Directors Report of ITI Ltd.

Mar 31, 2022

The Board of Directors hereby submits the report of the business and operations of your Company (“the Company” or “ITI”) along with the Audited Financial Statements (Standalone and Consolidated) for the Financial Year (FY) ended 31^st March 2022, Auditors report and comments on the Accounts by the Comptroller and Auditor General (CAG) of India.

As per the approved revival plan by the Cabinet Committee on Economic Affairs (CCEA) in February 2014, Company has been sanctioned an amount of Rs.4156.79 Crore, including Rs.1892.79 Crore as grant-in-aid and Rs.2264 Crore as CAPEX Fund. We have received Rs.945.56 Crore of the CAPEX Fund in the form of equity and the entire grant-in-aid until FY 2021-22. CAPEX Fund amounting to Rs.71.56 Crore was received during FY 2021-22. Rs.200 Crore has been allocated in budget as CAPEX Fund for FY 2022-23.

The CAPEX Fund has been invested for upgrading the manufacturing infrastructure at various Units of ITI to cater to the need of emerging technologies in Telecom industry. This has helped ITI regain its manufacturing strength. The State-of-the-art infrastructure established under revival funds has boosted the manufacturing strengths to cater for domestic market demands under Make in India mission of Government of India.

The Company has been declaring profit since FY 2017-18. The Networth of the Company had become positive from 2019-20.

FINANCIAL PERFORMANCE

The summarized performance of the Company (Standalone basis) for the financial year 2021-22 compared to the previous year 2020-21 is as under:

Rs. in Crore
S.No.	Particulars	2021-22	2020-21
1	Sales including services	2077	2578
2	Value of production	2097	2586
3	Profit/(Loss) after tax	121	11
4	Profit/(Loss) after tax	121	11
5	Other Comprehensive income	(15)	20
6	Total Comprehensive income	106	31
7	Financing expenses	192	160
8	Depreciation	50	42
9	Capital employed (Net Fixed Assets Working Capital)	2657	2360
10	R & D Expenditure	15	11

CONSOLIDATED PERFORMANCE

The Consolidated Revenue from operations is at Rs.1861 Crore (PY Rs.2362 Crore) reflect a decrease of 21% compared to the previous year. The profit before tax and Profit after tax for the financial year 2021-22 were Rs.119.69 Crore against Rs.9.48 Crore during the previous year.

OPERATIONAL PERFORMANCE

The Company has achieved the Turnover of Rs. 2077.48 Crore during the FY 202122 against Rs. 2577.90 Crore during the previous FY 2020-21.

MAJOR HIGHLIGHTS

The turnover for the FY 2021-22 is mainly constituted from Turnkey Projects; Mix of products and Services.

? Turnkey Projects

Execution of Turnkey Projects viz Gujnet, Mahanet, NFS Project, ASCON Phase IV Project, IAF Project, Andaman & Nicobar Bharat Net Project, Airtel FTTH Rollout,etc

? Products

Manufacturing and supply of various products viz HDPE Duct, OFC, Encryption Products, SMPS, Solar Panel, Mini PC, Fibre Distribution Management System, Banking products, Mini PDO, Smart cards, Solar street lights etc

? Services

AMC for ASCON, Defence Equipment, NGN equipment, OCB, GSM-SZ &

MLLN, Business from Data Centre, Upgradation of Data Centre for Indian Air Force, Upgradation of 3G network to 4G/LTE for Indian Air Force, Services from Test labs, Reliability lab, 3D printing, Start-up Hub, VSSC Business, skill development, Third Party Audit Services (TPA) for implementation of Bharatnet Phase II project in the states of Odisha, Jharkhand and various other states, business generated by Corporate, MSP, etc.

? During the year “Letter of Award (LOA)” received from Tamil Nadu

Fibrenet Corporation Limited (TANFINET) was converted into work order of Rs 432.96 Crore for execution of BharatNet Phase-II in the state of Tamil Nadu. The project includes Planning, Survey, Supply, Installation, Commissioning, Testing, End-to-End Integration, Operation & Maintenance of Optical Fibre Network (OFN) and Electronics of Package-D from TANFINET for providing Broad Band connectivity across the state of Tamil Nadu. The project is under implementation and expected to be completed by FY 2022-23.

? The Company has received a Letter of Intent (LOI) from Urban Development Department, Government of Maharashtra for the implementation of a centralized monitoring system based on Information and Communications Technology (ICT) for solid waste management procedures in all urban local bodies of Maharashtra. The expected value of this contract is Rs. 400 Crore, for a period of seven years.

? The Company has received a Purchase order worth Rs 70 Crore from BSNL for AMC of GSM Network for South Zone.

? The Company has received a work order from BSNL worth Rs.39.84 Crore for execution of Pilot Projects for last mile Broad band connectivity in uncovered villages under Universal Service Obligation Fund (USOF).

? The Company has received a LOI worth Rs.10.50 Crore from Bangalore Electricity Supply Company Limited (BESCOM), Karnataka for establishing Grid- Connected Roof top Solar Plant of various capacities.

? The Company has received a Purchase order from C-DoT for manufacture and supply of 40,000 Nos of Optical Network Termination (ONT 23) of worth Rs.7.22 Crore to M/s Railtel Corporation.

? It is of great pride for the Company to be associated with VSSC, ISRO country''s space mission which on 14^th February 2022 successfully placed three satellites- PSLV C52 into their exact orbits and these carried five package assembled at ITI.

? For the first time in the history of the Company, ITI has received an order from a Private operator for FTTH rollout worth around Rs. 34 Crore.

Rs. in Crore
Sl. No	Products/Projects	2021-22 (including ED,ST & GST)	2020-21 (including ED,ST & GST)
1	Corp Marketing & MSP''s	744.24	270.56
2	ASCON PH IV	599.57	328.40
3	Mahanet	283.51	1367.46
4	NFS Project	104.88	108.95
5	GSM SZ AMC	98.42	34.38
6	Gujnet	63.08	114.58
7	Defence Business & AMC/ ASCON AMC	34.39	165.37
8	Solar Panel/ Solar Street Light	29.98	12.29
9	Data Centre	20.41	17.98
10	SMPS	19.92	7.80
11	MLLN/ AMC for MLLN/SSTP	18.86	22.03
12	3D Printing, Aadhar based Business/ Mini PC/ Component Screening/ E-Governance projects/ Misc. Services	17.98	22.25
13	TPA for Bharanet Project in Jharkhand, Odisha & Satellite	9.18	11.24
14	GPON (ONT, OLT, SPV and I&C)	8.62	1.81
15	Airtel FTTH	5.97	0.00
16	OFC/ Trading	5.08	17.41
17	NGN AMC	3.94	4.03
18	OCB AMC Business	3.70	8.65
19	Energy Savings	2.36	0.00
20	GSM Franchise	1.17	1.66
21	Bharatnet A&N	0.67	23.86
22	Banking Products/ Cont.Mfg/ Sanitary Napkin Vending Machine	0.56	1.23
23	Wifi Hotspots I&C	0.58	0.43
24	HDPE Duct Manufacturing	0.41	35.54
	Total	2077.48	2577.90

CHANGE IN SHARE CAPITAL / ISSUE OF SHARES:

There was no change in the authorised/paid up share capital of the Company during the year.

During the financial year 2021-22, pursuant to the CCEA approval dated 20^th July 2016, to comply with SEBI''s (erstwhile) Minimum 10% Public Shareholding requirement 8,40,336 equity shares were transferred by President of India, Promoter to Special National Investment Fund (“SNIF”) on 17^th March 2022.

As part of revival package, the Company has received Rs 71,56,30,000 (Rupees Seventy One Crore Fifty Six Lakhs and Thirty Thousand only) from Ministry of Communication, Government of India on 31^st March 2022, as capital grant for meeting the expenditure towards CAPEX for implementation of various projects in its various plants.

The Board of Directors of the Company in its meeting held on 25^th May 2022, allotted 83,21,279 equity shares, at Rs 86.00 (face value of Rs 10 per share and at a premium of Rs 76) on preferential basis to the President of India against the Capex grant of Rs. 71.56 Crore received from Government of India. Accordingly, post allotment of equity shares on 25^th May 2022, the paid up Equity Share Capital has increased from Rs 9,33,52,28,690 to Rs 9,41,84,41,480.

During the year under review, the Company has not granted stock options or sweat equity shares. As on 31^st March 2022, none of the Directors of the Company hold any shares of the Company.

DIVIDEND

As the Company still has accumulated losses the Directors are not in the position to recommend any dividend for the year 2021-22.

RESERVES

As the Company still has accumulated losses, it has not transferred any amount to General Reserve.

OPERATIONAL PERFORMANCE OF PRODUCTION PLANTS AND SERVICE UNITS BANGALORE PLANT:

I. PERFORMANCE

In FY 2021-22, Bangalore Plant has achieved the turnover of Rs. 432.51 Crore. The turnover mainly consists of Manufacturing, Services and Projects.

II. MAJOR HIGHLIGHTS

i. Encryption Products

ITI has been the Pioneer in the field of encryptor device and has a major market trusted shareholding in the digital technologies. The products have evolved over the years in tune with the evolution in the digital communication technology. Bangalore Plant has Designed, Manufactured and Supplied around 189 Encryption Products during FY 2021-22

ii. Telephones

Bangalore Plant has Supplied 202 no''s of Field Telephone (5C) to Ashok Leyland, GRSE and 301 no''s of ETS (1 1) telephones to BSNL

Plant also manufactured and supplied 170 nos of Nutan Telephone to various customers.

iii. PM-WANI

This framework takes forward the goal of National Digital Communications Policy, 2018 (NDCP) of creating a robust digital communications infrastructure. The PM-WANI framework envisages provision of Broadband through Public Wi-Fi Hotspot providers. It consists of elements such as Public Data Office (PDO), Public Data Office Aggregator (PDOA), App Provider and Central Registry.

Bangalore Plant has manufactured and supplied 118 No''s of C-DoT designed Mini PDO for PM-WANI scheme.

iv. Data Centre and IT Business

Looking into high demand for data Centre business and the expected growth in India, ITI has expanded the Data Centre with 1000 Racks more capacity at Bangalore Plant having level of Tier III certification

i.e. ANSI/TIA-942-B. The TIA-942 Certification Program enables data centres to be reviewed and certified for conformity to the requirements of the globally-recognized ANSI/TIA-942 standard, providing greater assurance to customers and stakeholders.

ITI''s state-of-the-art Tier 3 Data Centre is currently spread over more than 2,00,000 Sq. ft. with world class facilities having ISO 20000-1:2011, ISO 27001:2013, ISO 27017: 2015 & ISO 27018:2019 certification. ITI Data Centre is also Empanelled Cloud Service Provider with MeitY (Ministry of Electronics and Information Technology). ITI has obtained Capability Maturity Model (CMMi) Level 3.

ITI Data Center has the capability to offer a wide spectrum of service portfolios which includes High density hosting services, Cloud services, Managed security services, on demand services, Professional services, Security Operations and Managed IT services.

The Company is providing IT services like Aadhar authentication services, e-KYC services, core banking applications, ERP services, mobile wallet application, e-Seva services etc. through ITI Data Center.

The new Data Center is operational since February 2021 and it has boarded 12 customers.

v. Security Operation Center (SoC)

The function of the SoC is to monitor, prevent, detect, investigate, and respond to cyber threats around the clock. SoC teams are responsible for monitoring and protecting the organization''s assets including intellectual property, personnel data, business systems, and brand integrity. The SoC team implements the organization''s overall cybersecurity strategy and acts as the central point of collaboration in coordinated efforts to monitor, assess and defend against cyberattacks.

Various services provided by the SoCaaS (SoC as a Service) are:

a. Data Loss Prevention

b. Security Information and Event Management SIEM & User and Entity Behaviour Analytics (UEBA).

c. Vulnerability and Penetration Testing (VAPT)

d. E-Mail Security

e. Firewall With DDOS (Distributed Denial-of-Service)

f. Network Access Control (NAC)

g. Identity & Access Management

h. Endpoint Detection And Response (EDR)

vi. ITI eSeva

An Integrated e-Services Platform to deliver more than 40 e-services to citizens under CSC Scheme. Currently more than 50 B2B, B2C & G2C e-services is being offered to 1000 ITI e-Seva Centers in Karnataka & more than 200 Centres in district of Chitrakoot, Uttar Pradesh.

Impact on Social Livelihood:

• Providing self-sustainable employment directly or indirectly to more than 500 entrepreneurs.

• ITI e-Seva through its presence in various geographical region of Urban and Rural areas of Karnataka & UP state, providing all e-Service to citizen at door step.

vii. SaaS

Various services are provided by the SaaS team along with the technology partners. A brief description of each is given below:

A) Offline Aadhaar KYC Verification

This service is used to verify the identity and address of the individual using Aadhaar Number. This ensures that fake Aadhaar is not used by the individual. Authentication is done using an API which can be integrated with any software application. The regulatory body maintaining this information is UIDAI.

B) PAN Verification

This service is used to verify the identity of the individual. This ensures that fake PAN is not used by the individual. The PAN verification happens through NSDL. It also confirms if the PAN and Aadhaar for an individual are linked

C) Aadhaar Masking

ITI offers an Automated Aadhaar Masking feature which can partially or completely mask the Aadhaar number on an image in real-time. This can be used to store all legacy Aadhaar cards of the financial institution as per RBI defined regulations. This Solution provides functionality to Mask all Aadhaar Numbers in any PDF/Image containing Valid 12 digit Aadhaar Number.

D) Video KYC

The Reserve Bank of India (RBI) has issued a notification in January 2020 allowing financial institutions (FI) to conduct video-based KYC (Know Your Customer) through the Video Customer Identification Process (V-CIP). ITI offer this as a service.

Verticals using the ITI SaaS Services

• Non Banking Financial Companies (NBFC)

• Micro Financing Institutions

• Fintech Companies

viii. Telecom Test Lab (TTL)

ITI has established the Telecom Test Lab to execute the various tests under EMC and Safety Test as per standards. EMC Lab is accredited by National Accreditation Board for Testing and Calibration Laboratories (NABL) and Conformity Assessment Body (CAB) by TEC Delhi. TTL caters to external customers ranging from commercial, communication, medical, industrial, IT and domestic sectors.

60 additional tests from automotive, railways, medical, household appliances standards are being added.

Further, to cater to customers from defence, TTL is being upgraded to test MIL systems.

ix. Startup Hubs

ITI has always been the front-runner in the nation building and implementation of Government of India policies. With a vision to contribute for Start-up India mission of Govt. of India, the Company has established a full-fledged Start-up hub at ITI Bangalore plant for encouraging start-ups in the country. ITI vision for Start-up hub is to help Start-ups convert their Innovations to Pilot Products quickly through Rapid Proto-typing facilities under one roof.

Start-up hub is having the facilities like dedicated corporate hub meeting room, demo room, highly secure Wi-Fi connectivity.

There are 10 start-ups occupied with 165 seats operational who are working on IoT based Home automation products, Test equipment''s and Covid related products, Secured voting system, CRM software development, Atmospheric water generator, drones and Helitaxi/ Air ambulance. Start-ups are using Rapid prototype manufacturing facilities & testing facilities within Bangalore Plant.

x. Reliability Engineering Lab

Reliability Engineering Lab is equipped with various Environmental Test chambers and are providing services to internal as well as

external customers. Lab facilitates to conduct all environmental tests as per QM333, JSS 55555, MIL Standard and Customer Test Requirement.

xi. High-Density Polyethylene (HDPE) Duct Manufacturing

Bangalore plant is equipped with excellent manufacturing infrastructure for production of HDPE Ducts with annual capacity of

8,000 KMs.

xii. Defence AMC & Non AMC card Repairs

Bangalore Plant also executes the AMC for Ananda BEU MK II, EDUs, STM 1 and STM 4 encryption Equipment''s supplied to Defence Customers all over India.

xiii. GSM SZ AMC

ITI had successfully completed the BSNL GSM project of around Rs.2940 Crore in various BSNL -South Zone Circles namely - Andhra Pradesh, Telangana, Chennai, Karnataka, Kerala and Tamil Nadu Circle along with mandatory AMC. Subsequently BSNL has extended the AMC upto Dec- 2021 and further extended AMC order worth Rs. 70 Crore for one more year upto Dec 2022.

PALAKKAD PLANT

I. PERFORMANCES

In the FY 2021-22, Palakkad Plant has achieved the Turnover of Rs. 30.35 Crore. The turnover mainly consists of Manufacturing, Services and Projects.

II. MAJOR HIGHLIGHTS

i. Laptop

ITI has taken initiatives to supply Laptops “ITI SMAASH” and the product has acquired all the statutory certifications such as BIS, FCC, RoHS, CE, BEE etc. The product is registered in GeM . The product is available in various configurations such as Celeron, Core i3, Core i5, Core i7 etc. ITI is having the MoU partnership with Intel as the technical advisor to identify the business requirements and including enabling ITI branded laptop portfolio for India market. The targeted market is mainly Government Business, Educational Institutions, etc. ITI has also signed an agreement with Microsoft as the OEM partner for Windows Operating System with which Microsoft will extend the direct support to ITI at par with other MNCs such as HP Dell etc.

ITI Palakkad Plant has received order from KSEDC (Kerala State Electronic Development Corporation) for supply of 100 Nos of Laptops.

ii. Smaash PC

ITI Palakkad has started assembly and marketing of Micro PC branded as “SMAASH”, which is a replacement to the traditional Desktops. Trademark is registered and BIS, CE, FCC, ROHS, and Energy Star Certifications have been received. The product is also customized with add on features such as Smart Power Station with dual power input as grid and solar with 3 hour backup, Smart lock for Physical Security etc.

The plant has also entered into IT business by offering software solutions such as Examination Management Software for Kerala University, Web site design & development for Kannur University, Infrastructure set up for Online Examination centre for Mahatma Gandhi University etc.

During FY 2021-22, ITI Palakkad has manufactured and supplied more than 1500 Nos of Smaash PC to various customers such as KSEDC for e-health Project, MG university, DIET Karnataka, IIST etc.

iii. Components Screening

ITI Palakkad Plant is associated with Vikram Sarabhai Space Centre(VSSC), Thiruvananthapuram in realization of electronic packages, screening of electronic components and assemblies for various launch vehicles as well as screening of electronic components since 2010 and expanded over a decade in to wide range of activities.

The component screening and testing facility is accredited by VSSC, Trivandrum for all types of avionics flight packages as well as more than 70 types of devices for screening tests. ITI Palakkad is having business association with 3 units of ISRO namely VSSC, LPSC (Liquid Propulsion System Centre) and MVIT (Mechanisms and Vehicle Integration Testing ) all of which are located at Thiruvananthapuram and engaged in the Manufacturing, Testing and Integration of all Launch Vehicles - PSLV, GSLV, GSLV Mark III etc. used in various space missions of ISRO. Orders are being received and executed continuously from the year 2017-18 onwards. More than 70,000 electronic components / assemblies are screened from this centre and more than 2,500 flight packages manufactured by ITI are successfully used in various launch vehicles - GSLV, PSLV and GSLV Mark-III- of ISRO including the prestigious Chandrayan mission.

Recently the facility got qualified for screening and package realization of Gaganyaan project of ISRO, against which pilot quantities are screened/assembled and delivered successfully. Expansion of scope of programme is being done continuously by developing test facilities for more devices.

Business opportunities for utilization of Component Screening and testing facility from non-ISRO client base like Automation and Biomedical industries are also being explored. Small pilot orders from M/s Bosch, M/s Tata Elxsi, M/s BPL and M/s Souriau connectors are received and executed successfully. NABL accreditation procedures are in progress, as it is essential to tap business opportunities from non-ISRO sectors.

iv. Smart Energy Meter

As a part of diversification strategy, ITI has entered into Smart Energy Meter manufacturing wherein the legacy energy meters are being replaced by smart energy meters. These meters records energy consumption and has a facility to store the data and reproduce whenever required. These meters enable a two-way communication between the meter and the central system.

ITI Palakkad has received type approval and BIS certification for Single Phase Smart Energy meters complying with IS 16444 technical specifications for two technologies. Facilities and infrastructure are set up at the plant for bulk manufacturing, calibration, testing and supply of smart energy meters.

The calibration laboratory of Smart Energy Meter has received the NABL accreditation as per standards ISO 17025: 2017 standards. ITI has supplied 91,000 nos of Smart Energy Meters to the DISCOMs in UP and Haryana. ITI is also trying to venture as a Total Advance Metering Infrastructure (AMI solutions) solution provider and pursue business with various Electricity distribution companies for offering smart energy meters solutions.

v. Smart Banking Card

ITI Palakkad plant is having state of the art infrastructure in line with technical specifications for Payment Card Industry (PCI).

ITI is the only PSU having the accreditation for Rupay chip card personalization from National Payments Corporation of India (NPCI). The infrastructure includes modern manufacturing equipment for Smart Card Assembly and customization for milling & embedding, personalization etc.

ITI Palakkad has executed the pilot order from SBI for the supply of 2 Lakhs Rupay cards. ITI is also pursuing business with other Public Sector banks and other customers for getting more orders.

Plant also executed the Order from Kerela Bank - ID card, Kerala Election Commission - EPIC Card of cumulative 46,386 Nos.

vi. High-Density Polyethylene (HDPE) Duct Manufacturing

Palakkad plant is equipped with excellent manufacturing infrastructure for production of HDPE Ducts with annual capacity of 8,000 KMs.

Plant has manufactured and supplied 2000 KMs of HDPE Duct to ASCON Phase IV, 600 KMs for TANFINET ; 83 KMs for BBNL -Andaman & Nicobar ; 67 KMs for Indian Railways and 5 KMs Dept. of Atomic Energy during the FY 2021-22.

vii. MLLN

ITI has been the leader in supplying MLLN products and services, including turnkey solutions for supply, installation, integration, commissioning, operation and maintenance of Network equipment to BSNL/MTNL since 2002-03. The existing MLLN networks has been installed and maintained by ITI till date. During FY 2021-22, ITI Palakkad has executed orders worth Rs 18.86 Crore from BSNL for the AMC (card repair and technical support) extended to MLLN equipments for BSNL.

MANKAPUR PLANT

I. PERFORMANCES

In the FY 2021-22, Mankapur Plant has achieved the Turnover of Rs. 86.29 Crore. The turnover mainly consists of Manufacturing, Services and Projects.

II. MAJOR HIGHLIGHTS

i. Fibre Distribution Management System (FDMS)

FDMS shall provide management of large volume of optical fibres or number of cables with flexibility and reliability in all environment of access network (i.e.) at the Central office (exchange end), outdoor closure and at the building premises. It shall provide management of fibres in a consistent and structured manner.

During the FY 2021-22 Plant has manufactured and supplied 514 Nos of FMDS for ASCON Phase IV Project.

ii. gigabit Passive Optical Network (GPON)

GPON technology offers an excellent mix of triple play services (voice, data & video) to end users. Mankapur Plant has State-of-art manufacturing facility for GPON-OLT & ONT systems and during FY 2021-22 Plant has manufactured and supplied 500 Nos of GPON ONT to various customers i.e BSNL, BBNL,etc

iii. High-Density Polyethylene (HDPE) Duct Manufacturing

Mankapur plant is equipped with excellent manufacturing infrastructure for production of HDPE Ducts with annual capacity of

12,000 KMs.

iv. Diversified Products

ITI Mankapur is doing business in diversified Products also. The products, which are developed and manufactured In-house, are Banking products viz, Note Counting machine, Fake note detectors, SNVM- FLORA (Sanitary Napkin Vending Machine), SNDM-FAUNA (Sanitary Napkin Disposal Machine), FMVM-KAVACH (Face Mask Vending Machine), and FMDM-CONA (Face Mask Disposal Machine).

Mankapur Plant has developed Anti Covid products to help prevent the spread of coronavirus like pedal operated hand Sanitizer Dispenser (All Clean), Automatic Hand Sanitizer Dispenser (Rakshak).

Plant has manufactured and Supplied 114 Nos of Note Counting Machine to various Bank and Post Offices. Plant also supplied 20 Nos of SNVM & SNDM to Railways, Municipality, colleges etc

RAE BARELI PLANT

I. PERFORMANCES

In the FY 2021-22, Rae Bareli Plant has achieved the Turnover of Rs. 56.38 Crore. The turnover mainly consists of Manufacturing, Services and Projects.

II. MAJOR HIGHLIGHTS

i. OFC

The Indian optical fiber cable market is gaining traction. The growth is driven by continued investments being made by the Indian government in developing OFC network infrastructure, in various projects. There has been increased adoption of Fiber-to-the-Home (FTTH) connectivity owing to government initiatives such as Digital India, Smart Cities, Bharatnet Project etc. Moreover, the growing number of data centres in India will fuel this growth further.

The Company have been making great efforts to meet domestic demand for optic fibre cable with the installed capacity of 30,000 KMs per annum. During FY 2021-22, Rae Bareli plant manufactured around 10,000 KMs of OFC for ASCON-IV project, Railways, MTNL and Indian Air Force.

ii. Gigabit Passive Optical Network (GPON)

GPON technology offers an excellent mix of triple play services (voice, data & video) to end users. Rae Bareli Plant has State-of-art manufacturing facility for GPON-OLT & ONT systems and during FY 2021-22 Plant has manufactured and supplied 100 GPON (ONT & OLT) to various customers i.e BSNL, BBNL, etc.

iii. High-Density Polyethylene (HDPE) Duct Manufacturing

Rae Bareli plant is equipped with excellent manufacturing infrastructure for production of HDPE Ducts with annual capacity of

28,000 KMs.

During the FY 2021-22, Plant manufactured and supplied 2000 KMs for ASCON Project; 200 KMs for Indian Air Force.

iv. Switched-Mode Power Supply (SMPS)

Rae Bareli plant received orders from various BSNL circles across India for supply of multi configuration SMPS Power Plants of 1169 no''s during FY 2021-22.

v. OFC Training Center

Optical Fibre is the backbone of any Telecommunication Networks.

So proper laying practices must be followed for setting up any Telecom Network.

Rae Bareli Plant has a well-equipped Tools and Test Lab with all OFC testing equipments like OTDR, Splicing Machine , Optical Attenuator, Laser Source, Power Meter, Digital Microscope, Visual Fault Locator, ERM Locator etc. All Fibre tools & accessories like FDMS, ERM, Joint Closure, Duct Cutter etc, Duct tools & accessories like Coupler, End Cap, End Plug and so on. It also has Aerial OFC Laying Accessories; OFC Laying site simulation Models etc.

NAINI PLANT

I. PERFORMANCES

In the FY 2021-22, Naini Plant has achieved the Turnover of Rs. 30.06 Crore. The turnover is mainly from manufacturing and services.

II. MAJOR HIGHLIGHTS

i. Solar Panel

The Government has set an ambitious target of generating 450 GW of renewable energy by 2030. This includes a target of generating 175 GW of renewable energy by 2022 with a target of 100 GW from solar power.

Naini Plant has state-of art manufacturing facility for Solar Panel manufacturing with annual capacity of 18 MW.

During the FY 2021-22, the Plant has manufactured and supplied 662 Nos of 60W Solar Panel for MahaNet; 16,640 Nos of 325W Solar Panel for Captive Requirement and 299 Nos of 325W Solar Panel for Retail customers.

ii. LED Street Light

Naini Plant has received LOI from M/S. ESSL for UREDA (Uttarakhand Renewable Energy Development Agency) for the supply, Installation & Commissioning of 19665 Nos Solar Street Light System in the state of UttaraKhand. Out of which, 8850 systems have been supplied during FY 2021-22.

SRINAGAR PLANT

I. PERFORMANCES

In the FY 2021-22, Srinagar Plant has achieved the Turnover of Rs 2 Lakhs.

II. MAJOR HIGHLIGHTS

Smart Skill Development Centre: Established in Srinagar is being used for imparting training to around 500 Students. Following Courses are offered as on date in the skill sets like:

• Medical lab Technician

• Optical Fibre Splicer

• Domestic Data Entry Operator.

• Solar Panel Technician

• Fashion Design

NETWORK SYSTEMS UNIT (NSU)

I. PERFORMANCE

NSU is headquartered at Bangalore with regional offices spread across all over India. NSU is committed to creditably and timely execute the projects/ services. Even at the challenging times of Covid-19 Pandemic, NSU has booked a colossal turnover of Rs. 697.63 Crore.

NSU has proficiency in project management, turnkey project implementation and maintenance services in the F.Y. 2021-2022 following turnover was booked by NSU under projects and services heads:

Under Projects Head - The unit has executed ASCON-IV project worth Rs. 599.56 Crore against order received from Ministry of Defence, GoI and GujNet project worth Rs. 63.08 Crore against order received from GFGNL for Broad Band connectivity across the Gram Panchayats in the state of Gujarat.

Under Services Head - The unit has executed ASCON-AMC orders worth Rs. 18.00 Crores for Defence; AMC orders worth Rs. 3.70 Crore for OCB equipment supplied to MTNL; Installation and Commissioning of GPON equipment supplied to BSNL worth Rs. 7.32 Crore.

II. PROJECTS EXECUTED During THE YEAR 2021-2022

a. Army Static Switched Communication Network (ASCON) Phase-IV

ITI signed contract for prestigious project of National Importance (ASCON-IV) on 01^st October 2020 with the Indian Army. This project involves developing a fully secured strategic next generation communication network oriented towards the borders (spread across Northern, North-Eastern and Western regions of India). The project scope involves laying OFC, establishing IP MPLS Network, Microwave, Satellite, Mobile Nodes, and construction of buildings and towers. Also, integration of this communication network with legacy Army network i.e., Network for spectrum (NFS), Army WAN, ASCON Phase III, etc. under this project scope.

