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Notes to Accounts of ITI Ltd.

Mar 31, 2016

Note No. 40

1 Corporate information:

ITI Limited is a Public Limited Company incorporated under the provisions of the Companies Act, 1956. The Company is primarily
engaged in the business of Manufacture, sale and servicing of Telecommunication equipments.

2 Execution and registration of sale deed for assets sold to DRDO for Rs, 2600 lacs during 2003-2004 is under process .

3 An amount of Rs, 16500 Lakhs has been received from the government towards payment of wage revision arrears during 2014-2015.An
Amount of Rs, 13354.46 lakhs has been paid towards payment of wage revision arrears and remaining amount of Rs, 3145.54 lacs kept
under Other Current Liabilities.

4 Balances in the accounts of creditors, advances from customers, debtors, claims recoverable, loans & advances, materials with
fabricators , subcontractors/others, material in transit, deposits, loans, and other payables/receivables such as Sales Tax, VAT,
Excise Duty, Cenvat, Service Tax, TDS etc., are under confirmation/reconciliation. Adjustments, if any will be made on completion
of such review / reconciliation / receipt of confirmations. However, in the opinion of the management, the Trade Receivables,
current assets and loans and advances are not less than as stated, if realized in the ordinary course of the business.

5 The Company is primarily engaged in business of manufacturing, trading and servicing of telecommunication equipments and
rendering other associated / ancillary services and there are no other reportable segments. The Company is primarily operating
in India, which is considered as a single geographical segment.

6 a) As per Accounting Standard 18 on Related Party Disclosures the following transactions are entered into with the Joint
Ventures of the company viz. India Satcom Ltd.,(ISL) and ITI Communications Pte. Ltd, Singapore(ITI-C).


7 Since the Company has no virtual certainty of sufficient future taxable income, deferred tax asset is not being recognized on
unabsorbed depreciation and carried forward losses of the Company under Accounting Standard (AS)-22 "Accounting for Taxes on
Income"

8 The Company has not provided for Rs, 2685 Lakhs being penalty on nonpayment of guarantee fee to the Government of India, since
the Ministry of Communications & IT has agreed in principle to waive the same as part of the Company revival package.


(Above figures are for ISL only and does not include that of ITI-C, Singapore, which is in the process of liquidation) (Bank
account of ISL in SBI-IFB became NPA during September 2009 and referred to Stressed Asset Management Branch of SBI. Under the
securitization and Reconstruction of Financial Assets and enforcement of Security Interest Act 2002 (SARFAESI), SBI has taken
possession of the property of ISL factory at Bangalore in May 2011. The accounts of ISL for the year 2015-16 is yet to be
received).


9. Accretion/Secretion to stock-in-trade is arrived at after considering due adjustment to difference in excise duty element in
respect of opening and closing stock-in-trade.

10.The Company is a Sick Company as per provisions of Sick Industrial Companies Act (SICA), 1985. CCEA has approved a financial
assistance of Rs, 4156.79 Crores in February, 2014, for revival of ITI under Rehabilitation Scheme. As a part of the approved
financial assistance, a sum of Rs, 192 crores has been received towards share application money as Capital Grant during the
financial year 2014-15 and Rs, 494.02 crores as Revenue Grant towards employee benefit expense and employee related statutory
dues during the financial year 2015-16. Out of Rs,494.02 crores, Rs,112.50 crores given towards employee benefit expense for the
period January 2015 to March 2015 is treted as extra ordinary item as per accounting policy.

11. Land proposed to be leased to Bangalore Metropolitan Transport Corporation, BMTC (which has not been revalued), measuring
12.15 acres is in possession of the BMTC. Pending Government of India approval for the lease, lease terms and agreement yet to be
finalized. Lease rental will be recognized on finalization of the terms. An amount of Rs, 285 lakhs received earlier from the
BMTC under an agreement to sell is held under deposits.

b) Pending litigations:- (i) Claim Recoverable - in land - Rs, 1049.41 lakhs due from M/S Himachal futuristic communications
towards LD. The Company has filed a legal case and the matter is pending before Delhi High court.

(ii) Vendors have fled the case against the company involving total amount Rs,272.21 lakhs and the case is pending before various
forums.

(iii) Disputed statutory liabilities of Rs,7125.97 lakhs.

Interest and penalties on arrears of all overdue statutory liabilities (including undisputed) could arise as and when assessed
and determined by the respective authorities.


12 National Highways Authority of India (NHAI) has acquired 1.375 acres of land in 2007-08 for public purpose on a compensation
of Rs, 146 lakshs, which is yet to be received pending submission of certain records by the unit. Proportionate cost of the
acquired land aggregating Rs, 5.81 lakhs has been withdrawn from Freehold Land under fixed assets and held as Claims Recoverable.
On receipt of the compensation from the NHAI, necessary accounting entries will be booked for recognizing the profit on sale of
land.

13 Karnataka Power Transmission Corporation Limited is using 5 Acres of Land (which has not been revalued) and no lease agreement
has been entered for the same.

14 No lease agreement has been entered with ESIC for the additional land occupied by them to an extent of 229 sqmt. Management
has confirmed that additional land will be included as a part of lease terms which is due for renewal during FY 2016-17.

