their

knowledge is true and fair.

Name No .of Shares

Mr. B. Hari 19,33,100

Mr. S.V. Ramani 3,975


SHAREHOLDERS’ INFORMATION


GENERAL INFORMATION FOR SHAREHOLDERS

(a) As indicated in the Notice to our Shareholders, the 21st Annual General Meeting of the Company will be held on Friday the 25th day of September 2009 at11.30 a.m. at Narada Gana Sabha Trust (Sathguru Gnanananda Hall) 314 (Old No. 254), T. T. K. Road, Chennai, India.

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

(c) Date of book closure: From 22nd to 25th September (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 normallycompleted 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 DepositorySystems in India – NSDL (National Securities Depository Limited) and CDSL (Central Depository Services (India) Limited). As on 31st March, 2009,approximately 90% of shares of the Company has been dematerialized.

(h) Address for correspondence :

(i) Registered Office : New No. 48, Old No. 30, Second Floor,Dr. Madhavan Nair Road, Mahalingapuram, Chennai - 600 034Phone: +91-44-4308 1246/47, Telefax: +91-44-4308 1248

(ii) Compliance Office and : 19, Ekdalia Road, Kolkata – 700 019Secretarial Department Phone: 2460 1293/1304/1980/1981, Fax : 2460 1281

Email: [email protected]

(iii) Share Registrar andTransfer Agents : Cameo Corporate Services Ltd.

Subramanian Building, 1, Club House RoadChennai – 600 002Phone: 044-2846 0390–95, Fax : 044 2846 0129Email: [email protected]

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 havepotential 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 relatedto capital markets, during the last three years.

MEANS OF COMMUNICATION

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

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



PATTERN OF SHARE HOLDINGSAS ON 31ST MARCH, 2009

PHYSICAL & ELECTRONIC

DISTRIBUTION OF SHAREHOLDINGSAS ON 31ST MARCH, 2009

PHYSICAL & ELECTRONIC

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

No. Total Shares Total Shares

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

Upto – 100 1028 28.19 61850 0.78

101 – 500 1605 44.01 435405 5.48

501 – 1000 454 12.45 359889 4.53

1001 – 2000 231 6.33 357153 4.49

2001 – 3000 103 2.82 270115 3.39

3001 – 4000 42 1.15 150212 1.89

4001 – 5000 28 0.77 130024 1.63

5001 – 10000 69 1.89 491183 6.18

10001 and above 87 2.39 5694469 71.63

Total 3647 100.00 7950300 100.00

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

Resident 3401 3727780 46.89

NRI 45 204005 2.56

Body Corporate 169 1483273 18.66

Promoters 6 2474992 31.13

Directors / relatives 25 59460 0.75

Clearing Members 1 790 0.01

Total 3647 7950300 100.00



STOCK MARKET PRICE MOVEMENT

The monthly high and low quotations and volume of shares traded at the Bombay Stock Exchnage (BSE) during the financial year 2008-09 (12 months) aregiven in the table below :

CSE

Period High Low Total No. of

(Rs.) (Rs.) shares traded

April, 2008 15.77 12.50 76188

May, 2008 16.50 13.40 77368

June, 2008 14.85 9.78 88644

July, 2008 10.90 9.40 59453

August, 2008 11.40 8.94 33898

September, 2008 10.35 8.00 42934

October, 2008 9.34 5.00 76821

November, 2008 8.03 5.24 25697

December, 2008 6.50 4.74 24629

January, 2009 6.40 4.00 11700

February, 2009 4.41 3.39 11560

March, 2009 5.01 3.33 39277


GENERAL BODY MEETING

(i) GENERAL MEETINGS:

(a) Annual General Meetings:

YEAR LOCATION DATE TIME

2005-2006 Hotel Residency Tower 27th September, 2006 11.30 A.M.

Sir Thyagaraya Road, T. Nagar

Chennai - 600 017

2006-2007 Hotel Residency Tower 14th September, 2007 11.30 A.M.

Sir Thyagaraya Road, T. Nagar

Chennai - 600 017

2007-2008 New Woodlands Hotel 26th September, 2008 11.30 A.M.

Dr. Radhakrishan Road, Mylapore

Chennai

NOMINATION FACILITY

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

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

The facility of nomination is not available to non-individual shareholders such as bodies corporate, financial institutions, Kartas of Hindu Undivided Families and

holders of Power of Attorney. In case of any assistance, please contact Cameo Corporate Services Ltd., Subramanian Building, 1, Club House Road, Chennai - 600

001 at the R & TA of the Company.



ANNEXURE TO DIRECTORS’ REPORT

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

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

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

I confirm that the Company has in respect of the financial year ended March 31, 2009, 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, 2009.

Place : Kolkata B. Hari

Dated : 30.06.2009 CEO & Managing Director


SECRETARIAL COMPLIANCE CERTIFICATE

AUDITOR’S CERTIFICATE

To the Members of Ontrack Systems Limited.

We have examined the compliance of conditions of corporate governance

by Ontrack Systems Limited for the year ended March 31, 2009, as

stipulated in Clause 49 of the Listing Agreement of the Company with Stock

Exchanges.

The compliance of conditions of corporate governance is the responsibility

of the management. Our examination was limited to procedures and

implementation thereof, adopted by the Company for ensuring the

compliance of the conditions of the Corporate Governance. It is neither an

audit nor an expression of opinion on the financial statements of the

Company.

In our opinion and to the best of our information and according to the

explanations given to us, we certify that the Company has complied with

the conditions of Corporate Governance as stipulated in the above mentioned

Listing Agreement.

We further state that such compliance is neither an assurance as to the

future viability of the Company nor the efficiency or effectiveness with

which the management has conducted the affairs of the Company.

For N. C. Ganguli & Co.

Chartered Accountants

Sd/-

Kolkata, India (A. K. Ganguli)

30th June, 2009 Proprietor

Membership No. 51862


AUDITORS’ REPORT

AUDITORS’ REPORT

1. We have audited the attached Balance Sheet of Ontrack Systems

Limited, as at 31st March 2009 and also the Profit & Loss Account

and the Cash Flow Statement for the year ended on that date annexed

thereto. These financial statements are the responsibility of the

Company’s management. Our responsibility is to express an opinion

on these financial statements based on our audit.

2. We conducted audit in accordance with the auditing standards

generally accepted in India. Those Standards require that we plan

and perform the audit to obtain reasonable assurance about whether

the financial statements are free of material misstatement. An audit

includes examining, on a test basis, evidence supporting the amounts

and disclosures in the financial statements. An audit also includes

assessing the accounting principles used and significant estimates

made by management, as well as evaluating the overall financial

statement presentation. We believe that our audit provides a

reasonable basis for our opinion.

3. As required by the Companies (Auditor’s Repor t) Order, 2003, as

amended, issued by the Central Government of India in terms of

sub-section (4A) of Section 227 of the Companies Act, 1956, we

enclose in the annexure a statement of the matters specified in

paragraphs 4 and 5 of the said order.

4. Further to our comments in the Annexure referred to above, we

report that.

(a) We have obtained all the information and explanations, which

to the best of our knowledge and belief were necessary for the

purposes of our audit;

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

have been kept by the company so far as appears from our

examination of such books;

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

Statement dealt with by this report are in agreement with the

books of account;

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

Cash Flow Statement dealt with by this report comply with the

Accounting Standards referred to in sub-section 3C of Section

211 of the Companies Act, 1956.

e ) On the basis of written representations received from the

Directors, as on 31st March 2009 and taken on record by the

Board of Directors, we report that none of the Directors is

disqualified as on 31st March 2009 from being appointed as a

director in terms of clause (g) of sub-section (1) of Section

274 of the Companies Act, 1956;

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

to the explanations given to us, the said accounts read together

with the notes thereon give the information required by the

Companies Act, 1956, in the manner so required and give a

true and fair view in conformity with the accounting principles

generally accepted in India;

(i) in the case of the Balance Sheet, of the state of affairs of

the Company as at 31st March 2009;

(ii) in the case of the Profit & Loss Account, of the Loss for

the year ended on that date; and

(iii) in the case of Cash Flow Statement, of the Cash flows forthe year ended on that date.

For N. C. Ganguli & Co.Chartered Accountants

Sd/-Kolkata, India (A. K. Ganguli)30th June, 2009 Proprietor


AUDITORS’ REPORT TO THE MEMBERS


ANNEXURE TO AUDITORS’ REPORT


Referred to in paragraph 3 of our Report of even date

1. (a) The Company has maintained records of its fixed assets.

(b) Physical verification of major Fixed Assets was conducted

by the management during the year, which in our opinion is

reasonable having regard to the size of the Company and

nature of its Fixed Assets. No material discrepancies were

noticed on such verification.

(c) The Company has not disposed off substantial par t of its

Fixed Assets during the year.

2. (a) The management carried out physical verification of inventory

at reasonable intervals during the year. The inventory of

Trading Goods (excluding items lying with customers for

providing standby support for maintenance services) have

been physically verified by the Management during the year.

Trading Stock inventory lying with third par ties, has been

substantially confirmed by company’s own documents but

not by the par ties themselves. The inventory value of Work-

in-Progress and Consumable Stores and Spares have been

considered at the end of each quarter by the management

on reasonable estimated basis.

(b) In our opinion, the procedure of physical verification of

inventory followed by the management is reasonable and

adequate in relation to the size of the Company and the nature

of its business.

(c) The Company has maintained reasonable records of Trading

Stock and no material discrepancies in Trading Stock was

noticed on physical verification with book records and the

said discrepancies have been properly dealt with in the books

of accounts.

3. In our opinion and according to our information and explanation

given to us, the Company has not granted or taken any loan,

secured or unsecured , to or from companies, firms and other

par ties listed in the register maintained under section 301 of the

Companies Act, 1956. Accordingly , the provisions of sub clause

sub clauses (b), (c), (d), (f) and (g) of clause 4 (iii) of the

Companies (Auditors Repor t) Order, 2003 are not applicable to

the Company except one interest free advance amounting to Rs.

21.71 lacs received from Managing Director.

4. In our opinion, there are adequate internal control procedures

commensurate with the size of the Company and the nature of its

business with regard to purchase of Inventory, Fixed Assets and

for the sale of goods and services. During the course of our audit

we have not observed any continuing failure to correct major

weakness has been noticed in the internal control system.

5. According to information and explanation given to us, we are of

the opinion that there are no contracts or arrangement that need

to be entered in to the register refer to in Section 301 of the

Companies Act, 1956 accordingly, the provisions of sub clauses

(a) and (b) of Clause 4 (v) of the Companies (Auditor’s Repor t)

Order, 2003 are not applicable to the Company.

6. The Company has not accepted any deposit from the public to

which the provisions of section 58A and 58AA of the Companies

Act 1956 and the rules framed there under apply.

7. In our opinion, the company has an internal audit system

commensurate with the size and nature of its business.

8. According to the information and explanations given to us,

maintenance of cost records have not been prescribed by the

Central Government under section 209 (1)(d) of the Companies

Act, 1956.