Proof of Concept (POC) to the customer is completed for a few sub-systems and for balance sub-systems it is in advance stages of completion. Upon successful completion of PoC, full-fledged trenching & ducting activities across the North-Western, North-Eastern & the hinterlands of Northern India had been initiated. Also, the construction of buildings has started. NSU achieved a turnover of Rs. 599.56 Crore from this project in the F.Y. 2021-2022.

b. BharatNet Phase-II in Gujarat (GujNet)

ITI had received order worth Rs. 1417.71 Crores from Gujarat Fibre Grid Network Limited (GFGNL) for implementation of turnkey project for Broad Band Connectivity to Gram Panchayats of Gujarat state under Bharat Net Phase II Project. The project includes laying of optical fibre cables (OFC), supply of DWDM equipment, optical transmission and access equipment and other related products as well as maintenance services. NSU has achieved a turnover of Rs. 63.07 Crore from this project in the F.Y. 20212022.

c. AMC for ASCON

ITI had successfully executed the first 3 phases of ASCON project. Now we are providing services to maintain the ASCON network. The scope of service under this project involves repair and maintenance of secrecy cards, maintenance of OFC routes, etc. NSU has achieved a turnover of Rs. 18.00 Crores from this project in the F.Y. 2021-2022.

d. BharatNet Phase-I in Andaman & Nicobar

The scope of this project involves network design and planning, supply, deployment and commissioning of fibre optic network for data connectivity for gram panchayats across Andaman & Nicobar Islands under BharatNet Phase-I project of BBNL.

e. Airtel Project

India''s second-largest service provider, Bharti Airtel, has awarded OFC works to ITI Limited, on 28^th August 2020. The Company is working with Private telcos to leverage local firms and expertise in all business verticals. NLD work involves construction of around 500 Km of underground optical fibre network for intercity back bone fibre connecting sixty-two nodes across six routes in state of Odisha and FTTH work is to construct around 380 Kms of aerial and underground optical fibre network for Fibre to Home connectivity which covers more than 37,000 Home Connections across 7 major cities in India. NSU has achieved a turnover of Rs. 5.96 Crores from this project in the F.Y. 2021-2022.

f. OCB-AMC

ITI was one of the major suppliers of fixed line switches to BSNL/MTNL. Currently, ITI has been extending the maintenance services to BSNL and MTNL for OCB exchanges. NSU has achieved a turnover of Rs. 3.70 Crores from this project in the F.Y. 2021-2022.

g. GPON Supply

NSU has installed and commissioned GPON equipment against the BSNL and BBNL orders, across all over India. NSU has achieved a turnover of Rs. 7.32 Crores from this project in the F.Y. 2021-2022.

iii. highlights

a. ITI has received Work Order for Planning, Survey, Supply, Installations, Commissioning, Testing End to end Integration Operation & Maintenance of Optical fiber network and Electronics for Bharat Net Phase - II in Tamil Nadu for Package-D amounting to a total value of Rs. 432.97 Crore.

b. GujNet project has successfully been completed, and same has rendered significant profit to ITI.

c. Warranty period successfully completed for GPON BBNL PO and AMC agreement signed.

MARKETING SERVICES AND PROJECTS (MSP)

The total Turnover from Corporate Marketing unit for the year 2021-22 was Rs 744.24 Crore.

• All MSPs Turnover (without below 4 projects) : Rs. 274.93 Crore

• Turnover from Projects :

1. IAF: (4G/LTE: 3G to 4G up gradation & expansion) : Rs. 84 Crore

2. IAF-FCI : Rs. 269.41 Crore upgradation of OPS of data centre at 6 locations

3. OFC (Mumbai) : Rs. 109.29 Crore

4. SWM (Solid waste Management) : Rs. 6.61 Crore

MSP DELHI

The total Turnover achieved for the year 2021-22 was Rs. 259.86 Crore which includes IAF 4G-Rs. 84 Crore. Some important projects are highlighted as below:

• MSP Delhi has executed the KVS (Kendria Vidhyalaya Sanghathan) project for SITC (Supply, Installation, Testing and Commissioning) of 2310 e-learning solution at 238 KVs - Total value Rs 80.45 Crore including AMC.

• Hoisting services of IUMS (Integrated Universities Management System) for HP University and implementation of IUMS for JNVU (Jay Narayan Vyas University) has been completed successfully.

• AMC for CCTV Surveillance for “Sriram Janmabhoomi Ayodhya” has been completed. Total value Rs 5.9 Crore.

• Work of Cloud hoisting for Universities like LUVAS (Lala lajpat Rai University of Veterinary and Animal Science), Hissar and RTU (Rajasthan technical university), Kota has been completed. Total value Rs 2.0 Crore.

• UKBOCW Project - Supply, storage of door-to-door delivery of ration kit & its e - management is Under Execution. Total Value Rs. 13.26 Crore

• Projects such as AMC for CCTV Surveillance, IUMS, N/W Up gradation, LAN/VAN and Wi-Fi system etc. are being executed. Approx. Value Rs. 15 Crore.

MSP LUCKNOW

The total revenue achieved for the year 2021-22 was Rs. 32.97 Crore. Some important projects are as follows:

• UP Vidhan Sabha Project for Digital Library & Communication System of value Rs. 2.83 Crore & Rs. 1.28 Crore have been completed successfully.

• UKBOCW project (Supply of Blanket, Solar Street light, and Napkin to Uttrakhand Govt.) is under execution. Total value Rs. 19.66 Crore.

• UP Minority commission (Smart Class works) Project is Under Execution. Total Value Rs. 9.33 Crore.

MSP HYDERABAD

The total revenue achieved for the year 2021-22 was Rs. 6.83 Crore. Some important projects are as follows:

• PACS, NMS for BSNL and Railway telecom Infra projects are being executed.

MSP BHUBANESHWAR

The total revenue achieved for the year 2021-22 was Rs. 7.27 Crore Some important highlights are as follows:

• CCTV surveillance work for Odisha police has been completed. Total value Rs 0.58 Crore.

MSP KOLKATA

The total revenue achieved for the year 2021-22 was Rs. 3.55 Crore Some important highlights are as follows:

• Project such as IUMS (Integrated Universities Management System) for RPCAU (Rajendra Prasad Central Agriculture University), PUSA, Bihar and SWAN (State wide Area Network), Mizoram have been completed.

• Project of Replacement of UTN Datacom equivalent in age cum condition basis in Malegaon division and Rangia division NF Railway Malegaon has been completed successfully

MSP MUMBAI

The total revenue achieved for the year 2021-22 was Rs. 158.21 Crore which includes SWM- Rs 6.61 Crore and OFC-109.29 Crore.

• Government of Maharashtra has appointed ITI for development, commissioning and implementation of ICT based Solid Waste Management Project in Maharashtra under “Urban Development Department” on rate contract basis for 7 years through GR No SMA-2021/C.R. NO. 12 (3)/UD-34 Dated 7^th October 2021.

• The Technology shall broadly comprise of following:

a) ICT Based Waste Collection Monitoring Technology for Household/ Commercial / Other Properties. ITI signed agreement with Maharashtra Government.

b) Street Sweeping Monitoring System

c) Liquid Waste Cleaning Monitoring System.

• Geo Fencing project of Maharashtra Government at 4 locations in Maharashtra Municipal Corporation and Facility Management System project of WWB (Worker Welfare Board) are being executed. Retrofit work of bullet proof vehicle for Maharashtra Government is under execution.

MSP CHENNAI

The total revenue achieved for the year 2021-22 was Rs. -16.49 Crore.

• Work order received for Provision of VSS works at Thiruvanthpuram southern railway and it''s under execution.

• Railway electrification project of Salem and Dindigul has been completed successfully and 2 other projects of electrification are under execution.

• Order Value of Rs 1.00 Crore for IT solution project of TN Agricultural universities received and same been successfully completed.

MSP BANGALORE

The total revenue achieved for the year 2021-22 was Rs. 292.04 Crore which includes IAF-FCI project : Rs 269.41 Crore. Some important projects are as follows:

• Project such as Solar power plant, LED Light and Solar water Heater for NAAC - Total value Rs 1.5 Crore and OFC laying work for southern railway - Total value Rs 5.0 Crore have been completed successfully.

• OMC project of Intelligent Traffic Management System phase-I and Phase-II Has been completed successfully- Total value - Rs. 30 Crore

Efforts undertaken by Corporate Marketing during year 2021-22

• ITI won an order for Rs. 233.89 Crore from IAF through open tender for up gradation of their 3G network to 4G network. It is being executed by MSP Delhi.

• ITI received order to supply 40,000 ONT from C-dot for RailTel and its being executed by our Mankapur unit.

• Empanelment with Vodafone as supplier for supply of HDPE Duct & OFC

• Empanelment with Airtel for supply of HDPE Duct & OFC is under progress

• Coordinated with our plants and participated in GeM bid / tender pertaining to OFC of order quantity - 8040 Kms (Won - 1513 Kms, Value - Rs. 11.30 Crore)

• Coordinated with our Naini unit and won Gem Bid pertaining to Solar panel of order quantity - 4500 Modules, Value - Rs. 0.83 Crore

• Coordinated with our Palakkad unit and participated in Gem Bid / Tender pertaining to PC of order quantity - 2754 (Won - 1604, Value - Rs 9.5 Crore)

• Approached private players like L&T, Ashoka Buildcon, Aksh Optifiber, Rajani telecom, Tata Communications for our HDPE Duct & OFC.

MEMORANDUM OF Understanding WITH MINISTRY OF COMMUNICATIONS

The Company''s rating for the FY 2019-20 is “Good” with a composite score of 52.46 and for the FY 2020-21 is “Fair” with a composite score of 43.05. The Company has signed MoU with the Administrative Ministry for sales turnover of Rs. 2723 Crore (at Excellent Level) for the FY 2021-22. The MoU Evaluation for the FY 2021-22 is yet to be finalized.

FUTURE OUTLOOK

The Company has undertaken many initiatives/ projects so as to boost the turnover and implement the Revival plan

I. Mono Crystalline Solar Cells

The demand of High Efficiency Crystalline Solar module is expected to grow of 8.5% CAGR. The National Solar mission has target to install

1,75,000 MW Renewable Energy capacity by year 2022. The prime objective of the mission covers generation of 1,00,000 MW Solar energy capacity including 40,000 MW Rooftop Solar Power project. The current manufacturing capacity in India is not sufficient to meet the objective mission. The indigenous solar cell manufacturing capacity in India is merely 3 GW whereas the Solar Module manufacturing opportunity is 20 GW as per MNRE report.

The Implementation of in house manufacturing facility in ITI will support ITI to expand market reach and building up the local supply-chain eco-system in India thus generating more jobs and revenue. ITI is planning to implement 250 MW in-house manufacturing facility of High Efficiency Mono Crystalline Solar Cell and Solar Module with an investment of Rs 125Crore in year 2022-23.

II. Digital Mobile Radio - DMR

ITI Ltd. R&D intends to take up the development of Digital Mobile Radio (DMR). This device uses digital technology along with a time division approach to enable greater levels of efficiency and performance along with improved spectrum usage. DMR aims to provide an affordable, low-complexity digital standard to replace analog radio. DMR based VHF/UHF radios are used in many applications such as military communications, police, railways, public safety, traffic control, disaster management, industrial security and communications etc. The VHF/UHF radio can be used in direct-to-direct communication in Tier I, Tier II or in multi-site environment in Tier II, Tier III modes.

ITI Ltd. looks forward to development of a DMR based full system to operate in the range of VHF/UHF frequencies. The developed Radio shall have complete user interface and the mechanical design to meet the needs of consumer applications.

ITI R&D proposes to develop the required DMR System comprises DMR Smart Phone, DMR LCR (Low Cost Radio), Repeater and Base Station. Once the System is designed and prototype proven, ITI Ltd. intends to demonstrate the prototype to defence and get it approved.

In order to emerge as a potential manufacturer for supply of Digital Mobile Radio (DMR) to customer, ITI has to be equipped with the latest technology & complete solution for DMR.

III. Manufacturing Infra & Test setup for 4G RRU/BBU

As part of its focus on delivering turnkey projects, in the field of Telecom, IT and networking ITI Limited has decided to contribute in the proliferation of indigenously manufactured 4G Mobile equipment and service in the Indian Telecom Space through forth coming BSNL''s 4G Tender under Atma Nirbhar Bharat Mission. ITI is currently conducting Proof of Concept (PoC) testing along with its technology partner TCS at Ambala for BSNL 4G network implementation. PoC test is expected to be completed by end of August 2022. Technology transfer for manufacturing of 4G Remote Radio Unit (RRU) is under process. ITI has upgraded its manufacturing infrastructure and procurement of Test Instruments for 4G RRUs are in progress. ITI plans to manufacture 4G equipment at its Bangalore, Palakkad and Mankapur plants.

In addition to manufacturing Remote Radio Head (RRH), ITI also want to manufacture Base Band Units(BBU) components including BBU chassis, indoor and outdoor cabinets required in the BSNL 4G network which is in the order of 57,000Nos.

IV. Establishment of MSP/SoC

ITI has entered into an MOU with Tata Communications Ltd for setting up of Multiservice Platform/Security Operation Centre (SoC) in ITI Data centre in Bangalore. Various IT and security services like Identity access Management, Email Security, Data Loss Prevention, Distributed Denial of Service (DDOS) Mitigation, Network Access Control, Endpoint Protection, Detection & Remediation, SIEM (Security Incident and Event Management) and Threat Intelligence & Advisory would be provided to various clients to fulfil their network security requirements. Implementation of Multiservice Platform/SoC is under progress and will be completed by September 2022.

V. Router Manufacturing

ITI has Technology transfer agreement with CDOT for manufacturing of Stackable Terabit Router (STBR) which provides advanced routing platform with 960 Gbps bidirectional switching capacity. CDOT STBR Router has 48 Ethernet interfaces which can be configured as either 1Gbps or 10Gbps each.

Stackable Tera bit Router (STBR) can be used as service provider edge router as well as an aggregation switch in the telecom and IT Network. These Routers are deployed in the network of NKN, TEC, Strategic Networks, CEIR and DRDO. The deployment of these Routers in ITI Data Centre would also be explored.

VI. Electronic Voting Machines-EVM

ITI looks forward to manufacture complete Electronic Voting Machine (EVM) system. The developed EVM has complete user interface and the mechanical design as per the needs of State Election Commission (SECs). Electronic Voting Machine (EVM) comprises of Ballot unit, Control unit & VVPAT (Voter Verifiable Paper Audit Trail).

ITI R&D has finalized the Technical specifications of EVM matching to SECs requirement of latest EVM for the development of prototypes for Lab evaluation/trails & product approval by TEC/ECI. ITI has manufactured the prototype.

CONTRIBUTION TO EXCHEQUER

During the year, your Company has contributed Rs. 191.64 Crores to the exchequer towards duties and taxes.

PUBLIC DEPOSIT

The Company did not accept any deposits during the year 2021-22. Deposits aggregating to Rs.0.23 Crores had matured for payment, but were not claimed on due dates.

CREDIT RATING

The Credit rating assigned by Rating Agencies for the various debt instruments of the Company forms part of the Corporate Governance Report

JOINT VENTURES

INDIA SATCOM LIMITED (ISL)

ISL is a Joint Venture of Chris Tech Systems Pvt Ltd and ITI. Chris Tech Systems Pvt Ltd has 51% equity participation in ISL and balance equity is held by ITI.

As part of revival, ISL has executed Joint Development Agreement to develop its immovable property as a Software Technology Park. The Master design of the project called as “Silicon Forest”, was completed with the required specification to get the rating of “IGBC Core and Shell Gold Certification”, a Green building rating that brings together a host of sustainable practices and solutions to reduce the

environmental impacts. The project is expected to create employment opportunities for 1000 people during construction and shall build an IT infrastructure designed with a working capacity for 25,000 Software professionals, thereby contributing to the economic growth of the country. ISL has also developed a cloud-based software application useful for various commercial applications and FY 2021-22 being the first year of business operation after a hiatus of quite a few years.

There was no Company which became or ceased to be subsidiary, joint venture or associate of the Company during the year under review.

The salient features of the Joint Venture Company are furnished in form AOC-1 which is appended to this report as Annexure 1.

QUALITY

ITI Limited is always committed to Quality and understand that Quality encompasses all functions. Quality is a driver that produces higher profits through lower costs and has the ability to command a premium price in the market place.

Quite conscious of the importance of the quality, since the very beginning of its incorporation, the company has introduced many quality procedures and practices and has established various Quality Management Systems and necessary infrastructure over the years.

All the Manufacturing Units of the Company are certified for ISO based Quality Management Systems i.e ISO 9001and ISO 14001 Environment Management System.

The Company has created the required Infrastructure by establishing state-of-the-art test facilities like environment test chambers, high altitude test facilities, bump & vibration test facilities, calibration facilities for electronic test instruments, EMI / EMC test facilities, etc. Facilities for Highly Accelerated Life Testing (HALT), Highly Accelerated Stress Screening (HASS) and combined environmental testing have been established for enhancing product reliability. Around two Labs have been accredited by NABL.

Requisite competency on various aspects of quality and reliability has been built by imparting training to employees every year for ISO under on-going competency development programme.

Efforts are paying rich dividend to the Company in many ways like improving our processes, reducing costs and improving profitability, enhancing customer satisfaction and earning goodwill, trust and reputation. With all these infrastructure in place along with necessary available competency and very high level of quality awareness within the company we are poised to comfortably meet any forthcoming challenge on this front in future.

ITI as a main System Integrator is responsible for quality of the overall system even on behalf of its vendors. In such a scenario, it is imperative to have a network of competent and reliable quality suppliers who can consistently deliver high quality products and services. In this context Supplier Quality Assurance Requirement Manual is under preparation with an objective to help in understanding the minimum quality performance requirements and expectations of ITI and its customers and regulators so that the suppliers shall consistently deliver defect free products by developing and enhancing their capabilities through continual improvement of their processes and product performance.

TSEC (Technical Specification Evaluation Certificate Issued by QA and Inspection Circle of BSNL) for

• Gigabit Passive Optical Network (GPON) - ONT & OLT,

• Radio Modem in ISM Band (Type A and Type B),

• Electronic Telephone Instrument with CLIP and two-way speaker feature (Type-I)

• Permanently Lubricated HDPE Telecom Ducts

• Executive Telephone System (ETS-04),

• Optical Fibre Cable ( various Types )

• SMPS Power Plant ( Outdoor and Indoor)

• 2 Mbps PCM Multiplexing Equipment

• Hybrid Solar Photo Voltaic (SPV) Power Supply System.

• Fiber Distribution Management System

BIS (Bureau of Indian Standards) Certification for

• Smart Energy Meter

• Crystalline Silicon Photovoltaic (PV) Modules

• Smaash PC

• Laptops

IEC (International Electro-Technical Commission) certificate for "Solar PV Module”

TEC (Telecommunication Engineering Center) Type Approval certificate for

Permanently Lubricated HDPE Telecom Ducts

NPCI certification for RuPay Card Manufacturing and Personalisation for Smart Card Manufacturing Infrastructure at Palakkad Plant.

NABL Certification

• EMC Lab at Bangalore Plant;

• Smart Energy Meter Calibration Laboratory at Palakkad Plant.

Accreditation of VSSC (Vikram Sarabai Space Center, Trivandrum) for Component Screening, Test & Evaluation, Assembly & Testing of flight Packages.

CSIR- CSIO (Central Scientific Instruments Organisation), Chennai certificated for UV Disinfection System - Garuda

MANPOWER

The Company recognizes the importance of and contribution of its Human Resource in providing the competitive advantages. It emphasizes on upgrading the skills and capabilities of its employees to improve their productivity. The Company is conducting training and workshops in new and strategic areas, so that its employees are ready to face challenges in the coming years. HR initiatives are focused on developing team spirits, employee''s empowerment and their involvement in various activities. All HR efforts are in alignment with the business priorities and with an objective of smooth transition to latest technology.

EMPLOYEES STRENGTH

The Employee strength as on 31^st March 2022 was 2442 out which 433 are female employees.

As on 31^st March 2022, there were 400 employees belonging to Scheduled Castes, 34 belonging to Scheduled Tribes and 468 employees belonging to OBC category. 531 Officials are on Tenure basis, 17 Consultants and 08 Project Coordinators / Project Assistants were recruited during the year 2021-2022.

Employees belonging to Physically Challenged category were 21 and Exservicemen category numbering 39 were on the rolls of the Company as at the end of the financial year.

INDUSTRIAL RELATIONS

ITI has glorious tradition of building and maintaining conducive employee-employer relations environment. The Industrial Relation scenario in the Company was cordial throughout the year. Employees Union and Officers Association extended their co-operation and support in ensuring smooth work flow and helped to meet the Company''s objectives.

PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE

The Company has Internal Complaints Committees (ICC) to redress complaints received regarding Sexual Harassment at all Units. All employees (permanent, Contractual, Temporary, trainees) are covered under this policy. The Company has complied with the provisions relating to the Constitution of ICC and during the year no cases/complaints have been filed under the Act.

developing EMPLOYEES CAPABILITIES & COMPETENCIES

ITI Limited weighs up that employee''s development, enhancing their skills & competencies for preparing them for future is the key step in taking up the challenges effectively.

HUMAN RESOURCES DEVELOPMENT i) Training & Development

Due to the rapid advancement of technology in the present era of globalization, it is very essential for the Company to develop the skills and knowledge required. A lot of attention is being paid to developing new skills, improving existing ones, and boosting capacity in order to meet and overcome the challenges faced. The success of the business depends on skilled manpower/ personnel. The major driving forces behind the Company''s expansion and sustainability are skill and knowledge. Attrition of trained and experienced employees has resulted to a shortage of skilled manpower for the Company right now which is a biggest challenge. The lack of required skill set is made by deliberate and well-planned training and development activities to improve/overcome the challenging situation. ITI Limited has adopted a strategy that directs employee training, development and capacity building training through a systematic and need based planning process through identification of training needs, designing and customizing the training programmes etc.

Learning is part of our core value at ITI Limited. Recognizing the need for capability building for current and future roles, ITI Limited has set up a comprehensive training facilities comprising Employee Development Centers (EDCs) at all plants and Simulator training facilities at Bengaluru. Training & Development is actively engaged in making our people future ready in terms of technology, business acumen and leadership so as Learning is one of our Core-Values.

Training Delivery modes includes classroom, online (web based and VideoConferencing), Virtual Reality and e-Learning with increasing emphasis on technology driven platforms. In fact, in the wake of Covid-19, almost all programs were being delivered virtually on GoTo Meet/CDOT, other such platforms.

With a major focus on the Company''s business objectives, employee-centered technological and managerial skill development, customer relations and quality, the Company has made a commitment to adopt the way to enhance the skills in emerging trends in telecom technologies, IoT and ICT etc, and also accelerated HR learning interventions and development activities. Employees get regular access to enhance the skills/knowledge on areas like new technology/general training courses such advanced courses on 4G/5G, IoT, enterprise risk management (ERM), advanced courses on PCMM Level 3, employee wellness programmes and awareness courses on the right to information etc.

The details of number of training programmes organized; No. of people trained; Training man-days achieved during the FY 2021-22 is as follows:

Details	Training		Total
	In-house (IH)	External (EN)
No. of programmes	70	31	101
No. of people trained	2238	241	2479
Trg. Man-days achieved	1985	580	2565
Male employees trained	1674	171	1845
Female employees trained	564	70	634
SC/ST employees trained	378	52	430
Note: IH-In House, EN: External Nomination

Talent Development

At ITI Limited, we believe in holistic development of not only our product but also of our talent/employees to give them an edge over for their personal and professional growth. Given the trend of increase in technology and innovation globally, it has been always being important to us to nurture our employees through comprehensive training and development programs.

A skill is the capacity to perform an action satisfactorily on the job; well-honed skills and knowledge can establish a person as an authority in a given field. Employee performance is improved by skill when they have the essential training to do their jobs. Employees can develop these talents further through a training programme. When new technology, procedures or systems are introduced, trainings are used to re-educate and re-train staff members in order to ensure that they are meeting the specific needs of their respective positions. And also, Employees may advance in their careers with the help of employee development programmes.

Corporate HRED has taken advantage to organize the programmes/workshops with the help from different govt. bodies like Department of Public Enterprises (DPE), Centre for Development of Advanced Computing (C-DAC), National Telecommunications Institute for Policy Research, Innovation & Training (NTIPRIT)/ Department of Telecommunications (DoT), National Academy of Human Resource Development (NAHRD), Government e-Marketplace (GeM) etc. i.e. Training programmes/workshops organized by DPE during FY 2021-22 under Research, Development & Consultancies (RDC) scheme for the benefit/well-being of our employees and the Company. With respect to webinars, Corporate HRED hosted/ organized like MANAS - the HR Maturity forum, CHINTAN - the Techno Brains and external free/paid webinars and new intervention like MANTHAN- Brainstorming Session initiative for cross functional departments to improve & share knowledge in the Company has been coordinated/organized by Corporate HRED department.

In addition to the above, 241 officials have been nominated for external training programmes/workshops organized by various Govt. agencies & private Institutions in the most important areas to groom and develop their skills, knowledge, attitude and new technology. These interventions help them to develop, ability to manage the change, drive for innovative ideas & approaches, to enhance critical thinking, positive attitude for building a high-performance work culture.

ii) Skill Development and Capacity Building:

Skill Development is significant in the overall development of an employee.The personal development & learning skills of employee will not only increase the opportunities but will also empower an individual. Skills like communication go a long way in aiding the overall development of students/trainees. Skill Development trainings provide significant benefits like; increase in employment opportunities, increased career development opportunities, personal growth, increases knowledge and understanding of local industry.

The Company not only develops the skill sets of its own employees by imparting training through its HR-Employee Development Centers located at units but also train and educate the young minds in vocational trades through summer training/ internship projects etc. Company has also ventured to provide theoretical and practical training to engineering, management students as an endeavor to bridge the institution-industry skill gaps. The Finishing School trainings at Company''s plants are doing yeoman services to the students'' community in the Country.

The Company is actively involved in imparting the Skill Development training in various modules of Telecom Skill Sector Council (TSSC)/ Electronics Sector Skill Council of India (ESSCI) and National Institute of Electronics & Information Technology (NIELIT) job roles and ITI Modules for various categories of students. As part of ‘Skill India'' Flagship programme, ITI started imparting Skill Development and Capacity Building training at various plants of ITI to youths/trainees/ students thereby enhancing their employability and increasing their employment opportunities and entrepreneurship.

ITI has been empanelled by Maulana Azad Education Foundation as Project Implementing Agency (PIA) and received an initial allocation/ target of 500 trainees for organizing Skill Development Training programme under ‘Seekho aur Kamao'' scheme of Ministry of Minority Affairs.

The following are some of the Job Roles in which ITI has imparted Skill Development trainings like Retail Team Leader (Seekho aur Kamao, under MoMA, by MAEF), Broadband Technician (NSKFDC) etc. In addition to the above, ITI is also engaging and imparting training to Graduate Engineers, Diploma (Technicians) and Trade Apprentices in various trades under the Apprentices'' Act / National Apprentices Promotion Scheme (NAPS). Also, as a part of capacity building, the Company is imparting training to the students of Engineering / Management to carry out their Internship, Project and Adoption of ITI / Specialized Industrial Trainings.

Course-wise number of participants imparted Skill Development training during the FY 2021-22:

Sl. No.	Name of Skill Development Scheme	No. of participants
1	ITI Trade Apprentices (NAC)	69
2	Diploma Technician Apprentices	15
3	Graduate Engineer Apprentices	22
4	In-Plant/Internship Training (ITIL module)	253
5	Project Training (ITIL module)	83
6	Special Industrial Training (ITIL module)	69
TOTAL		511

COMPLIANCE UNDER THE OFFICIAL LANGUAGE ACT, 1963

All Units/Marketing services and Projects (“MSP”) of the Company have established “Check-Points” in their departments to make effective implementation of the Official Language Policy. Monitoring is being done by the respective Official Language Implementation Committee (OLIC) constituted in every Unit/MSP

The Progress of Implementation of Official Language in corporate office as well as in all Units/MSP is being periodically reviewed by the OLIC of corporate office.

Units/MSP at Naini, Rae Bareli, Mankapur, New Delhi, Mumbai, Lucknow & Corporate Office have been notified in the Gazette of Government of India under the OL Rules 10(2) & (4), 1976 as more than eighty percent (80%) of the staff had working knowledge of Hindi in these Units/MSP

The Corporate Office is regularly sending the Quarterly Progressive Report to the Ministry of Communication, Department of Telecommunication, New Delhi as well as Dy. Director (Implementation), Regional Implementation Office, Bengaluru. We have also sent Half Yearly Hindi Progress report to Secretary, Town Official Language Implementation Committee (Undertaking) (TOLIC), Bangalore and Annual Assessment Report to Ministry of Communication, Department of Telecommunication, New Delhi. After reviewing our quarterly report & Annual report Corporate Office has been receiving appreciation letter for the last one year from Deputy Director (Implementation), Regional Implementation Office, Bangalore.

On 25^th-26^th October, 2021, Shri Ramanuj Dey, Deputy Secretary (OL) & Shri. PC. Vishwakarma, consultant (OL), Ministry of Communication, Department of Telecommunication, New Delhi, has inspected ITI limited, Registered & Corporate office of Official language department in connection of official language policy implementation.

After inspection an appreciation letter received in the review report sent to the Chairman and Managing Director by Shri. Ramanuj Dey, Deputy Secretary (OL), Department of Telecommunication, New Delhi.

The Company has published Hindi House Magazine “SANCHAR PRAGATI” for the first time and the first issue was released on 22^nd March 2022 by Chairman and Managing Director of ITI limited, Shri. Rakesh Mohan Agarwal, in the presence of all the members of the official language implementation committee and editor/ members of the Magazine.

In order to enhance working knowledge of Official Language of employees, internal training programs are conducted with support of internal/external faculties. Besides, employees are also encouraged to take part in Hindi Prabodh, Praveen,

Pragya & Parangat examinations for which financial incentives are given to qualified employees.

“Hindi Fortnight” was organized in the year 2021-2022 in all the Units and MSP offices and various events were organized for employees during this fortnight. Employees of Units/MSP also participated in the “Joint Hindi Month” competitions organized by Town Official Language Implementation Committee (Undertaking), Bangalore and won approx. 03 awards. Bilingual (i.e English and Hindi) website of the company is being regularly updated.

VIGILANCE

The vigilance department of ITI Limited focuses on preventive vigilance to identify deficiencies in the system if any and advise the management on streamlining the systems to prevent recurrence. The complaints received also are being investigated and brought to a logical conclusion.