15 Land Measuring 77 Acres have been resumed by the Govt of Kerala and is under adjudication of the Apex Court. The value of Land
as shown in the Balance Sheet includes the value of Land resumed by the Govt of Kerala pending decision by the Apex court.

16 During the year, the company has adopted the estimated useful life of the assets as prescribed under Part C of Schedule II to
the Companies Act, 2013 as against the old estimate as assessed by the management. Further, the Management is in the process of
identifying the assets whose life is expired as on April 01, 2015 and upon reconciliation the WDV of those assets whose life is
expired would be then transferred to retained earnings as provided in Note 7(b) to Schedule II of the Companies Act 2013.


17 In the absence of financial statements of Joint Venture Company, India Satcom Limited for the year ended March 31, 2016,
consolidated financial statements of the Company could not be prepared.

18 Previous year''s figures have been regrouped and reclassified wherever necessary to conform to current year''s classification.

19. Figures in brackets indicated in the Accounts reflect negative balances.


Mar 31, 2015

1 Corporate information:

ITI Limited is a Public Limited Company incorporated under the provisions of the Companies Act, 1956. The Company is primarily engaged in the business of Manufacture, sale and servicing of Telecommunication equipments.

2 Execution and registration of sale deed for assets sold to DRDO for Rs. 2600 lacs during 2003-2004 is under process .

3 An amount of Rs.165 Crores has been received from the government towards payment of wage revision arrears during 2014-2015. An Amount of Rs.11740.52 lacs has been paid towards payment of wage revision arrears and remaining amount of Rs.4759.48 lacs kept under Other Current Liabilities.

4 Balances in the accounts of creditors, advances from customers, debtors, claims recoverable, loans & advances, materials with fabricators , subcontractors/others, material in transit, deposits, loans, and other payables/receivables such as Sales Tax, VAT, Excise Duty, Cenvat, Service Tax, TDS etc., are under confirmation/reconciliation. Adjustments, if any will be made on completion of such review / reconciliation / receipt of confirmations. However, in the opinion of the management, the Trade Receivables, current assets and loans and advances are not less than as stated, if realized in the ordinary course of the business.

5 The Company is primarily engaged in business of manufacturing, trading and servicing of telecommunication equipments and rendering other associated / ancillary services and there are no other reportable segments. The Company is primarily operating in India, which is considered as a single geographical segment.

6 Since the Company has no virtual certainty of sufficient future taxable income, deferred tax asset is not being recognized on unabsorbed depreciation and carried forward losses of the Company under Accounting Standard (AS)-22 "Accounting for Taxes on Income"

7 The Company has not provided for Rs. 2685 Lakhs being penalty on non payment of guarantee fee to the Government of India, since the Ministry of Communications & IT has agreed in principle to waive the same as part of the Company revival package.

Particulars Current Year Previous Year 2014-15 2013-14

8 Estimated amount of contracts remaining to be executed on capital

account and not provided for (net of advances) 0.00 0.00

Commitments in respect of other contracts not provided for- 0.00 0.00



9 Contingent Liability in respect of

- Outstanding letters of credit & guarantees 23803.07 22094.07

- Sales Tax demand / Service Tax/Income Tax 3145.58 3392.32

- Non receipt of C/D forms 26070.30 2884.37

- Disputed Excise Duty Demand/CENVAT Disallowance 2641.59 2529.81

- ESI demand 0.00 0.00

- Demand of interest & penalty by KVAT 0.00 13.66

- Claims against the Company not acknowledged as debts 3824.75 3725.72

Interest and penalties on arrears of all overdue statutory liabilities (including undisputed) could arise as and when assessed and determined by the respective authorities.

10 Other Income includes compensation relating to Srinagar unit losses for the years 2014-15 awaiting reimbursement from Ministry of Communications & IT.

Against the compensation recognized during financial year 2013-14,

a sum of Rs.500 lacs has been received during financial year 2014-15. 864.99 893.83

11 Accretion/Secretion to stock-in-trade is arrived at after considering due adjustment to difference in excise duty element in respect of opening and closing stock-in-trade.

12 The Company is Sick Company as per provisions of Sick Industrial Companies Act (SICA), 1985. CCEA has approved a financial assistance of Rs. 4156.79 Crores in February, 2014, for Revival of ITI under Rehabilitation Scheme. As a part of the approved financial assistance, a sum of Rs.19200 lakhs has been received by the Company towards equity share application money.

13 Land proposed to be leased to Bangalore Metropolitan Transport Corporation, BMTC (which has not been revalued), measuring 12.15 acres is in possession of the BMTC. Pending Government of India approval for the lease, lease terms and agreement yet to be finalized. Lease rental will be recognized on finalization of the terms. An amount of Rs. 285 lakhs received earlier from the BMTC under an agreement to sell is held under deposits.

14 National Highways Authority of India (NHAI) has acquired 1.375 acres of land in 2007-08 for public purpose on a compensation of Rs. 146 lacs, which is yet to be received pending submission of certain records by the units. Proportionate cost of the acquired land aggregating Rs. 5.81 lakhs has been withdrawn from Freehold Land under fixed assets and held as Claims Recoverable. On receipt of the compensation from the NHAI, necessary accounting adjustments for booking the proof on sale of land and squiring of the will be carried out.

15 Karnataka Power Transmission Corporation Limited is using 5 Acres of Land (which has not been revalued) and no lease agreement has been entered for the same.