9. (a) According to the records of the company, some statutory

dues per taining to Provident Fund, Employees’ State

Insurance, Income Tax and VAT remained to be deposited

with the appropriate authorities in time.

(b) According to the information and explanation given to us

there were undisputed amount payable in respect of

Provident Fund of Rs. 18.87 lacs, Employees State Insurance

of Rs. 8.33 lacs, VAT of Rs.13.78 lacs and Professional Tax

(Employees) of Rs. 4.86 lacs and FBT Rs. 1.60 lacs

outstanding as at 31st March, 2009 for a period of more

than six months from the date they became payable. All other

undisputed statutory dues have been paid with some delays.

(c) The Company has disputed demand from Income Tax

department, the amounts involved and the forum where the

dispute is pending are detailed in the statement given below:



Sl. Name of the Nature of Dues Amount Forum whereNo. statute (in Rs.) dispute is pending

1. Income Tax Assessed Demand 8,36,456/- CIT (A) VIfor A.Y. 2003-04 Chennai

2. Income Tax Assessed Demand 2,95,553/- - Do -for A.Y. 2004-05


4. Income Tax Assessed Demand 4,36,678/- AO, VIfor A.Y. 2006-07 Chennai


10. During the year the Company posted a net loss for the first time

which exceeds 50 percent of the networth at the end of the

year.

The Company has incurred cash loss only during this financial

year and has generated cash profit immediately in the preceding

year.

11. The Company has not defaulted in repayment of dues to banks/

financial institutions with respect to its borrowings.

12. According to the information and explanations given to us, the

Company has not granted any loans or advances by way of pledge

of shares, debentures and other securities.

13. The Company is not a chit/nidhi/mutual benefit funds/society.

14. According to the information and explanations given to us, the

Company is not dealing or trading in Shares, Securities,

Debentures and other investments.

15. On the basis of the information and explanations given to us, the

Company has not given any guarantee for loans taken by others

from banks or financial institutions.

16. In our opinion and according to the information and explanation

given to us, no term Loan have been raised but a fresh WCTL of

Rs. 50 Lacs have been disbursed for the purpose for which it

was raised.

17. On the basis of our examination and according to the information

and explanations given to us, the company has not used the

funds borrowed on shor t term basis for long term purpose and

vice-versa.

18. During the year, the Company has not made any preferential

allotment of shares to par ties and Companies covered in the

register maintained under Section 301 of the Companies Act,

1956.

19. During the year, the Company has not issued any Debentures.

20. The Company has not raised any money by public issues during

the year.

21. According to the information and explanations given to us bymanagement, which have been relied upon by us, no materialfraud on or by the company has been noticed or repor ted duringthe period under audit.

For N. C. Ganguli & Co.

Chartered Accountants

Kolkata, India (CA. A. K. Ganguli)

30th June, 2009 Proprietor



BALANCE SHEET

As on As on31.03.2009 31.03.2008

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

SHAREHOLDERS’ FUNDS

Capital 1 7,95,03,000.00 7,95,03,000.00

Reserves and surplus 2 5,44,56,300.00 7,72,97,939.28

13,39,59,300.00 15,68,00,939.28LOAN FUNDS

Secured loans 3 12,37,45,746.88 13,09,25,609.29

Unsecured loans 4 57,66,918.26 67,56,500.0512,95,12,665.14 13,76,82,109.34

26,34,71,965.14 29,44,83,048.62

II APPLICATION OF FUNDSFixed Assets

Gross block 6 14,10,97,020.13 17,04,32,432.93Less: Depreciation & impairment loss 4,71,98,768.23 6,73,28,183.92

Net block 9,38,98,251.90 10,31,04,249.01

INVESTMENTS 7 6,62,19,102.63 6,11,35,706.24

DEFERRED TAX ASSETS 5 19,57,234.00 23,39,325.00

A. Current assets, loans and advances

Stock-in-trade 8 1,95,43,622.85 3,03,56,764.47

Sundry debtors 9 9,68,81,245.43 12,67,05,839.26Cash & Bank balances 10 35,79,738.05 30,88,564.78

Loans & advances 11 5,36,65,514.00 6,15,00,895.10

17,36,70,120.33 22,16,52,063.61

B. Less : Current liabilities & provisions

Current liabilities 12 12,17,86,080.22 8,34,23,751.16Provisions 13 34,73,399.00 1,14,65,000.00

12,52,59,479.22 9,48,88,751.16

Net current assets (A-B) 4,84,10,641.11 12,67,63,312.45

Miscellaneous Expenditure 14 8,55,341.94 11,40,455.92

Profit & Loss Account 5,21,31,393.56 —

TOTAL 26,34,71,965.14 29,44,83,048.62

Accounting Policies & Notes on accounts 24Business profile 25Related par ty disclosure 26Segment Repor ting 27

In accordance with our repor t of even date attached herewith.


Sd/- Sd/- Sd/-Kolkata, India (B. Hari) (S. V. Ramani) (A. K. Ganguli)30th June, 2009 Managing Director Whole-time Director and Secretary Proprietor

BALANCE SHEETAS ON 31ST MARCH, 2009


PROFIT & LOSS ACCOUNT

PROFIT & LOSS ACCOUNTFOR THE YEAR ENDED 31ST MARCH, 2009

Year ended Year ended31.03.2009 31.03.2008

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

Sales 15 24,19,32,957.10 28,18,80,201.28Other Income 16 1,16,40,141.82 16,15,722.55

TOTAL 25,35,73,098.92 28,34,95,923.83

EXPENDITURE

(Increase)/decrease of stock–(WIP) 17 77,58,489.31 (24,48,057.39)

Cost of purchases 18 5,48,95,735.63 4,32,99,729.58

Consumption of Con. Stores 19 13,97,701.71 19,92,836.11

Staff Cost 20 3,14,07,559.79 3,67,31,549.76

Operating expenses 21 11,15,57,186.82 10,62,69,013.54

Administrative expenses 22 8,34,71,033.94 5,22,57,111.38

Finance charges 23 1,80,05,577.47 1,64,58,712.85

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

Depreciation & impairment loss 6 1,89,85,642.11 2,47,80,613.20

Provision for Bad & Doubtful Debts 9 — 7,35,496.00

TOTAL 32,77,64,040.76 28,03,62,119.01

Profit before tax (7,41,90,941.84) 31,33,804.82

Less: Provision for Tax — 10,65,000.00

Provision for FBT 4,00,000.00 4,00,000.00

Add: Deferred Tax Assets/(Liabilities) 5 (3,82,091.00) 3,19,316.00

Profit after tax (7,49,73,032.84) 19,88,120.82

Add: Surplus of Profit & Loss A/c 2,28,41,639.28 2,10,53,518.46

(5,21,31,393.56) 2,30,41,639.28

Appropriations:

Transfer to general reserve — 2,00,000.00

Balance C/F to Balance Sheet (5,21,31,393.56) 2,28,41,639.28

(5,21,31,393.56) 2,30,41,639.28Accounting policies & notes on accounts 24Business profile 25Related par ty disclosure 26Segment repor ting 27EPS after tax — 0.26(Basic & Diluted) (Refer Note No. 2 (xv) of Sch–24)

In accordance with our repor t of even date attached herewith.




CASH FLOW STATEMENT

CASH FLOW STATEMENTFOR THE YEAR ENDED 31ST MARCH, 2009

31.03.2009 31.03.2008Rs. Rs. Rs. Rs.

A. Cash flow from operating activitiesNet profit before tax and extraordinary items (7,41,90,942) 31,33,805

Adjustment for– Depreciation 1,89,85,642 2,47,80,613– Deferred revenue expenses written off 2,85,114 2,85,114– Interest paid 1,80,05,577 1,64,58,713– Bad debts written off 3,31,29,667 98,54,500– Provision for bad & doubtful debts — 7,35,496– Other income (27,14,205) (8,28,650)– (Profit)/loss on sale of assets (3,75,100) 6,73,16,695 — 5,12,85,786

– Operating profit before working capital changes (68,74,247) 5,44,19,591Adjustment for :– Sundry debtors (increase) / decrease (33,05,073) 89,48,717– Stock in trade (increase) / decrease 1,08,13,141 (57,30,605)– Loans & advances (increase) / decrease 13,49,117 (1,79,12,400)– Current liabilities increase / (decrease) 3,03,50,673 3,92,07,857 1,65,89,455 18,95,167– Cash generated from operations 3,23,33,610 5,63,14,758– Direct tax paid (net of refund) (64,86,264) (64,86,264) 16,07,174– Net cash from operating activities 3,88,19,874 5,47,07,584

B. Cash flow from investing activitiesPurchase of fixed assets (97,79,645) (1,93,01,448)Sale of fixed assets 3,75,100 —Purchase of investments (50,83,397) (3,31,31,234)Dividend on shares (Subsidiary) 62,194 5,067Interest received 26,52,011 8,23,583

Net cash used in investing activities (1,17,73,737) (5,16,04,032)

C. Cash flow from financing activities– Proceeds from borrowingsLong term (1,04,61,675) (96,47,703)Short term 22,92,231 30,68,436Interest paid (1,80,05,577) (1,64,58,713)Increase in capital with premium — 2,53,12,500Dividend and dividend tax paid — (43,87,488)Net cash from financing activities (2,61,75,021) (21,12,968)

Net increase/(decrease) in cash &cash equivalents (A+B+C) 8,71,117 9,90,584

Cash & cash equivalents – opening balance 27,08,621 17,18,037

Cash & cash equivalents – closing balance 35,79,738 27,08,621

Note : Cash and cash equivalents consists of cash in hand and balance and short term deposits with Banks, including overdrawn balance ofBank, which are freely encashable.

As per our report of even date attachedFor N. C. Ganguli & Co.Chartered Accountants



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

As at As at

31st March 2009 31st March 2008

(Amount in Rs.) (Amount in Rs.)

SCHEDULE NO. 1

SHARE CAPITAL

Authorised:

20000000 Equity shares of Rs.10/- each 20,00,00,000.00 20,00,00,000.00

Issued, subscribed & paid up :

7950300 Equity shares of Rs.10/- each fully paid up 7,95,03,000.00 7,95,03,000.00

7,95,03,000.00 7,95,03,000.00

SCHEDULE NO. 2

RESERVES & SURPLUS

Share Premium

As per last Balance Sheet 2,41,18,300.00 2,41,18,300.00

Add : this year 2,08,12,500.00 2,08,12,500.00

4,49,30,800.00 4,49,30,800.00

Employee Stock Options Outstanding 1,25,500.00 1,25,500.00

General Reserves

As per last Balance Sheet 94,00,000.00 92,00,000.00

Add: Transferred from Profit and Loss A/c — 2,00,000.00

94,00,000.00 94,00,000.00

Surplus in Profit & Loss A/c — 2,28,41,639.28

5,44,56,300.00 7,72,97,939.28

SCHEDULE TO ACCOUNTS



SCHEDULES FORMING PART OF THE BALANCE SHEET ANDPROFIT & LOSS ACCOUNT

As at As at

31st March 2009 31st March 2008

(Amount in Rs.) (Amount in Rs.)