I. System Improvements

The details of system improvements effected based on preventive vigilance and investigations of complaints are as below :

a. Recruitment

The deficiencies w.r.t notification and the selection process were identified and advisories on the same to prevent recurrence of deficiencies in the sensitive recruitments were issued.

b. Security of factories

To strengthen security system in the factories of ITI at various places, a detailed review was done and details of deficiencies and guidelines for rectifying the same were issued to management.

c. Procurement of goods and services

The Materials Management Manual which was revised in 2016 was reviewed and the revised manual with latest guidelines and policy of the Company was completed and the draft is in the advance stage of acceptance by the management for compliance along with relevant DOF.

d. Works contracts for execution of projects

To overcome the deficiencies/discrepancies observed in the contracts being entered into and executed on various projects, a detailed advisory covering Pre tender, Tender stage, tender evaluation and Post tender execution was issued.

e. Leveraging of technology

The implementation of E Payment, E tender, Procurement through GEM and implementation of ERP was taken up as a regular review items in vigilance review with the management and quantum improvements was achieved on the same.

f. Disposal of overaged materials and Plant & Machineries

Detailed review of the huge accumulation of obsolete/unserviceable materials and Plant & Machinerie which were accumulated over the past two decades was taken up and disposal of the same is under process. This not only generates revenue on disposal but also reduces the expenses to maintain the inventory and release the space for alternate use in the unit.

II. Details of vigilance Complaints monitoring

The complaints received are being reviewed by vigilance organisation and whichever complaint requires investigation, the same are taken up duly following CVC guidelines. The details of vigilance complaints received and processed at ITIL during the year is as below,

Status of Vigilance Complaints - 2021-22
Opening Balance	Received during 2021-22	Total	Disposed	Pending Cases with Nature of Complaints
6	27	33	25	8 (Contract -4) (HR-4)

COMPLIANCE UNDER THE Right TO INFORMATION ACT,2005 (RTI)

During the FY 2021-22, 451 applications under RTI have been received including 48 RTI applications carried forward from previous years. Information was provided for 460 RTI applications. The Central Information Commission (“CIC”) has online RTI portal for filing online RTI requests for seeking information for convenience of the applicants. Out of the 460 replies, information was provided online for 210 cases. All cases referred to CIC by the applicants as Second Appeals have been successfully addressed and complied. Quarterly online RTI returns were uploaded on the CIC portal and also same information were published on the Company website.

AUDIT

> STATUTORY AUDIT

M/s. GRSM & Associates, Chartered Accountants, Bengaluru were appointed as Statutory Auditors for 2021-22, by Comptroller & Auditor General of India (C&AG) for Bangalore Plant, NS Unit, Corporate Office, 8 Regional Offices and Consolidation of accounts. They will hold office till conclusion of the ensuing Annual General Meeting. C&AG is in the process for appointment of Statutory Auditors for the year 2022-23.

The Statutory Auditors have been paid a total remuneration of Rs 12.85 lakhs towards audit fees, certification and other services. The above fees are excluding of taxes, re-imbursement of travelling and out of pocket expenses.

> AUDITORS’ REPORT

Auditors'' Report on the annual accounts for the financial year 2021-22 and the comments of the C&AG under Sec 143(6)(b) of the Companies Act, 2013 on the Annual accounts are appended to this report. Reply to observations of Statutory Auditors and C&AG are attached as addendum to this report.

During the year 2021-22, there has not been any fraud reported by the Statutory Auditors of the Company.

> BRANCH AUDITORS

The following firms of Chartered Accountants were appointed by Comptroller and Auditor General of India as Branch Auditors for different plants of the Company for the year 2021-22.

Sl No.	Unit	Name of the Firm
1.	Rae Bareli	M/s. Mehrotra Kapoor & Tandon, Rae Bareli
2.	Naini	M/s. G K Arora & Associates, Allahabad
3	Mankapur	M/s. S K Associates , Faizabad
4.	Palakkad	M/s. Argee & Co, Palakkad
5	Srinagar	M/s. Mohammad Qasim & Co, Srinagar

The fees paid to Branch Auditor for Rae Bareli is Rs 1.63 Lakhs, Naini Rs 1.16 lakhs, Palakkad Rs 1.34 lakhs, Mankapur Rs 1.18 lakhs and Srinagar Rs 0.20 lakhs towards audit fees, certification and other services. The above fees are excluding applicable taxes, re-imbursement of travelling and out of pocket expenses.

> COST AUDITORS

The Company maintains cost records as required under the provisions of the Companies Act. The Company had appointed M/s. GNV & Associates, Bengaluru as lead Cost Auditors for the year 2021-22 for the cost audit of units located at

Bengaluru and Palakkad and also for consolidation of Cost Audit Reports of the Company as a whole.

M/s. Aman Malviya & Associates, Lucknow were appointed as Branch Auditors for cost audit of units located at Naini, Rae Bareli, Mankapur and Srinagar.

A remuneration of Rs.3,16,000 inclusive of GST as applicable was fixed by the Board for payment to the Cost Auditors for 2021-22, which was ratified by the shareholders in the last Annual General Meeting held on 10.11.2021. The cost audit report for the year 2020-21 was filed with Ministry of Corporate Affairs.

> SECRETARIAL AUDITOR

The Board had appointed Shri D Venkateswarlu, Company Secretary in Practice, to conduct the Secretarial Audit of the Company for the year 2021-22. The Secretarial Auditor in his report have stated that during the period under review the Company has complied with the provisions of the Acts, Rules, Regulations, guidelines, standards except for those observations mentioned in Secretarial Audit Report, which is appended as Annexure-2. The reply of management to observations of Secretarial Auditor is attached as addendum to Directors report.

INTERNAL FINANCIAL CONTROL

The Internal Audit is conducted by Company''s Internal Audit team headed by professional personnel at Corporate Office and at Units. The reports of Internal Audit department indicating the status of compliance with internal control system of the Company, is periodically reviewed by Audit Committee. The Audit Committee also periodically interacts with the internal and statutory auditors including Branch auditors to assess the adequacy of internal control systems.

As per Auditor''s opinion, Company have in all material respects, an adequate internal financial controls system over financial reporting along with the findings expect of the observations referred in Annexure- B to the Independent Auditor''s Report and such internal financial control were operating effectively as on 31^st March 2022, based on the internal control with reference to the Financial Statements criteria established by the Company considering the essential components of internal control stated in the Guidance Note of Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

ITI is committed to the Communities around its business and far beyond through its CSR initiatives. The Company meticulously took care of its social responsibility and spent Rs 99.09 lakhs during the Financial year 2021-22 and Rs 11.46 lakhs is being transferred to PM Cares Fund.

Annual Report on CSR activities including the composition of CSR Committee is enclosed as Annexure-3 to the report.

The details of the CSR policy, projects and programmes are available on the website of the Company on at https://www.itiltd.in/csr

BOARD OF DIRECTORS AND KEY MANAGERIAL PERSONNEL

As on 10^th August 2022, there are Seven Directors on the Board of the Company, of which Three are Whole Time Directors (including Chairman and Managing Director), One is Government Director and Three Non Official Part Time Directors (Independent Directors).

INDEPENDENT DIRECTORS

During FY 2021-22, following Independent Directors have completed their term :

1. Shri Rajen Vidyarthi on 07^th August 2021

2. Dr Akhilesh Dube on 07^th August 2021

3. Shri Mayank Gupta on 12^th August 2021

4. Dr K R Shanmugam on 29^th August 2021

The Government of India vide order dated 01^st November 2021 appointed following Independent Directors for a period of three year w.e.f. 10^th November 2021 :

1. Dr Raja Nayak

2. Shri Billeswar Sinha

3. Smt Mamta Palariya

The Company has received the Certificate of Independence from the Independent Directors confirming that they meet the criteria prescribed for Independent Directors under the provisions of the Companies Act, 2013, and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations). The Independent Directors have confirmed that they are registered with the Database maintained by the Indian Institute of Corporate Affairs (IICA) under the Ministry of Corporate Affairs

In terms of the provisions of Schedule IV of the Companies Act, 2013, the terms and conditions of appointment of Independent Directors are posted on the website of the Company. Further, the Independent Directors are not liable to retire by rotation under the provisions of Section 152 of the Companies Act, 2013.

During the year under review, a separate meeting of Independent Directors was held on 07^th August 2021 in which all the Independent Directors were present.

government director

The following are changes in Government Directors:

1. Lt Gen Milind N Bhurke, PVSM, VSM, Signal Officer - in Chief was appointed as Government Director w.e.f 07^th May 2021 upon obtaining DIN.

2. Dr Rajesh Sharma was re-appointed as Government Director w.e.f. 01^st August 2021.

3. Lt Gen Milind N Bhurke, PVSM, VSM, Signal Officer- in Chief and Government Director ceased to be the Director of the Company consequent to his superannuation on 30^th June 2022.

FUNCTIONAL DIRECTORS

The following are the changes in Functional Directors :

1. Shri Shashi Prakash Gupta ceased to be the Director HR upon attaining the age of superannuation w.e.f. 30^th June 2021.

2. Shri Rakesh Mohan Agarwal, Chairman and Managing Director was entrusted with additional charge of Director HR w.e.f 02^nd July 2021 to 30^th September 2021

3. Shri D Venkateswarlu, Director Production was entrusted with additional charge of Director HR w.e.f. 29^th December 2021

4. Shri Rakesh Mohan Agarwal ceased to be Chairman and Managing Director of the Company upon attaining the age of superannuation w.e.f. 30^th June 2022

5. Shri D Venkateswarlu, Director Production assumed Additional Charge of Chairman and Managing Director w.e.f. 07^th July 2022

The Board wish to place on record its whole hearted appreciation for commendable contribution and guidance rendered by the Directors whose term of office ended during the year.

Shri Rajeev Srivastava, Director Finance retires by rotation at the forthcoming Annual General Meeting and being eligible offers himself for re-appointment.

KEY MANAGERIAL PERSONNEL

During the financial year 2021-22, apart from functional directors, Chief Financial Officer and Company Secretary continues to hold the post of Key Managerial Personnel of the Company.

DETAILS OF BOARD MEETINGS

During the year under review, 7 (Seven) Meetings of the Board of Directors were held. The details of meetings attended by each director are provided in the Corporate Governance Report.

COMPOSITION OF AUDIT COMMITTEE

As on 31^st March 2022, the Audit Committee comprised 4 (four) Members out of which 3 (three) were Independent Directors and 1 (one) was a Functional Director. During the year, 06 (six) Audit Committee Meetings were held, details of which are provided in the Corporate Governance Report.

There have been no instances during the year when recommendations of the Audit Committee were not accepted by the Board.

PERFORMANCE EVALUATION OF BOARD, ITS COMMITTEES AND INDIVIDUAL DIRECTORS AND POLICY FOR SELECTION AND APPOINTMENT OF DIRECTORS AND THEIR REMUNERATION

As per the provisions of Section 134(3)(p) of the Companies Act, 2013, a listed entity is required to include a statement indicating the manner of formal evaluation of performance of the Board, its Committees and of individual Directors. However, the said provisions are exempted for Government Companies as the performance evaluation of the Directors is carried out by the Administrative Ministry i.e. Ministry of Communications, as per laid down evaluation methodology.

With regard to formulation of criteria for appointment of Directors on the Board, being a Government Company, Government of India does the criteria for selection, appointment and terms and conditions of appointment including remuneration of the directors.

RISK MANAGEMENT

During the year, the Board of Directors in its meeting held on 22^nd June 2021 approved the Enterprise Risk Management Manual. The Company has a Risk Management Committee (‘RMC'') to frame, implement and monitor the risk management plan for the Company. The Committee had revamped its Enterprise Risk Management Manual - Policy & Framework with an objective to ensure that the Company has proper and continuous risk identification and management process. Risk Management is being practiced by the Company in all units and the possible risks associated with the business are identified and mitigation plans are evolved. Besides Risk Prioritization, the Roles and responsibilities of all the sub committees (below board level) have been clearly defined.

The details of Committee and other details are set out in the Corporate Governance Report and a detailed note on Risk Management is provided in the Management Discussion and Analysis Report.

WHISTLE BLOWER POLICY/ Vigil MECHANISM

Details regarding Vigil Mechanism is provided under Corporate Governance report which forms part of this Annual Report.

PARTICULARS OF EMPLOYEES

Government Companies are exempted from complying with provisions of Section 197 of the Companies Act, 2013. Therefore, such particulars have not been included as part of Directors'' Report.

BUSINESS RESPONSIBILITY REPORT AND MANAGEMENT DISCUSSION AND ANALYSIS REPORT

A separate section on Business Responsibility report and Management Discussion

and Analysis Report, as required under Listing Regulations, has been included in the Annual Report as Annexure- 4 & 5 respectively and the same forms part of the Directors'' Report.

CORPORATE GOVERNANCE REPORT

The report on Corporate Governance on the compliance of Corporate Governance conditions stipulated in Listing Regulations and the DPE guidelines forms part of Directors report. The Certificate on the Compliance of above Corporate Governance Conditions from Practicing Company Secretary also forms part of Directors'' report.

ANNUAL RETURN

In accordance with the Companies Act, 2013, the annual return is available on the Company''s website at https://www.itiltd.in/annual_general_meeting

RELATED PARTY TRANSACTIONS

All related party transactions entered during the year 2021-22 were in ordinary course of the business and are on an arm''s length basis.

The Company has formulated a Policy on Related Party Transactions which is available on the Company''s website at https://www.itiltd.in/codes_and_policies.

The disclosure of related party transactions as required under Section 134(3)(h) of the Companies Act, 2013 in Form AOC 2 is not applicable to the Company. Members may refer to note no. 32 to the financial statement which sets out related party disclosures pursuant to IndAs 24.

MATERIAL CHANGES AFFECTING FINANCIAL POSITION OCCURING BETWEEN THE END DATE OF FINANCIAL YEAR AND DATE OF THE REPORT

There have been no material changes and commitments affecting the financial position of the Company between the end of the financial year and the date of this report. There has been no change in the nature of the business of the Company.

REGULATORY OR COURTS ORDER:

During FY 2021-22, there was no order or direction of any court or tribunal or regulatory authority which either affecting Company''s status as a going concern or significantly affecting Company''s business operations.

DIRECTORS’ RESPONSIBILITY STATEMENT

The Board of Directors confirm that

(a) In the preparation of the annual accounts for the financial year ended 31^st March 2022, the applicable accounting standards had been followed along with proper explanation relating to material departures;

(b) Such accounting policies have been selected and applied consistently and judgments and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at 31^st March 2022 and of the profit of the Company at that date;

(c) Proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(d) The annual financial statements have been prepared on a going concern basis;

(e) Proper internal financial controls were in place and that the financial controls were adequate and were operating effectively; and

(f) That systems to ensure compliance with the provisions of all applicable laws were in place and that such systems were adequate and operating effectively.

PARTICULARS OF LOAN, GUARANTEES OR INVESTMENTS

There are no transactions of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013.

STATUS ON COMPLIANCE WITH THE INSOLVENCY AND BANKRUPTCY CODE, 2016

During the year 2021-22, M/s Emdee Digitronics Private Limited filed an application u/s 9 of the Insolvency and Bankruptcy Code, 2016 before NCLT Bengaluru Branch. On the last date of hearing on 03^rd August 2022, Counsels for both parties submitted before the Bench that a Joint Memo for withdrawal of the application will be filed. Hon''ble Bench heard both sides and posted the matter to 11^th August 2022.

There are no other applications made or any proceeding pending against the Company under Insolvency and Bankruptcy Code, 2016 (31 of 2016) during the financial year.

DETAILS OF DIFFERENCE BETWEEN AMOUNT OF THE VALUATION DONE AT THE TIME OF ONE TIME SETTLEMENT AND THE VALUATION DONE WHILE TAKING LOAN FROM THE BANKS OR FINANCIAL INSTITUTIONS ALONG WITH THE REASONS THEREOF

There are no instances of one-time settlement during the financial year 2021-22.

ENTERTAINMENT EXPENDITURE AND Foreign TRAVEL

The expenditure on entertainment was Rs. 2.58 lakhs (PY Rs.0.56 lakhs). Expenditure on official travel abroad by the officials of the Company was NIL during the year.

CITIZEN''S CHARTER

Citizens are implied as any stakeholder of the ITI Limited (ITI) extending from Employees, Customers, Vendors, Investors, Collaborators/JV Partners,

Competitors, Media, and Government to Society/community at large. The Citizen''s Charter does not by itself create new legal rights, but makes the citizens aware of their existing rights.

ITI Citizen''s Charter outlines its scope and contains general information about the Company, Citizens'' obligations towards the Company and the management''s commitment towards the citizens. It also contains Grievance Redressal Mechanism and Citizens'' Service Delivery.

The Charter exhibits the organization''s ability to provide quality products and efficient services to the citizens while meeting the legal and regulatory requirements. Continuous improvement of products and services is its aim for the satisfaction of the stakeholders. The Citizen Charter of the Company is available on the website at https://itiltd.in/doc/2022/Citizen_Charter_ITI.pdf

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

Particulars with respect to Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo, required to be disclosed under the Section 134 of the Companies Act, 2013 read with Rule 8 of Companies (Accounts) Rules, 2014 is appended as Annexure 6.

PROCUREMENT POLICY FOR MICRO AND SMALL ENTERPRISES ORDER 2012

Procurement Policy for Micro and Small Enterprises Order 2012 read with amendments made thereunder is being followed by all the Units of the Company. The annual target set for MSME procurement is 25% in FY 2021-22. The Company has achieved a decent target of 58.90% of total annual procurement through our MSME vendor during 2021-22. Total procurement value through MSME vendors was Rs 633.12 Crore.

ACKNOWLEDGEMENT

The Directors acknowledge the support and guidance received from Government of India particularly Ministry of Communications, various State Governments, regulatory and statutory authorities. The Directors appreciate and value the contribution made by the employees at all levels. The Directors would also like to place on record their appreciation for the continued co-operation and support received by the Company during the year from bankers, business associates, members, customers and other stakeholders. The Directors look forward to continuance of the supportive relations and assistance in the future.

For & on behalf of the Board D Venkateswarlu

Place: Bengaluru Director Production,

Date : 10^th August 2022 (Addl. charge) Chairman and Managing Director &

(Addl. charge) Director HR DIN : 08605954

---

Mar 31, 2018

Dear Shareholders,

The Board of Directors have pleasure to present the 68^th Annual Report of your Company along with its Audited Statements of Accounts for the year ended March 31, 2018, together with the Auditors’ Report and Comments on the Accounts by the Comptroller and Auditor General (CAG) of India.

PERFORMANCE

The Company has achieved Sales of Rs.1703 Crore during the year 2017-18 against Rs.1611 Crore during the previous year 2016-17. This is remarkably the highest turnover in the past seven years. The Financial Year 2017-18 has been a breakthrough year for ITI and it is a year of turn around for ITI, making profit without grants after a long gap of 16 years.Without the grants from the Government of India, net profit for the period before tax (after exceptional and/or extraordinary items) increased to Rs.102 Crore for the year ended March 31, 2018 as against a loss of Rs.56 Crore for the previous year.

The contribution (net of material cost) for the year 2017-18 is Rs.338 Crore, which is comparable for that of previous year at Rs.298 Crores. The company is making efforts to regain its strong leadership position in the telecommunications domain in the country. The company has plans to keep this profitability going on.

IMPLEMENTATION OF REVIVAL PACKAGE OF ITI LIMITED

The Cabinet Committee on Economic Affairs (CCEA), during February 2014, has approved the Revival plan of ITI of Rs.4156.79 Crores This package consists of Rs.2264 Crore in the form of equity for financial assistance in all the plants of ITI for implementation of new projects and Rs.1892.79 Crore to be financial assistance as grant-in-aid. Out of Rs.2264 Crore, Government has released Rs.192 Crore as first phase disbursement to the Company towards capital expenditure during 2014-15 and Rs.80 Crore has been released during 2016-17.

During the financial year 2017-18, the company received Rs 337 Crore as Capex funds. Rs.137 Crores received on 31st March 2018. Out of the effective capex amount of Rs.200 Crores received during August & September 2017, Rs.189.55 Crores was already utilized for implementation of New projects which was envisaged for the year 2017-18. Further Rs.100 Crore has been allotted in budget as Capex funds for FY 2018-19. The funds allotted has been invested for upgrading the manufacturing infrastructure at various Units of ITI to cater the need of emerging technologies in Telecom industry after studying the products/solutions prevailing now and expected in the Indian telecom market in future. With the upgraded manufacturing infrastructure, ITI has successfully bounced back to its core strength of manufacturing telecom products & solutions and in fact ITI is getting benefits from these as company is already manufacturing different products for different customers.

Under Revival plan, several projects have been implemented at various manufacturing plants of ITI and some projects are under implementation. With the infrastructure established, ITI could successfully manufacture G-PON products. ITI manufactured, supplied, installed & commissioned about 1500 OLT and 40000 ONT to cater for 40000 Gram panchayats for provisioning of high speed broad band connectivity under BharatNet project. Major thrust has been given for the manufacture of encrypted telecommunication equipments required for Defence sector. ITI has received Advance Purchase orders for Design, development, manufacture and supply of Multi Channel Encryption Units ( MCEU) under NFS project to Defence. ITI is bidding more tenders for Encryption equipment’s for Defence and confident of getting more orders. ITI has also ventured in to diversified products/services/ solutions like OFC /HDPE pipe manufacturing, Smart card manufacturing, radio modem, Antenna, Data Centre services (SaaS, Aadhaar based authentication Services etc..), Digital Mobile wallet, TAG-ITI for cashless transaction, Component screening , manufacturing and supply of avionics modules for ISRO, Set top box, Hand Held Terminals/devices, Mini PC, Smart energy meter etc. Solar panel manufacturing line for 18MW capacity is installed at ITI Naini. Our existing Data Center is being expanded further to augment 1200 racks and is at the final stages of commissioning. In addition to 3 lines of HDPE manufacturing at Rae Bareli plant, in view of huge requirement, to enhance the capacity one more line of HDPE pipe manufacturing has been commissioned at Palakkad unit. ITI has installed one manufacturing line for Optical Fibre Cable (OFC) at Rae Bareli unit and pilot lot has been produced.

The state of the art infrastructure established under revival package funds provided to ITI by GOI has boosted it’s manufacturing strengths to a new high paving way for manufacturing various telecom and allied products to cater for domestic market demands under make in India mission of Govt of India.

HIGHLIGHTS

The turnover for the year 2017-18 is mainly constituted from GPON Project, Network For Spectrum (NFS) project, ROs & CCOs Services, AMC for ASCON, Defense Business & it’s AMC, MLLN and SSTP Projects & it’s AMC , CDOT AN RAX, SECC, NGN, AMC for GSM-SZ,GSM-WZ, AMC for OCB, Data Centre and IT Solutions, Smart Energy Meter.

The company has been working on very important projects of National Importance. ITI has bagged turnkey orders for Supply, Installation, Commissioning and Maintenance of GPON Equipments covering about 40000 villages from BBNL& BSNL. This project will extend the High Speed broad band services on GPON platform to rural masses. Company has bagged purchase orders to the total value of Rs. 455.78 Crore during the year 2016-17 & 2017-18 from BBNL/BSNL. Out of this, orders worth Rs. 343 Crore have already been executed.

ITI has deployed 400 teams for Installation and Commissioning of this nationwide network penetrating to the uncovered Gram Panchayats in the remote Rural India. ITI is also participating in the tenders of “Bharat Net phase II Project”. This project provides Broadband connectivity to 1.5 lakhs Gram Panchayats in India. ITI has recently obtained purchase order worth Rs.110 Crore from BSNL against Bharatnet Phase II. In addition to this, ITI has won three tenders viz MahaNet, GujaratNet and west Bengal tender as part of BharatNet Phase II, which shall amount to total orders worth Rs.5700 Crore.

The other important project being executed is the NFS (Network For Spectrum) project worth Rs. 2985 Crores for the defense forces of India which involves Supply, trenching, laying, Installation, testing and maintenance of Optical Fiber Cable, PLB Duct and accessories for construction of exclusive Optical NLD backbone and Optical access routes on turnkey basis with AMC in the Eastern and North- Eastern region of the country. ITI has won the order for these 2 regions, for deployment of optical fibre for around 13,500 Kms of length. Out of the total of 13500 kms cable laying, nearly 10620 kms have been laid in both regions. So, ITI has already completed 78% of the work and will be completing the entire project by next year end.

On the defense front, the company has won Rs 7800 Crore worth mega tender of Army Static Switched Communication Network (ASCON) Phase IV project from the Ministry of Defence to deploy and maintain Phase IV of the Army’s modern communication network across India. The project includes civil works for the infrastructure and optical fiber network, installation, commissioning and maintenance of equipment such as IP MPLS routers, Microwave Radio, Satellite terminals, NMS and testing tools. ITI has also received Advance purchase order for value of Rs 86 Crore from Defense for the supply of encryption products. ITI has also bid for the ASCON encryption tender and hoping to get good orders. In addition, ITI has orders for 2mb BEU and other projects for defense.

ITI has also bagged huge order worth Rs 840 Crore from Energy Efficiency Services Limited (EESL) for supply of Smart Energy Meters and the order is under execution. Further, ITI has also received orders to the total value of Rs. 475 Crore from BSNL for supply, installation and AMC of Broadband Gateway Network (BNG), Anti Denial of Services (DDoS), Radio Modem and WiFi Hotspot.

Further order worth Rs. 5800 Crore for O&M and Sales & marketing of GSM Passive Infrastructure is expected from BSNL. This order is to be executed in 10 years and hence the business per annum will be Rs. 480 Crore Our company order book position is very strong and is expected to reach to a historic mark of Rs.20,000 Crore during 2018-19. ITI is addressing the Bharat Net Phase II projects of Telangana, Rajasthan, Kerala, Orissa and Jharkhand states. ITI is further pursuing many more tenders in the defense sector as well as tenders like Integrated Perimeter Security System (IPSS) of Air Force, Security And Growth for All in the Region (SAGAR) of Navy, IP-MPLS & Unified NMS for NFS project.

The overall performance of the Company is as follows:

Sl. No.	Products/Projects	2017-18 (Including ED, ST & GST)	2016-17 (Including ED & ST)
1	NFS Project	267.11	700.16
2	ROs/ CCOs/ IT	200.11	190.00
3	Defence Business & AMC/ ASCON AMC/TURNKEY	127.00	181.35
4	MLLN / MLLN AMC/ SSTP	185.66	154.85
5	GSM WZ Projects/ AMC	34.46	81.11
6	GSM SZ AMC	159.59	76.25
7	NPR / SECC Projects (Data Collection)	122.03	70.59
8	NGN / C5/ Ph2/ AMC	3.57	35.86
9	OCB AMC Business	26.73	32.86
10	G - PoN	390.99	22.51
11	Misc. Services	7.80	19.77
12	Data Centre	17.80	19.13
13	Banking/ Div. Prod./ cont.Mfg	4.34	11.23
14	SMPS & Repairs	5.81	5.73
15	SATCOM,PCM MUX & Teleset	2.95	5.24
16	GSM - MTNL	0.00	2.44
17	NPR - Smart Card	0.00	1.61
19	CDOT AN RAX/ Cards/ AMC	12.26	0.00
20	HDPE PIPE Mfg	0.48	0.00
21	3D Printing/Wallet/Adhaar based Business /Set Top Box/ Mini PC /Component Screening/LED Street Lighting	55.84	0.00
22	Solar panel	0.72	0.00
23	NGN Mfg.	55.66	0.00
24	Smart Energy Meter	22.20	0.00
	Total	1703.11	1610.69

PROJECTS EXECUTED DURING THE YEAR 2017-18

- Next Generation Network (NGN)

ITI Bangalore Plant successfully executed the purchase order worth Rs.59.23 Crore. for NGN products.

- Fiber Cable Laying for Network for Spectrum (NFS)

ITI Limited is executing the NFS Cable laying Project in Eastern and North Eastern states of the country. Cable laying and services work worth Rs. 146.64 Crore by Rae Bareli unit and Rs.120.47 Crore by Mankapur Unit have been completed during the year.

- Defence projects

ITI is the leader in supplying encryption equipments for the secured communication in the Defence networks. In the year 2017-18, ITI had executed orders worth Rs.24.94 Crore for Defence sector through supply of IP encryptors, secrecy Encryptors and AMC of equipment supplied to Defence.

- Giga-bit Passive Optical Network (GPON)

ITI Rae Bareli Plant has executed order worth Rs. 284.31 Crore, Naini Plant has executed order for Rs. 62.29 Crore and NSU Plant has executed order for Rs. 44.39 Crore during the year.

- Socio Economic &Caste Census (SECC) projects

ITI is one among the consortium of three PSUs (other two PSUs being M/s BEL & M/s ECIL) for the execution of prestigious National Population Register(NPR) Project under Ministry of Home Affairs (MHA) and SECC project for the Ministry of Rural Development (MoRD). ITI Palakkad executed total purchase order worth Rs.122.03 Crore against SECC Project during the year.

- MLLN and SSTP Projects & AMC

MLLN equipment provides dedicated Network between two points which carry voice, data and video and BSNL is providing leased circuits to banks and other organizations using MLLN. Palakkad has also implemented Hardware upgrade of SSTP equipment for BSNL & MTNL. Palakkad Plant has executed the orders of MLLN and SSTP Projects & its AMC for total value of Rs.185.66 Crore during the year.

- Switch Mode Power Supply (SMPS)

ITI Rae Bareli Plant is manufacturing SMPS systems and executing the orders from BSNL / MTNL. Order value of Rs.5.81 Crore has been executed by Raebareli.

- Maintenance Contracts for ASCON and OCB Projects

ITI had earlier established the ASCON network for Indian Army. ASCON AMC order worth Rs. 99.18 Crore has been executed by NSU. ITI was also the major supplier of fixed line switches to BSNL and MTNL. Currently, ITI has been extending maintenance assistance to BSNL and MTNL for OCB exchanges, OCB order worth Rs. 26.73 Crore has been executed during the year.

- GSM

ITI has implemented GSM Projects in BSNL West Zone and MTNL-Mumbai in technology alliance with M/s Alcatel-Lucent & in South Zone in technology alliance with M/s Huawei. The Annual Maintenance Contract related work have been carried out in these zones for total value of Rs.194.05 Crore.

- Data Center & IT Projects

ITI’s state-of-the-art Data Center is currently spread over more than 2, 00,000 Sq. ft. with world class facilities. It has the capability to house thousands of IT Infrastructure equipment and is designed to offer a wide spectrum of core hosting services with best suite of value added services under highly secure and stable environment. The company is providing Aadhar authentication services, e-KYC services, core banking applications, mobile wallet application etc. The turn over achieved during the year with Data Centre Services is Rs.17.80 Crore.

