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Directors Report of Ontrack Systems Ltd.

Mar 31, 2013

To The Members of Ontrack Systems Limited

The Directors are pleased to present the Twenty Fifth Annual Report together with the Audited Statement of Accounts and the Auditor''s Report of your Company for the Financial Year ended March 31, 2013. The financial highlights for the year under review are given below:

(Rs.in Lacs)

Amount Amount Sl. No. Description for the year ended for the year ended 31.03.2013 31.03.2012

1. Total Income 10,446.07 10,327.83

2. Total Expenditure 10,182.77 9,954.07

3. Profit before interest, depreciation & tax 263.30 373.76

4. Finance Charges 188.68 173.43

5. Depreciation & impairment loss 6.01 30.30

6. Other income 92.95 40.98

7. Profit before tax 161.56 211.01

8. Provision for tax 41.14 27.66

9. Deferred Tax - Asset (0.10) 28.33

10. Profit after tax 120.52 155.02

RESULTS OF OPERATIONS

- The operations of the company significantly improved during this year principally due to increase in domestic business. Overseas operation continues to be sluggish except for some improvement in Australia.

- Our total revenue increased to Rs. 10539.02 Lakhs from Rs. 10368.81 Lakhs in the previous year at a growth rate of 1.64%..

- Profit before tax is Rs. 161.56 Lakhs during the year as against Rs. 211.01 Lakhs in the previous year.

- The Net profit after tax of Rs.120.52 Lakhs as against Rs. 155.02 Lakhs in the previous year.

PERFORMANCE REVIEW OF BUSINESS UNITS

- Technology Solutions Group (TSG)

Technology Solutions Group since its inception in the year 2005 has helped its customers create a secure IT Infrastructure geared for meeting ever challenging and evolving requirements in different business environment. The team has enabled IT to be transitioned into an asset rather than just being a cost to the business.

TSG has invested in deploying Green IT solutions thereby enabling customers to reduce their carbon footprint and have environment friendly solutions.

Virtualization technologies deployed by TSG has enabled many companies to convert their physical servers into virtual machines with 99.99% availability - thereby creating valuable space in the data centers, reduced consumption of energy and ease of manageability and agility of the IT Infrastructure.

TSG has helped customers design their infrastructure to support big data, assisting them to store data securely and access efficiently. TSG deployed storage efficiency solutions that helped many customers get the most out their storage investments by improving productivity while reducing their costs.

TSG aims to provide customers with a range of consultancy services that will enable them to implement and manage IPv6 successfully and migration from IPv4 technology.

- SAP Business One

Considering the challenges for the SME organization in selecting and investing in a branded ERP the risk for success is one of the major key concerns of the decision making process SAP B1 has mitigated from time to time in re-modeling the implementation service approach and putting more focus on Change Management and User Acceptance Training and Testing.

Some of the new Launch includes:

Configured Solution for Process Manufacturing Industry vertical, Add-on Modules, Gate Pass Management, Discrete Manufacturing (Process

Routing Management). Sub-Contracting and Jobbing, Localized and Government Acknowledged Payroll Solution as per Localization, Purchase/ Production Indenting/Requisitions and Approvals, PF Trust Management, Purchase Tendering, Pre-Configured Solutions for Iron and Steel Industry and IT Hardware/Software Distributors, Solutions for College/Campus Management integrated with SAP Business One, Readymade SAP B1 solution for Healthcare Industry Vertical.

- Tendertimes.com

The company''s offering of Secure T tender Management solution has been very widely received by the customers. E-procurements with e-auction and e-reverse auction suits are now being offered to clients on a trial basis. E-procurement has been universally recognized as a method to reduce and manage enterprise costs.

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

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

- Indiaonestop.com

The revenue from Sales of Project reports maintained a healthy upward trend. Overseas clients were added from as far as Germany, Libya, UAE, USA, Egypt, Venezuela, Bahrain, Saudi Arabia and Sri Lanka. Indiaonestop.com is continuing its efforts to strengthen its e-platform in providing more and more valuable and updated information for its Indian business and industry helping exchange of information, views between India and other countries. During the year under review the portal registered over 4.7 million visitors monthly from over 90 countries.