SCHEDULE NO. 3

SECURED LOAN

OCC limit with Indian Bank, Strand Road Branch 4,05,76,182.38 4,04,34,957.96

(On hypothecation of Stocks and Book Debts)

OCC limit with SBI, Commercial Branch 4,96,55,086.50 5,15,14,498.33

(On hypothecation of Stocks and Book Debts)

Working Capital Term Loan from SBI-Commercial Branch 50,00,000.00 —

(On hypothecation of Book Debts)

Term Loan with SBI-Commercial Branch 2,85,14,478.00 3,89,76,153.00

(On Hypothecation/lien of Building, Plant & Machinery

and Personal Guarantee of Managing Director)

12,37,45,746.88 13,09,25,609.29

SCHEDULE NO. 4

UNSECURED LOANS

Auto Loan 1,72,948.21 —

Advance received from Corporate 55,93,970.05 67,56,500.05

57,66,918.26 67,56,500.05

SCHEDULE NO. 5

DEFERRED TAX (Liabilities) / Assets

Deferred tax (Liabilities) / Assets 23,39,325.00 20,20,009.00

Add/Less : Deferred tax (Liabilities) / Assets (3,82,091.00) 3,19,316.00

19,57,234.00 23,39,325.00


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

31st March 2009 31st March 2008(Amount in Rs.) (Amount in Rs.)

SCHEDULE NO. 7INVESTMENT (AT COST) TRADE,LONG TERM (AT COST) QUOTED:Investment in Equity with 11,900.00 11,900.00Tata Consultancy Services Ltd.(28 Nos. Equity shares of Rs.425/- each fully paid up)Market value @ Rs. 540/- per share

LONG TERM (AT COST) UNQUOTED :IN SUBSIDIARY COMPANIESInvestment in Equity withOntrack Systems (UK) Ltd. 1,31,99,722.93 1,31,99,722.93(100% Wholly Owned Subsidiary).(17,50,000 Ordinary shares of 10 pence each fully paid up)Investment in Equity withOntrack Systems (UAE) Ltd. 48,64,972.00 48,64,972.00(100% Wholly Owned Subsidiary)(3,000 Ordinary shares of AED 150/- each fully paid up)Ontrack Systems (Aust.) Pty. Ltd. 3,82,14,630.19 3,31,31,233.80(100% Wholly Owned Subsidiary)(394010 Ordinary shares of AUD 1.00 each fully paid up)Investment in Ontrack Global Services Ltd. 94,25,940.00 94,25,940.00(99.99% share holding).(942594 Ordinary shares of Rs.10/- each fully paid up)IN OTHER COMPANIESInvestment in Equity withOntrack Systems B.V, Netherland 5,01,729.40 5,01,729.40(Current year 26%, previous year 51% share holding)(9,256 Ordinary shares of Euro 1/- each fully paid up)PersonalMedic Limited 208.11 208.11(3 Ordinary shares of £ 1/- each fully paid up)

6,62,19,102.63 6,11,35,706.24SCHEDULE NO. 8STOCK –IN–TRADE AT COSTWork–in–progress 1,40,98,461.42 2,18,56,950.73Consumable and spares 14,78,957.95 22,47,742.66Trading stock 39,66,203.48 62,52,071.08

1,95,43,622.85 3,03,56,764.47SCHEDULE NO. 9SUNDRY DEBTORSUnsecuredA. Debts outstanding for period of more than six months

Considered good 3,22,08,789.34 3,17,85,271.36Considered doubtful — 7,35,496.00

3,22,08,789.34 3,25,20,767.36B. Others – Considered good 6,46,72,456.09 9,49,20,567.90

9,68,81,245.43 12,74,41,335.26Less: Provision for doubtful debts — 7,35,496.00

9,68,81,245.43 12,67,05,839.26SCHEDULE NO. 10CASH AND BANK BALANCECash in Hand 7,800.68 7,475.90Cash at Bank(i) Current A/C 49,391.11 —(ii) Dividend A/C - Indian Bank 1,010.00 1,040.00(iii) Fixed Deposit A/c 23,72,624.82 22,15,308.82(iv) Gratuity A/C - Indian Bank 1,756.00 1,786.00(v) EEFC GBP A/c 1,12,123.16 3,263.19(vi) EEFC USD A/c 7,527.69 2,90,915.09(vii) Dividend unpaid A/c 4,62,100.13 4,63,450.13(viii) Accrued Interest on FD 4,31,731.00 —(ix) Bank balance with other bank in Current A/c 1,33,673.46 1,05,325.65

ASAHI BANK, KANDA JAPAN(Maximum balance held during the year Rs. 1,33,673.46 and 35,79,738.05 30,88,564.78Previous year Rs. 1,05,325.65)




As at As at31st March 2009 31st March 2008(Amount in Rs.) (Amount in Rs.)

SCHEDULE NO. 11LOANS AND ADVANCES(Unsecured - considered good)Rent advances 42,851.54 24,500.00Advance Income Tax, FBT and TDS 26,99,268.00 91,85,532.22Advance to Staff 27,16,289.38 12,97,688.81Other advances 93,87,187.60 1,90,88,060.20Advance to supplier 36,68,471.00 —Prepaid expenses 4,63,731.33 11,24,968.65Deposit 2,10,54,814.12 2,04,64,335.12Advance to Subsidiaries (pending allotment) 1,11,32,901.03 78,15,810.10Advance for proper ty 15,00,000.00 15,00,000.00(Unsecured - doubtful)Other advance 10,00,000.00 10,00,000.00

5,36,65,514.00 6,15,00,895.10SCHEDULE NO. 12CURRENT LIABILITIESSUNDRY CREDITORSFor goods supplied 3,01,90,154.27 3,23,43,580.62For expenses 3,05,26,543.40 2,14,70,521.38Unexpired service income 5,54,366.11 3,20,752.71Dividend unpaid account 4,62,100.13 4,63,450.13Service tax deposit from customer 6,34,548.83 7,36,882.55Overdrawn - Axis Bank — 3,79,943.77Payable to Employee 2,00,601.23 —Advance for share application 2,38,34,100.00 —Other advance 21,70,843.25 —Advance from Customers 3,32,12,823.00 2,77,08,620.00

12,17,86,080.22 8,34,23,751.16SCHEDULE NO. 13PROVISIONSProvision for taxation 18,73,399.00 1,02,65,000.00Provision for Fringe Benefit Tax 16,00,000.00 12,00,000.00

34,73,399.00 1,14,65,000.00

SCHEDULE NO. 14MISCLLENEOUS EXPENDITUREDeffered Revenue Expenditure - Brand Building 11,40,455.92 14,25,569.901/5 written off 2,85,113.98 2,85,113.98

8,55,341.94 11,40,455.92




SCHEDULE NO. 15

SALES

Domestic 9,40,91,442.90 8,60,75,437.12Expor t 14,78,41,514.20 19,58,04,764.16

24,19,32,957.10 28,18,80,201.28SCHEDULE NO. 16

OTHER INCOME

Miscellaneous Income 8,83,917.62 4,58,856.44Profit on Sale of Vehicle + Other Assets 3,75,100.00 —Commission & Discount received 16,48,627.31 3,28,215.50Dividend Received 62,194.00 5,067.30

Interest Received 26,52,010.79 8,23,583.31Currency Fluctuation Profit 60,18,292.10 —

1,16,40,141.82 16,15,722.55SCHEDULE NO. 17

INCREASE/DECREASE IN W.I.P.

Opening stocks: 2,18,56,950.73 1,94,08,893.34Closing stocks: 1,40,98,461.42 2,18,56,950.73

(Increase)/Decrease in W.I.P. 77,58,489.31 (24,48,057.39)

SCHEDULE NO. 18

COST OF PURCHASEOpening stocks 62,52,071.08 43,72,527.00Add: Purchase 5,26,09,868.03 4,51,79,273.66

5,88,61,939.11 4,95,51,800.66

Less: Closing stocks 39,66,203.48 62,52,071.085,48,95,735.63 4,32,99,729.58

SCHEDULE NO. 19

CONSUMPTION OF CONSUMABLE STORESOpening stocks 22,47,742.66 8,44,739.25

Add: Purchase 6,28,917.00 33,95,839.5228,76,659.66 42,40,578.77

Less: Closing stocks 14,78,957.95 22,47,742.66

13,97,701.71 19,92,836.11

SCHEDULE NO. 20

STAFF COSTSalaries, Incentives and Bonus 2,86,81,263.65 3,40,50,267.15Employers contribution to Provident Fund 15,10,773.88 15,18,951.23Employers contribution to E.S.I 1,18,534.94 1,75,816.57

Contribution to group gratuity 55,000.00 3,59,235.00Insurance Benefit for Staff 10,41,987.32 6,27,279.81

3,14,07,559.79 3,67,31,549.76




SCHEDULES FORMING PART OF THE BALANCE SHEET ANDPROFIT & LOSS ACCOUNT


SCHEDULE NO. 21

OPERATING EXPENSESElectricity expenses 14,74,039.98 15,42,279.36Bandwith charges 15,35,368.55 16,45,991.01Professional and consultancy charge 65,93,053.02 70,05,327.15Repairs to machinery 17,14,119.19 8,35,954.39Insurance premium 93,025.00 1,23,956.43Hire charges 2,500.00 31,150.00Operative expenses for WOS-UAE 1,89,19,924.12 1,49,44,947.11Operative expenses for WOS-UK 8,12,25,156.96 8,01,39,408.09

11,15,57,186.82 10,62,69,013.54SCHEDULE NO. 22

ADMINISTRATIVE EXPENSESDirectors remuneration 31,80,000.00 31,80,000.00Rent 1,17,173.00 3,59,270.00Rates and Taxes 97,571.00 1,73,472.79Discount allowed 5,15,469.46 2,81,404.01Traveling and conveyance expenses 57,06,708.14 62,31,343.99Postage,Telephone and Telegram 14,70,569.06 15,94,675.37Printing & Stationary 7,55,671.80 7,10,405.09Business promotion 3,30,711.90 2,76,296.53Books and Periodicals 390.00 24,473.50Advertisement and Publicity 13,22,730.00 5,66,201.96Sundry subscription 33,000.00 60,852.00Office expenses 11,61,691.85 13,67,362.55Remuneration to Auditors 2,75,000.00 1,79,776.00Currency fluctuation Loss — 14,39,003.28Staff recruitment expenses — 1,15,407.00Staff training expense 3,61,350.00 49,360.00Staff welfare expenses 3,55,723.40 3,20,558.79Other charges 21,27,678.78 27,84,449.75Bad Debt 3,31,29,666.86 98,54,500.00Administrative expenses for WOS-UK 2,24,50,774.87 1,22,45,349.02Administrative expenses for WOS-UAE 1,00,79,153.82 1,04,42,949.75

8,34,71,033.94 5,22,57,111.38SCHEDULE NO. 23FINANCE CHARGESInterest 1,44,84,896.84 1,28,65,287.11Bank charges 35,20,680.63 35,93,425.74

1,80,05,577.47 1,64,58,712.85


SCHEDULE NO. 24

ACCOUNTING POLICIES AND NOTES ANNEXED TO AND FORM-ING PART OF ACCOUNTS FOR THE YEAR ENDED 31st MARCH,2009.