16 No lease agreement has been entered with ESIC for the additional land occupied by them to an extent of 229 sqmt. Management has confirmed that additional land will be included as a part of lease terms which is due for renewal during FY 2015-16.

17 Rent from C-DoT, an autonomous body from Government of India aggregating Rs. 5847.90 lakhs has not been realized for the years 2005-06 to 2010-11. Due to uncertainty of realization, recognition of gross rental revenue aggregating Rs. 4026.42 lakhs for the financial year 2011-12, 2012-13, 2013-14 & 2014-15 on accrual basis is deferred, which is conformity with AS-9.

18 Previous year's figures have been regrouped and reclassified wherever necessary to conform to current year's classification.

19 Figures in brackets indicated in the Accounts reflect negative balances

20 The financial statement for the year as approved by the Board of Directors and the report thereon issued by the Statutory Auditors were revised pursuant to C&AG's Audit observations during the course of audit under section 143(6)(a) of the Companies Act, 2013, by amending Note No.40 Sl.No.23 and incorporating Sl.No.19,20 & 21 of Significant Accounting policies. This amendment has no impact on the reported figure in the financial statements.


Mar 31, 2014

1. Company has not adopted the enhanced estimated useful life of the asset, suggested by registered valuer as this would have resulted in not complying with the requirment of charging minimum depreciation contemplated by schedule XIV of Companies Act, 1956. Consquently company charged off Rs.1670.67 Lakhs (Previous year Rs.1681.80 Lakhs) as depreciation on revalued asset for the year. However this has no effect on the losses of the year, as this amount is transferred from the revaluation reserve.

2. There is a charge of Rs. 7 lakhs on 400 D type and 624 E type quarters in favour of Govt. of Karnataka towards subsidy received in terms of Subsidised Industrial housing Scheme.

3. Factory building is on the leased land,measuring 36 Kanals and 13 Marlas for which extension for lease is under process with J&K Government.

4. With reference to Accounting Policy No.6 depreciation has been charged on Fixed assets over their assessed useful life as under.

However, in respect of assets having original cost of Rs.50,000/- and above, a residual balance of Rs.5/- has been retained in the books.

* i) Includes Rs.25 Lakhs value of land (Before revaluation) gifted by UP Govt. credited to Capital Reserve.

ii) (a) Land measuring 4653.75 sq.metres has been leased to Department of Telecommunications for a period of 99 years commencing from 3.10.1983.

(b) Formal Conveyance/lease deeds in respect of Land (excepting part of lands at Bangalore & Mankapur) are yet to be executed by the respective State Governments.

(c) Land measuring 1256.86 Sq. metres has been leased to Dept. of Telecommunications for a period of 99 years commencing from 10.07.1991.

(d) Registered valuers have revalued Land of the company on 31.3.2006. Land with original cost of Rs. 1000 Lakhs and written down value of Rs. 1000 Lakhs have been revalued at Rs.228637 Lakhs, resulting in an increase in value by 227637 Lakhs.

iii) 1.83 acres of land is leased to Southern Railways and 0.286 acres of land is leased to ESI corporation.

** Registered valuers have revalued Buildings of the company on 31.3.2006. Buildings with original cost of Rs.15277 Lakhs and written down value of Rs. 4631 Lakhs have been revalued at Rs. 42388 Lakhs, resulting in an increase in value by Rs. 37757 Lakhs.

*** i) Includes Rs.85 Lakhs of plant & machinery given free of cost by UNIDO.

ii) Includes Rs.60 Lakhs of plant & machinery cost of which is borne by Ministry of Information Technology.

iii) Includes cost of fixed assets worth Rs.5000 Lakhs procured out of Grant received from Government of India during 2004-05.

iv) Includes Rs.937 Lakhs of plant, machinery and Equipments received free of cost by Rae Bareli unit.

**** Includes Rs.26.94 Lakhs payment made to J&K Govt for which lease deed proceedings are in process.

Additional Disclosures

Note No. 2

1 Corporate information:

ITI Limited is a Public Limited Company incorporated under the provisions of the Companies Act, 1956. The Company is primarily engaged in the business of Manufacture, sale and servicing of Telecommunication equipments.

2 Execution and registration of sale deed for assets sold to DRDO for Rs. 2600 lacs during 2003-2004 is under process .

3 As per the Presidential directives and Tripartite agreement on wage settlement with employees, wage revision arrears for the period from 01.01.1997 to 31.03.2000 is to be paid by the Company in a phased manner on the improvement of Profitability position and also generation and availability of funds. Since the company has already been declared by BIFR as a sick company and the condition for payment of wage revision arrears as per directives/agreement aforesaid are not prevalent, company has not provided any liability for payment of arrears of wage revision for this period amounting to Rs. 16500 lakhs. This amount has been included in the Rehabilitation Scheme approved by CCEA.

4 Balances in the accounts of creditors, advances from customers, debtors, claims recoverable, loans & advances, materials with fabricators , subcontractors/others, material in transit, deposits, loans, and other payables/receivables such as Sales Tax, VAT, Excise Duty, Cenvat, Service Tax, TDS etc., are under confirmation/reconciliation. Adjustments, if any will be made on completion of such review / reconciliation / receipt of confirmations. However, in the opinion of the management, the Trade Receivables, current assets and loans and advances are not less than as stated, if realized in the ordinary course of the business.