- ERP Solutions

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

MS Dynamics practice has expanded providing solution to clients'' length and breadth of the country. SME segment have been targeted offerings different suits depending on the client''s needs. A Memorandum of Understanding was signed between West Bengal Industry Development Corporation Ltd. (Webel - a nodal agency for development of IT and ITES industry in West Bengal) and our company by offering a six months certificate course for training in ERP and Management practice in Microsoft Dynamics NAV and Axapta. The response has been encouraging. Some of the training personnel are absorbed in the company for execution of various projects in hand.

- Microsoft Dynamics NAV

In-spite-of the not so favorable market condition this division could add several new clients during last financial years and came out as the highest revenue contributor in the East for Microsoft.

With a vision to enter into the league of top five partners your company is now focused on enhancing its geographical reach both nationally and internationally. Initially the target is to cover the Eastern India and reach out to Western India. Globally UK and UAE where we already has a strong presence have been identified as potential marketplace.

Subsidiary Companies

- UK: Ontrack UK WOS approach is partnering for long term relationship with companies to bring to them the offshore advantage of skills and price advantage. The relationships grown over the year will make into long term business partners once the economy gets confident and companies begin to reinvest in its IT spend.

Ontrack UK WOS continues to service Dresser Inc a GE company for onsite management of infrastructure support and other bespoke developments. The final Market launch of the UK based Pharmacy chains POS and Web based application for the huge chain of single owner pharmacy is ongoing.

Outlook for 2013 - 14

Ontrack UK WOS is working on a few proposed POC with GE Ontrack UK has delayed launching its Microsoft Dynamics offshore support practice in the UK due to the slowdown. It is looking into launching the same in 1st quarter of 2013 as there is decent demand in MS Dynamics Axapta.

- UAE: The African crisis contributed to a large extent in the poor business environment in Middle East. However, client retention and renewal of existing contracts continued. The Google Apps initiative was started and yielded results, with clients acquired in UAE and the GCC region. The need to expand and consider new markets was addressed through delegation visits to Africa and regional partnership augmentation. Sales and marketing initiatives were undertaken in the region through these partnerships, primarily in Oman.

Government departments and projects were the main stay for the last fiscal. We continue to provide technical and infrastructure support to Government entities in Dubai and Abu Dhabi.

Expansions of markets were targeted through visits to Nigeria and Kenya. Partnerships for project execution and delivery have been identified and lead generation for promising projects were undertaken through local partners. Regional partners in Oman and Bahrain were identified, as well.

- Australia: Oz subsidiary signed Partnership agreement with SAP Australia for selling and implementing SAP Business One in various industries vertical especially in the SMB industry segment. The focus would be offshore- onshore combo model including getting new IT Managed service contracts.

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

- Associates: First Job College:

The objective of the college is to prepare 2 passed students, industry ready by imparting hands on training while enrolling them full time BBA & BCA degree course awarded by the UGC recognized State Govt. University.

The response for enrolment in the academic year 2012-13 has been very encouraging. Adequate infrastructures for both physical and training faculty are available. The best amongst first batch from the college is likely to be absorbed with the Company.

- Comunet Info-systems Pvt. Ltd.

Energy Bill Payment system of WBSEDCL called ATP

Comunet Info-systems Pvt. Ltd. has been able to grow more than three times in terms of turnover during the year. Daily transactions made by the Automatic Bill Payment Kiosks of WBSEDCL, managed by Comunet, have also increased significantly.

The company has executed successfully a ''Proof of Concepts'' on the prototype already developed by them and supplied to a NBFC. The product will fetch new business in the coming years. Two more prototypes of transaction machine are being designed in the laboratory of the company which will be developed in next year with the financial support from MSME and Technology Development Board under Department of Science and Technology, Govt. of India.

The company achieved a turnover of Rs. 367.84 Lakhs during the year as against Rs. 1144.00 Lakhs in the previous year. Profit after Tax being Rs. 1.21 Lakhs against that of last year''s Rs. 5.55 Lakhs for making substantial expenses in POC.

The Company has also explored new areas of ICT based services which will contribute to the business of the co. from next year.