1. Statement of significant accounting policies

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

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

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

iii) Inventories of trading goods, spare parts and consumable storesare valued at lower of cost or market value. Outdated and damagedstocks are written off on technical evaluation. The WIP is valued atdirect cost attributed to projects at the end of each quarter based onstages of completion as certified by the management.

iv) The Company has a group gratuity policy with the Life InsuranceCorporation of India and the premium paid to LIC is accounted for.

The Company has a group Mediclaim Insurance Policy with BajajAllianz General Insurance Co. Ltd. and the premium paid to InsuranceCompany is accounted for.

Company’s contribution to Provident Fund and E.S.I. have been paidto the appropriate authority. The benefits to employees like ProvidentFund, E.S.I. and Gratuity have been accounted for all employeesemployed in India.

v) All Fixed Assets are accounted for at cost less depreciation andimpairment loss. Capital Work-in-progress are converted to FixedAssets on completion of the project for which the said Capitalexpenditure has been incurred. No Depreciation has been providedon Capital Work-in-Progress as the said asset is not put to use.

vi) Depreciation on Fixed Assets has been provided on Straight LineMethod and written off over a period of:

Computer and its Accessories 3 YearsBuilding — freehold 20 YearsOther Fixed Assets 5 Years

Leasehold Land & Building is amortized for the lease period.

Computer Software is amortized over a period of three years.

vii) An impairment loss is recognized whenever the carrying amount ofthe Fixed Assets exceed the recoverable amount i.e. net realisableprice. An impairment loss is charged to Profit & Loss Account in theyear in which the asset is identified as impaired. The impairmentloss recognized in prior accounting period is reversed if there hasbeen a change in the estimate of recoverable amount.

viii) The sales are recognized at the point of despatch of material to thecustomers and bills are raised to them. Income from maintenancecontracts are accounted for in the relevant accounting year upon


entering into the contract. Revenue from software development isrecognised on the basis of achievement of prescribed milestone asrelevant to terms of contract as proportionate completion methodas applicable.

ix) Deferred revenue expenditure are amortised over a period of fiveyears.

x) The geographical segments have been identified on the basis oflocation of the major customers of the Company. The geographicalsegments are Europe, USA & Other Countries and Domestic. Thesesegments represent a strategic business unit that offers differentplaces as unit having different risk and returns.

(xi) Inter-segment sales and transfers, if any, are accounted for as if thesales or transfers were to third parties at current market prices.

(xii) Income and expense items, which are not allocable to any specificgeographical segment, are classified as unallocated revenue andexpenditure respectively. This expense includes Depreciation,Deferred Revenue Expenditure W/o, Finance Charges, Expenses inextraordinary nature and other unallocated expenses of Administrativeand Operating expenses and Income includes Other Income whichis shown separately.

xiii) Foreign currency transactions denominated in foreign currencies arenormally recorded at the exchange rate prevailing at the time of thetransaction.

Monetary items denominated in foreign currencies at the year-endand not covered by forward exchange contracts are translated atyear-end rates. Those transactions covered by forward exchangecontracts are translated at year-end rates ruling at the date oftransaction as increased or decreased by the proportionate differencebetween the forward rate and exchange rate on the date of transaction,such difference having been recognized over the life of the contract.Non-monetary items including Fixed Assets which are carried in termsof historical cost denominated in a foreign currency are reportedusing the exchange rate on the date of the transaction.

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

xv) Provision for Tax is based on Current Tax rates in force. Deferred Taxis recognized, subject to the consideration of prudence, on timingdifferences, being the difference between taxable income andaccounting income that originate in one period and may be reversedin one or more subsequent periods. The rate of Deferred Tax is basedon the tax rate and laws that have been enacted or substantivelyenacted as on the Balance Sheet date. The Deferred Tax Asset isrecognized and carried forward only to the extent that there isreasonable cer tainty that the asset will be realised in future.

xvi) Provisions involving substantial degree of estimation in measurementare recognized when there is a present obligation as a result of pastevents and it is probable that there will be an outflow of resources.Contingent Liabilities are not recognized but are disclosed in theNotes. Contingent Assets are neither recognized nor disclosed inthe financial statements.



Notes on Accounts

(i) The company has taken interest bearing advance from Corporatesamounting to Rs. 63.25 lacs and interest free advance of Rs. 21.71lacs from Managing Director which have been disclosed underSchedule 26 as related parties.

(ii) Figures of the previous year have been reworked, regrouped,rearranged and reclassified wherever necessary.

(iii) The Company has disputed demand from Income Tax department,

the amounts involved and the forum where the dispute is pending

are detailed in the statement given below:







(iv) Calculation of deferred tax assets are given below:

Particulars Current year Previous year

DTA

Difference of depreciation 15,57,287 12,13,124

Disallowances for non payment of TDS 4,88,047 11,57,161

20,45,334 23,70,285

DTL

Amortisation of def. Rev. exp. 88,100 30,960

Net DTA 19,57,234 23,39,325

(v) Balances of Debtors, Creditors, Loans and Advances are subject toconfirmation by the parties.

(vi) The company has not received any memorandum claiming theirstatus as on 31.03.2009 as micro, small or medium enterprise,consequently the amount paid / payable to these parties during theyear is NIL.

(vi) Depreciation has been provided for in the Accounts on “StraightLine Method” at the rates prescribed in Schedule XIV to theCompanies Act, 1956 except for specific assets which aredepreciated over the useful lives of the assets, which are not lessthan those prescribed under the Companies Act, 1956.

(vii) Investments held by the Company which are long term in natureare stated at cost unless there is any permanent diminution in valuewhere provision for diminution is made on individual investmentbasis. Earnings on investments are accounted for on accrual basis.

(ix) Inventories are valued at cost which is based on First-In-First-Outmethod or net realisable value, whichever is lower. Unserviceable /damaged / discarded stocks and shortages are charged to the Profitand Loss Account.

(x) (a) Interest debited to the Profit & Loss Account is net of interestcapitalised amounting to Rs. 39,54,704/- (2007-08: Rs.53,52,392/-).

(b) The Company has given foreign bank guarantee of Rs. 629.31lacs (USD 1.59 million) against advance received fromcustomer and domestic bank guarantee of Rs. 26.17 lacsagainst execution of orders.



3. Remuneration to Auditors

(Amount in Rs.) (Amount in Rs.)Year ended 31.03.2009 Year ended 31.03.2008

Audit fee 2,25,000.00 1,50,000.00

Tax Audit fee 50,000.00 25,000.00

Out of Pocket Expenses — 4,776.00

2,75,000.00 1,79,776.00

4. Remuneration to Managing Director & Wholetime Director

(Amount in Rs.) (Amount in Rs.)Year ended 31.03.2009 Year ended 31.03.2008

Remuneration 30,00,000.00 30,00,000.00

P. F. Contribution 1,80,000.00 1,80,000.00

31,80,000.00 31,80,000.00

Note: Remuneration paid to Managing Director and Whole-time Director is within the limit as per provision of Schedule XIII of the Companies Act 1956, assuch computation of net profit in accordance with Sec.- 309 (5) of the Companies Act, 1956 is not given separately.


ANNEXURE – 1 Referred to in Schedule – 24

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

Year ended 31.3.2009 Year ended 31.3.2008(Amount in Rs.) (Amount in Rs.)

1. A. Employed throughout the year and wherein receipt ofRemuneration the aggregate ofwhich was not less than Rs. 24,00,000/–Number of employees None NoneRemuneration Nil Nil

B. Employed for a part of the year on remuneration ofRs. 2,00,000/- per monthNumber of employees None NoneRemuneration Nil Nil

2. Licensed Capacity 40 crores 40 crores

As per SIA registration with Govt. of India

3. Installed Capacity 40 crores 40 crores

4. PRODUCTION CAPACITY Not applicable Not applicable

5. PRODUCTION Not applicable Not applicable

6. A. IMPORTS 86,50,984 71,15,717

B. EXPORTS 14,78,41,514 19,58,04,764

7. TURNOVER

Sales 24,19,32,957 28,18,80,201Other income 1,16,40,142 16,15,723

8. COST OF PURCHASE

a. Impor ted 86,50,984 71,15,717

b. Indigenous 4,76,42,452 3,81,76,848

9. EXPENDITURE IN FOREIGN CURRENCY

Foreign Travel 6,72,627 19,28,201

10. EARNINGS IN FOREIGN EXCHANGE

a. FOB value Expor ts 14,78,41,514 19,58,04,764b. Dividend Received Nil Nil

11. SSI Creditors and amount owed over 30 days Nil Nil

12. No specific license is required for manufacture of products, in term of the New Industrial Policy of the Govt. of India except those which arein the restricted list. As per SIA approval received from Govt. of India, the annual capacity of the Company works out to Rs. 40 crores.

Fur ther software development, system integration and networking cannot be expressed in any generic unit terms and hence is not practi-cable to give these details in quantitative figures.

13. CONTINGENT LIABILITIES

Income Tax 1,16,56,665/- 14,70,796/-

Bank Guarantee - Foreign 6,29,32,000/- 6,29,32,000/- - Domestic 26,17,128/- 39,76,432/-




SCHEDULE NO : 25

BUSINESS PROFILE

I. Registration details

Registration no. : 18—15370Registration date : 15.02.1988Balance Sheet date : 31.03.2009

II. Capital raised during the year (Amount in Rs. thousand)

Public issue Rights issueNil Nil

Private placement/Preferencetial Allotment Bonus issueNil Nil

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

Total Liabilities Total Assets263472 263472

Source of funds (Amount in Rs. thousand)Share Capital Reserves & Surplus

79503 54456Secured loans Unsecured loans

123746 5767

Application of funds (Amount in Rs. thousand)

Net Fixed Assets Investment93898 66219

Net Current Assets Deffered tax Assets48412 1957

Accumulated Losses Miscellaneous Expenses52131 855

IV. Performance of Company (Amount in Rs. thousand)

Turnover Total Expenditure253573 327764

Profit/(Loss) before tax Profit/(Loss) after tax(74191) (74973)

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

V. Generic names of principal product/services of Company

Item code no. Product description847190 Computer Hardware

Not applicable IT Services85249009 Software development.

In accordance with our repor t ofeven date attached herewith.





SCHEDULE NO. 26

RELATED PARTY TRANSACTIONS

During the year the Company had transactions mainly with its subsidiary Ontrack Systems (UK) Ltd., UK, Ontrack Systems (UAE) Ltd., UAE,Ontrack Systems B.V., Netherlands and Ontrack Global Services Ltd., India. The other companies having some transactions were Cosmat Invest-ments Pvt. Ltd., Venus Bar ter Pvt. Ltd. and Ginvani Merchants Pvt. Ltd., India.