- E-Tendering Business, Network Management, Contract Manufacturing, CCTV Surveillance Orders

Regional Offices of ITI have executed various orders viz. E-Tendering Business, Network Management, CCTV Surveillance Orders, Video Audio Infra, WiFi establishment , ICT based feedback devices and other miscellaneous orders for total value of Rs.200 Crore during the year.

ITI is also providing manufacturing services in it’s plants, viz PCB manufacturing services in Bangalore and Palakkad plants, 3-D printing services in Bangalore Plant, Mechanical fabrication services in all the plants except Palakkad plant, EMI & EMC testing services in Bangalore plant etc. Our renewed infrastructure is capable of taking up manufacturing any type of electronic and communication products.

FINANCE

The performance of the Company for the year 2017-18 as compared to the previous year is as follows

(Rs.in Crore)

Sl. No.	Particulars	2017-18	2016-17
i	Sales including services	1703	1611
ii	Value of Production	1691	1629
iii	Loss/Profit before tax	230	266
iv	Loss/Profit after tax	230	266
v	Other Comprehensive Income	5	39
vi	Total Comprehensive Income	235	305
vii	Financing Expenses	153	153
viii	Depreciation	25	17
ix	Capital Employed (Net Fixed Assets working capital)	1978	1452
x	R&D Expenditure	15	16

SHARE CAPITAL

The Cabinet Committee on Economic Affairs (CCEA), on 24^th February 2014 has approved financial assistance, based on the recommendations of Board for Reconstruction of Public Sector Enterprises (BRPSE) to an extent of Rs.4156.79 Crore for the revival of the Company. The fund infusion will be capital grant of Rs.2264 Crore in the form of equity and the balance amount of Rs.1892.79 Crore in the form of grant-in-aid.

The Company has received Rs.100 Crore during July 2017 and Rs.100 Crore during September 2017 and Rs.137 Crore during March 2018 from Ministry of Communications for meeting the expenditure towards CAPEX for implementation of various projects in its various plants. During the year under review, the Company has allotted 20,00,00,000 equity shares of Rs.10 each at par to President of India. Accordingly, the paid up Equity Share Capital as on 31^st March 2018 was Rs.760,00,00,000.

The Government of India vide letter no. 20-36/2012- FAC-II dated 20-07-2016 has communicated the approval of Cabinet Committee on Economic Affairs to transfer requisite number of shares of President of India to Special National Investment Fund to meet SEBI’s 10% Minimum Public Shareholding requirement. Accordingly, during the year under review, 2,72,00,000 equity shares of Rs.10 each are transferred from President of India to Special National Investment Fund (SNIF) and 3,37,00,000 equity shares of Rs.10 each are yet to be transferred to SNIF to meet SEBI’s minimum 10% Public Shareholding requirement.

During the year under review, the Company has not granted stock options or sweat equity. As on 31^st March 2018, none of the Directors of the Company hold any shares of the Company.

DIVIDEND

As your Company still have accumulated losses the Directors are not in a position to recommend any dividend for the year 2017-18.

HIGHLIGHTS OF THE PRODUCTION PLANTS AND SERVICE UNITS BANGALORE PLANT

Bangalore plant achieved a turnover of Rs.301.80 Crore (with ED & service tax) during the year 2017-18 registering a profit of Rs.45.15 Crore.

Major Projects / Orders completed in FY 2017-18

The supply consisted of NGN SKD manufacturing worth Rs.55.66 Crore. Under services, the unit executed Rs.159.59 Crore for GSM-SZ AMC, Installation and Commission of NGN for BSNL worth Rs.1.57 Crore, NGN AMC worth Rs.2.00 Crore, SaaS Business worth Rs.0.72 Crore and the Unit generated revenue of Rs.17.80 Crore from Data Centre Business.

The Unit also has executed Defense orders worth Rs.24.94 Crore, and C-DOT ANRAX orders worth Rs.12.26 Crore for BSNL.

Unit supplied LED equipments worth Rs.21.60 Crore. Revenue of Rs.2.83 Crore was generated from Contract Manufacturing, 3D Printing and Reliability Lab services.

Revenue of Rs.7.36 Lakhs was earned by providing In-plant Training for 535 Students during the Financial Year.

Future Outlook

AS part of new revival projects, establishment of Data Centers at Bangalore & Naini, Construction of EMI/ EMC Chamber, advanced ESS (Environmental Stress Screening) and CATH (Combined Altitude Temperature and Humidity) Chamber, etc. are under implementation/ installation.

Development of Radio Modem, CLIP phones, Antenna is being validated by BSNL for TSEC.

Bangalore plant established the production facilities for upcoming projects of Multi-channel Encryption Units (MCEU), Radio Modem, Smart Energy Meter, etc.

Bangalore plant is also venturing into new Point to Multipoint Communication, Smart city / IOT projects.

Efforts are being undertaken to get In-house Reliability Engineering Laboratory NABL Accreditation to bring excellence and competency in Environmental Testing. Steps are being taken to get NABL Accreditation for Central Instruments Cell (CIC) and IGI labs also.

Quality Management System

Bangalore plant has up-graded its Quality Management System to the latest standard of ISO 9001:2015 and the certification was awarded by NVT QC.

PMKVY

Bangalore plant has set up a State of art Skill Development center called the Pradhan Mantri Kausal Vikas Yojna (PMKVY) Center of Excellence to cater to the skill development of the needy to impart Hands on Training as per the Qualification Packs envisaged by National Skill Development Corporation under TSSC (Telecom Sector Skill Council). 71 students have been trained on the OFC splicing technique. ‘Train the Trainer’ program which includes Domain skills on OFS and OFT and Platform skills was successfully conducted at ITI BGP’s CoE for a week so that similar kind of Skill Development initiatives can be taken at their parent plant. 5 officials from Srinagar Unit attended the training.

IoT

Bangalore plant has set up a Centre of Excellence for showcasing and development of solutions for the Internet of Things (IoT), namely Smart Environment, Smart Lighting, Smart Home/office, Smart Health, Intelligent Transport System, SCADA Solutions, Water, Gas, & Electricity, RFID Based solutions, etc.

IoT has been actively pursuing Smart city project opportunities and is in the process of participating in the upcoming major smart city tenders for the role of Master System Integrator involving many IoT verticals.

IoT Bangalore plant has partnered with C-DAC Bengaluru in the field of ICT Technology. Currently working on the following Initiatives:

1. Actively working for pilot implementation of Smart Post Box for Dept. of Post Karnataka circle.

2. Actively working with Dept. of Agriculture, Karnataka circle for pilot implementation of smart agriculture project for Proactive measures for pest attacks & irrigation schedules for crops like Paddy, Ground Nut.

3D printing

3D printing is a revolutionary manufacturing method by which we can create various types of three Dimensional (Solid) parts for R&D Prototype, Medical purpose, etc. Bangalore Plant has procured Poly Jet 3D Printer which is capable of producing prototypes with different materials using a CAD file.

Reliability Engineering Laboratory

New state of the art environmental testing chambers added to the existing facility include ESS (Environmental Stress Screening) which is a Rapid Temperature Cycling chamber that can swing from -70 to 200 deg. C with 15 degree ramp per minute and which can take care of stringent requirements of Defense and Aerospace customers.

HALT/HASS (Highly Accelerated Life Test/Highly Accelerated Stress Screening) chamber is also installed which will eliminate the defects in the design stage used for Defense customers. This chamber can cater to Temperature, Humidity and vibration requirements all rolled into one.

Another feather in the cap is the Random Vibration and Sinusoidal Vibration facilities which work from 5 Hz to 2000 Hz on all X, Y and Z axes. The lab is generating sizeable revenue using this facility catering to external customers.

Workshop on ‘Internet of Things - Working Solutions’

A one-day workshop on ‘Internet of Things - Working Solutions’ was jointly organized by ITI Limited and C-DAC (Centre for Development of Advanced Computing) at Centre of Excellence (COE), Skill Development Centre, ITI Limited, Bangalore plant on July 25, 2017. The workshop was aimed to generate synergy between the organizations to create IoT infrastructure for the society. The IoT segment is expected to benefit the Nation through utilizing the maximum business potential in the coming days.

ITI participated in Vendor Development & Investors Summit, Karnataka

Karnataka Government in association with Confederation of Indian Industries (CII) organized a Vendor Development & Investors Summit, Karnataka, at Bengaluru International Exhibition Centre (BIEC) from November 23 to 24, 2017. The focus of the summit was to provide a platform for CPSUs, SPSUs, Mega and Large units for identification of vendors in terms of production capacity and quality standards based on six key sectors namely aerospace and defence equipment, automobile, biotech, agriculture, textile and innovation and start-ups.

ITI Limited showcased various products, posters and banners viz. ETS-04 Telephone, Nutan Telephone, Radio Modem, GPON ONT, Smash PC, SMT assembled cards, 3D printed components, ITI TAG Wallet & Swachh Feedback Device at the exhibition. Shri R.V.Deshpande, Minister for Medium and Large Industries, Dr.Mohana Kumari, Minister for Small scale industries and other delegates visited ITI stall and appreciated the products of ITI.

FIGI Symposium - 2017, Bengaluru

The Financial Inclusion Global Initiative (FIGI) was launched earlier this year by the International Telecommunication Union (ITU), the World Bank Group (WBG) and the committee on payments and market infrastructures (CPMI).

The theme of the first edition of the Financial Inclusion Global Initiative (FIGI) symposium, hosted by the Ministry of Communications, India is “Innovative approaches to digital financial inclusion challenges”.

The event was held between 29^th November to December 1, 2017 over a period of 3 days. The event brought together telecom/ICT and financial regulators, policymakers, digital financial services providers, payment system organizations and other DFS stakeholders from around the world.

ITI’s Participation included a setting up of a stall to showcase ITI’s manufacturing capabilities. Various officials from Department of Telecommunications, Kenyan delegates etc. had visited ITI stall. The following are some of the highlights from the FIGI symposium:

- The FIGI symposium was inaugurated by Shri Manoj Sinha, Honorable Minister of state for communications (I/C) & Minister of state for Railways, Govt. of India on 30^th November.

- Smt. Aruna Sundararajan, Secretary (Telecom) and also TRAI Chairman, MeiTY, ITU and World Bank officials were among the dignitaries present.

Inauguration of New Facilities

The following New facilities are added on in BG Plant.

- PCB Photo Image Transfer Area,

- Injection Moulding Facility

- New DG Set with underground fuel tank and centralized air facilities

Enterprise Resource Planning (ERP)

ITI Limited has launched Infor ERP application at ITI Bangalore Plant on February 1, 2018. As a part of centralized ERP system, Bangalore Plant is the first plant of ITI Limited to implement ERP and to go live on Infor ERP application. Infor ERP is an enterprise resource planning software providing manufacturing companies with a complete planning system that covers full business processes from planning and purchasing to sales and customer services. Some of the major benefits of implementing ERP application include increased productivity, efficiency, decrease costs and streamline processes in the organization.

GPON Manufacturing

Bangalore Plant has established the GPON OLT manufacturing set up and repair facility for ONT. Around 100 nos. of ONTs have been repaired using this repair facility inhouse.

MoUs signed during the year

Bangalore Plant has signed MoU for development of Face Recognition System, ICT Technologies which includes Smart Post Box and Smart Agriculture Project.

Dealer’s Possession License

Bangalore Plant has obtained DPL (Dealer’s Possession License) from Wireless Planning Commission which is a mandatory requirement for importing any RF equipment. This was obtained to import Point to Multipoint Microwave and other RF equipment which will enable to address various requirements of customers relating to current technologies.

Tenders Addressed

IP Encryptors, 1 Gigabit Encryptor, Bulk Encryption Unit(BEU), Telephone-5C, PCM MUX, ETS 04, RADIO MODEM IN ISM BAND, CDOT ANRAX Control Cards, ARC Cards, ARI Cards, Hyper-Converged Infrastructure (HCI), Contract manufacturing for BHEL, BEL, C-DAC, C-DOT, LRDE, ISRO etc.

Measures taken for energy conservation

Energy Consumption for the year is 2,276,267 units, With the upgraded infrastructure for Electronic Manufacturing in place and Rs.3000 Crore worth of tenders on the anvil, the plant is all set for a historic turn around.

RESEARCH & DEVELOPMENT:

Research & Development (R&D) located in Bangalore plant is designing & Developing Communication equipment’s to support manufacturing and also keep abreast with State of the Art Technologies in the field of Electronics & Communications. R&D has core strength in design & development of Encryption systems to secure Communication Networks and also in development of Network solutions. The strength of R&D lies in its skilled design team with expertise in development of Hardware & Software. The necessary infrastructure to aid design & development is available in the form of Test Instruments, Software design tools, CAD design tools, reliability test laboratories. The R&D team develops allied products in area Transmission and terminal products.

Major Products / systems developed in Financial Year 2017 -18:

R&D developed products in the following areas:

D Encryption Systems for Defence D Network solutions for Communication Network D Power supply modules

R&D carried out study on new technologies in the area of Satellite receivers, Mobile encryption, SIP Phones / VoIP phones, Electronic Voting Systems, IoT products for Smart Cities etc.,

The successful products Solutions developed in Financial Year 2017-18 are:

D Encryption Products:

- Terminal end Secrecy Device (TESD) for Defence Communication Network of Defence o Internet Protocol (IP) Encryptors for satellite security

- Next generation Network (NGN) Bulk Encryption Units (BEU) for Media Security o Multi Channel Encryption Units ( MCEU)for Network for Spectrum (NFS) net work

- Encryptors for ASCON Ph IV network These products have been successfully undergone Field trails and testing & Evaluation by customers. Also, the same are subjected for certification by DRDO lab.

D Network solution for DCN network of Defence New Initiatives undertaken in Financial Year 2017-18:

In the year 2017 -18 R&D initiated development of new products like IRNSS receivers for Defence in association with ISRO, Development of Ballot systems, Sub products for Smart City IoT products like Smart Post Box etc.,

R&D developed products were productionised by Bangalore plant worth Rs12.80 Crores in Financial Year 2017-18.

MANKAPUR PLANT

a. Prestigious NFS project for package F for construction of exclusive optical NLD backbone and optical access route on turnkey basis for Defense network allocated to ITI Mankapur is worth Rs.826.88 Crore excluding AMC. Out of this, cable laying and services work worth Rs.110.53Crore have been completed in FY 2017-18 and cable colaying work of worth Rs.9.94 Crore was also done.

b. Mankapur Plant including GSM WZ & MTNL has achieved a turnover of Rs.156.12 Crore (including ED & Service Tax).

c. The Plant has upgraded its infrastructure under revival plan and the manufacturing for ONT 11 (GPON equipment) commenced in February 2017. This year 21060 Nos of ONT11 with enclosures had been produced and delivered to RBL unit against BBNL, BSNL and BBNL Add on orders besides completing the supplies of ONT11 against previous balance order.

d. Unit has started business of ONT TITLI, a CPE and a humble beginning has been made in the year executing order worth Rs.0.05 Crores.

e. ITI Mankapur is organizing “Finishing School” for the engineering under graduates pursuing higher studies or skill development. Under Finishing School project towards the knowledge based activities, ITI Mankapur earned revenue of approx. Rs.0.13 Crore while imparting training on technical innovation and skill up gradation to the engineering students from various reputed Engg. Colleges and Polytechnics of the country, for their better career opportunities.

f. Measures taken for energy conservation:

1. Retrofit replacement of 18 Watt LED tube light in place of 40 watts FTL’s. (Conventional tube lights).

2. Replacement of 20 Watt lamps in place of 40-watt fluorescent Tube lights in street lighting.

3. Complete shut off 3x620 TR centrifugal air conditioning plant after commissioning energy efficient VRF air conditioning package units in production area.

4. Close monitoring of daily power consumption of factory and colony

5. The energy conservation efforts have resulted in a saving of approx. Rs.48.37 lakhs in 2017-18 in comparison with 2016-17.

RAE BARELI PLANT

Rae Bareli Plant achieved a performance of Rs.443.55 Crore, during the year 2017-18 by execution of NFS Order, GPON equipment supplies, supply of SMPS equipments, HDPE Pipe and GSM Franchise business.

Major Orders received up to 31^st March 2017

As part of revival plan, Raebareli plant has upgraded the infrastructure and manufacturing facilities for manufacture of GPON Equipment, SMPS, HDPE and OFC.

GPON Project: Giga-bit Passive Optical Network (GPON) is a family of products for high speed broadband communication through fibre backbone. It caters to variety of services, like voice, video, data, internet etc. Active transmission equipment in GPON network consists mainly of Optical Line Termination (OLT) and Optical Network Unit (ONT).

ITI has received four Purchase orders amounting to Rs 455.78 Crorefrom BBNL &BSNL for supply, installation and commissioning of GPON Equipments. Against these orders, supply of ONT, OLT, Splitters, accessories and IT equipments, were allocated to Raebareli Plant.

ITI Raebareli plant has supplied 40341nos of ONT and 1551 nos of OLT till 31^st March, 2018.

PLB HDPE PIPE Project: PLB HDPE (Permanently Lubricated High Density Poly-ethylene) Pipe is used for laying of optical fiber cable (OFC) underground.

ITI Raebareli has set up three lines of PLB HDPE Pipe manufacturing and obtained TSEC. The plant has supplied HDPE Pipe to BSNL against an educational order.

Optical Fiber Cable(OFC) Project: An optical fiber cable is a cable containing one or more optical fibers that are used to carry light. The optical fiber elements are typically individually coated with plastic layers and contained in a protective tube suitable for the environment where the cable will be deployed. Different types of cable are used for different applications.

Fiber optic cables find many uses in a wide variety of industries and applications. Some uses of fiber optic cables include Medical, Defense/Government, Data Storage, Telecommunications, Networking, Industrial/ Commercial, FTT-X technology.

ITI Raebareli has established Optical Fiber Cable (OFC) manufacturing plant and completed pilot production. TSEC activities are under finalization and bulk production will start after completion of TSEC.

FUTURE OUTLOOK Li-Ion Battery for Telecom application Project:

Lithium is a good conductor of electricity and can combine with many other metals to form alloys. Lithium ion batteries provide more and more energy in a smaller container. Lithium-ion batteries have many applications like cell phones, FTTX installations, remote terminals (such as in FTTX installations), access networks, BTS (Base Transceiver Stations) for wireless networks, cable networks, central offices, fuel cell powered system cars, artificial pacemakers, PCs, laptops, audio players, clocks, toys, cameras, automobiles etc.

ITI has entered into agreement with M/s EXICOM for implementation of this project. ITI will be fully responsible for marketing, manufacturing, installation and maintenance support.

PALAKKAD PLANT

I. Performance

ITI Palakkad Plant has achieved a turnover of Rs. 364.43 Crores during the year 2017-18 registering a profit of Rs. 43.53 Crores.

II. Projects -BSNL and MTNL

MLLN and SSTP projects

ITI Palakkad has been awarded with two MLLN orders worth Rs.130 Crore and Rs. 40 Crore from BSNL for the supply , installation & commissioning of VMUX/DXC equipments. The supplies against both the orders are completed. Installation & commissioning of the equipments are in progress.

ITI Palakkad received and executed SSTP Upgrade Project worth Rs.7 Crore for MTNL

AMC orders worth Rs.44 Crore of MLLN and SSTP projects were successfully executed. 24 x 7 technical support has been provided to BSNL and MTNL for MLLN, SSTP and OCB projects.

III. Revival Projects

ITI Palakkad has ventured into the following projects as part of the capex investments made under revival plan of ITI.

a. Component Screening

ITI has set up the infrastructure to carry out Component Screening facility in a fully air conditioned ESD protected area of 7000 sq.feet exclusively dedicated to the screening and burn-in of all active and passive electronic components and electronic assemblies set up to meet the requirements of VSSC as well as other defense organizations like NPOL, DRDO, BEL, BHEL, ECIL, HAL etc.

As on date, ITI Screening facility is accredited for total 11 types of items by VSSC (4 types of active components, 1 type of passive component and 6 types of sub assemblies). ITI is expected to get accreditation from VSSC for the Test set up made for Test & Evaluation (T&E) of 5 types of sub-assemblies for which evaluation successfully completed by VSSC. Development of test setup for T & E facility of another 9 more assemblies are in progress. Efforts are in progress at various stages for getting the accreditation for the screening of another 8 active components also.

Purchase orders worth Rs. 88 lakhs received from VSSC, out of which more than 50% is executed successfully. More orders are awaited from VSSC for this project.

b. HDPE manufacturing

ITI Palakkad has commissioned machines for one line of HDPE manufacturing. Pilot production of samples for 8 colours (2km each) for TSEC qualification completed TSEC Certification is under progress Monthly Manufacturing Capacity is 375 KM. The requirements against available orders for ASCON and BharathNet can be partially met with the installed capacity.

c. Smart Banking Card Project

ITI Palakkad has been certified by National Payment Corporation of India (NPCI) for Rupay Card Personalization. With this, ITI Ltd has earned the privilege as the first PSU to get accredited for Rupay Card personalization.

The plant is now modernized with state of the art infrastructure in line with technical specifications for Payment Card Industry (PCI). The infrastructure includes modern manufacturing equipments for Smart Card Assembly and personalization for milling & embedding, personalization etc, having monthly production capacity of approximately 12 Lakhs banking cards (Debit/Credit). The physical security is ensured by installing Security & Surveillance systems as per PCI specifications and logical data security is established through a dedicated network with all security features.

d. Mini PC

ITI Palakkad has developed Mini PC branded as “SMAASH PC”, which is having unique features such as smart performance, low power consumption, sleek design and operating in a silent environment. Trade mark is registered and CE, FCC and ROHS Certifications received and trying for BIS and Energystar.

The Plant has supplied Mini PCs to MG University of Kerala and Calicut University. As part of marketing effort, sample PCs have been positioned at various state government offices in Kerala. Marketing efforts are continuing for more orders.

e. Repair Centre Upgradation

The repair centre is augmented with additional automated test accessories to carry out the repair activities for the current products such as MLLN, OCB etc. as part of the AMC support with BSNL/MTNL ITI is earning an annual revenue of approximately Rs.40 Crore as part of AMC every year.

As required by VSSC, Palakkad Plant is also setting up a full fledged Test Lab for RF and other packages. With these infrastructures, testing of RF packages, Power modules, DC-DC converters and other direct flight packages are identified as the new business area, against which the test set up is completed and evaluated successfully by VSSC. Purchase orders worth Rs.1.83 Crore are received from VSSC.

f. PCB Upgradation

The PCB plant of ITI Palakkad was upgraded with most modern equipments for manufacturing upto 10 Layers as per the LCSO/VSSC specifications to meet all the high quality PCB requirements for industries such as VSSC, HAL, BEL etc. We are planning to manufacture the PCBs of Smart Energy Meter at our PCB plant.

g. Smart Energy Meter

ITI has been awarded with the letter of award (LOA) from Energy Efficiency Services Limited (EESL) for the manufacturing, supply and maintenance of 25 Lakhs GPRS based Smart energy meters complying to IS 16444 technical specifications. Type approval for the new product as per EESL specification is in progress at CPRI, Bengaluru.

h. Set Top Boxes

ITI has signed a MoU with Broadcast Engineering Corporation India Ltd (BECIL) for the technology transfer and manufacturing of Set Top Boxes with design from M/s Bydesign. ITI has completed the pilot manufacturing of two models of set top boxes of different chip modules. Type approval has been obtained for both the models.

i. Hand Held Devices

ITI is in the process of identifying partners for technology transfer and manufacturing of POS payment terminals.

Additional Skill Acquisition Programme

Kerala Government has selected ITI as one of the Training Service Provider of ASAP Scheme (Additional Skill Acquisition Programme) for providing training on training on Computer Hardware and Pick & Place (SMT). During 2017-18, we have completed one batch for each course, with revenue of Rs. 4.2 lakhs for two batches. A new batch for PCB Course will commence from next June 2018.

Energy Conservation

Tow ards Energy saving front, the plant has replaced all HPSV lamps by LED Lighting (Yearly savings of 48,180 Units and Rs.2,56,595/-), replaced higher Capacity Condenser Water Pumps and Cooler Tower Fans with Low power Condenser water pump and cooling tower fans suitable for our Centralized Air-conditioning Plant (savings of 7311KWh, and Rs.38,017/-is achieved during the last 3 months) and switching off the light in production Hangers during Lunch Break resulted in savings of Rs.18,900/- per year We are discussing with EESL for replacing all fluorescent lights and fans with energy efficient electric appliances supplied by EESL which in turn will result in savings of approximately 16 Lakhs.

Water Conservation

As part of conserving water, the plant implemented Rain Water harvesting by collecting rain water into a storage area of capacity 2 Lakh Litres. Also on experimental basis, plant has implemented drip irrigation system for garden by saving approximately 3000 liters of water daily.

Corporate Social Responsibility

As part of Corporate Social Responsibility, ITI Palakkad is making charity contributions by sponsoring student’s scholarships for financially backward bright students, making contributions to charitable institutions etc.

Certifications

ITI has earned the recognition as the first PSU to get accredited for Rupay Card personalisation by National Payment Corporation of India (NPCI).

ITI is certified with ISO 14001: 2015 for Environment Management System and ISO 9001: 2015 for Quality Management System.

Accolades

In the Industrial Safety front, ITI Palakkad have won First Prize for the Outstanding Safety performance in the large size Engineering Industries Group from National Safety Council Kerala Chapter during 2017-18

NAINI PLANT

ITI Naini has diversified the business from Transmission equipment to Renewable Energy (Solar) business segment. Naini Plant has achieved the Turn over of Rs.63.11 Croreduring FY 2017-18 through supply of SPE systems for GPON Project and Supply of Roof Top Solar Power Plant.

Major orders executed by NainiPlant Solar

Under BharatNet Phase-I, Rural masses of India are being digitally connected through the High Speed Broad Band services on GPON platform. ONT which is Broadband Access equipment is a part of the GPON equipment and will be installed in Gram Panchayats. To provide uninterrupted power supply to ONT, SPE (Solar Power Equipment) is also required for each ONT and ITI Naini has produced & supplied 35300 SPEs amounting to Rs.62.29 Crorefor the year 2017-18 and completed the orders.

ITI Naini had received a Work Order of Rs.75 lakhs from M/s L&T construction for Supply & Installation of Roof Top Solar Power Plant at Safdarganj Hospital, New Delhi and completed the job.

ITI Naini has taken initiative for development of solar products like Charge Controller, LED Street Lights and other LED based lighting products for Home Appliances.

Under Revival Plan Phase II, ITI Naini has augmented SPV Module Manufacturing Capacity by installing State of the Art 18 MWp Automatic SPV Module Manufacturing Line, to 23 MWp. This will enable to manufacture IEC Certified module ranging from 30 Wp to 300 Wp.

ITI has bagged an order for installation of Roof Top Solar Power Plant for capacity 10 MWp in UP & 2.293 MWp in Karnataka from Solar Energy Corporation of India (SECI),a PSU under Ministry of New and Renewable Energy (MNRE). A consortium agreement has been signed with M/s Cambridge Energy Resources (CER), Gurugram, Haryana, for this project. ITI also signed MOU with CER Renewtec (CER_RT) assign of CER for implementation of the project. The 10 MWp Power plant will be installed at ITI, Naini and 2.293 MWp plant is proposed for ITI, Bangalore.

Data Center

Purchase order has been placed to M/s Trimax for design and implementation of Data Center (Disaster Recovery Site). Structure stability test, Roads & APRON surrounding building & Anti-termite treatment of the identified building has been done.

Quality

ITI Naini has upgraded to ISO 9001:2015 from ISO 9001:2008 in the month of Nov 2017 and Certificate is valid upto 30^th Nov. 2020. Similarly up-gradation of ISO 14001:2004 to ISO 14001:2015 is under process. ITI Naini already acquired ISO 18001: 2007 certification for Occupational Health and Safety Services (OHSAS)

Training

15 days Skill Development Training Program of Solar Module Assembly Technician was conducted for 4 batches and 90 trainees were trained & revenue of approximately Rs 2.06 Lakhs generated and an amount of Rs.1.0 Lakh spent for conducting on-line exam for trainees through TSSC. Six months specialized industrial training conducted for 80 trainees. 4/6 weeks

Vocational/summer trainees conducted for 281 Degree/ Diploma/MBA students & revenue of Rs.5.62 generated. Four In-house training programs organized for total 123 training man-days with in the training budget of Rs 0.25 Lakh (For In-House & External Training Program). Inplant training for 206 trainees conducted in 7 batches and revenue of rupees 34,400/ generated. 33 trade apprentices engaged for one year trade apprentice at stipend of rupees 6348/ per month per candidates.

Energy Conservation

During the year 2017-18, 8632 KWh saving in consumption was achieved as an Energy Conservation Measure.

SRINAGAR PLANT

Srinagar plant is gearing up to venture in to the skill development activitites for the benefit of local youth, State Govt. employees and other sections of the Society, under the skill India mission from Govt.of India. During the Financial Year 2017-18. Some area of the Plant is renovated to set up Skill Development Centre. Five employees of the plant were deputed to ITI Limited Bangalore for receiving the training in OFC-Domain & Platform skills under the TSSC accreditation. In addition to above, few more employees of the plant have also been given acquaintance of the basic assembly and testing of Solar SPV Panels/Modules at ITI Limited Naini plant. The Expertise will be utilized in the skill Development of customers at Srinagar plant.

The Plant also actively participated in Swachhta Mission of GOI and spent Lacs of Rupees during FY 2017-18.

NETWORK SYSTEMS UNIT (NSU)

Highlights of NSU Unit for the year 2017-18:

This non production Unit is having its core strength in execution of Turn key projects of communication networks and AMC. It has a track record of steady growth and continuous profitability.

- In the Financial year 2017-18, NSU has given its best ever performance by achieving the turnover of Rs.173.98 Crore and registering a profit of Rs.20 Crore.

- Revenue from AMC for ASCON projects Rs.99.18 Crore continued to be a major contributor while AMC for OCB of BSNL and MTNL contributed Rs.26.73 Crore.

- In the current fiscal due to reduction in OCB Exchanges capacities and changes in contract values resulted lower turnover in OCB AMC segment, but at the same time, the unit clocked one of its best turnover in recent years by implementing one of the Govt. of India’s prestigious project -GPON Installation and commissioning under Bharatnet Phase - 1 to the tune of Rs.44.39 Crore. The unit is set to migrate from ISO 9001-2008 to ISO 90012015 certification standards, shortly.