- Subsidiary companies Consolidated Financial Statement

The Board of Directors by a resolution at the meeting held on 30.05.2012 given consent for not attaching the Balance Sheet and Financial statements in terms of the Central Govt. Ministry of Corporate Affairs Circular No.2/11 dated 08.02.2011. The consolidated financial statements however have full details of the financial portion of the subsidiaries as per the general approval of the Central Govt. Circular dated 08.02.2011.

- MATERIAL CHANGES AND COMMITMENTS:

There are no material changes and commitments affecting the financial position of your Company between the end of the Financial Year of your Company to which the Balance Sheet relates and the date of this report.

- Increase in Share Capital

During the year under review the equity capital of the company has remained unchanged since the company had not issued any new equity shares.

- Corporate Social Responsibility

The company has taken initiatives in sponsoring building road connecting two small villages to the nearest Block level offices in the Nadia district of West Bengal. The Company through its Educational Society proposes to impart skill development to at least 100 students so that they are industry ready and employable.

- HUMAN RESOURCE DEVELOPMENT

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

- QUALITY

The ISO 9001-2008 certification includes Company''s state-of-the art Global Delivery Centre at Salt Lake, Kolkata, Technology Solutions Group, Human Resource Department, Accounts Department Tendertimes.com and IndiaOneStop.com. Internal audit checks are conducted once every quarter for all the units. The software division of the Company plans to implement ISMS (Information Security Management System) in its salt lake facility.

- CORPORATE GOVERNANCE

The Company has complied with the requirement of Corporate Governance as stipulated under clause 49 of the Equity listing agreement with the Stock Exchanges and accordingly, the Report on Corporate Governance forms part of the Annual Report.

The requisite certificate from the Auditors of the Company, M/s. Goenka, Shaw & Co., regarding compliances with the conditions of the Corporate Governance is annexed to this Report as also the Management Discussion and Analysis which is given as Annexure to this Report.

- CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, R & D AND FOREIGN EXCHANGE EARNING AND OUTGO U/s 217(1) (e)

Your company continuously strives to conserve energy, adopt environment-friendly practices and employ technology for efficient operations.

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

The Technology Change Management Group of the Company continuously scans the market for new technologies, design systems and processes to induct such new technologies.

The foreign exchange earnings and outgoes for the year ended 31st March, 2013.

(Amount in Rs.)

2013 2012

Earnings 437.16 808.10

Outgoes 0.43 1.18

- PERSONNEL

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

- DIRECTOR''S RESPONSIBILITY STATEMENT U/s 217(2AA)

The Financial statements are prepared in accordance with the accounting standards issued by the Institute of Chartered Accountants of India and the requirements of the Companies Act, 1956, to the extent applicable to us, and guidelines issued by SEBI on the historical cost convention as a going concern and on the actual basis. There are no material departures from prescribed accounting standards in the adoption of the accounting standards.

We accept responsibility for the integrity and objectivity of these financial statements. The accounting policies used in the preparation of the financial statements have been followed consistently except as otherwise stated in the notes. The estimates and judgments related to the financial statements have been made on a prudent and reasonable basis, in order that the financial statements reflect in a true and fair manner the form and substance of transactions, and reasonably present our state of affairs and profits for the year.

- FIXED DEPOSITS

The Company has not accepted any fixed deposit and, as such, no amount of principal or interest was outstanding as of the Balance Sheet date.

- DIRECTORS

Shri. Ramdevan V Krishnaswamy retires by rotation and being eligible offers himself for re-appointment.

- AUDITORS

M/s. Goenka Shaw & Co., Chartered Accountants, the Auditors of the Company, retire at the ensuing Annual General Meeting and have con- firmed their eligibility and willingness to continue till conclusion of next AGM of the company, if re-appointed.