B. Hari is Director in its Subsidiary Ontrack Systems (UK) Ltd., Ontrack Systems (UAE) Ltd., Ontrack Systems B.V., Netherlands and OntrackGlobal Services Ltd. Rick Vander Schaft is the Director of Ontrack Systems B.V., Netherlands, S. V. Ramani is Director of Ontrack Global ServicesLimited, Mrs. Simi Hari wife of Managing Director is the Director of Ontrack Global Services Limited and Dr. B. Ramana brother of ManagingDirector is the Director of Ontrack Global Services Limited.

Key Managerial Personnel: Sushil Prasad

Summary of the transaction with the above related party

Total sales, debtors, investment, dividend received, advance received from Managing Director and advance paid to subsidiary and group company under sameManagement are Rs. 14,93,90,746/- (Rs. 14,60,80,314/-), Rs. 5,67,32,019/- (Rs. 6,58,33,343/-), Rs. 50,83,396/- (Rs. Nil), Rs. Nil (Rs. Nil ) Rs. 2170843.25and Rs. 33,17,091/- (Rs. 31,11,650/- ) respectively. The figures of the previous year have been given in brackets.

Closing Balance of Loan given and Interest received Rs. 23,43,217/- (Rs. 79,43,139.81/-), Rs. 1,21,563/- (Rs. 6,72,024.49/-) and remuneration to KeyManagement Personnel and Directors are Rs. 36,78,000/- (Rs. 36,70,500/-). AS-15 (Revised 2005) of employees benefit are not disclosed, so other longterm employee benefit for Key Management personals are also not disclosed. The figures of the previous year have been given in brackets.

Closing balance of Loan received and interest paid Rs. Nil (Rs. 67,56,500/-), Rs. Nil (Rs. 6,70,749.26/-)

Particulars Domestic Europe USA & Others Total

Revenue 9,40,91,443 8,51,00,499 6,27,41,015 24,19,32,957

(8,60,75,437) (13,13,82,602) (6,44,22,162) (28,18,80,201)

Direct & Allocated Cost 8,46,07,117 10,36,75,932 2,89,99,078 21,72,82,127(7,14,86,693) (10,94,54,297) (1,22,06,585) (19,31,47,575)

Profit/(loss) before interest & depreciation 94,84,326 (1,85,75,433) 3,37,41,937 2,46,50,830

(1,45,88,744) (2,19,28,305) (5,22,15,577) (8,87,32,626)

Finance Charges (Net) 63,65,436

(1,48,42,990)

Depreciation & Impairment Loss 1,89,85,642

(2,47,80,613)

Unallocated Expenses 7,34,90,694

(4,59,75,218)

Profit/(loss) before tax (7,41,90,942)

(31,33,805)

Provision for tax (Net) 7,82,091

(11,45,684)

Profit/(loss) after tax (7,49,73,033)

(19,88,121)

SCHEDULE NO. 27

SEGMENT INFORMATION FOR THE YEAR ENDED 31ST MARCH, 2009

Primary Segment Reporting — Geographical SegmentSegment wise Revenue Results

(Amount in Rs.)


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61


AUDITORS’ REPORT

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

AUDITORS’ REPORT

4. The Company has set up a joint venture with PersonalMedicLimited, U.K. The said joint venture has not yet commencedoperations as stated by management. So no components ofJoint Venture has been consolidated.

5. The Company’s holding of shares of Ontrack Systems BV,Netherlands has been reduced during the year as such its statushas been changed from subsidiary to Joint Venture. The relevantpar t of Joint Venture has been duly consolidated in financialstatement.

5. We repor t that the Consolidated Financial Statement have beenprepared by the Company’s management in accordance withthe requirements of the Accounting Standards (AS) 21,Consolidated Financial Statements, issued by the Institute ofChartered Accountants of India.

a. in the case of the Consolidated Balance Sheet, of the stateof affairs of Ontrack Systems Limited as at 31st March,2009;

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

c. in the case of Consolidated Cash Flow Statement, of thecash flows for the year ended on that date.


Sd/-Kolkata, India (A. K. Ganguli)30th June, 2009 Proprietor


1. We have audited the attached Consolidated Balance Sheet ofOntrack Systems Limited (‘the Company’) and its subsidiaries(collectively referred as the OSL Group’) as at 31st March, 2009and also the Consolidated Profit and Loss Account for the yearended on that date and the Consolidated Cash Flow Statementfor the year ended on that date annexed thereto. These financialstatements are the responsibility of the Company’s managementand have been prepared by the management on the basis ofseparate financial statements. Our responsibility is to expressan opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with auditing standardsgenerally accepted in India. Those Standards require that weplan and perform the audit to obtain reasonable assurance aboutwhether the f inancia l statements are f ree of mater ia lmisstatement. An Audit includes examining, on a test basis,evidence suppor ting the amounts and disclosures in the financialstatements. An Audit also includes assessing the accountingprinciples used and significant estimates made by management,as well as evaluating the overall financial statement presentation.We believe that our audit provides a reasonable basis for ouropinion.

3. In respect of the financial statements of cer tain subsidiaries,we did not carry out the audit. These financial statements havebeen audited / reviewed by other Auditors/ managementcertificate whose repor ts have been furnished to us except theaudit report of Ontrack Systems (Aust.) Pty. Ltd. In our opinion,insofar as it relates to the amounts included in respect of thesubsidiaries are concerned, those are based solely on therepor ts of the other auditors. The details of Total Assets andTotal Revenue in respect of these subsidiaries, to which theyare reflected in the Consolidated financial statement are givenbelow:

Audited by other Auditors: (Rs. in lacs)

Total TotalAssets Revenue

A. Foreign Subsidiaries

1. Ontrack Systems (UK) Ltd. 245.10 817.122. Ontrack Systems (UAE) Ltd . 82.87 682.473. Ontrack Systems (Aus.) Ltd. 206.19 514.91

B. Indian SubsidiaryOntrack Global Services Ltd. 94.26 22.16


CONSOLIDATED FINANCIAL STATEMENT

CONSOLIDATED BALANCE SHEETAS ON 31ST MARCH 2009

As on As on31.03.2009 31.03.2008

SCHEDULE NO. (Amount in Rs.) (Amount in Rs.)

I SOURCES OF FUNDSShareholder’s Funds

Capital 1 7,95,03,000.00 7,95,03,000.00Reserves and Surplus 2 5,44,56,300.00 10,19,74,140.86

13,39,59,300.00 18,14,77,140.86 Minority Interest — 31,64,014.48

Loan FundsSecured Loans 3 13,04,20,588.61 13,09,25,609.29Unsecured Loans 4 58,50,516.86 68,22,413.17

27,02,30,405.47 32,23,89,177.80

II APPLICATION OF FUNDSFixed AssetsGross Block 6 20,02,39,228.22 18,60,71,409.40Less: Depreciation & Impairment loss 5,95,97,775.18 7,88,55,410.84

Net Block 14,06,41,453.04 10,72,15,998.56

INVESTMENTS 7 5,13,837.51 3,31,43,341.91

DEFERRED TAX ASSETS 5 35,56,117.31 24,71,730.31

A. Current Assets, Loans and AdvancesStock–In–Trade 8 1,95,43,622.85 3,03,56,764.47Sundry Debtors 9 11,34,96,626.85 17,37,68,438.54Cash & Bank Balances 10 67,59,841.56 1,20,14,375.26Loans & Advances 11 7,78,48,756.87 6,09,63,644.44

21,76,48,848.13 27,71,03,222.71B. Less : Current Liabilities & Provisions

Current Liabilities 12 13,55,92,678.18 9,37,26,184.90Provisions 13 34,73,399.00 1,19,10,783.59

13,90,66,077.18 10,56,36,968.49

Net Current Assets (A-B) 7,85,82,770.95 17,14,66,254.22Miscellaneous Expenditure 14 64,17,398.43 67,35,353.41Profit & Loss Account 14 4,05,18,828.23 13,56,499.39TOTAL 27,02,30,405.47 32,23,89,177.80Notes on accounts 24

Segment Repor ting 25In accordance with our repor t of

even date attached herewith.


Sd/- Sd/- Sd/-Kolkata, India (B. Hari) (S.V. Ramani) (A.K. Ganguli)30th June, 2009 Managing Director Whole-time Director and Secretary Proprietor



CONSOLIDATED PROFIT & LOSS ACCOUNTFOR THE YEAR ENDED 31ST MARCH, 2009

As on As on31.03.2009 31.03.2008

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

Sales 15 29,60,91,684.68 35,76,79,095.76Other Income 16 1,17,56,724.45 16,21,850.98

TOTAL 30,78,48,409.13 35,93,00,946.74

EXPENDITURE(Increase)/decrease of stock (WIP) 17 77,58,489.31 (24,48,057.39)Cost of purchases 18 5,48,95,735.63 4,34,88,729.58Consumption of Con. stores 19 13,97,701.71 19,92,836.11Staff Cost 20 15,90,99,316.75 11,06,28,712.18Operating expenses 21 2,62,23,738.26 9,95,78,678.65Administrative expenses 22 8,93,18,838.48 5,37,59,620.14Finance charge 23 2,01,86,711.78 1,72,46,709.22Preliminary & Preoperative exp. w/o 14 3,17,954.98 3,17,954.98Depreciation & Impairment Loss 6 1,98,57,422.14 2,76,87,982.99Provision for Bad & Doubtful Debts 9 — 7,35,496.00TOTAL 37,90,55,909.04 35,29,88,662.46

Profit before tax (7,12,07,499.91) 63,12,284.28Minority interest - share of profit/(loss) — 12,92,940.56Profit after minority interest (7,12,07,499.91) 50,19,343.72Less: Provision for tax

- Current tax — 15,10,783.59 Provision for FBT 4,00,000.00 4,00,000.00Add: Deferred Tax Assets/(Liabilities) 5 10,84,387.00 7,98,777.71Profit after tax (7,05,23,112.91) 39,07,337.84Add: Surplus Profit & Loss A/c 4,62,24,900.30 4,25,17,562.46

(2,42,98,212.61) 4,64,24,900.30AppropriationsTransfer to general reserve — 2,00,000.00Balance C/F to Balance Sheet (2,42,98,212.61) 4,62,24,900.30

(2,42,98,212.61) 4,64,24,900.30

Notes on accounts 24Segment repor ting 25EPS after tax — 0.52(Basic & Diluted) (Refer to schedule – 24)

In accordance with our repor t ofeven date attached herewith.


Sd/- Sd/- Sd/-Kolkata, India (B. Hari) (S.V. Ramani) (A.K. Ganguli)30th June, 2009 Managing Director Whole-time Director and Secretary Proprietor



31.03.2009 31.03.2008(Amount in Rs.) (Amount in Rs.)