HIGHLIGHTS OF REGIONAL OFFICES (ROs)

Performance:

- Performance of ROs for the FY 2017-18 is Rs.200 Crores. higher than the last fiscal (Rs.190 Crores)

- ROs have reported overall profit of Rs.5.86 Crores, higher than the last fiscal (Rs.2.78 Crores)

- Orders bagged by ROs in FY 2017-18 amounts to approx. Rs.229.68 Crores.

New Major Projects taken up in 2017-18:-

RO- Delhi:

- Integrated University Management System (IUMS) for Universities of approx value Rs.15 Crore

- CCTV Surveillance Systems for Delhi Police, MHA, ICMR< Guru Jambeshwar University Hisar and Co-Operative Bank, Shimla of total approx. value Rs.10.5 Crore.

- Wi Fi Zones establishment for Dept. of Higher Education, Haryana of approx.Value Rs.4 Crore.

- Networking Solutions for Guru Jambeshwar University, Hisar of approx value Rs.2 Crore.

ROs- BANGALORE, BHUBANESHWAR, CHENNAI, DELHI, HYDERABAD, MUMBAI:

- Deployment of ICT based Feedback devices for community & public toilets under SBM (Swaccha Bharat Mission)

RO- Lucknow:

- Audio Video Streaming (Broadcasting system) for UP Vidhan Sabha of approx total Value Rs.4.4 Crore

- CCTV Surveillance systems for UP Police& UP Vidhan Sabha of approx value Rs.5 Crore

- GIS based project for UP BOCW (Buildings & other construction workers), Welfare Board of approx value Rs.12.6 Crore.

- Infrastructure creation for Smart Class Rooms at Manipur University of approx. Value Rs.2.39 Crore.

RO-Mumbai:

- Soft Asset Geo Fencing & Manpower tracking system for Nagpur Municipal Corp., of approx value Rs.12 Crore Big orders successfully completed in 2017-18

- e- Tendering business of approx. Value Rs.36 Crore - RO Delhi, Bangalore, Kolkata, Bhubaneswar & Mumbai

- RO LKO has successfully completed CCTV Surveillance work (Rs.2.28 Crore) & ICT Infrastructure projects (Rs.5.6 Crore.)

- RO Delhi has completed Integrated University Management Systems (IUMS) Orders (Rs.16 Cr), CCTV Surveillance Work orders (Rs.18 Cr) and establishing of Wi-Fi zones (Rs.4.10 Cr).

Future Prospects:

- ROs are focusing to explore, address and grab new business opportunities in the Field of IoT, Smart City, Smart Cards, Smart lighting / Smart Buildings, e-MarketPlace, Geo Fencing & Manpower Tracking / Vehicle Tracking etc.

- Integrated Command & Control Centers for Smart City components

- GIS Survey / GIS mapping for Buildings & Other Construction Workers Welfare Board & Local Bodies.

- CCTV Surveillance, ICT Infrastructure, ERP Solutions, Solar Power Plants etc.

7. RATING IN MEMORANDUM OF UNDER STANDING

The company’s rating for the year 2016-17 is “Good” with a composite score of 57.85. The company has signed Memorandum of Understanding with the Administrative Ministry for sales turnover of Rs.2700 Crore (at Good level) for the year 2018-19.

FUTURE OUTLOOK:

Company has undertaken many initiatives/ projects so as to boost turnover and the revival activity which is already in process.

- G-PON Products Manufacturing:

ITI had participated in GPON turnkey project tenders for BharatNet phase I project for providing high speed Broad band connectivity to 1 lakh Gram panchayats across the country and successful in securing orders from the BBNL and BSNL. ITI successfully manufactured, supplied, installed and commissioned about 1500 OLT units and 40,000 ONTs. ITI is expected to get some more orders under BharatNet Ph I project. ITI is manufacturing these products at Rae Bareli and Mankapur plant from component level with C-DOT as the technology provider. In view of huge requirement of OFC deployment for Govt of India under BharathNet project there would be corresponding requirements of GPON solution. ITI is also aggressively bidding for BharatNet Ph II project and expected to get orders for which ITI will manufacture and supply GPON products. Bangalore plant has also geared up for manufacturing GPON products to meet the expected additional requirements.

- HDPE pipe and Optical fibre cable manufacturing:

Laying of optical fibre cable (OFC) underground is to be carried out through PLB HDPE (Permanently lubricated high density Poly ethylene) Pipe only. The demand for HDPE Pipes has risen due to several Government projects like NFS, BharatNet etc. Also there is huge requirement of OFC /HDPE in ASCON project. As per Govt. of India initiative for “DIGITAL INDIA” programme, optical fibre network is to be established for high speed internet access across the country. Hence, there is huge demand of PLB HDPE pipes. Apart from BSNL and BBNL, other service providers are also requiring such type of PLB HDPE pipes for their telecom service. ITI has established 3 lines of HDPE manufacturing at Rae Bareli unit and one manufacturing line at Palakkad unit. One manufacturing line of OFC has been commissioned at Rae Bareli unit. The capacity installed will be used to meet the requirements of ASCON and BharatNet Ph II orders on ITI.Pilot production of OFC and HDPE pipes have been done by ITI. HDPE pipe supplied to BSNL against educational order.

- Encryption Products for Defence:

The encryption products for Defence communication networks are being designed by our R&D and manufactured, supplied & maintained by ITI from long time. ITI has been the pioneer in this field. The products have evolved over the years in tune with the evolution in the digital communication technology. There are major requirements of encryption products for Defence for their NFS network, ASCON network etc. Company has received the advance purchase orders for design, manufacturing and supply of Multi-Channel encryption Unit (MECU) under NFS project valued about Rs.86 Crores. Company is participating in tenders for defence and expected to get more business.

- BharatNet Phase II project:

Under BharatNet Phase II project for providing high speed Broad band connectivity to 1.5 lakh Gram panchayats across the country, ITI is addressing tenders from BSNL, BBNL and other state Government aggressively for securing business. ITI is having all the products for end to end connectivity required like GPON (OLT&ONT), Solar Panels, OFC, HDPE pipe, Wi-Fi solution. All these products are manufactured and supplied by ITI.

- Manufacture of smart Energy Meters.

As a part of diversification, ITI has entered into IoT and Smart City business. In this regard, ITI has tied up with many start-ups and Companies for Smart business verticals of IoT and Smart City for addressing the business opportunities in this sector. One of the Smart solution is Smart Energy Meters wherein the legacy energy meters will be replaced by smart energy meters. These meters records energy consumption and has a facility to store the data and reproduce whenever required. These meters enable a two-way communication between the meter and the central system. The meters have a feature of monitoring the quality of power also. These meters are popular among residential as well as the industrial customers.The Smart Meters play a vital and crucial role in Smart Grid with special focus in distribution side. It is one of the pillar technologies in the Smart Grid. The existing meters, both electromechanical and Electronic meters, doesn’t have essential features like theft detection, power outage, communication to utility, load connect / disconnect etc.

ITI had participated in a tender for a project of designing, engineering, manufacturing, testing, inspection, supply of smart meters to M/s. Energy Efficiency Services Limited (EESL), a Public sector Undertaking under Ministry of Power, Government of India. ITI stood L1 and got contract for supply of 25 lakh energy meters in phases over next three years.

ITI will manufacture these meters and supply using our existing infrastructure and also by establishing new additional infrastructure specifically required for manufacture of smart meters. The order value is Rs.840 Crore. There is huge requirement of such meters in the country. This project is a stepping stone for ITI for taking up for other projects in IoT/ smart city projects in the days to come.

- Manufacture of Smart Cards:

As an extension of National Population Register project, which is under execution by ITI as a consortium partner with BEL and ECIL, ITI is looking at the huge opportunity of manufacturing Smart card-based identity cards for the citizens in the Country. In addition, there are opportunities regarding supply of smart cards for unorganized workers, driving licences, motor vehicle registration etc. ITI is already having smart card manufacturing facility at its Palakkad plant. and same has been augmented to take manufacture of various types of smart cards. In view of GOI Digital India mission, smart cards assumes significant role in cash less transactions across the country in every sector and there will be huge demand for the same.

- Li-Ion Batteries for Telecom applications:

Long life, low maintenance & High energy density back up power solutions using Li-Ion technology have been proved in all fields of consumer electronics like PCs, Mobile phones, Tablet PCs etc. They also make inroads into other applications of Telecom industry like powering GSM towers. ITI has entered into TOT for supply of Li-Ion batteries with focus on meeting needs of Telecom applications like GSM BTS sites. ITI is planning to take up assembling of Li-Ion batteries , specifically for supplying to the BTS sites. Further there is a huge requirement of such batteries in E - Vehicle sector in the country. The Indian automobile industry is one of the largest growing markets of the world and contributes highly in the country’s manufacturing facilities. Not only this, the automotive industry in India is further expected to pull up the share of manufacturing in India’s GDP to 25% by 2022 from 15% currently, with production of Electric Vehicles in the country. However, India’s electric vehicle industry is a very new when compared with the other international markets. There is a growing demand for Li - Ion batteries in the country.

- Component Screening Project:

Component Screening is a Project suggested by VSSC (ISRO) for ITI Palakkad to take up for meeting their requirement of approximately 5 Lakhs screened components per year. Screened Components are required regularly for VSSC for their space missions. Basic component screening facility has already been established in the plant. Further the Component Screening infrastructure has been upgraded to cater for new components and also for meeting needs of Component Screening for defence requirement.

- Data Centre and IT Business:

Currently ITI has been operating a tier 3 Data Centre in its Bangalore plant. The Company is already providing IT solutions like e-Banking, Aadhaar based authentication etc. on SaaS basis from the Data Centre.Looking into high demand for data Centre business and the expected growth in India, under the revival plan, our existing Data Centre is being expanded to level of Tier III plus to cater for 1200 racks. With 1000 Racks at Bangalore Plant and 200 Racks at Naini Plant are planned as disaster recovery site.

- Wi-Fi products:

Wi-Fi products have revolutionized the way we communicate. In addition to low power Wi-Fi products in residences, Wi-Fi hot spots are coming up all around the country. Further, Wi-Fi products are also expected to be part of the Digital India programme to connect every citizen to Broadband network and also in setting up of Smart Cities. ITI is addressing the business opportunity in Wi-Fi vertical for BSNL and BBNL.

- Managed Leased Line Network (MLLN) Equipments:

ITI has been the leader in supplying MLLN products and services, including turnkey solutions for supply, installation, integration, commissioning, operation and maintenance of Network Equipment to BSNL since 2002-03. The existing MLLN networks has been installed and maintained by ITI till date. Currently, ITI has signed agreements for supply of IP based MLLN technology.

- Business with other PSUs/Contract Manufacturing:

Contract manufacturing for PSUs is an existing activity in ITI. ITI is already executing job works for PSUs like, BHEL, BEL, VSSC, NPOL etc. With upgradation of infrastructure in ITI, there is more scope for getting new business in the area of contract manufacturing which is being pursued.

- IOT and Smart City

ITI has made foray in to Internet of Things commonly called as “IoT” which is making big headway in common man’s day to day life across the world. The purpose of the Smart Cities Mission is to drive economic growth and improve the quality of life of people by enabling local area development. Application of smart solutions will enable cities to use technology, information and data to improve infrastructure and services. ITI has entered in to teaming agreements with many start-ups who have developed “smart” solutions which are integral part of IoT sector. ITI is planning to offer solutions for smart education, smart health, smart environment, smart transport etc... ITI is actively participating in smart city tenders to secure business.

PROPOSAL FOR FURTHER PUBLIC OFFER

The Cabinet Committee on Economic Affairs (CCEA) at its meeting held on 21^st March 2018 approved the Further Public Offer of ITI (“FPO”) consisting of Issue of 18 Crore fresh equity shares of the face value of Rs 10 each at a price to be determined through a book building process in order to raise working capital for new projects, reduce its debt obligations and to meet SEBI’s requirement of Minimum 25% Public shareholding.

Additional equity shares not exceeding 5% of the Fresh Issue to Public (18 Crore equity shares) will be reserved for the employees of the Company. The eligible employees and retail investors may be offered shares at a discount of 5% on the Issue Price subject to the decision of a FPO committee and Board. After the FPO the Government of India will continue to hold 75% of the equity shares of the Company.

ITI has appointed M/s. Cyril Amarchand Mangaldas as the Domestic legal counsel and M/s Clyde & Co., as International Legal Counsel and M/s. BOB Capital Markets Limited, Karvy Investor Services Limited and PNB Investment Services Limited as the Book Running Lead Managers for the FPO. M/s Karvy Computershare Private Limited has been appointed as the Registrar & Transfer Agents for the FPO. M/s Concept Communications Limited has been appointed as the advertising agency for the FPO.

CONTRIBUTION TO EXCHEQUER

During the year, your company has contributed Rs.33585.18 Lakhs to the exchequer towards duties and taxes.

PUBLIC DEPOSITS

Value of deposits held by the company is NIL. Deposits aggregating to Rs.0.24 Crore had matured for payment, but were not claimed on due dates.

REVIEW OF ACCOUNTS BY INDIAN AUDIT AND ACCOUNTS DEPARTMENT

The “Nil” comments on the accounts for the year 2017-18 by the Comptroller and Auditor General of India is appended.

JOINT VENTURES INDIA SATCOM LIMITED (ISL)

ISL was incorporated in the year 1987 and the present shareholding of ITI in ISL is 49% of its sharecapital with M/s. Chris Tech Systems Pvt Limited holding 51% of its sharecapital. Consequent to the delay in final disposal of the case initiated by Karnataka Industrial Area Development Board (KIADB) which is pending before Hon’ble High Court of Karnataka, ISL could not proceed with its revival operations through land development.

There was no company which became or ceased to be a subsidiary, joint venture or associate of the Company during the year under review.

The salient features of the Joint Venture Company are furnished in form AOC -1 which is appended to this report.

QUALITY

Quality Policy of ITI is to provide excellent products and services to our customers whilst providing sustained business growth in terms of profitability and return on capital employed by grooming a Quality-focused culturewith a stable and experienced workforce and a focus on continuous improvement. Key elements of business system improvement include rigorous processes for understanding customer needs and diligently managed inspection processes.

Our mission is to be a customer focused innovative telecom company that consistently supplies high quality products and services that exceed our customer expectations.

Quality Assurance wings are functioning in all the manufacturing units of ITI. The QA wings are responsible for delivery of Quality products and services. The units have been well equipped with necessary test facilities and test systems for carrying out elaborate tests, conducting reliability evaluations on all the products to ensure quality. This is achieved by sound and effective Quality Management System.

The five manufacturing plants at Bangalore, Palakkad, Mankapur, Rae-Bareli and Naini have been accredited with ISO 9001-2015. The periodical Surveillance Audit & Recertification Audits have been conducted successfully. Keeping in tune with the Global concern for Environmental Management, Mankapur, Raebareli, Naini and Palakkad plants have already obtained ISO 14001-2015 EMS certifications. ITI Bangalore Plant is in the process of getting certification with the latest standard. The guidance and support to all the units for training implementation surveillance audits and recertification audits of ISO 90012015 and EMS 14001-2015 are provided by Corporate Quality Assurance.

Reliability engineering laboratory of ITI Bangalore Plant has been upgraded with static of the art test chambers to meet customer requirements.

TelecomTesting Centre, the first of its kind in ITI history, will be launched shortly. This centre will cater to the defence and telecom customer requirements and will consist of

1) EMI/EMC test Lab

2) SAP Lab

3) Safety Lab

4) Security Lab

MANPOWER

Employee strength at the end of the year 31^st March, 2018 was 3576 out which 463 were female employees.

As on 31.03.2018, there were 598 employees belonging to Scheduled Castes and 53 belonging to Scheduled Tribes.

157 Officials on Tenure basis, 64 Contract Technicians, 11 Contract Operators and 5 Experts were recruited during the year 2017-2018.

Employees belonging to Physically Challenged Persons numbering 46 and Ex-servicemen category numbering 9 were on the rolls of the company as at the end of the financial year.

INDUSTRIAL RELATIONS

The Industrial Relations scenario in the Company was cordial during the year. Employees’ Union and Officers’ Association extended their co-operation and support in ensuring smooth work flow and helped to meet the Company’s objective.

PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE

As per the requirement of the Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013 (‘Act’) and Rules made there under, Company has constituted Internal Complaints Committees (ICC) to redress complaints received regarding Sexual Harassment at our all Units. All employees (permanent, Contractual, Temporary, trainees) are covered under this policy No. of complaints received during the year 2017-2018 is NIL.

HUMAN RESOURCE DEVELOPMENT

To keep pace with the latest trends in Telecom Technologies, company has rededicated the EDCs to strategize HR interventions with focus on company’s business objectives, employee-centered Technological and Managerial, Skill Development, Quality and Customer Relations. The Company’s HRD initiatives were prioritised on New Telecom Technology, Telecom Manufacturing, Information Technology and Talent Management-Development of leadership and managerial skills, besides planning a score of social awareness training initiatives. On new telecom front, IT and talent management, training was organized on core areas.

During the year 2017-18 the company organised 110 in-house training programmes and nominated suitable executives for the need based external training programmes. Total 1856 (Male 1608 & Female 248) employees have been trained and achieved 4291 training man-days.

To develop leadership and managerial skills of managers, company organised two MDPs at IIMK, wherein more than 50 executives have been trained, thus achieved 250 training man-days. Further, 61 officials have been nominated for external training programmes, organised by Premier Institutions like IITs/ IIMs in the most important areas and achieved 177 training man-days under RDC scheme of DPE.

The company has excelled on the MoU commitment with respect to HRD System and consecutively secured ‘Excellent Rating’ for the year 2017-18 also.

OFFICIAL LANGUAGE

All Units / Offices have established “Check-points” in their departments to make effective implementation of the Official Language Policy. Monitoring is being done by the respective Official Language Implementation Committees constituted in every Unit / Office.

The Progress of Implementation of Official Language in our Corporate Office as well as in our all subordinate Units / Offices is also being periodically reviewed by the OLIC Committee of Corporate office.

In order to enhance the working knowledge of Official Language of our employees, they have been sent to various Training Programs organized by the government for imparting training in Hindi awareness, Hindi typing and Hindi Stenography as per our requirement. However, the Official Language Cells of the different Units / Offices have also conducted internal training programs. Besides, employees were encouraged to take part in Hindi Prabodh, Praveen & Pragya examinations for which financial incentives have also been sanctioned.

Our Units / Offices at Naini, Rae Bareli, Mankapur, New Delhi, Mumbai, Lucknow & Corporate Office have been notified in the Gazette of India as per OL Rules 10 (2) & (4), 1976 after more than eighty percent (80%) of the staff working have acquired a working knowledge of Hindi in these Units/ Offices.

After reviewing our quarterly reports, regular appreciation letters have been received from Dy. Director-OL, Official Language Department DoT, New Delhi as well as Dy. Director (Implementation), Regional Implementation Office, Bengaluru.

ITI Limited, Registered and Corporate Office, Bengaluru, was awarded Second prize for the best official language performance award for the year 2016-17 by Chairman, Town Official Language Implementation Committee (Enterprise), Bengaluru on 25^th July, 2017 at BEL, Officer’s Club, Bengaluru Complex, Jalhalli.

A Joint Hindi Fortnight Program for Bengaluru based PSUs / Organisations was organized by TOLIC (Town Official Language Implementation Committee) Bengaluru between 10.07.2017 & 16.08.2017. Various types of competitions were arranged during this period. On this occasion many officers/Non-officers of ITI Limited, Bengaluru based Units / Offices also participated in these competitions and more than 03 Officers / Non-Officers have got the prizes. Valedictory function was held on 19.12.2017 and cash prizes and certificates to the wining participants were given by President, TOLIC.

“Hindi Fortnight” was celebrated and various Hindi Workshops were organised for encouraging progressive use of Hindi during 2017-18. Bilingual (i.e. English and Hindi) website of company is being regularly updated.

VIGILANCE

Vigilance Department focused on the preventive vigilance activities in order to bring more transparency and efficiency in the organization during the year 201718. CVC guidelines and Government policies in this regard have been strictly followed.

To achieve the above objectives, Corporate vigilance advised periodically to the Management for improvement regarding publishing of NITs and ‘Contracts concluded’ in the company website, implementation of Rotational Transfers of Executives in Sensitive Areas, implementation of Integrity Pact, periodical review for ensuring probity and efficacy among employees. Several System Improvement Measures have also been suggested to various departments as a part of preventive vigilance.

The Company celebrated Vigilance Awareness Week from 30^th October 2017 to 4^th November 2017 in all manufacturing units, business establishments and corporate office. As an outreach activity, Seminar and Integrity pledge was organized at Lucknow Public School, Rae Bareli on 01^st November 2017 & at Kendriya Vidyalaya, Rae Bareli on 02^nd November 2017 to create awareness on corruption and on the role of preventive vigilance to combat corruption. More than 200 students from each school participated., Debate/ speech Competition was conducted amongst students. In all other Manufacturing Units viz., Naini, Mankapur, Palakkad, Units have conducted Vigilance Awareness Week - 2017 programme. The Observance covered Pledge taking ceremony, Holding Essay/ Quiz/ Drawing Competitions, arranging Valedictory Function on the Concluding Day of the Vigilance Observance Week.

To address the grievances of intending bidders the issue of appointment of IEM was taken up by Chief Vigilance Officer with the management and Company appointed Shri Venugopal K Nair, IPS (Retd) as Independent External Monitor (IEM) during November, 2017.

Vigilance Department has deployed a fully functional Online Vigilance Clearance System in the company to achieve a paperless, time saving system for providing vigilance clearance. The system architecture is designed by Corporate Vigilance.

The Vigilance department is putting emphasis on preventive vigilance like implementation of Integrity Pact, E-procurement, conducting CTE type examination, publishing of tenders & POs in website, surprise checks in sensitive departments and checking of Annual Property Return etc.

RIGHT TO INFORMATION

During the year 2017-18, 384 RTI requests have been received. Information was provided for 382 RTI applications for year 2017-18. The Central Information Commission has launched an online RTI Portal for filing online RTI request for seeking information for convenience of the applicants. Out of 382 RTI replies,reply/information was provided online for 43 cases. Quarterly online RTI returns were uploaded on the CIC portal and same information is submitted to Ministry of Communications and also published on our Company website. With a view to achieve total transparency, the requests and responses are being uploaded on our website by FAA/ CPIO/ Public Information Officers of Units under specific links provided to each Unit. All cases referred to CIC by the applicants as second appeals have been successfully addressed and complied in totality to CIC decisions.

AUDITORS - STATUTORY AUDITORS

M/s. Sankaran & Krishnan, Chartered Accountants Bengaluru were appointed by Comptroller and Auditor General of India as Statutory Auditors for the year 2017-18.

- BRANCH AUDITORS

The following firms of chartered Accountants were appointed as Branch Auditors for different plants of the Company for the year 2017-18

S.No.	Unit	Name of Auditor
1	Bangalore	M/s Sankaran & Krishnan, Bengaluru
2	Naini	Neeraj Prakash & Associates, Allahabad
3	Rae Bareli	M/s R K Chari & Co., Lucknow
4	Mankapur	M/s P N G & Co., Faizabad
5	Palakkad	M/s Varier & Associates, Palakkad
6	Srinagar	M/s Amir Jan & Associates, Srinagar

- COST AUDITORS

M/s GNV Associates, Cost Accountants, Bengaluru was appointed as Cost Auditors for the year 2017-18 for the cost audit of south-based units located at Bangalore, Palakkad and also consolidation for the Company and M/s. Aman Malviya & Associates, Lucknow as Branch auditors for the Cost Audit of North based units located at Naini, Rae Bareli, Mankapur and Srinagar.

- SECRETARIAL AUDITOR

The Company has appointed Shri D Venkateswarlu, Company Secretary in practice, to undertake the Secretarial Audit of the Company. The Secretarial Audit Report for the year 2017-18 and reply to the observations of the Secretarial Auditor are appended as an Annexure to this Report.

INTERNAL FINANCIAL CONTROLS

The Company has in place adequate internal financial controls with reference to financial statements. During the year, the Company has engaged M/s Gowthama & Company, Bengaluru (Firm Registration No. 005917S) Chartered Accountants for reviewing and installing adequate Internal Financial Controls and to ensure proper and adequate systems for compliance with the provisions of all applicable laws. An internal audit mechanism is in place for conducting extensive audit of various operational and financial matters. C&AG conducts audit. An independent Audit Committee of the Board of Directors also examines internal/ statutory audit observations and provides guidance based on the same. The Audit Committee also looks into the internal control system, Company procedures and internal audit performance and reports to the Board of Directors.

CORPORATE SOCIAL RESPONSIBILITY INITIATIVES

Corporate Social Responsibility is an initiative brought in by the Ministry of Corporate Affairs whereby corporates earning adequate and consistent profits are mandated to serve society by contributing at least 2% of average net profits of the Company during three immediately preceding financial year in various activities as defined in Schedule VII of the Companies Act 2013.

Accordingly during the financial years 2015-16, 2016-17 and 2017-18, the Company has earned net profit of Rs.251.19 Crores, Rs.304.88 Crores and Rs.230.56 Crores respectively which is inclusive of grant in aid (Rs.494.02 Crores, Rs 360.71 Crores and Rs 132.98 Crores respectively) received from Government of India. The grant in aid has been given to the Company for specific purpose and cannot be used for allocation for CSR activities. However, for the financial year 2017-18 the company has earned operational profit of Rs 97.58 Crores excluding grant in aid.

Hence as required under section 135 of the Companies Act, 2013, the company has constituted CSR Committee and the company shall spend the mandated amount in areas identified by the CSR Committee in the upcoming financial year. However, the Company has set up Hospitals, Schools and Playgrounds at Townships of Manufacturing Units for the benefit of employees and the local community.

BUSINESS RESPONSIBILITY REPORT

The Company’s Business Responsibility report for the year forms part of the Annual Report.

BOARD OF DIRECTORS AND KEY MANAGERIAL PERSONNEL

As on 13^th August 2018, the Board of ITI, comprises of Ten Directors of whom three are Whole Time Directors, one Government Nominee Director and Six Non Official Part Time Directors (Independent Directors)

INDEPENDENT DIRECTORS

As on 31^st March 2018, Shri Saday Krishna Kanoria and Smt Asha Kumari Jaswal were the independent Directors of the Company.

The Government of India, vide letter No. F.No. E-5-5/2018-PSA dated 17^th July 2018, appointed five independent Directors on the Board of the Company viz., Shri K R Shanmugam, Shri Suresh Chandra Panda, Dr. Akhilesh Dube, Shri Mayank Gupta and Shri Rajen Vidyarthi. Shri Suresh Chandra Panda’s appointment has taken effect from 17^th July 2018. Dr. Akhilesh Dube’s and Shri Rajen Vidyarthi’s appointment has taken effect from 08^th August 2018. Shri Mayank Gupta’s appointment has taken effect from 13^th August 2018. However Shri K R Shanmugam has to obtain Director Identification Number and his appointment will take effect from date of obtaining the same.

The terms and conditions of the Independent Directors are posted on the website of the Company. Independent Directors shall not be liable to retire by rotation. The Independent Directors of your Company have given the certificate of independence to your Company stating that they meet the criteria of independence as mentioned under Section 149 (6) of the Companies Act, 2013. For the year under review, a separate meeting of Independent Directors was held on 13^th February 2018 in which all the Independent Directors were present.

GOVERNMENT NOMINEE DIRECTORS

Lt General A R Prasad, AVSM, VSM, ADC, Signal Officer in Chief and Senior Colonel Commandant, Ministry of Defence, Government Nominee Director, retired from service by superannuation on 31^st July 2018

Shri R M Agarwal, Former DDG (SU) DOT Government Nominee Director has been appointed as Director Marketing and assumed charge on 27^th April 2018.

Shri Rajesh Sharma, Deputy Director General (SU), Department of Telecommunications was appointed as Government Nominee Director.

CHANGES IN FUNCTIONAL DIRECTORS

Shri S.Gopu, Director-HR was granted additional charge of Chairman and Managing Director w.e.f. 01^st January 2017. Shri S Gopu was appointed as Chairman and Managing Director with effect from 23^rd January 2018. The detailed Terms and Conditions of appointment of Chairman and Managing Director was received vide Ministry of Communications letter No. F.No. E-14-4/2018-PSA dated 06^th April 2018. Shri S Gopu retired from services by superannuation on 31^st May 2018.

Shri K Alagesan, Director-Production was entrusted with additional charge of Director Marketing from 01^st January 2017 to 27^th April 2018, additional charge of Director Human resources from 08^th May 2018 to 02^nd August 2018. At present, holds the additional charge of Chairman and Managing Director with effect from 01^st June 2018.

Dr Janaki Anathakrishnan, Director Finance / Chief Financial Officer was prematurely terminated on her own request and repatriated to her parent cadre (IP&T Accounts & Finance Services). Dr Janaki Anathakrishnan was relieved from duty on 12^th December 2017

Shri Chittaranjan Pradhan (IP &T AFS-1995), a SAG level officer in Department of Telecommunications, took over additional charge as Director Finance with effect from 23^rd March 2018.

Shri R M Agarwal, former Government Nominee Director, Ministry of Communications has been appointed as Director Marketing with effect from April 27,2018. Shri R M Agarwal has been entrusted with additional charge as Director Human Resources with effect from August 02,2018

Smt Malathy Menon has been appointed as Chief Financial Officer with effect from 14^th December 2017. Mrs S Shanmuga Priya continues as Company Secretary of the Company. Chief Financial Officer and Company Secretary continues to be Key Managerial Personnel along with the Functional Directors of the Company.

The Board placed on record its deep appreciation of the valuable services rendered by the Directors whose term of office ended during the year.

Shri K Alagesan and Shri R M Agarwal, Directors retires by rotation at the forthcoming Annual General Meeting and being eligible offers themselves for re-appointment.

The policy on Director’s appointment and remuneration and also remuneration for Key Managerial Personnel forms part of Corporate Governance Report of this Annual Report.

NUMBER OF MEETINGS OF BOARD

During the year, 7 meetings of the Board were held on 25.05.2017, 28.05.2017*, 22.08.2017, 13.09.2017, 14.12.2017, 13.02.2018, 27.03.2018. * The meeting held on 25.05.2017 was adjourned to 28.05.2017

PARTICULARS OF EMPLOYEES

There were no employees of the Company who received remuneration in excess of the limits prescribed under Companies Act, 2013 read with Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2015.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

A separate section ‘Management Discussion and Analysis Report’ has been included in the Annual Report and the same forms part of the Directors’ Report.

