Hello

In order to build full traceability matrix, it is better to use the web application
But before that, you need to create the links correctly
You need to link from bottom up (Upstream traceability), means:
Test case points to PRS item which points to SRD item which points to MRD item
After you create the links, you can generate traceability report, either from desktop (select the MRD in the “Item type” drop box”and click OK) or from web (using filter based dashboard)

In web there are more options, and you can add the traceability matrix to your dashboard
Create links: http://www.orcanos.com/help/Knowledgebase/creating-relations-traceability-in-qpack-web/
Add traceability to dashboard: http://www.orcanos.com/help/Knowledgebase/adding-a-new-panel/