A. Cash flow from operating activitiesNet profit before tax and extraordinary items (7,12,07,500) 50,19,344Adjustment for:– Depreciation 1,98,57,422 2,76,87,983– Amortisation of deferred revenue expenditure 3,17,955 3,17,955– Interest paid 2,01,86,712 1,72,49,462– Provision for Bad & doubtful debts — 7,35,496– Bad debts 3,31,29,667 98,54,500– Other income (33,74,655) (8,34,779)– Currency fluctuation profit / (Unrealised loss) (1,48,64,282) 24,23,853– (Profit)/Loss on sale of assets (3,75,100) —

Operating profit before working capital changes (1,63,29,781) 6,24,53,814Adjustment for:– Sundry debtors (increase)/decrease 2,58,49,372 (78,19,087)– Stock in trade (increase)/decrease 1,08,13,141 (57,30,605)– Loans & advances (increase)/decrease (2,33,71,377) 56,39,949– Current liabilities (decrease)/increase 4,19,09,776 1,20,62,624

Cash generated from operations 3,88,71,131 6,66,06,695Direct tax paid (net of refund) 23,51,121 45,48,527Net cash from operating activities 3,65,20,010 6,20,58,168

B. Cash flow from investing activitiesPurchase of fixed assets (5,42,18,890) (1,99,30,406)(Purchase)/Transfer of Investment 3,26,29,504 (3,21,06,833)Sale of fixed assets 13,11,113 —Income from J.V - Holland 5,43,868 —Dividend on share (Subsidiary) 62,194 5,067Interest received 27,68,593 8,29,712Net cash used in investing activities (1,69,03,618) (5,12,02,460)

C. Cash flow from financing activitiesProceeds from borrowingsLong term (1,04,61,675) (96,47,703)Short term 89,84,758 30,36,609Interest paid (2,01,86,712) (1,72,49,462)Cost of Increase of Misc.Expenditure — —Increase in capital premium — 2,53,12,500Dividend paid — (43,87,488)Minority Interest (31,64,014) 27,39,760Net cash used in financing activities (2,48,27,643) (1,95,784)Net increase/(decrease) in cash & cash equivalents (A+B+C) (52,11,251) 1,06,59,924Cash & cash equivalents - opening balance 85,46,757 (21,13,167)Cash & cash equivalents - closing balance (33,35,506) 85,46,757

Notes: Cash and cash equivalents consists of cash in hand and balance and shor t term deposits with Bank including overdrawn balance of bank,which are freely encashable.Cash and cash equivalents included in the cash flow statement comprise of the following balance sheet Amount

Year ended Year ended31.03.2009 31.03.08

Cash & Cash Equivalents 1,81,99,788 61,22,904Loss on Exchange fluctuation (unrealised) (1,48,64,282) 24,23,853Cash and Cash Equivalent as restated (33,35,506) 85,46,757

As per our repor t of even date attached herewithFor N. C. Ganguli & Co.Chartered Accountant


CONSOLIDATED CASH FLOW STATEMENTSFOR THE YEAR ENDED 31ST MARCH, 2009




SCHEDULE NO. 1

SHARE CAPITAL

Authorised:

20000000 Equity shares of Rs.10/- each 20,00,00,000.00 20,00,00,000.00

(Previous year 20000000 equity of Rs. 10/- each)

Issued, subscribed & paid up :

7950300 Equity shares of Rs.10/- each fully paid up 7,95,03,000.00 7,95,03,000.00

7,95,03,000.00 7,95,03,000.00

SCHEDULE NO. 2RESERVES & SURPLUSShare PremiumAs per last Balance Sheet 4,49,30,800.00 2,41,18,300.00Add : this year — 2,08,12,500.00

4,49,30,800.00 4,49,30,800.00

Employee stock options outstanding 1,25,500.00 1,25,500.00

General ReservesAs per last Balance Sheet 94,00,000.00 92,00,000.00Add: Transferred from Profit and Loss A/c — 2,00,000.00

94,00,000.00 94,00,000.00

Surplus in Profit & Loss A/c — 4,75,17,840.865,44,56,300.00 10,19,74,140.86

SCHEDULE NO. 3SECURED LOANOCC limit with Indian Bank, Strand Road Branch 4,72,51,024.11 4,04,34,957.96(On hypothecation of stocks and book debts)OCC limit with SBI,Commercial Branch 4,96,55,086.50 5,15,14,498.33(On Hypothecation of Stocks & Book Debts)SBI WCTL 50,00,000.00 —Term Loan with SBI-Commercial Branch 2,85,14,478.00 3,89,76,153.00(On Hypothecation/lien of Building,Plant & Machinary,and Personal Guarantee of Managing Director)

13,04,20,588.61 13,09,25,609.29SCHEDULE NO. 4UNSECURED LOANSAdvance Received from Corporate 55,93,970.05 67,56,500.05HSBC Auto -Loan 2,56,546.81 65,913.12

58,50,516.86 68,22,413.17

SCHEDULE NO. 5Deferred Tax (Liabilities) / Assets 24,71,730.31 16,72,952.60Add / Less : Deferred Tax (Liabilities) / Assets 10,84,387.00 7,98,777.71

35,56,117.31 24,71,730.31

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



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SCHEDULE NO. 7INVESTMENT (AT COST) TRADELONG TERM, (AT COST) (QUOTED)Investment in Equity with Tata Consultancy Services Ltd. 11,900.00 11,900.00(28 Nos. Equity shares of Rs. 425/- each fully paid up)Market value @ Rs. 540/- per shareLONG TERM (AT COST) (UNQUOTED)IN OTHER COMPANIESOntrack Systems B.V, Netherland 5,01,729.40 —(Current year 26%, previous year 51% share holding)(9,256 Ordinary shares of Euro 1/- each fully paid up)Investment in Equity with Ontrack Systems (Aus.) Pty. Ltd. — 3,31,31,233.80(100% Wholly Owned Subsidiary).(394010 Nos. Equity shares of USD 1.00 each fully paid up)

Investment in Equity with Personal Medic Limited 208.11 208.11(3 Ordinary shares of £ 1 each fully paid up)

5,13,837.51 3,31,43,341.91SCHEDULE NO. 8STOCK-IN-TRADE AT COSTWork-in-progress (at cost) 1,40,98,461.42 2,18,56,950.73Consumable and spares (at cost) 14,78,957.95 22,47,742.66Trading stock (at cost) 39,66,203.48 62,52,071.08

1,95,43,622.85 3,03,56,764.47SCHEDULE NO. 9SUNDRY DEBTORSUnsecuredA. Debts outstanding for period of more than six months

Considered good 4,36,71,185.03 4,93,18,963.16Considered doubtful — 7,35,496.00

4,36,71,185.03 5,00,54,459.16

B. Others: considered good 6,98,25,441.82 12,44,49,475.3811,34,96,626.85 17,45,03,934.54

Less: Provision for doubtful debts — 7,35,496.00

11,34,96,626.85 17,37,68,438.54SCHEDULE NO. 10CASH AND BANK BALANCECash in hand 3,56,345.98 2,60,171.58Cash at BankBalance with scheduled banks in(i) Current A/c 49,391.11 —(ii) Dividend A/c - Indian Bank 1,010.00 1,040.00(iii) Fixed Deposit A/c - Indian Bank 23,72,624.82 22,15,308.82(iv) Gratuity A/c 1,756.00 1,786.00(v) EEFC GBP A/c 1,12,123.16 3,263.19(vi) EEFC USD A/c 7,527.69 2,90,915.09(vii) Dividend unpaid A/c 4,62,100.13 4,63,450.13(viii) Accrued Interest on FD 4,31,731.00 —(viii) Bank balance with other bank in current A/c :

ASAHI BANK, KANDA JAPAN 1,33,673.46 1,05,325.65HSBC-UK 27,93,130.91 44,73,515.13Rabo Bank - Holland — 41,46,700.95Axis Bank, India 38,427.30 52,898.72

67,59,841.56 1,20,14,375.26





SCHEDULE NO. 11LOANS AND ADVANCES(Unsecured - considered good)Advance rent 42,851.54 24,500.00Advance Income Tax and TDS 26,99,268.00 91,85,532.22Advance to staff 54,17,039.38 34,27,088.81Advance to supplier 36,68,471.00 —Other advances 4,05,74,630.08 1,94,84,829.34Prepaid expenses 4,63,731.33 58,77,358.95Deposit 2,10,54,814.12 2,04,64,335.12Advance for proper ty 15,00,000.00 15,00,000.00Advance to Holland 14,27,951.42 —(Unsecured - doubtful)Advances 10,00,000.00 10,00,000.00

7,78,48,756.87 6,09,63,644.44SCHEDULE NO. 12CURRENT LIABILITIESSUNDRY CREDITORSFor goods supplied 3,11,13,998.49 3,95,44,867.57For expenses 4,01,22,474.62 2,14,83,994.38Advance for share application money 2,38,34,100.00 —Advance from customer 3,32,12,823.00 2,77,08,620.00Other advance 22,33,931.37 —Unexpired service income 5,54,366.11 3,20,752.71Dividend unpaid account 4,62,100.13 4,63,450.13Overdrawn bank balance 34,24,335.63 34,67,617.56Service Tax Deposit from customers 6,34,548.83 7,36,882.55

13,55,92,678.18 9,37,26,184.90SCHEDULE NO. 13PROVISIONSProvisions for tax 18,73,399.00 1,07,10,783.59Provision for Fringe Benefit Tax 16,00,000.00 12,00,000.00

34,73,399.00 1,19,10,783.59SCHEDULE NO. 14MISCELLANEOUS EXPENDITUREPreliminary & preoperative Expenses 98,523.00 1,31,364.00Less: Written Off 1/5th 32,841.00 32,841.00

65,682.00 98,523.00DEFERRED REVENUE EXPENDITURE

Brand Building 66,36,830.41 69,21,944.39

Less: Written Off 1/5th 2,85,113.98 2,85,113.98

63,51,716.51 66,36,830.41

64,17,398.43 67,35,353.41PROFIT & LOSS ACCOUNT

Profit & Loss Account 2,42,98,212.61 —

Currency Fluctuation Loss 1,62,20,615.62 13,56,499.39

4,05,18,828.23 13,56,499.39





SCHEDULE NO. 15SALESDomestic 9,63,07,651.83 8,60,75,437.12Export Sales 19,97,84,032.85 27,16,03,658.64

29,60,91,684.68 35,76,79,095.76

SCHEDULE NO. 16OTHER INCOMEIncome from currency fluctuation 54,74,424.18 —Miscellaneous income 8,83,917.62 4,58,856.44Profit on Sale of Assets and Investment 3,75,100.00 —Commission & Discount received 16,48,627.31 3,28,215.50Dividend received 62,194.00 5,067.30Interest received 27,68,593.42 8,29,711.74Income from Holland (JV) 5,43,867.92 —

1,17,56,724.45 16,21,850.98SCHEDULE NO. 17(INCREASE)/DECREASE IN W.I.P.Opening stock : 2,18,56,950.73 1,94,08,893.34Closing stock : 1,40,98,461.42 2,18,56,950.73

(Increase)/Decrease in stock 77,58,489.31 (24,48,057.39)

SCHEDULE NO. 18COST OF PURCHASEOpening stock 62,52,071.08 43,72,527.00Add : Purchases 5,26,09,868.03 4,53,68,273.66