CORPORATE GOVERNANCE REPORT

The report on Corporate Governance on the compliance of Corporate Governance conditions stipulated by SEBI (Listing Obligations and Disclosure Requirements) Regulation, 2015 and the DPE guidelines on corporate governance forms part of Directors report. The Certificate on the Compliance of above Corporate Governance Conditions from Practising Company Secretary also forms part of Directors’ report.

EXTRACT OF ANNUAL RETURN

The extract of annual return in Form MGT-9 as required under Section 92(3) and Rule 12 of the Companies (Management and Administration) Rules, 2014 is appended as an Annexure to this Report, which is also available on Company’s website at http://www.itiltd-india.com/ investor_information.

RELATED PARTY TRANSACTIONS

The Company has formulated a Policy on Related Party Transactions which is also available on Company’s website at http://www.itiltd-india.com/ investor_information.

All Related Party Transactions entered during the year were in Ordinary Course of the Business and on Arm’s Length basis. No Material Related Party Transactions, i.e. transactions exceeding ten percent of the annual consolidated turnover as per the last audited financial statements, were entered during the year by your Company. Accordingly, the disclosure of Related Party Transactions as required under Section 134(3) (h) of the Companies Act, 2013 in Form AOC 2 is not applicable.

MATERIAL CHANGES AFFECTING FINANCIAL POSITION OCCURRING BETWEEN THE END DATE OF FINANCIAL YEAR AND DATE OF THE REPORT

The Authorised share capital of the Company was amended from Rs.1200 Crore (divided into Equity Share capital of Rs.800 Crore and Redeemable Cumulative Preference Share capital of Rs 400 Crore) to Rs. 3500 Crore (divided into Equity Share capital of Rs.2800 Crore and Redeemable Cumulative Preference Share capital of Rs.700 Crore). The shareholders have approved the same in the Extra Ordinary General Meeting held on April 05, 2018.

The capital clause of the Memorandum of Association and the entire set of Articles of Association of the Company has been amended and approved in the Extra Ordinary General Meeting on 05.04.2018

The Company has allotted 13,70,00,000 equity shares of Rs.10 each at par to President of India during May 19, 2018 against the CAPEX infusion of Rs.137 Crore by the Government of India, as part of revival package.

DIRECTORS’ RESPONSIBILITY STATEMENT

The Directors confirm that

(a) in the preparation of the annual accounts for the year ended 31^st March 2018, the applicable accounting standards had been followed along with proper explanation relating to material departures;

(b) such accounting policies have been selected and applied consistently and judgments and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at 31^st March 2018 and of the profit of the company at that date;

(c) proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of Companies Act, 2013 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

(d) the annual financial statements have been prepared on a going concern basis; and

(e) proper internal financial controls were in place and that the financial controls were adequate and were operating effectively.

(f) that systems to ensure compliance with the provisions of all applicable laws were in place and that such systems were adequate and operating effectively.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements.

ENTERTAINMENT EXPENDITURE AND FOREIGN TRAVEL

The expenditure on entertainment was Rs.4.67 lakhs. Expenditure on official travel abroad by the officials of the Company amounted to Rs.3.24 lakhs during the year.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

Particulars with respect to Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo, required to be disclosed under the Section 134 of the Companies Act 2013 read with Rule 8 of Companies (Accounts) Rules, 2014 are annexed.

AWARDS

ITI Limited receives Certificate of Appreciation for BharatNet Phase I

A Certificate of Appreciation was awarded to ITI Limited in recognition of its significant contribution as ‘best performing equipment supply partners’ to achieve BharatNet Phase I target for connecting over one lakh Gram Panchayats. The certificate was presented by Shri Manoj Sinha, Hon’ble Minister of State for Communications to Shri S. Gopu, CMD, ITI Limited at a felicitation function organized by the Department of Telecommunications (DoT) at India Habitat Center, New Delhi on January 8, 2018.

National Safety Awards Conferred on ITI Raebareli Plant

ITI Raebareli plant has been conferred with the National Safety Awards for the Performance Year 2015 for Outstanding Performance in Safety at industrial establishments for maintaining consistent safety standards. The National Safety Awards and Certificates were received by Shri S P Gupta, AGM-RB, Unit Head from Shri Santosh Kumar Gangwar, Union Minister of State for Labour & Employment on September 17, 2017 at Plenary Hall, Vigyan Bhawan, New Delhi. ITI’s customary practice of maintaining ‘Safety First’ at its establishments has been recognized by Government of India. Raebareli plant has received the Awards and Certificates in two categories -’Runner-UP’ for achieving Lowest Average Frequency Rate of Accident and ‘Runner-UP’ for achieving Accident Free Year during the Performance Year 2015.

ITI Limited receives Indywood Excellence Awards 2017

ITI Limited was awarded Indywood Built in India Excellence Awards 2017 in the category of Public Sector -Telecommunications at Ramoji Film City, Hyderabad on December 4, 2017. Smt Sandhya Puttyah Jugnauth, Senior Cultural Officer, Ministry of Arts and Culture, Mauritius presented the trophy and certificate to Shri S. Gopu, CMD ITI Limited. The award was presented to ITI Limited in recognition of efforts made by the organization to boost the concept of ‘Make in India’ towards the development of telecommunication sector. Indywood Built In India Excellence Awards 2017 was organized as a part of Project Indywood, a US$10 Billion Project to be initiated by a consortium of 2000 Indian Corporate and Multi-Millionaires.

Shri S. Gopu, CMD receives India’s Best HR Leaders in PSUs Award

Shri S. Gopu, CMD, ITI Limited received India’s Best HR Leaders in PSUs Award from ASIA PACIFIC HRM CONGRESS, TIMES ASCENT hosted by World HRD Congress, Times ASCENT group on September 19, 2017 at Vivanta By Taj, Yeshwantpur, Bengaluru. The award was presented to Shri Gopu in recognition of best HR practices, contributions to future technology challenges & innovations and benchmarking talent and services for an organized cause.

Shri S. Gopu, CMD, ITI receives Pride of Karnataka Awards 2017

Shri S. Gopu, CMD, ITI Limited was honoured with Pride of Karnataka Awards 2017 for Corporate Excellence presented by CMO Asia held at M. S Ramaiah University of Applied Sciences, Bengaluru on 11th November 2017. Shri Gopu was presented the award in recognition of his success from innovative, effective practices and contribution towards development of telecommunication sector.

National Institute of Personnel Management confers

‘NIPM LIFE TIME ACHIEVEMENT AWARD 2017’ to Shri S. Gopu, CMD, ITI Limited

Shri S. Gopu, CMD, ITI was conferred with ‘NIPM LIFE TIME ACHIEVEMENT AWARD 2017’ for Government Administration by National Institute of Personnel Management (NIPM), Palghat Group, Kerala Chapter at the ‘NIPM AWARD NITE 2018’ held at Lead College of Management, Dhoni, Palakkad on January 20, 2018. The prestigious award was presented by Retired Justice, Shri Chettur

Shri N Sivasailam, Additional Secretary, DoT visits ITI Raebareli Plant

Shri N Sivasailam, IAS, Additional Secretary (T), DoT visited ITI Raebareli Plant facilities on September 10, 2017. Smt Asha Kumari Jaswal, Independent Director visits ITI Bangalore Plant

Smt Asha Kumari Jaswal, Independent Director visited ITI Bangalore Plant facilities on 24^th May 2017.

ITI Limited has signed a Memorandum of Understanding (MoU) with Department of Telecommunications (DOT), GoI for the year 2017-18. Ms. Aruna Sundararajan, IAS, Telecom Secretary and Chairman (Telecom Commission), DoT, Ministry of Communications & IT, Government of India and Shri S. Gopu, Chairman and Managing Director, ITI Limited signed and exchanged the MoU on June 30, 2017.

ITI Limited participates in Global Exhibitions on Services 2017

ITI Limited participated in e-bharat expo pavilion, Digitally Empowering Society - 3^rd Global Exhibition on Services (GES 2017) from April 17^th to 20^th, 2017 at India Expo Centre & Mart, Greater Noida organized by Ministry of Commerce & Industry, Government of India in association with Services Export Promotion Council (SEPC) & Confederation of Indian Industry (CII).

ITI participates in Vendor Development & Investors Summit, Karnataka

ITI Limited participated in the Vendor Development & Investors Summit, Karnataka held at Bengaluru International Exhibition Centre (BIEC) from November 23 to 24, 2017. ITI Limited showcased various products viz. ETS-04 Telephone, Nutan Telephone, Radio Modem, GPON ONT, Smash PC, SMT assembled cards, 3D printer, ITI TAG Wallet & Swachh Feedback Device at the exhibition. Shri R.V. Deshpande, Minister for Medium and Large Industries, Dr Mohana Kumari, Minister for Small scale industries and other delegates visited ITI stall and appreciated the products of ITI.

ITI participates in Financial Inclusion Global Initiative (FIGI) Symposium

ITI Limited participated in the Symposium on Financial Inclusion Global Initiative (FIGI) held in Bengaluru from November 29 to December 1, 2017. Department of Telecommunications (DoT), Ministry of Communications hosted the first edition of FIGI with the theme “Innovative approaches to digital financial inclusion challenges.” During the symposium ITI Limited showcased its products and manufacturing capabilities. Shri Manoj Sinha, Hon’ble Minister of State for Communications, Ms Aruna Sundararajan, IAS, Telecom Secretary, TRAI Chairman, MeiTY, ITU and World Bank officials and delegates visited ITI stall and appreciated the products.

ITI Limited participates in India Electronics Week 2018 Expo

ITI Limited participated in the ‘India Electronics Week 2018 Expo’ organized by Electronics For You (EFY) Group supported by the Ministry of Electronics and Information Technology (MeitY) at Karnataka Trade Promotion Organization (KTPO), White Field, Bengaluru from February 7- 9, 2018. In the expo, ITI Limited showcased its products viz., SWACHH Feedback Device, Radio Modem, Smart Energy Meter, CLIP Phone, ISM Band Antennas, SMAASH Mini PC, ONT, NUTAN Phone and ETS04 phone. The visitors appreciated ITI’s products and contract manufacturing services of 3D Printing, SMT Assembly and IoT Applications.

Department of Telecommunications Organizes Release of Strategic Plan for Synergy among PSU’s

To create synergies among the seven PSU’s of DoT, the department has unveiled a strategic plan at National Media Centre, New Delhi on February 22, 2018. During the event, MoUs were signed and exchanged between various PSUs under the strategic plan. Amongst them are MoUs between ITI, CDOT and TCIL pertaining to export of products, with CDOT for transfer of technology for manufacture of Terabit Router and with CDOT & MTNL for joint execution of Internet of Things and Smart City projects with TCIL (TTL) for OFC business.

(L to R) Shri R M Agarwal, DDG (SU), DoT along with Shri S. Gopu, CMD, ITI Limited, Shri PK Purwar, CMD, MTNL, Shri Sanjay Singh, CMD, BBNL, Shri A Seshagiri Rao, CMD, TCIL and Shri Anupam Shrivastava, CMD, BSNL.

ITI holds Vendors’ Meet for Fibre Infrastructure Projects

ITI Limited organized Vendors’ Meet for Fibre Infrastructure Projects at Bangalore Plant on December 27, 2017 as per the guidance of Department of Telecommunications. The meet was organized for vendors to partner with ITI Limited to supply and laying HDPE duct and optical fiber cable and meet the requirements of the BharatNet project as well as ASCON project of Army as per the Digital India initiative of GoI.

ITI Commemorates 126^th Birth Anniversary of Dr B R Ambedkar

Shri S. Gopu, CMD, ITI Limited released a book on Dr Ambedkar’s life-conscientious statesman during the 126^th birth anniversary celebrations of Dr B R Ambedkar at ITI Bangalore Plant.

Shri S. Gopu, CMD, ITI Limited speaking on the occasion of 152^nd World Telecommunication and Information Society Daycelebrationsin the presence of Dr. Sarat Chandra Babu T, Executive Director, C-DAC, Bengaluru at ITI Bangalore Plant on May 17, 2017.

ITI Limited Celebrates 3^rd International Day of Yoga

ITI Limited observed the 3^rd International Day of Yoga with enthusiasm across all the Units/Plants focused on the theme ‘Yoga for Health’ on June 21, 2017.

Shri S. Gopu, CMD, ITI Limited, Dr. Janaki Ananthakrishnan, Director (Finance), Shri Arun Kumar M, Executive Director-R&D, Shri S S Chakrabarti, GM-NS Unit and Shri Y Muralidhar, AGM-BG & R&D, Unit Head, Senior Officers and Employees participated in the yoga session at ITI Bangalore Plant.

Shri J Premchand, GM-PKD, Unit Head, Senior Officers and Employees participated in the yoga session at ITI Palakkad Plant.

ITI observes National Productivity Week

ITI Limited observed National Productivity week across its Plants/Units with the National Productivity Council (NPC) theme ‘Industry 4.0, Leapfrog Opportunity for India’ from February 12 - 18, 2018. Shri K Alagesan, Director (Production) speaking on the occasion of valedictory function in the presence of Guest of Honor, Shri H R Prabhu, Regional Director, NPC, Bengaluru and Shri Y Muralidhar, AGM-BG & R&D, Unit Head, senior officers, employees of Bangalore Plant, Corporate Office and NS Unit on February 19, 2018.

ITI Limited Observes National Safety Day

Shri Rajiv Seth, GM-MKP, Unit Head felicitated the winners of essay writing competitions during the National Safety Day celebrations on 4^th March 2018 at ITI Mankapur Plant.

ITI Limited Celebrates International Women’s Day 2018

Shri Y Muralidhar, AGM-BG & R&D, Unit Head inaugurated the International Women’s Day celebrations on 8^th March 2018 at ITI Bangalore Plant

Shri S. Gopu, CMD, ITI Limited speaking on the occasion of International Women’s Day valedictory function in the presence of Shri K Alagesan, Director (Production), Shri Y Muralidhar, AGM-BG & R&D, Unit Head, Chief Guest Smt Renuka Gopu and Dr. Padma Alagesan on March 16, 2018 at ITI Bangalore Plant

ACKNOWLEDGEMENT

The Board of Directors are extremely grateful for the continued patronage and support received from Ministry of Communications, Ministry of Defence and various other agencies in Central and State Governments, the Comptroller & Auditor General of India, Statutory Auditors, Secretarial Auditors, Cost Auditors, Internal Auditors, Suppliers, Sub-contractors, Company’s Bankers and our valued customers including BSNL BBNL, MTNS, EESL, etc.

The Board also places on record its appreciation for the contribution and support extended by all employees of ITI Ltd. Your Directors express their appreciation and gratitude to all the shareholders/investors for the trust and confidence reposed in the Company and look forward to their continued support and participation in sustaining the growth of the Company in the coming years.

For and on behalf of the Board of Directors

(K Alagesan)

Place: Bengaluru Director Production/

Date: 13^th August 2018 Addl Charge Chairman and Managing Director

---

Mar 31, 2017

Dear Shareholders,

I am delighted to present, on behalf of the Board of Directors, the 67th Annual Report of your Company along with its Audited Statements of Accounts for the year ended March 31, 2017, together with the Auditors’ Report and Comments on the Accounts by the Comptroller and Auditor General (CAG) of India.

PERFORMANCE

The Company has achieved Sales of Rs.1611 Crores during the year 2016-17 against Rs.1253 Crores during the previous year 2015-16. This is remarkably the highest turnover in the past six years. The Company could achieve this turnover in spite of the fact that our major customers BSNL and MTNL have not placed orders like earlier years. With the grants from the Government of India, net profit for the period has increased by 21% to mark Rs.305 Crores for the year 2016-17 as against Rs. 251 Crores for the previous year, which is after considering a grant of Rs.360.71 Crores by the Government during 2016-17 and Rs.494.02 Crores during 2015-16.

After continuous loss for the last 13 years till 2014-15, our Company has achieved its turn around with this profit of Rs. 305 Crores for the second consecutive year taking into account the grant in aid received from the Government of India for revival. While considering profit/loss of the Company without any Government grants, ITI’s losses have drastically come down to Rs.56 Crores in 2016-17 from Rs.243 Crores in 2015-16 which is an incomparable organizational achievement.

The contribution (net of material cost) for the year 2016-17 is Rs.298 Crores, which is comparable for that of previous year at Rs.201 Crores. The company is making efforts to regain its strong leadership position in the telecommunications domain in the country. The company has plans to keep this sustainability going on and achieve the complete turnaround with the support of Government of India.

IMPLEMENTATION OF REVIVAL PACKAGE OF ITI LIMITED

The Cabinet Committee on Economic Affairs (CCEA), during February 2014, has approved the Revival plan of ITI by fund infusion of Rs.4156.79 Crores. This package consists of Rs.2264 Crores in the form of equity for financial assistance in all the plants of ITI for implementation of new projects and Rs.1892.79 Crores to be financial assistance as grant-in-aid. Out of Rs.2264 Crores, Government has released Rs. 192 Crores as first phase disbursement to the Company towards capital expenditure during 2014-15 and Rs.80 Crores has been released during 2016-17. Company has already submitted proposals for new projects worth Rs.500 Crores and has been allocated Rs. 200 Crores Capex in Budget estimation of 2017-18. Funds against this allocation are expected to be released shortly from the Government. Beyond this we have put up proposals for implementation of new projects for about Rs. 600 Crores.

For the projects planned under Rs.192 Crores plan the infrastructure up-gradation has been completed in all plants of ITI . Further the projects planned under Rs.80 Crores are in final stages of implementation. This support from the Government has helped ITI to enter into manufacturing of products in different market domains in a big way. We are manufacturing and supplying GPON equipments for providing 2 Mbps high speed Broad band connectivity to Gram panchayats across India under BharatNet project to BBNL & BSNL.

Under Revival plan, several projects have been already implemented at various manufacturing plants of ITI and some projects are under implementation. In addition to telecom products like G-PON (ITI has got orders from BBNL and BSNL for the supply of GPON equipments with C-DoT technology and is expecting orders from Railtel.), MLLN, Broadband equipments etc., Major impetus has been given for the manufacture of encrypted telecommunication equipments required for Defence sector. We have submitted tenders for Encryption equipments for Defence and we are confident of getting orders in the coming months. ITI has also ventured in to diversified products like OFC manufacturing, Smart card manufacturing, Data Centre, Products / solutions under IOT verticals etc. Solar panel manufacturing line for 18MW capacity is being installed at ITI Naini. Our existing Data Center is being expanded further to augment 1200 racks. ITI has already established 3 lines of HDPE manufacturing at Rae Bareli plant. In view of huge requirement, to enhance the capacity, one more line of HDPE pipe manufacturing has been commissioned at Palakkad unit.

ITI is in the process of installing one manufacturing line for Optical Fibre Cable (OFC) at Rae Bareli unit. Further optical fibre drawing and optical fibre cable manufacturing infrastructure is also being planned at Bangalore unit. ITI has taken TOT for manufacture and supply of Li-Ion batteries focussing for Telecom applications, Wi-fi solutions, Low power BTS with C DOT technology, Contract manufacturing activities for VSSC and other PSUs.. A 3-D printing facility has been commissioned at Bangalore unit. Other products identified for manufacture are Antenna, Radio modems, CLIP Phones, Smart Jammers, Anti intrusion systems, Set top box, Hand Held Terminals/devices, Smart energy meters, component screening facility, Mini PC etc.

The revival package provided to ITI has boosted our manufacturing strengths to a new height and we are confident of manufacturing various telecom and allied products to cater for domestic market demands under make in India vision of Government of India.

HIGHLIGHTS

The turnover for the year 2016-17 is mainly constituted from Network For Spectrum (NFS) project, ROs and CCOs Services, AMC for ASCON, Defense Business and it’s AMC, MLLN and SSTP Projects and it’s AMC, National Population Register (NPR), NGN, AMC for GSM-SZ, GSM-WZ, AMC for OCB, GPON, Data Centre and IT and IOT Solutions.

The Company has been working on very important projects National Importance. ITI has bagged turnkey orders for Supply, Installation, Commissioning and Maintenance of GPON Equipments covering about 38000 villages from BBNL & BSNL. This project will extend the High Speed broad band services on GPON platform to rural masses. Company has bagged purchase orders from BBNL for Rs. 205 Crores and from BSNL for Rs 130 Crores during the year 2016-17.

GPON is a prestigious project of national importance which is being executed by ITI against the “BharatNet Project” under the scheme of “Digital India”. ITI is presently executing G-PON order of BBNL with C-DOT technology. The ONT, OLT, Splitters, Accessories and IT equipments are being supplied by ITI Raebareli Plant, ONT being supplied by Mankapur Plant also and Solar Power Equipements are being supplied by ITI Naini Plant. ITI Bangalore plant is also ready to supply GPON equipments and a full-fledged repair centre is being setup at ITI Bangalore for catering the repair services.

ITI has deployed 400 teams for Installation and Commissioning of this nationwide network penetrating to the uncovered Gram Panchayats in the hinterland of remote Rural India. ITI is also discussing on the phase II of “BharatNet Project” and expect more orders from this mega project. This project provides Broadband connectivity to 2.5 Lakhs Grama Panchayats in India.

The other important project being executed is the NFS (Network For Spectrum) project worth Rs. 2985 Crores for the defense forces of India which involves Procurement, Supply, Trenching, Laying, Installation, Testing and Maintenance of Optical Fiber Cable, PLB Duct and accessories for construction of exclusive Optical NLD backbone and Optical access routes on turnkey basis with AMC in the Eastern and North- Eastern region of the country. ITI has won the order for these 2 zones, for deployment of optical fibre for around 13,500 Kms of length. Out of the total of 13500 kms cable laying, nearly 9000 kms have been laid in both F and G Packages. So, ITI has already completed 70% of the work and will be completing the entire project by this year end.

This year ITI have achieved another height as ITI Palakkad plant was part of the recent rocket launch of the ISRO. Palakkad plant has contributed to the manufacturing of electronic assembly for ISRO’s Geosynchronous Satellite Launch Vehicle (GSLV) Mark III, one of the prestigious missions of ISRO. The electronic packages fabricated at ITI Palakkad plant were part of the successful launch on June 5, 2017.

On the defense front, the Company has participated in the mega tender of ASCON Phase IV project and awaiting opening of the commercial bid. ITI has recently won a contract from BSNL for encryption products of the NFS project. We are expecting an order for Rs. 90 Crores from the defense for the supply of encryption products. We have also bid for the ASCON encryption tender and hoping to get good orders. In addition, ITI has orders for MIL PCM and other projects for defense.

The overall performance of the Company is as follows:

(Rs. in Crore)

Sl. No.	Products/Projects	2016-17 (Including ED & ST)	2015-16 (Including ED & ST)
1	NFS Project	700.16	535.28
2	ROs/ CCOs/ IT/ IOT	190.00	145.03
3	Defence / ASCON	181.35	117.93
4	MLLN / MLLN AMC/SSTP	154.85	42.64
5	GSM WZ Projects / AMC	81.11	88.43
6	GSM - SZ AMC	76.25	65.11
7	NPR / SECC Projects (Data Collection)	70.59	104.63
8	NGN / C5 / Ph2	35.86	63.22
9	OCB AMC Business	32.86	31.46
10	GPON	22.51	6.66
11	Misc. Services	19.77	29.50
12	Data Centre	19.13	13.96
13	Banking / Div. Prod./Cont.Mfg	11.23	0.00
14	SMPS & Repairs	5.73	6.77
15	SATCOM & PCM MUX & TELESET	5.24	0.48
16	GSM - MTNL	2.44	2.16
17	NPR - Smart Card	1.61	0.00
18	WLL- CDMA Infra	0.00	0.08
	Total	1610.69	1253.34

PROJECTS EXECUTED DURING THE YEAR 2016-17

- Next Generation Network (NGN)

ITI Bangalore plant successfully executed the purchase order worth Rs.35.86 Crores for NGN products received from BSNL.

- National Population Registration (NPR) / Aadhaar Seeding and Socio Economic & Caste Census (SECC) projects

ITI is one among the consortium of three PSUs (other two PSUs being M/s BEL and M/s ECIL) for the execution of prestigious National Population Register (NPR) Project under Ministry of Home Affairs (MHA). The job involves collection of citizen data including biometrics.

The Aadhaar seeding work of Kerala has also been awarded to ITI and the work started in July 2016 ITI has seeded nearly 330 Lakhs Aadhaar Numbers to the NPR data base at 75 Centers in 14 districtof Kerala. The Projects was completed in all centers during December 2016. The above consortium is also executing SECC Projects for the Ministry of Rurual Development (MORD). ITI Palakkad has executed total purchase orders worth Rs.70.59 Crores during the year.

- GSM

ITI has implemented GSM Projects in BSNL West Zone and MTNL-Mumbai in technology alliance with M/s Alcatel-Lucent and in South Zone in technology alliance with M/s Huawei. The Annual Maintenance Contract related works have been carried out in these zones for total value of Rs.159.80 Crores.

- Defence projects

ITI is the leader in supplying encryption equipments for the secured communication in the Defence networks. In the year 2016-17, ITI had executed orders worth Rs.76.20 Crores from Defence sector for IP encryptors, NGN (BU), 5C telephone instruments etc.

- Fiber Cable Laying for Network for Spectrum (NFS)

ITI Limited is executing the NFS Cable laying Project in Eastern and North Eastern states of the Country. Cable Laying and services worth Rs.395.91 Crores by Raebareli Unit and Rs.304.25 Crores by Mankapur unit have been completed during the year 2016-17.

- MLLN and SSTP Projects & AMC

MLLN equipment provides dedicated path between two points which carry voice, data and video and BSNL is providing leased circuits to banks and other organizations using MLLN. Palakkad Plant has received order for Rs.134 Crores during 2016-17. Palakkad has also implemented Hardware upgrade of SSTP equipment to overcome the obsolescence of some cards used in the equipment, Capacity upgrade of Mobile Number Portability functions and Software upgrade to match the global levels for future addition of features. Palakkad Plant has executed the orders received from BSNL for MLLN and SSTP Projects and its AMC for total value of Rs.154.85 Crores during the year.

- Giga-bit Passive Optical Network (GPON)

ITI Rae Bareli Plant has executed order worth Rs. 14.26 Crores and NainiPlant has executed order for Rs.8.25 Crores during the year.

- Switch Mode Power Supply (SMPS)

ITI Rae Bareli Plant is manufacturing SMPS systems and executing the orders from BSNL / MTNL. Order value worth Rs.5.73 Crores has been executed by Raebareli Unit.

- Data Center & IT Projects

ITI has already established Tier 3 state-of- art Datacenter at Bangalore on PPP model. Presentlythis Data Center is fully booked for co-location services. ITI is also playing a major role in implementing IT projects.

The Government is pursuing E-Governance projects for taking the benefit of IT to the Village Panchayats and a substantial budget provision has been made by the Government for the same. ITI is aggressively pursuing this market segment. ITI has executed SWAN (State Wide Area Network) projects of Mizoram. ITI is also executing Accelerated Power Development and Reform Programme (APDRP) of Tamil Nadu state.

- Maintenance Contracts for ASCON and OCB Projects

ITI had earlier established the ASCON network for Indian Army. ASCON AMC order worth Rs 105.15 Crores has been executed by NSU. ITI was also the major supplier of fixed line switches to BSNL and MTNL. Currently, ITI has been extending maintenance assistance to to BSNL and MTNL for OCB exchanges, OCB order worth Rs.32.86 Crores has been executed during the year.

- E-Tendering Business, Network Management, CCTV Surveillance Orders

Regional Offices of ITI have executed various orders viz. E-Tendering Business, Network Management, CCTV Surveillance Orders, Video Audio Infra, WiFi establishment and othr miscellaneous orders for total value of Rs.190 Crores during the year.

FINANCE

The performance of the Company for the year 2016-17 as compare to the previous year is as follows

(Rs. in Crs)

Sl. No.	Particulars	2016-17	2015-16
i	Sales including services	1611	1253
ii	Value of Production	1629	1253
iii	Loss/Profit before tax	305	251
iv	Loss/Profit after tax	305	251
v	Financing Expenses	153	157
vi	Depreciation	17	13
vii	Capital Employed (Net Fixed Assets working capital)	1812	460
viii	R&D Expenditure	16	16

SHARE CAPITAL

The Cabinet Committee on Economic Affairs (CCEA), on 24th February 2014 has approved financial assistance, based on the recommendations of Board for Reconstruction of Public Sector Enterprises (BRPSE) to an extent of Rs. 4156.79 Crores for the revival of the Company. The fund infusion will be capital grant of Rs.2264 Crores in the form of equity and the balance amount of Rs.1892.79 Crores in the form of grant-in-aid.

The Company has received Rs.192 Crores during February 2015 and Rs.80 Crores during November 2016 and Rs. 100 Crores during July 2017 from Ministry of Communications and IT for meeting the expenditure towards CAPEX implementation of various projects in its various plants. The Company has allotted 27,20,00,000 equity shares of Rs. 10 each at par to President of India.

Accordingly, the paid up Equity Share Capital as on 31st March 2017 was Rs. 560,00,00,000. Government of India vide letter no. 20-36/2012- FAC-II dated 20-07-2016 has communicated the approval of Cabinet Committee on Economic Affairs to transfer requisite number of shares of President of India to Special National Investment Fund to meet SEBI’s 10% Minimum Public Shareholding requirement. Accordingly, 2,72,00,000 equity shares of Rs 10 each are to be transferred from President of India to Special National Investment Fund (SNIF) for maintenance of SEBI’s 10% minimum Public shareholding

During the year under review, the Company has not granted stock options or sweat equity. As on 31st March 2017, none of the Directors of the Company hold any shares of the Company.

DIVIDEND

As your Company still have accumulated losses the Directors are not in a position to recommend any dividend for the year 2016-2017.

HIGHLIGHTS OF THE PRODUCTION PLANTS AND SERVICE UNITS BANGALORE PLANT

Bangalore plant achieved a turnover of Rs.217.60 Crores (with ED & service tax) during the year 2016-17 registering a profit of Rs.6.22 Crores.

Major Projects / Orders completed in FY 2016-17

The supply consisted of NGN supplies worth Rs.35.86 Crores under the Government’s prestigious Digital India Initiative. Under services, the unit executed GSM-SZ AMC of Rs.76.25 Crores, Defence AMC of Rs.13.65 Crores and generated revenue of Rs.19.13 Crores from Data Centre Business.