5 The Company is primarily engaged in business of manufacturing, trading and servicing of telecommunication equipments and rendering other associated / ancillary services and there are no other reportable segments. The Company is primarily operating in India, which is considered as a single geographical segment.

6 As per Accounting Standard 18 on Related Party Disclosures the following transactions are entered into with the Joint Ventures of the company viz. India Satcom Ltd.,(ISL) and ITI Communications Pte. Ltd, Singapore(ITI-C).

8 Since the Company has no virtual certainty of suffcient future taxable income, deferred tax asset is not being recognised on unabsorbed depreciation and carried forward losses of the Company under Accounting Standard (AS)-22 "Accounting for Taxes on Income"

9 The Company has not provided for Rs. 2685 Lakhs being penalty on non payment of guarantee fee to the Government of India, since the Ministry of Communications & IT has agreed in principle to waive the same as part of the Company revival package.

Rs. in lakhs Particulars Current Year Previous Year 2013-14 2012-13

10 Contingent Liability in respect of

- Outstanding letters of credit & guarantees 22094.07 44008.37

- Sales Tax demand /Service Tax/Income Tax 3392.32 3077.91

- Non receipt of C/D forms 2884.37 2179.31

- Disputed Excise Duty Demand/CENVAT Disallowance 2529.81 2387.47

- ESI demand 0.00 0.00

- Demand of interest & penalty by KVAT 13.66 445.43

- Claims against the Company not acknowledged as debts 3725.72 3635.77

Interest and penalties on arrears of all overdue statutory liabilities (including undisputed) could arise as and when assessed and determined by the respective authorities.

11 Accretion/Decretion to stock-in-trade is arrived at after considering due adjustment to difference in excise duty element in respect of opening and closing stock-in-trade.

12 Of the 12.15 acres of land proposed to be leased to Bangalore Metropolitan Transport Corporation, BMTC (which has not been revalued), 8.22 acres is already in possession of the BMTC. Pending Government of India approval for the lease, lease terms and agreement yet to be finalised. Lease rental will be recognised on finalisation of the terms. An amount of Rs. 285 lakhs received earlier from the BMTC is held under deposits.

13 National Highways Authority of India (NHAI) has acquired 1.375 acres of land in 2007-08 for public purpose for which compensation is yet to be received pending submission of certain records by the unit. Proportionate cost of the acquired land has been withdrawn from Freehold Land under fixed assets and compensation amount due is held as Claims Recoverable. On receipt of the compensation from the NHAI, necessary accounting adjustments will be carried out.

14 Karnataka Power Transmission Corporation Limited is using 5 Acres of Land and the same is not revalued.

15 Land Measuring 77 Acres have been resumed by the Govt of Kerala and is under adjudication of the Apex Court. The value of Land as shown in the Balance Sheet includes the value of Land resumed by the Govt of Kerala.

16 Rent from C-DoT, Government of India aggregating Rs. 5847.90 lakhs has not been realised for the years 2005-06 to 2010-11. Due to uncertainity of realisation, recognition of gross rental revenue aggregating Rs. 3015.18 lakhs for the financial years 2011-12,2012-13 & 2013-14 on accrual basis is deferred, which is in conformity with Accounting Standard 9.

17 Previous year''s figures have been regrouped and reclassified wherever necessary to conform to current year''s classification.

18 Figures in brackets indicated in the Accounts reflect negative balances.


Mar 31, 2013

1 Corporate information:

ITI Limited is a Public Limited Company incorporated under the provisions of the Companies Act, 1956. The Company is primarily engaged in the business of Manufacture, sale and servicing of Telecommunication equipments.

2 Execution and registration of sale deed for assets sold to DRDO for Rs. 2600 lacs during 2003-2004 is under process.

3 As per the Presidential directives and Tripartite agreement on wage settlement with employees, wage revision arrears for the period from 01.01.1997 to 31.03.2000 is to be paid by the Company in a phased manner on the improvement of profitability position and also generation and availability of funds. Since the company has already been declared by BIFR as a sick company and the condition for payment of wage revision arrears as per directives/agreement aforesaid are not prevalent, company has not provided any liability for payment of arrears of wage revision for this period amounting to Rs. 16500 lakhs. This amount has been included in the Draft Rehabilitation Scheme(DRS) submitted to BIFR.

4 Balances in the accounts of creditors, advances from customers, debtors, claims recoverable, loans & advances, materials with fabricators, subcontractors/others, material in transit, deposits, loans, and other payables/receivables such as Sales Tax, VAT, Excise Duty, Cenvat, Service Tax, TDS etc., are under confirmation/reconciliation.

5 The Company is engaged in the business of manufacture, sale and servicing of telecommunication equipments and there are no separate reportable segments as per Accounting Standard 17 issued by the Institute of Chartered Accountants of India.

6 As per Accounting Standard 18 on Related Party Disclosures the following transactions are entered into with the Joint Ventures of the company viz. India Satcom Ltd.,(ISL) and ITI Communications Pte. Ltd, Singapore(ITI-C).

7 Since the Company has no virtual certainty of sufficient future taxable income, deferred tax asset is not being recognised on unabsorbed depreciation and carried forward losses of the Company under Accounting Standard (AS)-22 "Accounting for Taxes on Income"

8 In 2012-13, an amount of Rs.13000 lakhs was received by the Company from the Ministry of Communication & IT, Government of India towards salary for four months in 2011-12 and the amount is recognized as income in the year under Extraordinary Item.