5,88,61,939.11 4,97,40,800.66Less : Closing stock 39,66,203.48 62,52,071.08

5,48,95,735.63 4,34,88,729.58SCHEDULE NO. 19CONSUMPTION OF CONSUMABLE STORESOpening stock 22,47,742.66 8,44,739.25Add : Purchases 6,28,917.00 33,95,839.52

28,76,659.66 42,40,578.77Less : Closing Stock 14,78,957.95 22,47,742.66

13,97,701.71 19,92,836.11SCHEDULE NO. 20STAFF COSTSalaries, Incentives and Bonus 15,63,73,020.61 10,79,47,429.57Contribution to Provident Fund 15,10,773.88 15,18,951.23Contribution to E.S.I 1,18,534.94 1,75,816.57Contribution to Group Gratuity 55,000.00 3,59,235.00Insurance benefit to staff 10,41,987.32 6,27,279.81

15,90,99,316.75 11,06,28,712.18






SCHEDULE NO. 21

OPERATING EXPENSESElectricity expenses 21,74,039.98 15,42,279.36Bandwidth charges 21,10,368.55 17,90,200.75Professional and consultancy charges 85,93,053.02 65,56,507.18Repairs to Machinery 21,12,849.19 17,64,143.89Insurance premium 93,025.00 1,23,956.43Hire charges 2,500.00 31,150.00Operative expenses for WOS-UAE 22,33,561.94 55,92,330.20Operative expenses for WOS-UK 89,04,340.58 7,99,50,408.09Operative Expenses for Subsidiary-Holland — 22,27,702.75

2,62,23,738.26 9,95,78,678.65SCHEDULE NO. 22

ADMINISTRATIVE EXPENSESDirectors’ remuneration 61,80,395.43 63,35,450.00Rent 41,17,173.00 37,71,215.46Rates and taxes 3,97,571.00 1,73,472.79Discount allowed 5,15,469.46 2,81,404.01Travelling and conveyance expenses 1,07,64,708.14 1,37,36,557.86Postage, telephone and telegram 26,70,569.06 22,51,334.37Printing & stationary 7,55,671.80 7,22,722.85Business promotion 21,30,711.90 15,66,162.89Books and periodicals 1,00,390.00 24,473.50Adver tisement and publicity 17,22,730.00 5,66,201.96Sundry subscription 33,000.00 60,852.00Office expenses 15,13,237.85 13,60,935.55Remuneration to Auditors 4,28,230.00 1,99,439.00Staff recruitment expenses — 1,15,407.00Staff training expenses 3,61,350.00 49,360.00Staff welfare expenses 3,55,723.40 5,30,003.30Other charges 22,24,172.78 38,10,256.36Bad debt 3,31,29,666.86 98,54,500.00Administrative expenses for WOS–UK 1,61,25,746.96 48,51,654.70Administrative expenses for WOS-UAE 45,47,216.54 34,98,216.54Administrative expenses for Australia 12,45,104.30 —

8,93,18,838.48 5,37,59,620.14

SCHEDULE NO. 23

FINANCE CHARGESInterest 1,44,84,896.84 1,29,55,508.15Bank charges 57,01,814.94 42,91,201.07

2,01,86,711.78 1,72,46,709.22


SCHEDULE NO. 24

Notes to Consolidated Financial StatementOVERVIEW

Ontrack Systems Limited (OSL), together with its subsidiariesOntrack Systems (UK) Ltd. and Ontrack Systems (UAE) Ltd. andOntrack Systems B.V. Netherland and Ontrack Global Services Ltd.are a provider of IT services globally. The Company has anestablished line of business in UK, UAE, Holland and Australia whichmainly deals with computer software development both onsite andoffshore. The Company is headquar tered in India. The companyhas also acquired another subsidiary by the name of OntrackSystems (Aust.) Pty. Ltd.

OSL Group is founded to provide Information Technology (IT)solutions, IT consulting, Development services globally, enhancingcompetitive advantage of its customers. The Company also providesboth onsite as well as offshore services in the area of internet,migration projects, data warehousing, e-commerce and web-basedsolutions amongst others.

The company has a Joint Venture with Personal Medic Ltd. atUK but due to non availability of the accounts, AccountingStandard 27 of ICAI could not be furnished in consolidatedaccounts, except investment in said JV.

As per report of UK Auditor “The company is entitled to theexemption u/s. 248 of the UK Companies Act., 1985 from theobligation to prepare group accounts. Hence, the unauditedfinancial results are not consolidated wih UK A/c. as stated bymanagement.

BASIS OF PREPARING THE FINANCIAL STATEMENTS

The accompanying financial statement for the fiscal period whichbegins on 1st April 2008 and ends on 31st March, 2009 have beenprepared incorporating Accounting Policies of the parent companyunder the historical cost convention, in compliance with IndianGenerally Accepted Accounting Practices (“GAAP”) comprises withmandatory and relevant Accounting Standards (AS) issued by theInstitute of Char tered Accountants of India (“ICAI”) and incompliance with the provisions of Companies Act, 1956.

Consolidated Financial Statements do not include inter companiessales (service charges) and payment of service charges, intercompany debtors, creditors, advance and investment in paid-upcapital. The advance from customer is net off with Sundry Debtors.

At the time of consolidation of Profit & Loss account the Companyhas clubbed each group of expenses of subsidiaries under the samegroup of expenses of parent Company (OSL), but a clubbing groupfigure of operating Expenses of each Subsidiary and AdministrativeExpenses of each subsidiary has been shown under the group ofOperating Expenses and Administrative Expenses respectively.

The excess of cost to the Parent Company of its investment in thesubsidiaries over the Parent’s portion of the Equity of the subsidiaryat the date they become subsidiary is recognized in the fianancialstatements as Goodwill.

Minority Interest in the consolidated financial statements is identifiedand recognized after taking into consideration.- The amount of Equity attributable to minorities at the date on which

investments in a subsidiary is made.

- The minorities share of movement in equity since the date parent-subsidiary relationship came into existence.

- Adjustment of the profit attributtable to the minorities against theminority interest in the equity of the subsidiaries.

Mr. B. Hari is Managing Director of parent company and also Directorof OSL (UK) and has drawn remuneration from both the Companies.

The consolidation of financial reporting are strictly as per Indian“GAAP”.

USE OF ESTIMATESThe Consolidated Financial Statements include the accounts of theCompany and its Subsidiaries which is called as OSL Group. Thepreparation of Consolidated Financial Statements requiresManagement to make estimate and assumptions that affect thereported amounts of assets and liabilities, revenues and expenditureand disclosure of contingent liabilities. Although these estimatesare based on the Management’s best knowledge of current eventsand the actions the Company may undertake in future, actual resultultimately may differ from the estimates.

FOREIGN CURRENCY TRANSACTIONSForeign currency transactions denominated in foreign currenciesare normally recorded at the exchange rate prevailing at the time ofthe transaction.Monetary items denominated in foreign currencies at the year-endand not covered by forward exchange contracts are translated atyear end rates. Non monetary foreign currency items are carried athistorical cost, except new investment and addition to fixed assetin subsidiary have been made at year end rate. The entire effect hasbeen transferred to unrealised loss on Currency Fluctuation, to theextent of Rs. 1,62,20,615.62/- corresponding loss (Rs. 13,56,499/-)for the previous year. The said unrealised loss of currency fluctuationis transferred to currency fluctuation reserve under the group“Reserve & Surplus” in Balance Sheet as per ManagementAccounting policy adopted during the year.

PROVISION & CONTINGENT LIABILITIESThe group recognizes a provision when there is a present obligationas a result of a past event that probably requires an outflow ofresources and a reliable estimate can be made of the amount of theobligation. A disclosure for a contingent liability is made when thereis a possible obligation or a present obligation that may, but probablywill not, require an outflow of resources or there is a presentobligation, reliable estimate of the amount of which cannot be made.Where there is possible obligation or a present obligation and thelikelihood of outflow of resources is remote, no provision ordisclosure for contingent liability is made.

TAXES ON INCOMECurrent Tax in respect of taxable income is provided for the yearbased on applicable tax rates and laws. Deferred Tax is recognizedsubject to the consideration of prudence in respect of deferred tax

NOTES TO CONSOLIDATED FINANCIAL STATEMENT

1.



geographical segments have been identified on the basis of location

of the major customers of the Company. The geographical

segments are Europe, USA & Other Countries and Domestic. These

geographical places represent a strategic business unit that offers

different places as unit having different risk and returns.

INTER-SEGMENT TRANSFERS

Inter-segment sales and transfers, if any, are accounted for as if

the sales or transfers were to third par ties at current market prices.

CONSOLIDATED RELATED PARTY TRANSACTIONS

During the year the Company had transactions mainly with itssubsidiary Ontrack Systems (UK) Ltd., UK, Ontrack Systems (UAE)Ltd., UAE, Ontrack Systems B.V., Netherlands and Ontrack GlobalServices Ltd., India. The other companies having sometransactions were Cosmat Investments Pvt. Ltd., Venus Bar terPvt. Ltd. and Ginvani Merchants Pvt. Ltd., India.

B. Hari is Director in its Subsidiary Ontrack Systems (UK) Ltd.,Ontrack Systems (UAE) Ltd., Ontrack Systems B.V., Netherlandsand Ontrack Global Services Ltd. Rick Vander Schaft is the Directorof Ontrack Systems B.V., Netherlands, S. V. Ramani is Director ofOntrack Global Services Limited, Mrs. Simi Hari wife of ManagingDirector is the Director of Ontrack Global Services Limited andDr. B. Ramana brother of Managing Director is the Director ofOntrack Global Services Limited.

Key Managerial Personnel: Sushil Prasad

SUMMARY OF THE TRANSACTIONS WITH THE ABOVE RELATED

PARTY

Total sales, debtors, investment, dividend received, advance receivedfrom Managing Director and advance paid to subsidiary and groupcompany under same Management are Rs. 14,93,90,746/- (Rs.14,60,80,314/-), Rs. 5,67,32,019/- (Rs. 6,58,33,343/-), Rs.50,83,396/- (Rs. Nil), Rs. Nil (Rs. Nil ) Rs. 2170843.25 and Rs.33,17,091/- (Rs. 31,11,650/- ) respectively. The figures of the previousyear have been given in brackets.

Closing Balance of Loan given and Interest received Rs. 23,43,217/-(Rs. 79,43,139.81/-), Rs. 1,21,563/- (Rs. 6,72,024.49/-) andremuneration to Key Management Personnel and Directors are Rs.36,78,000/- (Rs. 36,70,500/-). AS-15 (Revised 2005) of employeesbenefit are not disclosed, so other long term employee benefit for KeyManagement personals are also not disclosed. The figures of theprevious year have been given in brackets.

Closing balance of Loan received and interest paid Rs. Nil (Rs.67,56,500/-), Rs. Nil (Rs. 6,70,749.26/-)

UNALLOCATED ITEMS

General Income and Expenses items, which are not allocable toany specific geographical segment, are classified as unallocatedrevenue and expenditure respectively. This expense includes

assets, on timing differences, being the difference between taxable

income and accounting income that originate in one period and

are capable of reversal in one or more subsequent periods and is

measured using tax rates and laws that have been enacted or

subbstanitively enacted by the Balance Sheet date. Deferred Tax

Assets are reviewed at each Balance Sheet date to re-assess

realization.