The Unit also supplied Defence Equipments worth Rs.62.55 Crores, ISAT for CRPF - Rs.1.57 Crores, Telephones for Defence and BSNl worth Rs.0.79 Crores; Primary MUX for BSNL for Rs.2.58 Crores, Contract Manufacturing and Reliability Lab services Rs. 0.78 Crores, and Spares Rs.0.01 Crores. Revenue of Rs.10.38 Lakhs earned by way of in-plant Training during the Financial Year.

Under the revival plan Phase I, 6 projects viz Legacy secrecy projects, 1 Gigabit encryptor, Multichannel Encryption Unit, PSU Business, SCADA, MUX, Telephone, Data Centre and IT Projects are implmented. All the manufacturing areas viz. IGI, Component Test Labs, PCB Plant, SMT Line, Central Machine Shop, Coil Winding, Injection Moulding, Inspection and Testing, Material Handling, Reliability Chambers, Air conditioning Plants, Power backups like UPS, DG sets, Safety Equipments, Servers, Desktops, Laptops etc. were upgraded with modern equipments to take care of latest technology in Electronics Manufacturing. Similarly, R&D upgraded the research facilities by inductin latest development tools for future requirements. R&D took on development of Multi channel Encryption Units (MCEU), Gigabit Encryptor, Optical transport Unit (OTU1 & OTU2), 1G & 10 G Interface for NFS secrecy, etc.

Future Outlook

Under new revival projects, establishment of Data Centres at Bangalore & Naini, Development of Radio Modem, CLIP phones, Antenna Manufacturing, Creation of EMI/EMC Chamber, Poly jet 3D Printer, etc. are under implementation. Demo samples are being validated for offering to TSEC certification to BSNL. ITI is also venturing into new smart city / IOT project.

PMKVY

Bangalore plant has set up a state of art skill development scheme called the Pradhan Mantri Kausal Vikas Yojna (PMKVY) to cater to the skill development for the needy to impart Hands on Training, GE certified course at the Centre of Excellence CoE. 70 students have been trained so far on the OFC splicing technique and it is matter of pride that all the students who attended the online test have cleared the exam.

IoT

Under Centre of Excellence (CoE), Bangalore plant has set up a centre where ITI will develop solutions and showcase of Internet of Things (IoT)namely Smart Environment, Smart Lighting, Smart Home/Office, Smart Health, Intelligent Transport System, SCADA Solutions in Water, Gas & Electricity, RFID Based solutions, Content Filtering Solutions for ISP, Education Sector etc. ITI has entered into teaming agreement with number of IoT companies including some start-ups firms and plan to showcase the smart solutions from these companies in this facility. ITI has tied up with many technology providers for offering various solutions based on IoT, which go into building smart infrastructure for smart cities and also for augmenting the Digital India initiative of Government of India. Exploring business from various Government bodies like MoUD & State Government, Agricultural Board, Pollution Control Board, Water Supply Board, Municipal Authorities etc.

3D printing

3D printing is a revolutionary manufacturing method by which we can create various types of Three Dimensional (Solid) parts using a CAD file with a single machine Bangalore Plant has procured Fortis 450 3D printer and installed.

Data Centre

ITI is setting up a Data Centre with a rack space of 24,000 Sq ft at Bangalore Plant. There are lot of scopes to get good orders from Government agencies. The plan is to set up the Tier III Data Centre (Uptime 99.982%), at Bangalore with a DR site at Naini and vice versa. ITI Data Center is an endeavor to provide customer-centric services to Government Organizations and Corporate entities. The expected potential customers are Banks, Financial services and Insurance (BFSI) sector, Government organizations / PSUs, Defense Ministry and Defense Organizations, Medium, Small and Micro Scale Enterprises (MSME), Educational Institutions. 1000 racks Data Center at Bangalore and 200 racks Data Center at Naini has been planned. Data Center with First 300 Racks is planned to be put live by October-2017.

TAG - ITI Wallet

This is a cashless secure payment service under Digital India initiative of Government of India “Mera Mobile - Mera Bank”. This is called TAG-ITI MOBILE WALLET which has a huge popularity especially after the Demonetization move. All the transactions are executed and monitored by our Data Centre in Bangalore plant. ITI is the first manufacturing PSU to have entered into cashless transaction with this “TAG-ITI”.

Aadhaar Based Authentication Services on SaaS Model

With the ‘Digital India’ initiative gaining ground and the increase in demand for Aadhaar based authentication services, ITI has ventured into the business of providing Aadhaar based authentication services based on Software as a Service (SaaS) model to address various segments. Till date, over 98 Crores Aadhaar numbers have been generated by UIDAI and 97% of Adult population has Aadhaar Number.

ITI shall be playing the role of providing ASA (Authentication Service Agency) & KSA (KYC Service Agency) services to the concerned departments of Government. of Gujarat who sign up with UIDAI as AUAs (Authentication User Agency) and KUAs (KYC User Agency). Similarly ITI will provide support for the AUA/KUA entities to integrate Aadhaar services in their core plaform based on the business requirements. The ITI ASA / KSA solution / platform will be hosted in ITI Data Center in Bangalore.

ITI is also focusing on ICT projects under Digital India. We have bagged many orders for various services like AADHAAR authentication, e-signature, e-KYC under different projects like e-mitra, e-gram from various State Governments and nationalized banks.

PCB Plant

A state of art PCB manufacturing plant has been set up in Bangalore plant and inaugurated by DDG-SU on the 18th January, 2017.

MoUs signed during the year

Bangalore Plant has signed about 4 MoUs for development manufature and supply of Radio Modem, CLIP phones, Antenna and Ruggedised MUX equipment.

Tender Addressed

GSM 2G, IP Encryptors, BEU, PCM MUX, ETS04, Contract manufacturing for BHEL, CDAC, CDoT, LRDE,BEL, ISRO etc.

Measures taken for energy conservation

Energy Consumption for the year is 2,276,456 units, which is only 10% higher than previous year consumption inspite of the fact that upgradation of infrastructure and installation of various equipments under revival plan are carried out during the year 2016-17.

With the upgraded infrastructure for Electronic Manufacturing in place and Rs.3000 Crores worth of tenders on the anvil, the plant is all set for a historic turn around.

MANKAPUR PLANT

Mankapur Plant including GSM WZ & MTNL has achieved a turnover of Rs.389.45 Crores (including ED & Service Tax) which is highest in the last eleven years.

Projects / Major orders completed during 2016-17

Prestigious NFS project for package F for construction of exclusive optical NLD backbone and optical access route on turnkey basis for Defense network is being executed by ITI Mankapur. Additional cable colaying work is also started.

Revival Projects

The Plant has upgraded its infrastructure under revival plan during the financial year. The manufacturing for ONT 11 (GPON equipment) has commenced in February 2017 and 4104 nos. of ONT 11 have been produced and delivered to Raebareli unit against BBNL order During the year, the unit obtained for the first time, orders worth Rs.33.50 Lakhs for contract manufacturing from C-DoT Bangalore.

BBWT (Wi-Fi) PRODUCT

Wi-Fi products are emerging as a good business opportunityin the Indian communication market. Broadband Wireless Terminal (BBWT) of C-DOT is an effective solution to provide broadband services using Wi-Fi technology to rural, urban and semi urban areas. It is an ideal solution for railway stations, schools, warehouses, hotels and other enterprises needing to extend managed wireless LANs outdoors where Ethernet cabling is not possible. It operaters in 2.4 Ghz and 5.8 Ghz license free band and supports optical and electrical Ethernet 10/100/1000 Mbps interface for backhaul connectivity. The Plant has installed the equipments for manufacturing of BBWTWiFi systems.

Low Power BTS

Under USO Fund Low Power BTS of 2W and 5W capacity are to be installed in uncovered rural/ remote areas/ villages across the country, especially in North Eastern part of India. The compact BTS of C-DOT is a potential solution for providing GSM Network in these areas. The equipment for manufacturing of Low Power BTS is planned to be installed in Mankapur by September 2017.

Skill Development Programme

Under the Skill Development Programme, Mankapur Plant has adopted “Government. Industrial Training Institute, Mankapur” in September 2016. and have imparted training to 371 stdents. Besides this, training for skill up-gradation of Lecturers of Government. Polytechnics and seminar on Management of Waste Electrical, Electronics Equipment (WEEE) was also conducted by unit HREDC during the year.

Hospital Information System (HIS), an application to handle the services of ITI hospital has been developed in house and successfully deployed by ITI Computer Division. HIS includes service modules like OPD, Referrals, Emergency, Common Services and Rostering besides Store management, Indoor management, User management and Master data setup.

Measures taken for energy conservation

a. Installation of LED street lighting in factory and colony area. - 300 Nos.

b. Retrofit replacement of LED tube lights in place of conventional FTIis in factory area 300 Nos.

c. Surrendering contract demand of factory connection by 1300 KVA in August 2015 & another by 1200 KVA in May 2016 and the present contract demand of factory is 2000 KVA.

d. Close monitoring of daily power consumption of factory and colony.

e. The energy conservation efforts has resulted in a saving of approx. Rs. 105 lakhs in 2016-17 in comparison with 2015-16.

RAE BARELI PLANT

Rae Bareli Plant achieved a performance of Rs. 435.67 Crores, during the year 2016-17 by execution of NFS Project, GPON equipment supplies, supply of SMPS equipments and GSM Franchise business.

Major Orders received up to 31st March 2017

Out of the purchase orders received from BBNL towards GPON Project for Rs. 205 Crores and from BSNL for Rs 130 Crores during the year 2016-17, Purchase order value of Rs.114 Crores and Rs 47 Crores respectively are allocated to ITI Raebareli for supply of ONT,OLT, Splitters , accessories and IT equipments.

GPON Project

Giga-bit Passive Optical Network (GPON) is a family of products for high speed broadband communication through fibre backbone. It caters to variety of services, like voice, video, data, internet etc. Active transmission equipment in GPON network consists mainly of Optical Line Termination (OLT) and Optical Network Unit (OnT). ITI Raebareli plant has supplied 7635 OnT and 03 OLT up to 31st March 2017.

PLB HDPE PIPE Project

PLB HDPE (Permanently Lubricated High Density Poly-ethylene) Pipe is used for laying of optical fiber cable (OFC) underground. ITI Raebareli had already set up one line of PLB HDPE Pipe manufacturing and obtained TSEC. Further, two additional lines of PLB HDPE Pipe manufacturing have been installed. The plant has received an educational order of Rs. 48 Lacs from BSNL and obtained BPC.

FUTURE OUTLOOK Li-Ion Battery Project

Lithium is a good conductor of electricity and can combine with many other metals to form alloys. Lithium ion batteries provide more and more energy in a smaller container Lithium-ion batteries have many applications like cell phones, FTTX installations, remoteterminals (such as in FTTX installations), access networks, BTS (Base Transceiver Stations for wireless networks, cable networks, central offices, fuel cell powered system cars, artificial pacemakers, PCs, laptops, audio players, clocks, toys, cameras, automobiles etc.

ITI has entered into agreement with M/s EXICOM for implementation of this project for Telecom application. ITI will be fully responsible for marketing, manufacturing, installation and maintenance support.

Optical Fiber Cable(OFC) Project

An optical fiber cable is a cable containing one or more optical fibers that are used to carry light. The optical fiber elements are typically individually coated with plastic layers and contained in a protective tube suitable for the environment where the cable will be deployed. Different types of cable are used for different applications.

Fiber optic cables find many uses in a wide variety of industries and applications. Some uses of fiber optic cables include Medical, Defense/Government, Data Storage, Telecommunications, Networking, Industrial/ Commercial, FTT-X technology.

ITI Raebareli has ordered Machines and equipment worth Rs. 40 Crores for implementation of this project. Optical Fiber Cable (OFC) manufacturing plant is under installation and commissioning.

PALAKKAD PLANT Performance

The Palakkad Unit has achieved a turnover of Rs.231.71 Crores. during the year 2016-17 registering a profit of Rs.131.29 Crores. The Palakkad unit has set an ambitious production target of Rs.307 Crores for the year 2017-18 for which the entire Palakkad team is making all out efforts.

Major Projects / orders completed in Financial Year 2016-17

The unit has completed the prestigious identity projects such as National Population Register (NPR) awarded by Office of RGI and Marine Fishers Identity Project (MFID) from Department of Fisheries. The Unit has also successfully completed the work of Socio Economic Caste Census (SECC) for the Ministry of Rural Department, which helped them to have a unified database which can be used for availing the various benefit schemes. ITI has completed the supplies of Biometric Handheld Terminals to Office of RGI and Fisheries departments for the reading and authentication of Smart Cards supplies against NPR and MFID projects. The unit has also completed the order of NPR Aadhaar seeding project in Kerala for the order value of Rs.11.00 Crores.

ITI Palakkad also executed SSTP Upgrade Project worth Rs.37 Crores for BSNL and received Purchase Order of Rs.134 Crores from BSNL for MLLN Project out of which order worth Rs.75 Crores is executed during 2016-17. AMC orders worth Rs.40 Crores of MLLN and SSTP projects were successfully executed. Excellent technical support had been provided to BSNL and MTNL for MLLN, SSTP and OCB projects.

Defence / Contract Manufacturing

The focused and result oriented efforts in the Defence and Contract manufacturing area had been made during the year 2016-17. A leap in the business activities with VSSC has been made with the facility accreditation of SMT assembly line, Conformal Coating, Testing of some avionics packages and Component Screening. Subsequently accreditation for manufacturing and testing of 21 avionics packages and screening of 2 types of components received from VSSC. Purchase Order are continuously being received and executed within the stipulated delivery schedules.

VSSC, due to their increased launch vehicle requirements, are planning to outsource various activities as an end to end production mode to approved work centres and ITI Palakkad is qualified as one among them. The manpower for space quality work are trained from VSSC to meet the stringent quality standards for space applications. Packages manufactured and tested at ITI Palakkad are successfully flown to space in various launch vehicles (PSLV & GSLV) of ISRO including the recent GSLV Mark III mission which was a major milestone of ISRO. ITI Palakkad is the only approved work centre by VSSC for manufacturing of RMSA (Remote Mount Safe Arm), which is a package used to trigger the launch vehicles in to space. To meet the requirements of Mil and flight grade bare PCBs, the PCB plant is being upgraded with the state of the art machineries and the accreditation process is in progress. Manufacturing orders also increased with the enhancement of customer base with M/s BHEL, M/s CDOT, M/s CDAC and M/s BEL for contact manufacturing and M/s BEML for cable harnessing. Orders received against Defence and Contract manufacturing are worth Rs.2.5 Crores , which is much higher than previous years.

Future Outlook

As part of the revival project, ITI Palakkad is in the process of getting VISA/Master Certification against which the necessary infrastructure setting for Smart card personalization, surveillance requirements as per the VISA/Master specifications etc. is in progress. Once certified, ITI will be the first PSU to venture in the EMV card personalization domain for supplying EMV chip cards for the banking requirements.

The unit has implemented in Phase I, new projects such as Component screening, Smart cards and MLLN. Against the second phase, the projects such as Smart Cards, Component screening, PCB plant upgradation, HDPE pipe, Smart Energy meter, Set top box, setting up of Repair centre, Handheld terminals, Mini PC etc are progressing to address the market requirement.

The installation & commissioning of machines for HDPE pipe is in the final stage of completion and commercial production is scheduled by November 2017.

ITI has entered into an MoU with M/s CDAC, Thiruvanathapuram for the Transfer of Technology (ToT) and manufacturing of Smart Energy Meter. ITI has signed an MoU for the ToT and manufacturing of Aadhaar Authentication Terminals. ITI has also developed Mini PC under the brand name “ITI Smaash” for which the marketing efforts are in progress.

E-governance Project Initiatives

Against e-governance projects, ITI has submitted the proposal to Kerala State Government against the RFP for Fair Price Shop (ARD) automation under end-to-end computerization of Public Distribution System (PDS) and deployment of e-POS devices in Kerala. ITI has also submitted the techno-commercial proposal to Kerala State Road Transport Corporation (KSRTC) for Intelligent Transport Systems alongwith M/s CDIT, Thiruvanathapuram as the partner.

Additional Skill Acquisition Programme

Kerala Government has selected Palakkad Unit as one of their Training Service Provider of ASAP Scheme (Additional Skill Acquisition Programme) and the Unit has conducted training for one Batch of 29 students for Pick and Place and two batches of around 30 students each for PCB Course. The Unit could generate a revenue of approximately Rs 9 lakhs against this.

QMS/ EMS

The Palakkad Unit is certified with ISO 14001: 2015 for Environment Management System. The certification audit for Quality Management System and Environment Management System with ISO 9001: 2015 standard is completed.

NAINI PLANT

The Plant has achieved a turnover of Rs. 8.25 Crores including ED & ST for the year 2016-17 against supply of Solar equipments for GPON order received from BBNL.

During 2016-17, ITI Naini, being the designated unit for Solar Panel and Transmission equipment, has geared up for addressing Solar Segment and implementation of Revival Plan Project.

Major Orders and Projects Solar Project

Against the purchase orders received from BBNL and BSNL for GPON Projects, ITI Naini Plant is supplying Solar Power equipment. ONT (Broadband Access equipment), which is part of the GPON equipment will be installed in Gram Panchayats. The Solar Power equipment, which is being produced by ITI Naini will provide seamless power to the ONT.

ITI Naini has successfully received Type Approval Certification (TAC) for Solar Power Equipment from BSNL-QA, Bangalore. The Solar modules (60Wp) offered with the product has been successfully tested by National Institute of Solar Energy (NISE), Gurugram and Conformity Test Lab, New Delhi as per BSNL QA test Plan.

Out of present BBNL order quantity of 20000 numbers. ITI Naini has dispatched 5012 numbers of Solar Power Equipment till March 2017.

ITI also Participated in Railtel tender for supply, services and AMC for SPV based solar systems required for GPON. ITI Naini expected to get order for SPV system for GPON.

ITI received order of Rs. 65 Lakhs from M/s L&T construction for Supply of System for project & Work order is awaited which will lead to total Purchase Order value of Rs 75 Lakhs for the project. This will open a new window for Grid Connected SPV System for high KW/MW capacity. Efforts are being made to get similar order from other PSUs for Grid connected Rooftop Solar Power plant.

Future Outlook

ITI Naini has initiated various activities of development of solar application based products like Charge Controller, LED Street Lights and other LED based lighting products.

The Plant has geared up for addressing the opportunity in renewable energy sector and will supply Crystalline Solar Modules to various schemes of Ministry of New and Renewable Energy (MNRE). ITI Naini already has 5 MWp installed capacity of Solar Panel Manufacturing ITI make modules (from 30 Wp to 300 Wp) have been qualified in stringent Test of IEC and has been certified for IEC 61215, 61730, 61701) by M/s UL India, Bangalore.

To meet future requirement, Naini has planned under Revival Plan Phase-II, to augment manufacturing capacity by adding 18 MWp Automatic Solar Panel Manufacturing Line. Procurement & installation of equipment for 18 MWp Manufacturing Line, is in progress. Civil, Plant & other related activities are in advance stage of completion. Moreover, Tabber- Stringer machine has been incorporated in the existing 5 MWp line to enhance automation under Revival Plan Phase-I.

ITI is planning to participate in 1000 MWp tender for Grid connected Roof top Solar Power plant on Government buildings floated by Solar Energy Corporation of India (SECI), a PSU under Ministry of New and Renewable Energy (MNRE). ITI is expecting for 50 MWp capacity in the tender. A consortium agreement has been signed with M/s Cambridge Energy Resources, Gurugram, Haryana, for this project.

Gyansetu project

ITI Naini has signed an agreement with Center for Development of Telematics (CDoT) & Center for DevelopmentofAdvanceComputing(CDAC)BangaloreforTransferofTechnologyofGyanSetuProject,Hybrid Solar Charge Controller suitable for Telecom application and On grid Solar Power Conditioning Unit (PCU) of various rating for Solar Rooftop application. The Gyansetu project will extend the services of Digital India PrograminruralareasthroughCommonServiceCenters(CSC).Thisprojectwillproviderealtimeinformation about the Government services to citizen, (PAN Card, AADHAR, Election Card, Passport) Education, Health, Mandi rates, weather forecast, Agriculture information, Land records (Khasra/Khatauni) etc.

Carrier Ethernet

Naini unit is also exploring to address Carrier Ethernet Segment which is used for Metro/Aggregation Network, as a Revival Plan Project.

Data Center

Purchase order has been placed for design and implementation of Data Center. Building has also been identified for Data Center (Disaster Recovery Site)

Quality

For Solar Manufacturing, 18001 certification for Occupational Health and Safety Services (OHSAS) and 50001 certification for energy systems are mandatory. ITI Naini has acquired 18001 certification from SOCOTEC in March 2017 and is valid up to March 2020.

Skill Development Training

15 days Skill Development Training Program of Solar Module Assembly Technician conducted for 4 batches and 90 trainees were trained & revenue of approximately Rs. 2.06 Lakhs generated and an amount of Rs.1.0 Lakh spent for conducting on-line exam for trainees through TSSC. Six months specialized industrial training conducted for 80 trainees.

4 to 6 weeks Vocational/summer training was conducted for 340 Degree/Diploma/MBA students and revenue of Rs.6.64 Lakhs generated. Five In-house training programs and 2 External training program organized for total 52 training man-days with in the training budget of Rs.0.35 Lakh (For In-House and External)

Energy Conservation

During the year 2016-17, 12031 KVAH saving in consumption was achieved as an Energy Conservation Measure.

SRINAGAR PLANT

The Plant is gearing up for Skill Development activitites for the benefit of local youth, State Government employees and other sections of the Society. Some areas of the Plant is renovated to set up Skill Development Centre.

NETWORK SYSTEMS UNIT (NSU)

This non-production Unit with core strength in Turnkey Projects execution and Annual Maintenance works has a track record of steady growth and continuous profitability.

In the Financial year 2016-17, NSU has given better performance by achieving a turnover of Rs.138.01 Crores and registering a profit of Rs.28.50 Crores Revenue from AMC for ASCON continues to be the major contributor while OCB 283 AMC for BSNL and MTNL contributed Rs. 31.37 Crores For the current fiscal, OCB 283 AMC for BSNL and MTNL have been renewed and are together valued at Rs.26.74 Crores Hence focus is now on generating maximum turnover under AMC for ASCON which is valid till the end of 2019. NSU is also geared up to involve itself in a big way for Installation and Commissioning of GPON equipments. The Unit has initiated steps to migrate from ISO 9001-2008 to ISO 9001-2015 Certification Standards.

HIGHLIGHTS OF REGIONAL OFFICES (ROs)

Performance of Reginal Offices for the Financial Year 2016-17 is Rs.190 Crores (with Service Tax) which is about 31% higher than the last fiscal with a profit of Rs.2.77 Crores Sundry Debtor realization during 2016-17 is Rs.120.56 Crores which is 34% higher than the last fiscal. Orders bagged in 2016-17 amounts to approximately Rs.216.13 Crores. As on 01.04.2017, Orders worth Rs.76.31 Crores are one hand.

New Projects taken up in 2016-17

The following Projects were taken up by Regional offices during the year 2016-17.

1. Integrated University Management System (IUMS) for Universities of total approximately value Rs.18.29 Crores - RO Delhi.

2. CCTV Surveillance Systems for Ministry of Finance (North Block), Ministry of Agriculture (Krishi Bhawan) and HP Cooperative Bank of approximately total value Rs.17 Crores. - RO Delhi.

3. Wi Fi Zones establishment for Government Colleges in Punjab & Haryana Mandi Board of approximately value Rs.3.62 Crores.

4. Wi Fi Zones establishment at important tourist spots in the state of Uttarakhand for the Government of Uttarakhand of approximately value Rs.19 Crores. - RO Lucknow.

5. ICT Infrastructure creation and Implementation of Hospital Management Systems for AYUSH / AIIA of approximately total value of Rs.9 Crores. - RO Lucknow.

6. Audio Video Infra for Lucknow Development Authority (LDA) of approximately total value Rs.29.50 Crores - RO Lucknow.

7. CCTV Surveillance systems for Allahabad University campus & 49 Warehouses of CWC of approximately total value Rs.4.50 Crores - RO Lucknow.

8. Integrated University Management System (IUMS) for HNBG Central University of approximately value Rs.2 Crores - RO Lucknow.

9. Digital Emergency Announcement & Audio Video System for UP Special Task Force of approximately value Rs.2 Crores - RO Lucknow

Major orders successfully completed in 2016-17

1. e Tendering business of value Rs.43 Crores - RO Delhi, Bangalore, Kolkata & Lucknow.

2. RO Hyderabad has successfully implemented the Network Management System (NMS) project for BSNL.

3. RO Lucknow has successfully established the Audio Video Infra for Lucknow Development Authority (LDA).

4. RO Delhi has completed Integrated University Management Systems (IUMS) orders of value Rs.12.0 Crores

5. RO Delhi has completed CCTV Surveillance orders of value Rs.16.0 Crores

6. RO Delhi has completed Wi Fi Zones establishment orders of value Rs.3.62 Crores

Future Prospects

1. Ministry of Urban Development has assigned the task of implementation of an ICT based solution to capture real time feedback from community & public toilets in 12 States / Union Territories - IoT business.

2. ERP / Integrated University Management Systems for universities in Bihar.

3. GIS activities for UP Buildings & Other Construction Workers Welfare Board.

4. e Classrooms for Medical Colleges under Ministry of Health.

5. CCTV Surveillance system for District Courts in Bihar.

Putting all out efforts to address & grab the business from segments like Smart City,IoT& e Market Place etc.

RATING IN MEMORANDUM OF UNDERSTANDING

The Company’s rating for the year 2015-16 is “Good” with a positive score of 60.72. The company has signed Memorandum of Understanding with the Administrative Ministry for sales turnover of Rs.2000 Crores (at Good level) for the year 2017-18.

FUTURE OUTLOOK

The following projects are planned for implementation under revival plan.

HDPE Pipe and Optical Fiber Cable Manufacturing

Laying of Optical Fiber Cable (OFC) underground is to be carried out through PLB HDPE (Permanently Lubricated High Density Poly Ethylene) Pipe only. The demand for HDPE Pipes has quickly risen due to several Government projects like, NFS, ASCON, BharatNet etc. As per Government of India initiative for “DIGITAL INDIA” programme, optical fibre network is to be established for high speed internet access across the country Therefore, there is huge demand of PLB HDPE pipes. Apart from BSNL and BBNL, other service providers are also requiring such type of PLB HDPE pipes for their teleco service. In addition to the existing one manufacturing line for HDPE, two more lines have been commissioned at ITI Raebareliplant An educational order for 100 KMs HDPE pipe to BSNL has successfully completed by RaeBarei unit. The plant is now ready for bulk production. Considering the very huge market available for this product, ITI is in the process of establishing one more line at ITI’s southern unit at Palakkad and will be commissioned shortly. Similar to HDPE pipes, as indicated above there is huge demand for optical fiber cables also. It is expected that the existing old copper cables used for India’s Telecommunication network will be replaced with OFC in future. And also therewill be huge demand of OFC for BhartNet phase III. Looking in to OFC demand expected in the country, Company is in the final stages of commissioning one line OFC manufacturing at Raebareli unit. Further optical fibre drawing and optical fibre cable manufacturing infrastructure is also being planned at Bangalore unit.

- Encryption Products for Defence

The encryption products for Defence communication networks are being designed by our R&D and manufactured and supplied by ITI for long time. ITI has been the pioneer in this field. The products are evolved in tune with the evolution in the digital communication technology. There are major requirements of encryption products for Defence for their NFS network, ASCON network etc. ITI is expecting good business in this year in encryption portfolio.

- G-PON Manufacturing

ITI had participated in GPON turnkey project tenders for BharatNet project and successful in getting orders from the BBNL and BSNL. Company got orders for about Rs.425 Crores for manufacturing and supply of 1500 OLT and 37300 ONTs. Further company is expecting one more GPON order from Railtel shortly. ITI is manufacturing these products at Raebareli and Mankapur plant from component level with C-DOT as the technology provider. The supply, installation and commissioning are in progress across India. In view of huge requirement of OFC deployment for Government of India BharatNet project phase II and III, there would be corresponding requirements of GPON solution also. The Company is geared up for manufacturing using our latest established infrastructure facilities..

- Manufacture of Smart Cards

As an extension of National Population Register project, which is under execution by ITI as a consortium partner with BEL and ECIL, ITI is looking at the huge opportunity of manufacturing Smart card based identity cards for the citizens in the Country. In addition, there are opportunities regarding supply of smart cards for unorganized workers, driving licenses, motor vehicle registration etc. ITI is already having smart card manufacturing facility at its Palakkad plant. This is being further augmented to take manufacture of various types of identity cards.

- Manufacturing of Li-Ion Batteries

Long life, low maintenance and high energy density back up power solutions using Li-Ion technology have been proved in all fields of consumer electronics like PCs, Mobile phones, Tablet PCs etc. They also make inroads into other applications of Telecom industry like powering GSM towers. ITI has taken TOT for manufacture and supply of Li-Ion batteries with focus on meeting needs of Telecom applictions like GSM BTS sites. ITI is planning to take up assembling of Li-Ion batteries in one of its plants, specifically for supplying to the BTS sites.

- Component Screening Project

Component Screening is a Project suggested by VSSC (ISRO) for ITI Palakkad to take up for meeting their requirement of approximately 5 Lakh screened components per year. Screened Components are required regularly for VSSC for their space missions. Basic component screening facility has already been established in the plant. Further the infrastructure upgradation is in final stages to cater for new components and also for meeting needs for component screening for defence.

- Data Center and IT Business

The Company has planned investment to address the huge growth in the service sector related to Information Technology. Currently ITI has been operating one Data Center in its Bangalore plant in partnership with a private company. Looking into high demand for data Centre business and the expected growth in India, the Company is already in the process of building our own Data Centre under the revival plan. The Company is already providing IT solutions, like E-Banking, Aadhaar based authentication etc. on SaaS basis from the Data Center.

- Wi-Fi products

Wi-Fi products have revolutionized the way we communicate. In addition to low power Wi-Fi products in residences, Wi-Fi hot spots are coming up all around the country. Further, Wi-Fi products are also expected to be part of the Digital India programme to connect every citizen to Broadband network and also in setting up of Smart Cities. ITI is planning to address this business opportunity in association with the technology partner.