9 The Company has not provided for Rs. 2685 Lakhs being penalty on non payment of guarantee fee to the Government of India, since the Ministry of Communications & IT has agreed in principle to waive the same as part of the Company revival package.

10 Other Income includes compensation relating to Srinagar unit losses for 550.07 707.91 the years 2012-13 awaiting reimbursement from Ministry of Communications.

11 Value of Imported Raw Materials, Store and Spare parts consumed and Value of Indigenous Materials Consumed and percentage of each to the total consumption

12 Accretion/Decretion to stock-in-trade is arrived at after considering due adjustment to difference in excise duty element in respect of opening and closing stock-in-trade.

13 Of the 12.15 acres of land proposed to be leased to Bangalore Metropolitan Transport Corporation, BMTC (which has not been revalued), 8.22 acres is already in possession of the BMTC. Pending Government of India approval for the lease, lease terms and agreement yet to be finalised. Lease rental will be recognised on finalisation of the terms. An amount of Rs. 285 lakhs received earlier from the BMTC is held under deposits.

14 National Highways Authority of India (NHAI) has acquired 1.375 acres of land in 2007-08 for public purpose for which compensation is yet to be received pending submission of certain records by the unit. Proportionate cost of the acquired land has been withdrawn from Freehold Land under fixed assets and held as Claims Recoverable. On receipt of the compensation from the NHAI, necessory accounting adjustments will be carried out.

15 Karnataka Power Transmission Corporation Limited is using 5 Acres of Land and the same is not revalued.

16 Rent from C-DoT, Government of India aggregating Rs. 5847.90 lakhs has not been realised for the years 2005-06 to 2010-11. Due to uncertainly of realisation, recognition of gross rental revenue aggregating Rs. 2003.94 lakhs for the financial years 2011-12 & 2012-13 on accrual basis is deferred, which is in conformity with AS-9.

17 Previous year''s figures have been regrouped and reclassified wherever necessary to conform to current year''s classification.

18 Figures in brackets indicated in the Accounts reflect negative balances.


Mar 31, 2012

1. Company has not adopted the enhanced estimated useful life of the asset, suggested by registered valuer as this would have resulted in not complying with the requirment of charging minimum depreciation contemplated by schedule XIV of Companies Act, 1956. Consquently company charged off Rs.1877.88 Lakhs (Previous year Rs.2509.04 Lakhs) as depreciation on revalued asset for the year. However this has no effect on the losses of the year, as this amount is transferred from the revaluation reserve.

2. There is a charge of Rs.7 lakhs on 400 D type and 624 E type quarters in favour of Govt. of Karnataka towards subsidy received in terms of Subsidised Industrial housing Scheme.

3. Factory building is on the leased land,measuring 36 Kanals and 13 Marlas for which extension for lease is under process with J&K Government.

4. With reference to Accounting Policy No.6 depreciation has been charged on Fixed assets over their assessed useful life as under.

However, in respect of assets having original cost of Rs.50,000/- and above, a residual balance of Rs.5/- has been retained in the books.

* i) Includes Rs.25 Lakhs value of land (Before revaluation) gifted by UP Govt. credited to Capital Reserve.

ii) (a) Land measuring 4653.75 sq.metres has been leased to Department of Tele communications for a period of 99 years commencing from 3.10.1983.

(b) Formal Conveyance/lease deeds in respect of Land (excepting part of lands at Bangalore & Mankapur) are yet to be executed by the respective State Governments.

(c) Land measuring 1256.86 Sq. metres has been leased to Dept. of Telecommunications for a period of 99 years commencing from 10.07.1991.

(d) Registered valuers have revalued Land of the company on 31.3.2006. Land with original cost of Rs Rs.1000 Lakhs and written down value of Rs.1000 Lakhs have been revalued at Rs.228637 Lakhs, resulting in an increase in value by Rs. 227637 Lakhs.

(iii) 1.83 acres of land is leased to Southern Railways and 0.286 acres of land is leased to ESI corporation.

** Registered valuers have revalued Buildings of the company on 31.3.2006. Buildings with original cost of Rs.15277 Lakhs and written down value of Rs. 4631 Lakhs have been revalued at Rs. 42388 Lakhs, resulting in an increase in value by Rs. 37757 Lakhs.

*** i) Includes Rs.85 Lakhs of plant & machinery given free of cost by UNIDO.

ii) Includes Rs.60 Lakhs of plant & machinery cost of which is borne by Ministry of Information Technology.

iii) Includes cost of fixed assets worth Rs.5000 Lakhs procured out of Grant received from Government of India during 2004-05

iv) includes Rs.937 Lakhs of plant, machinery and Equipments received free of cost by Rae Bareli unit.

**** Includes Rs.26.94 Lakhs payment made to J&K Govt for which lease deed proceedings are in process.

In respect of Interest charged In excess of State Bank Advance Rate w.e.f. 01.04.2009, aggregate refund received upto 31.03.2012 is Rs. 241.20 Lakhs from State Bank of Hyderabad,State Bank of Patiala,State Bank of Travancore and Canara Bank. The remaining Banks vIz.StateBanak Of India,State banak of Bikaner& Jaipur, State Bank of Mysore, Bank of Baroda.Central Bank of India,Punjab National Bank.Development Credit Bank Ltd.Jndus Ind Bank Ltd..Axis Bank Ltd.,Vljaya Bank and Indian Bank are expected to refund excess Interest during 2012-2013.