Fringe Benefits Tax is accounted for based on the estimated fringe

benefits for the period as per the related provisions of the Income

Tax Act, 1961.

CONTINGENT LIABILITIES

The Company has disputed demand from Income Tax depar tment,

the amounts involved and the forum where the dispute is pending

are detailed in the statement given below:






5. Income Tax Assessed Demand 9,28,415/- AO, VI

for A.Y. 2007-08 Chennai

The Company has given Foreign Bank Guarantee of Rs. 629.32 lacs (USD1.59 million) against advance received from customer and domestic bankguarantee of Rs. 26.17 lacs against execution of orders which are disclosedas contingent liabilities.

CAPITAL EMPLOYED

The capital employed is Rs. 1734 lacs.

SEGMENT REPORTING POLICIES

The Company is providing services globally. The Company’s

operating businesses are originated mainly from Foreign source.

The Management’s perception is that this percentage will be

increased to more than 60% in next year and it will be gradually

increased. The services within a particular economic environment

has typical risks and returns that are different from those

components operating in other economic environments. The


SCHEDULE NO. 25

SEGMENT INFORMATION FOR THE YEAR ENDED 31ST MARCH 2009

Primary Segment Reporting Geographical Segment

CONSOLIDATED SEGMENT-WISE REVENUE RESULTS (Amount in Rs.)

PARTICULARS DOMESTIC EUROPE USA & OTHERS TOTAL

Revenue (Excluding intersegment) 9,63,07,651 9,39,05,212 10,58,78,822 29,60,91,685

(8,60,75,437) (21,08,69,039) (6,07,34,620) (35,76,79,096)

Direct & allocated cost 8,60,62,151 11,16,04,118 9,53,65,887 29,30,32,156

(6,79,26,308) (18,35,84,976) (3,79,41,653) (28,94,52,937)

Profit/(loss) before interest & depreciation 1,02,45,500 (1,76,98,906) 1,05,12,935 30,59,529

(1,81,49,129) (2,72,84,063) (2,27,92,967) (6,82,26,159)

Finance charges (Net) 84,29,987

(1,56,27,611)

Depreciation & impairment loss 1,98,57,422

(2,76,87,983)

Unallocated expenses 4,59,79,620

(1,85,98,281)

Profit/(loss) before tax (7,12,07,500)

(63,12,284)

Profit before tax after Minority interest loss —

(50,19,344)

Provision for tax (net) 80,173

(11,12,006)

Profit/(loss) after tax (7,12,87,673)

(39,07,338)

Notes : The figures of the previous year are shown in brackets


depreciation, deferred revenue expenditure W/o, finance charges,expenses in extra ordinary nature and other unallocated expensesof Administrative and Operating Expenses and Income includesOther Income which is shown as Net of Finance Charges.

CAPITAL EMPLOYED

The Segment-wise apportionment of Capital is not disclosed sinceCapital is used as a whole for the Company, but excluding currencyfluctuation results which is unrealised gain.

EARNINGS PER SHARE

Earnings Per Share is calculated by dividing the profit (Numerator)attributable to the equity shareholders by the number of equityshares (Denominator) as under:


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NOTICE

NOTICENotice is hereby given that the 21st Annual General Meeting of theShareholders of the Company will be held at 11:30 A.M. on Friday, the25th day of September, 2009 at Narada Gana Sabha Trust (SathguruGnanananda Hall) 314 (Old No. 254), T. T. K. Road, Chennai-600 018,India to transact the following business:

1. To receive, consider and adopt

a) The Audited Balance Sheet as at March 31st, 2009.

b) The Audited Profit and Loss account for the year ended March31st, 2009.

c) The Auditors’ report, thereon; and

d) Directors’ report for the year 2008–09.

2. To appoint a Director in place of Mr. Robin Ghosh, who retires byrotation and, being eligible, offers himself for re-appointment.

3. To appoint a Director in place of Mr. V. K. Chhinkwani, who retiresby rotation and, being eligible, offers himself for re-appointment.

4. To appoint M/s. Goenka Shaw & Co., Char tered Accountants asAuditor of the Company in place of the retiring Auditor M/s. N. C.Ganguli & Co., Chartered Accountants, and to hold office from theconclusion of ensuing Annual General Meeting until the conclusionof the next Annual General Meeting at a remuneration to be fixed bythe Board of Director of the Company.

By Order of the BoardSd/-

Place : Kolkata (S. V. Ramani)Dated : 30.06.09 Whole-time Director & Secretary

NOTES

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

of the Companies Act, 1956 is annexed hereto.

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

to appoint a proxy to attend and vote on his behalf and a proxy

need not be a member. The instrument appointing a proxy should

be deposited at the Registered Office of the Company, not later

than 48 hours before the meeting.

3. The Register of Members and share transfer books will remain

closed from 19 th September to 25th September, 2009 (both

days inclusive).

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

Accounts to the meeting. Please bring the attendance slip with

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

meeting hall.

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

immediately.

6. Members desirous of getting any information about the accounts

and operations of the Company are requested to address their

queries to the Company Secretary at least seven days in advance

of the meeting so that information required can be made readily

available at the meeting. Members may also login to the

Company’s Website: http://www.ontrackindia.com for detail

information on the financial performance of the Company.

7. Pursuant to the provisions of Section 109A of the Companies

Act, 1956, Shareholders are requested to file Nomination Forms

in respect of their shareholdings. Any Shareholder wishing to

avail of this facility may submit to the Company Statutory Form

2B.

8. Members wishing to claim their dividend, which remain

unclaimed, are requested to correspond with Company

Secretary at the Corporate Office in Kolkata with a copy to the

R & TA, Cameo Corporate Services Ltd., Chennai. Members

are requested to note that dividends not encashed or claimed

within 7 years from the date of transfer to the Company’s unpaid

dividend account, will as per Section 205A of the Companies

Act, 1956, be transferred to the Investors Education and

Protection Fund.

9. Members are requested to address all communications

including dividend mandates to the Registrar and Share Transfer

Agents – Cameo Corporate Ser vices Ltd., Subramanian

Building, 1, Club House Road, Chennai – 600 002, India, E-

mail: [email protected].


ITEM NO. 4

Appointment of M/s. Goenka Shaw & Co., Chartered Accountants as Auditor of the Company

M/s. N. C. Ganguli & Co. has given their resignation as auditors of the Company. In its resignation letter to the Company, N. C. Ganguli & Co. confirmed thatthere were no circumstances connected with their resignation that they considered should be brought to the attention of the shareholders of creditors of theCompany or its subsidiaries.

M/s. Goenka Shaw & Co., Chartered Accountants have consented to act as the Auditors of the Company as per their letter dated the 09.06.2009, receivedby the Company and placed before the meeting intimating that the said appointment would be in accordance with the limits stated in section 224 (1B) of theCompanies Act, 1956 and the Board to consider the same.

Brief resume of the directors being appointed/re-appointed, nature of their expertise in specific functional areas and names of companies in which theyhold directorships, memberships of the committees of the Board and their shareholding in the Company as required under Clause 49 of the listingagreement are furnished hereunder:

Mr. Vijay Chhinkwani is a practising Certified Accountant based in Kolkata. He has rich experience in handling various statutory, Internal audits, Income Taxand sales tax matters. Mr. Vijay is a qualified Chartered Accountant from the Institute of Char tered Accountants of India. He has over 22 years experience inAudit and Taxation.

Mr. Robin Ghosh is a post-graduate in Economics from Delhi University and is currently Managing Director, INFOCOM, an information and communicationCompany involved in production of television software in the area of entertainment and education. He worked as Chief Economist with Bengal Chamber ofCommerce & Industry, Calcutta where his assignments included preparation of analysis of Government’s economic policies, help and advise membercompanies on various economic and business issues. He is associated with International Group that owns and manages Institute of Advanced Management(IAM) at Kolkata & Goa and International Institute of Hotel Management (IIHM) at Kolkata.

By Order of the Board of Directors.Sd/-

Place : Kolkata (S.V. Ramani)Dated : 30.06.2009 Whole-time Director & Secretary

NOTICE

Details of the Directors seeking appointment/reappointmentin the Annual General Meeting fixed on 25th September 2009

EXPLANATORY STATEMENT PURSUANT TOSECTION 173(2) OF THE COMPANIES ACT, 1956

Name of Director

Date of Birth

Date of Appointment

Experience in specific functional areas

Qualification

List of Outside Directorship held

Chairman/Membership of the Committee ofDirectors

Chairman/Membership of the Committeeof Directors of Other Companies in whichhe/she is a Director

Mr. Vijay Chhinkwani

13th March, 1961

19.06.2003

Accounts, Audit & Taxation(Income Tax & VAT)

FCA

Nil

Audit Committee- Chairman

NIL

Mr. Robin Ghosh

26.06.2007

Business Economist

Post Graduate in Economics

Two

Nil

Nil

17.08.1945

TWENTY FIRST ANNUAL GENERAL MEETING

DP ID/Client-ID No. of Shares

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

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

Signed by the saidAffix

1 RupeesRevenue Stamp

DP ID/Client-ID No. of Shares

ONTRACK SYSTEMS LIMITEDRegistered Office: New No. - 48, Old No.30, Second Floor, Dr. Madhavan Nair Road,

Mahalingapuram, Chennai - 600 034, India, Telephone: +91(44) 4308 1246/1247

P R O X Y F O R M

ONTRACK SYSTEMS LIMITEDRegistered Office: New No. - 48, Old No.30, Second Floor, Dr. Madhavan Nair Road,

Mahalingapuram, Chennai - 600 034, India, Telephone: +91(44) 4308 1246/1247

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

25th September, 2009 Narada Gana Sabha Trust (Sathguru Gnanananda Hall) 11.30 A.M.314 (Old No. 254), T. T. K. Road, Chennai-600 018, India

I hereby record my presence at the Twenty First Annual General Meeting of the Compqny on 14th September, 2007. Please tick in the appropriate box.

Member Proxy

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

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

I/We...........................................................................................................................................................................................................................................................of ............................................................................................................................................................................ being a Member/Members of Ontrack SystemsLimited,hereby appoint...............................................................................................................................................................................................................................of................................................................................... or failing him......................................................................................................................................................of.................................................................................. or failing him....................................................................................................................................................of...............................................................................as my/our proxy to attend and vote for me/us on my/our behalf at the Twenty First Annual General Meeting of the Company to be held on Friday, the 25th day of September,2009 and at any adjournment thereof.

As witness my/our hand (s) this day of ......................................................... 2009........................

ONTRACK SYSTEMS LIMITEDontrackindia.com/ontrackindia/templates/OSL/pdf/Annual...ONTRACK SYSTEMS LIMITED (Rs. in million) FINANCIAL HIGHLIGHTS Particulars 2008-2009 2007-2008 2006–2007

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