- ACKNOWLEDGEMENT

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

For and on behalf of the Board of Directors

Sd/- Sd/-

Place : Kolkata, India S. V. Ramani B. Hari

Date : 30.05.2013 Whole-time Director Chairman and and Secretary Managing Director


Mar 31, 2010

The Directors are pleased to present the Twentysecond Annual Report together with the Audited Statement of Accounts and the Auditors Report of your Company for the Financial Year ended March 31, 2010. The financial highlights for the year under review are given below:

(Rs. in Lacs)

Amount Amount

Sl. No. Description for the year ended for the year ended 31.03.2010 31.03.2009

1. Total Income 3558.30 2419.33

2. Total Expenditure 3185.73 2907.73

3. Profit before interest, depreciation & tax 372.57 (488.40)

4. Finance Charges 234.62 180.05

5. Depreciation & impairment loss 128.94 189.86

6. Other income 28.79 112.65

7. Profit/(Loss) on sale of Assets - 3.75

8. Profit before tax 37.80 (741.91)

9. Provision for tax 12.00 -

10. Provision for Fringe Benefit Tax - 4.00

11. Deferred Tax - Asset 9.22 3.82

12. Profit after tax 16.58 (749.73)

13. Distributable Profit Appropriation:-

Transfer to General Reserve - -

RESULTS OF OPERATIONS

- There has been significant improvement in the financial position of the Company during year under review principally due to improvement in the business scenario globally. The companys focus on domestic business has also contributed significantly to the improved financial position

- The Companys total revenue increased to Rs. 3587.09 lacs from Rs.2535.73 lacs in the previous year at a growth rate of 41.46 %.

- Profit before tax is Rs.37.80 lacs during the year as against loss of Rs.741.91 lacs in the previous year.

- The Net profit after tax showed a positive figure of Rs.16.58 lacs against a loss of Rs.749.73 lacs in the previous year.

PERFORMANCE REVIEW OF BUSINESS UNITS

- Enterprise Solution Group

Enterprise Solution Group provides end to end simple window turnkey solution highly beneficial to existing and new customers. Building on the success achieved with application of offshore -onsite combo model in collaboration with Ontrack Australia and UK, ESG plans to expand their business overseas through the wholly owned subsidiaries at UAE, Australia and UK.

The future focus would be venturing into end to end solution combining the strength on Internet Service Provider Also expanding the Touch screen Information kiosks which finds ready application in Railways , Power and other core sectors including e-governance projects in various Government departments.

- Tendertimes.com

The Companys offering of Secure T tender Management solution has been very widely received by the customers. E-procurements with e-auction and e-reverse auction suits are now being offered to clients on a trial basis.

E-procurement has been universally recognized as a method to reduce and manage enterprise costs.

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

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

- Indiaonestop.com

Indiaonestop.com is continuing its efforts to strengthen its e-platform in providing more and more valuable and updated information for its Indian business and industry helping exchange of information, views between India and other countries. During the year under review the portal registered over 4.5 million visits from over 90 countries. The revenue from Sales of Project reports maintained a healthy upward trend. Overseas clients were added from as far as Germany, Libya, UAE, USA, Egypt, Venezuela, Bahrain, Saudi Arabia and Pakistan.

- ERP Solutions and Training

MS Dynamics practice has expanded providing solution to clients in different parts of the country. SME segment have been targeted different suits depending on the clients needs. A Memorandum of Understanding was signed between West Bengal Industry Development Corporation Ltd. (Webel - a nodal agency for development of IT and ITES industry in West Bengal) and our Company by offering a six months certificate course for training in ERP and Management practice in Microsoft Dynamics NAV and Axapta. The response has been encouraging. Some of the training personnel are absorbed in the Company for execution of various projects in hand.

Subsidiary Companies

- UK: market continues to reel under recession. It is a great opportunity for us to offer natural offshore facilities from India. The Managed service space Application development and Maintenance especially in the Small and Medium segment will be continued focus in UK. Ontrack UK bagged a prestigious offshore development order from a UK based pharmacy chain for developing POS and back end software support from India.

- UAE: New clients in the Government section from different Emirates were acquired.As a solution partner, UAE subsidiary has been implementing Remote Infrastructure and Solution support to various clients both in the Govt. and the private sector.

An Emiratization Project which has been successfully supported for more than 3 years was further enhanced with new feature rollouts. Expansion initiatives to other GCC countries is being pursued with interest of Partnership from entities in Saudi Arabia and Bahrain.

The focus will remain in Long term onsite support contacts and large government projects.

- Australia: Oz subsidiary signed Partner agreement with SAP Australia for selling and implementing SAP Business One in various industry vertical especially in the SMB industry segment. The focus would be offshore- onshore combo model including getting new IT Managed service contracts.