1 Corporate information:

ITI Limited is a public Company domiciled in India and incorporated under the provisions of the Companies Act, 1956. The Company is primarily engaged in the business of Manufacture and sale of Telecommunication equipments.

2 Presentation and disclosure of financial statements:

The revised Schedule VI notified under the Companies Act 1956, has become applicable to the Company, for preparation and presentation of its financial statements for the year ended 31.03.2012. The adoption of revised Schedule VI does not impact recognition and measurement principles followed for preparation of financial statements. However, it has significant impact on presentation and disclosures made in the financial statements. The Company has also reclassified the previous year figures in accordance with the requirements applicable in the current year.

3 Insurance and Customs Duty Claims are accounted as and when the claims are accepted by respective authorities.

4 Execution and registration of sale deed for assets sold to DRDO forRs. 2600 lacs during 2003-2004 is under process .

5 As per the Presidential directives and Tripartite agreement on wage settlement with employees, wage revision arrears for the period from 01.01.1997 to 31.03.2000 is to be paid by the Company in a phased manner on the improvement of profitability position and also generation and availability of funds. Since the company has already been declared by BIFR as a sick company and the condition for payment of wage revision arrears as per directives/agreement aforesaid are not prevalent, company has not provided any liability for payment of arrears of wage revision for this period amounting to Rs. 16500 lakhs. This amount has been included in the Draft Rehabilitation Scheme(DRS) submitted to BIFR.

6 Balances in the accounts of creditors, debtors, advances from customers. Claims recoverable, loans and advances, materials with fabricators , sub-contractors/others,material in transit, deposits. Loans, Creditors, and other payables are subject to confirmation.

7 The company is engaged in the business of manufacture and sale of telecommunication equipments and there are no separate reportable segments as per Accounting Standard 17 issued by the Institute of Chartered Accountants of India.

8 As per Accounting Standard 18 on Related Party Disclosures the following transactions are entered into with the Joint Ventures of the company viz. India Satcom Ltd and ITI Communications Pte. Ltd, Singapore.

9 Since the company has no virtual certainty of sufficient future taxable income, no deferred tax asset is being recognised on unabsorbed depreciation and carried forward losses of the company under Accounting Standard (AS)-22 "Accounting for Taxes on Income"

10 Accretion/Decretion to stock-in-trade is arrived after considering due adjustment to difference in excise duty element in respect of opening and closing stock-in-trade.

11 Salaries, Wages & Bonus includes Rs. 42.10 Lakhs as Salaries of Srinagar employees presently posted at different units of ITI due to disturbed Law & Order situation in Kashmir Vally(P.Y.Rs. 37.51 Lakhs)

12 12.15 acres of land has been agreed to be sold to BMTC not revalued. Out of which 8.22 acres already in possession of BMTC. Sale deed registration is pending as Govt, approval is awaited for which an advance ofRs. 285 lacs has been received.

13 National Highway Authority has acquired 1.375 acres of land for road widening in Electronics City for a compensation of Rs. 146lacs(yet to be received) during 2007-08. The land is in possession of NHAI pending transfer of title. However value of land continues in the books of Accounts. NHAI has also notified for acquisition of about 0.5495 acres of land & some building at Palakkad for which compensation is yet to be decided.

14 KPTCL is in possession of 5 acres of land and not revalued.

15 Rent from C-Dot aggregating to Rs. 5847.90 lakhs has not been received for the last 6 years. The Company has deferred recognition of revenue aggregating to Rs. 992.70 Lakhs for the current financial year due to uncertainty in receiving the amount which is in conformity with AS-9.

16 Previous year's figures have been regrouped and reclassified wherever necessary to conform to current year's classification.

17 Figures in brackets indicated in the Accounts reflect negative balances.


Mar 31, 2011

1. Execution and registration of sale deed for assets sold to DRDO for Rs. 26 Crores during 2003-2004 is under process consequent to the receipt of Ministry approval.

2. As per the Presidential directives and Tripartite agreement on wage settlement with employees, wage revision arrears for the period from 01.01.1997 to 31.03.2000 is to be paid by the Company in a phased manner on the improvement of profitability position and also generation and availability of funds. Since the company has already been declared by BIFR as a sick company and the condition for payment of wage revision arrears as per directives/agreement aforesaid are not prevalent, company has not provided any liability for payment of arrears of wage revision for this period amounting to Rs. 165 Crs. This amount has been included in the Draft Rehabilitation Scheme(DRS) submitted to BIFR.

3. Interest on Royalty payable to C-DOT has not been provided in view of substantial dues (which are more than the royalty amount) outstanding for a long time from C-DOT on account of Rent payable on our premises leased out to them. The issue is under correspondence/discussions with DoT and C-DoT.

4. In case of back to back arrangements, Liquidated damages is accounted on net basis.

5 Redemption installments in respect of the following Cumiulative Redeemable Preference shares issued by the company have not been paid on due dates on account of fund constraints

6 A list of micro, small and medium enterprises to whom the Company owe any sum together with interest outstanding for more than 30 days to the extent identified.

i. Crystalonics Displays (P) Ltd. Bangalore

ii. Fasteners & Industrial Components Bangalore

iii. Latha Plastronics Bangalore

iv M R Engineers Bangalore

v Maruthi Rubber Products Bangalore

vi Protectron Electromech (P) Ltd. Bangalore

vii S K Electronics Industries Bangalore

viii Sri Kumar Packing Products Bangalore

ix Sri Shakti Industries Bangalore

x Udaya Insulated Cable Co. Bangalore

xi Universal Agencies Bangalore

xii Woody Industries Kerala

7 Balances in the accounts of creditors, debtors, advances from customers, some bank accounts, Claims recoverable, loans and advances,materials with fabricators, sub-contractors/others, material in transit, deposits, Loans, Creditors, Sales Tax,VAT, Excise Duty,Cenvat, Service Tax are under confirmation/reconciliation

8 Claims and expenses recoverable - inland- schedule 5.04 includes Rs.16.72 Crores recoverable from M/s HCL Infosystem Ltd. as compensation on account of excess amount spent by ITI Ltd. MANKAPUR. The above is on the basis of agreement entered into between ITI, HCL and Alcatel.

9 Inventory of Pallakad unit includes an amount of Rs. 2.04 lakhs pending in Stock Correction Suspense Account as on 31.03.2011, the material is not physically held by the Unit but sent to different suppliers for rectification/replacement.

10 Debtors and Security Deposit of NSU includes Rs.83.64 Lakhs and Rs.4 Lakhs respectively due from Central Railway. Arbitration proceedings are under progress for the settlement.

11 Cabinet Committee on Economic Affairs (CCEA) as a part of revival package approved financial assistance of Rs. 3000 crores to ITI, out of which Rs. 2820 crores was received by ITI in August 2009. The balance Rs.180 crores was received in March 2011 and the same been taken to Capital Reserve.

12 Company has not adopted the enhanced estimated useful life of the asset, suggested by registered valuer as this would have resulted in not complying with the requirement of charging minimum depreciation contemplated by schedule XIV of Companies Act, 1956. Consquently company charged off Rs.25.09 Crores (Previous year 25.34 crores) as depreciation on revalued asset for the year. However this has no effect on the losses of the year, as this amount is transferred from the revaluation reserve.

13 Construction/ Turnkey Contracts:

The company for the financial year 2010-11 has recognised revenue on Construction/ Turnkey contracts based on stage of completion as determined with respect to completion of physical proportion of the contract as certified and furnished by Company's Engineers. Consequently,

14 The company is engaged in the business of manufacture and sale of telecommunication equipments and there are no separate reportable segments as per Accounting Standard 17 issued by the Institute of Chartered Accountants of India.

15 As per Accounting Standard 18 on Related Party Disclosures the following transactions are entered into with the Joint Ventures of the company viz. India Satcom Ltd and ITI Communications Pte. Ltd, Singapore.

16 Since the company has no virtual certainty of sufficient future taxable income, no deferred tax asset is being recognised on unabsorbed depreciation and carried forward losses of the company under Accounting Standard (AS)-22 "Accounting for Taxes on Income"

17 JOINT VENTURES:

The financial reporting of interests in Joint Ventures as per AS-27, the Joint Ventures of the company come under the category of Jointly controlled entities. The 2 Joint Ventures of the company are:

a. India Satcom Limited

No.2, Kadugodi Industrial Area, Whitefield, Bangalore - 560 067 Company's stake in equity participation-49% Place of incorporation of JV-India

b. ITI Communications Pte Limited

No.5, Shenton way, #27-01, UIC Building, Singapore-068808 Company's stake in equity participation-49% Place of incorporation of JV-Singapore (The above figures does not include ITI-C, Singapore since it is in the process of liquidation.)

(Bank account of ISL in SBI-IFB became NPA during September 2009 and referred to Stressed Asset Management Branch of SBI. Under the securitization and Reconstruction of Financial Assets and enforcement of Security Interest Act 2002 ( SARFAESI), SBI has taken possession of the property of ISL factory at Bangalore in May 2011. The accounts of ISL for the year 2010-11 are yet to be finalised).

18 The Government has communicated vide its letter dated 28.01.2011 that ITI may cancel the proposal of sale of its shares(1621800 Nos) in ISL to M/s Chris Tech Systems Private Limited. Consequently, the consideration amount of Rs.3 crores deposited in ESCROW account has since been released.

Rs.In Crores

Current Year Previous Year 2010-11 2009-10

19 Contingent Liability in respect of

- Outstanding letters of credit & guarantees 265.12 484.05

- Sales Tax demand /Service Tax 33.58 41.11

- Non receipt of C/D forms 72.40 130.30

- Disputed Excise Duty Demand/CENVAT Disallowance 41.72 80.77

- ESI demand 0.94 0.98

- Demand of interest & penalty by KVAT 4.45 4.32

- Claims against the Company not acknowledged as debts 70.29 68.90

20 Previous year's figures have been regrouped and reclassified wherever necessary to conform to current year's classification.

21 Accretion/Decretion to stock-in-trade is arrived after considering due adjustment to difference in excise duty element in respect of opening and closing stock-in-trade.

22 Figures in brackets indicated in the Accounts reflect negative balances.






Mar 31, 2010

1 Execution and registration of sale deed for assets sold to DRDO for Rs. 26 Crores during 2003-2004 is under process consequent to the receipt of Ministry approval.