Business outlook is improved substantially after the general financial pressure eased a little and business has started picking up. Based on the success achieved during past year , Australia subsidiary portfolio now includes pre-configured solutions for logistics, end to end single window service IT consultancy besides extended SAP R/3 through cost effective SAP remote support.

- Subsidiary companies Consolidated Financial Statement

In terms of Section 212 of the company Act 1956 we are required to attach to the Directors Report, Balance Sheet and Profit & Loss

account of our subsidiaries. We had applied to the Government of India for an exemption from such an attachment as we present the audited consolidated financial statement in the Annual Report. The Govt. of India has granted us an exemption from complying with section 212 vide the approval letter No.: 47/679/2010-CL-III. Accordingly the annual report does not contain the financial statement of subsidiaries. However the consolidated financial statements of the subsidiaries are separately published.

- Increase in Share Capital

During the year under review the equity capital of the Company was augmented by fresh infusion of equity by roping in strategic investor valued at Rs. 1,19,17,050/-.

- Corporate Social Responsibility

The Company has taken initiatives in sponsoring building road connecting two small villages to the nearest Block level offices in the Nadia district of West Bengal. The Company through its Educational Society proposes to impart skill development to atlest 50 students so that they are made industry ready and employable.

- HUMAN RESOURCE DEVELOPMENT

The Companys recruitment policy ensures suitable candidates with merit are selected from campus. Your Company constantly strives on improvement in the project management competency of its associates and personnel by continuous upgradation of their skills by training and development. The Companys expansion globally has resulted in global cultural integration since the Company employs people from various foreign countries. The Companys HR policies and processes are aligned to effectively drive its expanding business and emerging opportunities. Attrition during the fiscal remained within reasonable proportion.

- QUALITY

The ISO 9001-2008 certification includes Companys state-of-the- art Global Delivery Centre at Salt Lake, Kolkata. ISO internal audit checks are conducted once every quarter for all divisions including accounts department that was brought under the purview of ISO Audit last year. The Company has taken initiatives to become CMM level 4/5 compliant and to implement ISMS (Information Security Management System).

- CORPORATE GOVERNANCE

The Company has complied with the requirement of Corporate Governance as stipulated under clause 49 of the Equity listing agreement with the Stock Exchanges and accordingly, the Report on Corporate Governance forms part of the Annual Report.

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

- TECHNOLOGY, R & D AND FOREIGN EXCHANGE

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

The Technology Change Management Group of the Company continuously scans the market for new technologies, design systems and processes to induct such new technologies.

The foreign exchange earnings and outgoes for the year ended 31st March, 2010

(Amount in Rs.)

2010 2009

Earnings 8,45,16,251 14,78,41,514

Outgoes 6,68,763 6,72,627

- PERSONNEL

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

- DIRECTORS 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. Appropriate accounting policies have been selected and applied consistently and judgment and estimates made are reasonable and prudent so as to give true and fair view of the affairs of the Company as on 31st March, 2010, and of the profit of the Company for the period 1st April 2009 to 31st March, 2010. Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting 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

In accordance with the requirements of the Companies Act 1956 read with the provisions of the Articles of Association of the Company Shri Robin Ghosh and Shri Ramadevan Krishnaswamy retire by rotation and being eligible offer themselves for re-appointment.

- AUDITORS

M/s. Goenka Shaw & Co., Chartered Accountants, the auditor of the company retire at the ensuing AGM and have expressed their willingness to continue till conclusion of next AGM of the company, if re-appointed.

- ACKNOWLEDGEMENT

Your Directors take this opportunity to thank its customers both in India and abroad, investors, business partners, bankers, financial institutions, business associates and advisors for their consistent support to the Company. Your Directors place on record their appreciation of the contributions made by employees at all level through hard work, cooperation and dedication, which has enabled the Company to move forward. Your Directors once again take this opportunity to thank the Governments of India, UK, UAE, Holland, Australia & USA for their cooperation and assistance in enabling your Company to enter the global marketplace.

For and on behalf of the Board of Directors

Sd/- Sd/-

Place : Kolkata, India S. V. Ramani B. Hari

Date : 29th May, 2010 Whole-time Director Managing Director

and Secretary

 
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