2 As per the Presidential directives and Tripartite agreement on wage settlement with employees, wage revision arrears for the period from 01.01.1997.to 31.3.2000 is to be paid by the Company in a phased manner on the improvement of profitability position and also generation and availability of funds. Since the company has already been declared by BIFR as a sick company and the condition for payment of wage revision arrears as per directives/agreement aforesaid are not prevalent, company has not provided any liability for payment of arrears of wage revision for this period amounting to Rs. 165 Crs.

3 Redemption installments in respect of the following

Cumulative Redeemable Preference shares issued by the company have not been paid on due dates on account of fund constraints

4 Loans and Advances includes an outstanding amount of Rs.3.55 Crs pending adjustment against pay revision arrears.

5 A list of micro, small and medium enterprises to whom the Company owe any sum together with interest outstanding for more than 30 days to the extent identified.

i. ABILTY ENTERPRISES ii. VAIBHAV PLASTIC iii. VEE KAY INDUSTRIES

6 Balances in the accounts of creditors, debtors, advances from customers, some bank accounts, Claims recoverable, loans and advances, materials with fabricators , sub-contractors/ others,material in transit, deposits, Loans, Creditors, Sales Tax,VAT, Excise Duty,Cenvat, Service Tax are under confirmation/reconciliation.

7 Claims and expenses recoverable - inland- schedule 5.04 includes Rs. 17.60 Crores recoverable from M/s HCL Infosystem Ltd. as compensation on account of excess amount spent by ITI Ltd. MANKAPUR . The above is on the basis of agreement entered into between ITI, HCL and Alcatel.

8 In respect of orders received by Company for GSM 2 Million and 3 Million in the minutes of meeting held with Ministry it has been indicated that BSNL will favourably consider waiver of interest on the Advances paid to ITI for the above two projects.

9 Inventory of Pallakad unit includes an amount of Rs. 2.04 lakhs pending in Stock Correction Suspense Account which represent materials sent to suppliers for rectification/ replacement.

10 Debtors and Security Deposit of NSU includes Rs.83.64 Lakhs and Rs.4 Lakhs respectively due from Central Railway. Arbitration proceedings are under progress for the settlement.

11 During the year an amount of Rs. 2820 Crores was received by the Company from Ministry of Communication & IT for discharging liabilities of the company. As per directions the Company has discharged all liabilities except to the extent of Rs. 7.50 Crores. As per Companys Accounting Policy a sum of Rs.311 Crores has been taken to P&L A/c through Revenue Grant and balance to Capital Reserve.

12 Company has not adopted the enhanced estimated useful life of the asset, suggested by registered valuer as this would have resulted in not complying with the requirment of charging minimum depreciation contemplated by schedule XIV of Companies Act, 1956. Consequently company charged off Rs. 25.34 Crores (Previous year 26.31 Crores) as depreciation on revalued asset for the year. However this has no effect on the losses of the year, as this amount is transferred from the revaluation reserve.

13 Construction/ Turnkey Contracts:

The company for the financial year 2009-10 has recognised revenue on Construction/ Turnkey contracts based on stage of completion as determined with respect to completion of physical proportion of the contract as certified and furnished by Companys Engineers. Consequently,

14 The company is engaged in the business of manufacture and sale of telecommunication equipments and there are no separate reportable segments as per Accounting Standard 17 issued by the Institute of Chartered Accountants of India.

15 Since the company has no virtual certainty of sufficient future taxable income, no deferred tax asset is being recognised on unabsorbed depreciation and carried forward losses of the company under Accounting Standard (AS)-22 "Accounting for Taxes on Income"

16 JOINT VENTURES:

The financial reporting of interests in Joint Ventures as per AS-27, the Joint Ventures of the company come under the category of Jointly controlled entities. The 2 Joint Ventures of the company are: a India Satcom Limited,

No.2, Kadugodi Industrial Area, Whitefield, Bangalore - 67 Companys stake in equity participation-49% Place of incorporation of JV-lndia

17 The company has sold the entire shareholding of 1621800 shares of ISL (INDIA SATCOM LIMITED) on 02-09-2006 for a consideration of Rs.3 crores. The same is deposited in ESCROW accounts (asper the agreement sale consideration). Approval of the Central Government is awaited for the said sale of shares.

18 Current liabilities includes a sum of Rs. 47.43 lakhs being the principal and interest of unclaimed bonds and public deposit of the Company. The same has not been transferred to "Investors Education and Protection Fund"as per sec 205(c) of the Companies Act. The same will be deposited in that account as soon as the funds position of the company gets improved.

19 Accretion/Decretion to stock-in-trade is arrived after considering due adjustment to difference in excise duty element in respect of opening and closing stock-in-trade.

20 Figures in brackets indicated in the Accounts reflect negative balances.

21 In respect of rental income received from Hosmat Hospital Bangalore service tax and penalty is not considered as this issue of applicability of service tax is sub-judice.

22 The Balance Sheet and Profit and Loss Account adopted by the Board of Directors on 04r08.2010and reported by the Statutory Auditors on 04.08.2010 have been revised in the light of observations arising from the audit by the Comptroller and Auditor General of India resulting in correction of certain notes and increase in net loss by Rs.90.54 Crores.

 
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