- Managed Leased Line Network (MLLN) Equipments

ITI has been the leader in supplying MLLN equipment for BSNL and MTNL since 2002-03. The existing MLLN networks of these Telecom Service Providers have been set up and maintained by ITI till date. ITI is also getting good revenue for giving maintenance support to the existing networks. Company has bagged one more big order for MLLN turnkey project recently from BSNL. ITI hopes and gearing up to address the future MLLN requirements on IP based technology.

- Low Power BTS systems for remote villages

Low power BTS systems have been planned as a means to extend mobile connectivity to cover all the unconnected villages in the country. USOF has planned to fund such programmes so that every village in the country is connected through mobile communication networks. ITI is hoping to get orders for supply of equipments required for such networks.

- Business with other PSUs/Contract Manufacturing

Contract manufacturing for PSUs is an existing activity in ITI. ITI is ready executing job works for PSUs like, BHEL, BEL, VSSC, NPOL etc. With upgradation of infrastructure in ITI, there is more scope for getting new business in the area of contract manufacturing.

- IOT and Smart City

ITI has made foray in to Internet Of Things commonly called as “IOT” which is making big head way in common man’s day to day life across the world. The purpose of the Smart Cities Mission is to drive economic growth and improve the quality of life of people by enabling local area development and harnessing technology, especially technology that leads to Smart outcomes. Application of smart solutions will enable cities to use technology, information and data to improve infrastructure and services. ITI has entered in to teaming agreements with many start-ups who have developed “smart” solutions which are integral part of IOT sector. ITI is planning to offer solutions for smart education, smart health, smart environment, smart transport etc. As of now, 90 cities find a place in the Centre’s programme. ITI is planning to actively participate in smart city tenders to secure business in the days to come.

CONTRIBUTION TO EXCHEQUER

During the year, your company has contributed Rs. 10497.99 Lakhs to the exchequer towards duties and taxes.

PUBLIC DEPOSITS

Value of deposits held by the company is NIL. Deposits aggregating to Rs. 0.24 Crores had matured for payment, but were not claimed on due dates.

REVIEW OF ACCOUNTS BY INDIAN AUDIT AND ACCOUNTS DEPARTMENT

The comments on the accounts for the year 2016-17 by the Comptroller and Auditor General of India is appended.

JOINT VENTURES INDIA SATCOM LIMITED (ISL)

ISL was incorporated in the year 1987 and the present shareholding of ITI in ISL is 49% of its share capital with M/s. Chris Tech Systems Pvt Limited holding 51% of its share capital. Consequent to the delay in final disposal of the case initiated by Karnataka Industrial Area Development Board (KIADB) which is pending before Hon’ble High Court of Karnataka, ISL could not proceed with its revival operations through land development.

There was no company which became or ceased to be a subsidiary, joint venture or associate of the Company during the year under review.

The salient features of the Joint Venture Company are furnished in form AOC -1 which is appended to this report.

QUALITY

Quality policy of ITI is to “deliver high quality, secure and reliable products, services and solutions” by empowering every employee. Quality Assurance wings are functioning in all the manufacturing units of ITI. The QA wings are responsible for delivery of Quality products and services. The Units have been well equipped with necessary test facilities and test systems for carrying out elaborate tests, conducting reliability evaluations on all the products to ensure quality. This is achieved by sound and effective Quality Management System.

The five manufacturing plants at Bengaluru, Palakkad, Mankapur, Rae-Bareli and Naini have been accredited with ISO 9001-2008, NSU Bangalore is also accredited With ISO 9001-2008. The periodical Surveillance Audit & Recertification Audits have been conducted successfully, Keeping in tune with the Global concern for Environmental Management all the plants have also gone in forISO14001-2004 EMS certifications. The guidance and support to all the units for training implementation surveillance audits & recertification audits of ISO 9001-2008 and EMS 14001-2004 are provided by Corporate Quality Assurance .

Corporate Management has given approval to the units for upgradation to the new ISO Standards - QMS ISO 9001:2015 & EMS 14001:2015 as per the requirements.

There is a three-year transition period (Sept 2015 to Sept 2018) to upgrade to the new Standards. Suitable internal auditors training are being conducted by individual Units by utilising their Annual Training Budget allocated for 2016-17.

MANPOWER

Employee strength at the end of the year 31st March, 2017 was 4052 out which 431 were female employees. As on 31.03.2017, there were 670 employees belonging to Scheduled Castes and 47 belonging to Scheduled Tribes.

56 Officers on Tenure basis 20 Contract Engineers, 13 Contract Technicians and 10 Contract Operators were recruited during the year 2016-2017.

Employees belonging to Physically Challenged Persons numbering 55 and Ex-servicemen category numbering 12 were on the rolls of the company as at the end of the financial year.

INDUSTRIAL RELATIONS

The Industrial Relations scenario in the Company was cordial during the year. Employees’ Union and Officers’ Association extended their co-operation and support in ensuring smooth work flow and helped to meet the Company’s objective.

PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE

As per the requirement of the Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013 (‘Act’) and Rules made there under, the Company has constituted Internal Complaints Committees (ICC) to redress complaints received regarding Sexual Harassment at our all Units. All employees (permanent, Contractual, Temporary, trainees) are covered under this policy.

No. of complaints are received during the year 2016-2017 is NIL.

HUMAN RESOURCE DEVELOPMENT

The world of today, as we know has gone through many revolutionary changes that brought people even more closer than they were in the past. The world that we live and breathe in today, while benefiting ourselves with the endless possibilities that technology has introduced to us, it brought forth a gift unparallel to any other luxury. This rapidly growing telecom market brings on more challenges. The lack of qualified human resource in both technical and managerial competencies in telecommunication sector make the Government confront with immense constraints in its development project expansion. The Government of India hence attempts to improve the skill sets in the telecommunication industry. The training and development are the key instruments to build the HR skills and capacity of ITI Limited. The sufficient investment on human capital Training & development will produce moderate and positive impacts on employee productivity improvement and also organizational performance as a whole. The Learning and Development had strong relationship to the company’s performance and improvement. The correlation of the training capacity and imparting telecom skills development training is immense. The training activity in the company is a planned process, oriented towards employee productivity development and to enable its employees to remain updated of knowledge and skills surmounting the technological obsolescence and competitive edge in our services. The training is allied with the financial condition of the Company.

Bearing in mind the Company MoU target on HRM-Training for the financial year 2016-17, the HRD initiatives were more oriented towards imparting training to Executives/Non-Executives for knowledge/ skill development in Telecom & IT. Training programmes and workshops were organized in IoT, Broadband, OFC, Mobile, NGN, Cyber Security, Communication Technologies, ERP Cashless transactions, GST, MDP etc., towards digitalization and to improve computer literacy in the company, both basic and advance course in computer skills. Training programmes in Microsoft Office were imparted throughout the company. Training programmes were also organized in-house on Soft Skills, Stress Management, Safety, besides organizing awareness programmes in Health, Environment, Energy Management and Official Language.

ITI Limited takes up Government of India initiatives like ‘Skill India’, ‘Digital India’ etc., to fully comply with the directives of the Government of India and in HRD sphere to accelerate skill development training and its implementation. The company has entered into MoUs with NSDC-Telecom Sector Skill Council (TSSC) and Electronics Sector Skill Council of India (ESSCI) for implementation of skill development activities and has taken initiatives. The Company is a NSDC affiliated training provider, to ensure delivery of NOS aligned curriculum. TSSC/ESSCI has accredited for imparting skill development in their QPS/ Job Rolls for the students across India, utilizing the infrastructure facilities in the HRD/SD centres of ITI Units. These short-courses are devised to enable students trainees to take up employment immediately enhance the employability, in association with Government authorities and Skill Sector Councils and other Training Partners in all ITI Units. Training of Trainers (ToT) programmes in Optical Fiber Splicer and Optical Fiber Technician have been organized at Bangalore for trainers of Bangalore Plant and Srinagar Plant separately. Trainers have been prepared to start the skill delopement trained/being trained in various job rolls like Base Station Service Engineer (BSS Engineer), OFS, PCB Fabricator, Circuit Image Operator (PCB), Pick & Place Operator, Solar Module Assembly Technician, Field Trial Computer Peripheral (FTCP) etc.

During the financial year, ITI imparted skill development training to 2480 trainees, out of which 173 in TSSC/ESSCI qualifications packs/job role and 2307 have been trained in ITI modules.

In respect of HRM performance indicators, 59 training programmes have been organized in house/ sponsored outside. The company totally trained 1644 Executives / Non-Executives achieving total 2068 mandays. ITI always achieves its targets and in fact overwhelmingly surpasses given targets of MoU with DoT. Additionally, the skill gaps arising out of newer technologies and changed product portfolio among the employees are also continuously monitored and effectively plugged in periodically.

Training, becoming a vital part to help groom the telecom sector of today, ITI Limited has started to take up the stance in emphasizing the need for telecom training and executive coaching to help their employees train better for the present as well as future challenges. Existing in today’s ever growing market, the company has to come up with many different things to stay in the competition. Now this involved the managerial level serving their companies to get a better understanding at what they are about the uprising challenges in the telecom industry by imparting telecom training coupled with executive or managerial development in collaboration with Premiere Institutes like IITs, IIMs etc. Training has its importance for the managerial staff as well since they are the ones that are responsible for getting the work done through their team. Executives / Managerial training brings a better understanding to them about what they need to prepare themselves with while performing better at their job. Leadership development is also taught to people under the training programme so that those with the spark to become a better leader of tomorrow can get a good insight at what they need to gear themselves up with.

OFFICIAL LANGUAGE

All Units / Offices have established “Check-points” in their departments to make effective implementation of the Official Language Policy. Monitoring is being done by the respective Official Language Implementation Committee(OLIC) constituted in every Unit / Office.

The Progress of Implementation of Official Language in our Corporate Office as well as in Units / Offices is also being periodically reviewed by the OLIC of Corporate office.

In order to enhance the working knowledge of Official Language of our employees, they have been sent to various Training Programs organized by the Government for imparting training in Hindi awareness, Hindi typing and Hindi Stenography as per, the Company’s requirement. However, the Official Language Cells of the different Units / Offices have also conducted internal training programs. Besides, employees were encouraged to take part in Hindi Prabodh, Praveen & Pragya examinations for which financial incentives have also been sanctioned.

Our Units / Offices at Naini, Rae Bareli, Mankapur, New Delhi, Mumbai, Lucknow & Corporate Office have been notified in the Gazette of India as per OL Rules 10 (2) & (4), 1976 after more than eighty percent (80%) of the staff working have acquired a working knowledge of Hindi in these Units/ Offices.

After reviewing our quarterly reports, regular appreciation letters have been received from Dy. Director-OL, Official Language Department DoT, New Delhi as well as Dy. Director (Implementation), Regional Implementation Office, Bangalore.

A Joint Hindi Fortnight Program for Bangalore based PSUs / Organisations was organized by TOLIC (Town Official Language Implementation Committee) Bangalore between 11.07.2016 and 10.08.2016. Various types of competitions were arranged during this period. On this occasion many officers/Non-officers of ITI Limited, Bangalore based Units / Offices also participated in these competitions and more than 03 Officers / Non Officers have got the prizes. Valedictory function was held on 28.12.2016 and cash prizes and certificates to the wining participants were given by President, TOLIC. “Hindi Fortnight” was celebrated and various Hindi Workshops were organised for encouraging progressive use of Hindi during 2016-17. Bilingual (i.e. English and Hindi) website of company is being regularly updated.

VIGILANCE

During the year 2016-17, Vigilance Department focused on the preventive vigilance activities in order to bring more transparency and efficiency in the organization. CVC guidelines and Government policies in this regard have been strictly followed.

To achieve the above objectives, Corporate vigilance advised periodically to the Management for improvement regarding publishing of NITs and ‘Contracts concluded’ in the company website, implementation of Rotational Transfers of Executives in Sensitive Areas, implementation of Integrity Pact, periodical review for ensuring probity and efficacy among employees. Several System Improvement Measures have also been suggested to various departments as a part of preventive vigilance.

The Company celebrated Vigilance Awareness Week from 31st October, 2016 to 5th November, 2016 in all manufacturing units, business establishments and corporate office. Seminars were organized at Kendriya Vidyalaya, Rae Bareli and at St. Peter School, Rae Bareli to create awareness on corruption and on the role of preventive vigilance to combat corruption. In this occasion, a booklet was released by CVO-ITI on Awareness on Works, Goods and Services. This booklet elaborately covers necessary guidelines to be considered for procurement and different check points to be considered during the different phases of purchase procedures, tender process, award of contracts, payment of contractors, back to back procedure etc. It also refers to the list of relevant circulars/orders issued by CVC/DoPT/Ministry.

The Vigilance department is putting emphasis on preventive vigilance like implementation of Integrity Pact, E-procurement, conducting CTE type examination, publishing of tenders and POs in website, surprise checks in sensitive departments and checking of Annual Property Return etc.

RIGHT TO INFORMATION

During the year 2016-17, out of 393 RTI requests, information was provided against 376, 1 request rejected and 5 requests were transferred to another Public Authority. The RTI returns on quarterly basis is being submitted to the Ministry for forwarding the same to Central Information Commission and the same is published on our Company website. With a view to achieve total transparency, the requests and responses are being uploaded on our website by FAA/CPIO/Public Information Officers of Units under specific link given to each Unit. All cases referred to CIC as second appeal have been successfully addressed.

AUDITORS - STATUTORY AUDITORS

M/s. Sundar Srini & Sridhar, Chartered Accountants, Chennai, were appointed by Comptroller and Auditor General of India as Statutory Auditors for the year 2016-17.

- BRANCH AUDITORS

The following firms of chartered Accountants were appointed as Branch Auditors for different plants of the Company for the year 2016-17

S.No.	Unit	Name of Auditor
1	Bangalore	Sundar Srini & Sridhar, Bangalore
2	Naini	Neeraj Prakash & Associates, Allahabad
3	Rae Bareli	Rajesh Srivastava & Associates, Lucknow
4	Mankapur	Sri Ram Bhuvanesh & Co, Faizabad,
5	Palakkad	Mahadevan & Sivarajan, Palakkad
6	Srinagar	S D M & Co, Srinagar

- COST AUDITORS

M/s GNV Associates, Cost Accountants, Bengaluru was appointed as Cost Auditors for the year 2016-17- for the cost audit of south-based units located at Bangalore, Palakkad and also consolidation for the Company and M/s. Aman Malviya & Associates, Lucknow as Branch auditors for the Cost Audit of North based units located at Naini, Rae Bareli, Mankapur and Srinagar.

- SECRETARIAL AUDITOR

The Company has appointed Shri D Venkateswarlu, Company Secretary in practice, to undertake the Secretarial Audit of the Company. The Secretarial Audit Report for the year 2016-17 and reply to the observations of the Secretarial Auditor are appended as an Annexure to this Report.

CORPORATE SOCIAL RESPONSIBILITY INITIATIVES

The Company has constituted Corporate Social Responsibility Committee and the details of same are furnished in Corporate Governance report. For the year under review, the Company was not required to spend on CSR activities. However, the Company has set up Hospitals, Schools and Playgrounds at Townships of Manufacturing Units for the benefit of employees and the local community.

BOARD OF DIRECTORS AND KEY MANAGERIAL PERSONNEL

As on 22nd August 2017, the Board of ITI, comprises of Seven Directors of whom three are Whole Time Directors, two Non Official Part Time Directors (Independent Directors) and two Official Part Time Directors (Nominees of Government of India).

Ministry of Communications & IT has been requested to appoint requisite number of independent Directors to comply with the provisions of Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations,

Appointment of Independent Directors

During the year, the Government of India, vide letter No. ENo.5-3/2016-PSA dated 30.01.2017, appointed Smt Asha Kumari Jaswal as Independent Director on the Board of the Company. Her appointment has taken effect from 06.04.2017.

The terms and conditions of the Independent Directors are posted on the web-site of the Company. Independent Directors shall not be liable to retire by rotation. The Independent Directors of your Company have given the certificate of independence to your Company stating that they meet the criteria of independence as mentioned under Section 149 (6) of the Companies Act, 2013.

Government Nominee Directors

Shri R M Agarwal, DDG(SU), Department of Telecommunications, Ministry of Communications & IT was appointed as Government Nominee Director vide MoC & IT letter No. ENo.5-1/2016-PSA dated 08.06.2016 in the place of Shri Srikanta Panda.

Lt General A R Prasad, VSM, ADC, Signal Officer in Chief and Senior Colonel Commandant, Ministry of Defence was appointed as Government Nominee Director vide MoC & IT letter no. ENo.5-1/2016-PSA dated 07.11.2016 in the place of Lt General Nitin Kohli.

Changes in Functional Directors

Shri P K Gupta, then Director Marketing was granted additional charge as Chairman and Managing Director in the place of Shri K K Gupta w.e.f 01.11.2015. Shri P K Gupta relinquished the position as a Director on 31.12.2016 on attaining the age of superannuation.

Shri S.Gopu, Director-HR was granted additional charge of Chairman and Managing Director w.e.f. 01.01.2017.

Shri K Alagesan, Director- Production was granted additional charge of Director Marketing w.e.f. 01.01.2017. Dr Janaki Anathakrishnan, Director Finance continues as Chief Financial Officer. Mrs S Shanmuga Priya continues as Company Secretary of the Company. Chief Financial Officer and Company Secretary continues to be Key Managerial Personnel along with the Functional Directors of the Company.

The Board placed on record its deep appreciation of the valuable services rendered by the Directors whose term of office ended during the year.

Shri K Alagesan and Dr Janaki Ananthakrishnan, Directors retires by rotation at the forthcoming Annual General Meeting and being eligible offers themselves for re-appointment.

The policy on Director’s appointment and remuneration and also remuneration for Key Managerial Personnel forms part of Corporate Governance Report of this Annual Report.

NUMBER OF MEETINGS OF BOARD

During the year, 5 meetings of the Board were held on 26.05.2016, 30.05.2016*, 27.06.2016, 11.08.2016, 10.11.2016, 09.02.2017. * The meeting held on 26.05.2016 was adjourned to 30.05.2016

PARTICULARS OF EMPLOYEES

There were no employees of the Company who received remuneration in excess of the limits prescribed under Companies Act, 2013 read with Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2015.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT AND CORPORATE GOVERNANCE REPORT

A report on Corporate Governance and Management Discussion and Analysis Report alongwith a Compliance Certificate from Statutory Auditors as required under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is appended to this report.

EXTRACT OF ANNUAL RETURN

The extract of annual return in Form MGT 9 as required under Section 92(3) and Rule 12 of the Companies (Management and Administration) Rules, 2014 is appended as an Annexure to this Report.

RELATED PARTY TRANSACTIONS

In line with the requirements of the Companies Act, 2013 and Equity Listing Agreement, your Company has formulated a Policy on Related Party Transactions which is also available on Company’s website at http://www.itiltd-india.com/investor_information. The Policy intends to ensure that proper reporting; approval and disclosure processes are in place for all transactions between the Company and Related Parties.

All Related Party Transactions entered during the year were in Ordinary Course of the Business and on Arm’s Length basis. No Material Related Party Transactions, i.e. transactions exceeding ten percent of the annual consolidated turnover as per the last audited financial statements, were entered during the year by your Company. Accordingly, the disclosure of Related Party Transactions as required under Section 134(3) (h) of the Companies Act, 2013 in Form AOC 2 is not applicable.

DIRECTORS’ RESPONSIBILITY STATEMENT

The Directors confirm that

(a) in the preparation of the annual accounts for the year ended 31st March 2017, the applicable accounting standards had been followed along with proper explanation relating to material departures;

(b) such accounting policies have been selected and applied consistently and judgments and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at 31st March 2017 and of the profit of the company at that date;

(c) proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of Companies Act, 2013 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

(d) the annual financial statements have been prepared on a going concern basis; and

(e) proper internal financial controls were in place and that the financial controls were adequate and were operating effectively.

(f) that systems to ensure compliance with the provisions of all applicable laws were in place and that such systems were adequate and operating effectively.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements.

ENTERTAINMENT EXPENDITURE AND FOREIGN TRAVEL

The expenditure on entertainment was Rs. -6.43 Lakhs. Expenditure on official travel abroad by the officials of the Company amounted to Rs. NIL during the year.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

Particulars with respect to Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo, required to be disclosed under the Section 134 of the Companies Act 2013 read with Rule 8 of Companies (Accounts) Rules, 2014 are annexed.

ACKNOWLEDGEMENT

“Your Directors place on record their deep appreciation and gratitude for the valuable support received from all the customers and look forward to their continued support and co-operation in future. The Directors also acknowledge and thank all collaborators, vendors and other service providers for their valuable assistance and cooperation extended to the Company.

The Board of Directors are highly grateful for the assistance and continued support extended by the Ministry of Communications & IT and various other agencies in Central and State Governments.

The Board of Directors acknowledge the constructive suggestions received from the Comptroller and Auditor General of India, the Statutory Auditors, Branch Auditors, Cost Auditors and Secretarial Auditor and are highly grateful for their continued support and cooperation.

Your Directors also take this opportunity to place on record their appreciation for the dedicated work put forth by the employees at all levels”

For and on behalf of the

Board of Directors

(S. Gopu)

Place: Bangalore Director HR /

Date: 22.08.2017 Addl Charge Chairman and Managing Director

---

Mar 31, 2016

To

The Members

ITI Limited

The Directors have pleasure in presenting the 66th Annual Report of the Company together with Audited Accounts and Auditor''s
Report thereon for the year ended 31st March 2016.

PERFORMANCE:

The Company has achieved Sales of Rs,1253.34 Crore comprising of Services of Rs, 563.76 Crore and Production of Rs, 689.58 Crore
during the year 2015-16 against Sales of Rs, 619.81 Crore comprising of Services of Rs, 414.99 Crore and Production of Rs, 204.82
Crore during the previous year 2014-15. The Company could achieve this turnover in spite of the fact that our major customers
BSNL and MTNL have not placed orders like earlier years. The net profit of the Company for the year 2015-16 is Rs, 251 Crore
against the loss figure of Rs, 297 Crore for the year 2014-15, which however, was after considering a grant of Rs, 494 Crore by
the Government.

After a continuous loss for the last 14 years, your Company has achieved its first turnaround profit of Rs, 251 Crore taking into
account the grant in aid received from the Government of India for revival.

The contribution (net of material cost) for the year is Rs, 201 crore, which is comparable for that of previous year at Rs, 172
crore.

IMPLEMENTATION OF REVIVAL PACKAGE:

The Cabinet Committee on Economic Affairs (CCEA), during February 2014, has approved a Revival plan for ITI with a funding
support of Rs, 4156.79 Crores. This package consists of Rs, 2264 Crores as equity for capital expenditure for up-gradation of
manufacturing infrastructure in all the plants of ITI for implementation of new projects and Rs,1892.79 Crores as grant-in- aid
to clear part of liabilities. Out of Rs, 2264 Crores, Government had already released Rs,192 Crore as first phase disbursement to
the Company towards capital expenditure and has made an allocation of Rs, 80 Crores for capex for the year 2016-17.

The infrastructure up-gradation for implementation of various projects is completed at different plants of ITI and the projects
are under implementation. This support from the Government will help ITI to enter into manufacturing of products in different
market domains in a big way.

Under Revival plan, several projects have been planned for implementation at various manufacturing plants of ITI. In addition to
telecom products like G-PON (recently ITI has won the tender from BBNL for the supply of G-PON equipments with C-DoT technology),
MLLN, Broadband equipments etc., major thrust has been given for the manufacture of encrypted telecommunication equipments
required for Defence sector. ITI has also taken up diversified products like Solar panel manufacturing, Smart card manufacturing
and Data center. ITI has already established HDPE manufacturing line at Raebareli plant. ITI is also planning to manufacture OFC
cables, Optic fber manufacturing, Li-Ion batteries, Wi-f solutions, Low power BTS, establishment of ITI''s own Data center,
contract manufacturing activities for VSSC and other PSUs., The other products identified for manufacture are Antenna, Radio
modems, Smart Jammers, Anti intrusion systems, Set top box, Smart energy meters etc.,

Against the CCEA approval of Rs,1892.79 Crores as grant-in-aid, the Government has so far (as on 31.07.2016) released Rs,1004.02
Crores towards establishment cost, payment of statutory dues and 1997 wage revision arrears to the employees.

HIGHLIGHTS:

The turnover for the year 2015-16 is mainly constituted from Network For Spectrum (NFS), National Population Register (NPR), NGN,
AMC for GSM-SZ, GSM-WZ, OCB, MLLN & ASCON, Defence and IT Solutions.

The Company is executing the turnkey NFS Project for BSNL worth Rs,2984 Crore which involves procurement, Supply, trenching,
laying, Installation, testing and maintenance of Optical Fiber Cable, PLB Duct and accessories for construction of exclusive
Optical NLD backbone and Optical access routes on turnkey basis in the Eastern and North- eastern region of the country. Out of
the total of 13500 kms cable laying, nearly 6000 kms have been laid in both F and G Packages.

PRODUCTION

(Rs, in Crore)

2015-16 2014-15

(including (including

Sl. Product/Project ED & ED &
Service Service
Tax) Tax)

1 NFS cable laying 535.28 0.00

2 ROs / CCO / IT 145.03 158.09

3 Defence / ASCON 117.93 81.72

4 NPR/SECC Projects 104.63 51.10
(Data)

5 GSM - WZ (Incl. BTS, 88.43 19.72
RTT, Shelter & AMC )

6 GSM - SZ 65.11 48.30

7 NGN 63.22 47.49

8 MLLN 42.64 38.42

9 OCB AMC Business 31.46 36.86

10 Misc. Services 29.50 29.03

11 Data Centre 13.96 11.56

12 SMPS 6.77 5.75

13 G-PoN 6.66 14.83

14 GSM - MTNL 2.16 5.43

15 PCM MUX 0.48 1.73

16 WLL-CDMA Infra 0.08 0.00

17 Diversified Products/ 0.00 68.40
Cont.Mfg.

18 SIM / USIM / SMART 0.00 0.89
Cards

19 C-DOT Products 0.00 0.34

20 Solar Panel 0.00 0.15

Total 1253.34 619.81

PROJECTS EXECUTED DURING THE YEAR 2015-16:

- Next Generation Network (NGN)

ITI Bangalore plant successfully executed the purchase order worth Rs, 63.22 Crores. for NGN products received from BSNL.

- National Population Registration (NPR) and Socio Economic & Caste Census (SECC) projects ITI is one among the consortium of
three PSUs (other two PSUs being M/sBEL &M/s ECIL)for the execution of prestigious National Population Register(NPR) Project
under Ministry of Home Affairs (MHA). The job involves collection of citizen data including biometrics which is under execution.
The above consortium is also executing SECC project for the Ministry of Rural Development (MoRD).

- GSM

ITI has implemented GSM Projects in BSNL West Zone and MTNL-Mumbai in technology alliance with M/sAlcatel-Lucent & in South Zone
in technology alliance with M/s Huawei. The Annual Maintenance Contract related works have been carried out in these zones.

- Defense projects

ITI is the leader in supplying encryption equipments for the secured communication in the Defense networks. In the year 2015-16,
ITI had executed orders from Defense sector for IP encryptions, NGN (BU), 5C telephone instruments etc.

- Fiber Cable Laying for Network for Spectrum (NFS)

ITI Limited is executing the NFS Cable laying Project in Eastern and North Eastern states of the country. The project is divided
into 2 packages viz. Package F and Package G. Package F executed by Mankapur Unit covering six states viz., West Bengal, Bihar,
Jharkhand, Chhattisgarh, Sikkim and Assam. Package G is executed by Rae Bareli Unit in North Eastern states. This is a turnkey
project for Defense tendered by BSNL which involves trenching, ducting and laying of optical fiber cable for 13500 kilometers.
The total PO value is Rs, 2111Crores (excluding AMC). Out of this the Rae Bareli has a PO worth Rs,1267 Crores. Out of this,
cable laying and services work worth Rs, 274.36 Crores have been completed by Rae Bareli unit during the year. Mankapur Unit has
a PO worth 844 Crores. Out of this, cable laying and services work worth Rs, 260.93 Crores have been completed during the year.

- Switch Mode Power Supply (SMPS)

ITI Rae Bareli Plant is manufacturing SMPS systems and executing the orders from BSNL / MTNL. For the first time, Rae Bareli
Plant has taken TSEC of 25A indoor/outdoor, 50A indoor/ outdoor and 100A SMPS Power Plant and upgraded manufacturing line of SMPS
Power Plant.

- Data Center & IT Projects

ITI has already established Tier 3 state-of- art Data center at Bangalore on PPP model. Presently, this Data Center is fully
booked for co- location services. ITI is also playing a major role in implementing IT projects. The Government is pursuing
E-Governance projects for taking the benefit of IT to the Village Panchayats and a substantial budget provision has been made by
the Government for the same. ITI is aggressively pursuing this market segment. ITI has executed SWAN (State Wide Area Network)
projects of Maharashtra, Odisha and Mizoram. ITI is also executing Accelerated Power Development and Reform Programme (APDRP) of
Tamil Nadu state.

- Maintenance Contracts

ITI had earlier established the ASCON network for Indian Army. ITI was also the major supplier of fixed line switches to BSNL and
MTNL. Currently, ITI has been extending maintenance assistance to Indian Army for ASCON and to BSNL and MTNL for OCB exchanges,
MLLN and STP Networks under Annual Maintenance Contracts.

FINANCE

The performance of the Company for the year 2015-

2016 as compared to the previous year is as follows:

(Rs,. in Crore)

SI. Particulars 2015-2016 2014-2015
No
i. Sales including 1253 620
services

ii. Value of 1253 618
Production

iii. Loss/Profit before 251 (297)
tax

iv. Loss/Profit after 251 (297)
tax

v. Financing 157 157
Expenses

vi. Depreciation 13 15

vii. Capital Employed 460 1112
(Net Fixed Assets
working capital)

viii.R&D Expenditure 16 13

SHARE CAPITAL

The Cabinet Committee on Economic Affairs (CCEA), on 24th February 2014 has approved financial assistance, based on the
recommendations of Board for Reconstruction of Public Sector Enterprises (BRPSE) to an extent of Rs, 4156.79 crore for the
revival of the Company. The fund infusion will be capital grant of Rs, 2264 crore in the form of equity and the balance amount of
Rs, 1892.79 crore in the form of grant-in-aid.

The Company has received Rs,192 crores from Ministry of Communications and IT for meeting the expenditure towards CAPEX
implementation of various projects in its various plants, during February 2015.

The paid up Equity Share Capital as on 31st March 2016 was Rs, 288,00,00,000.

During the year under review, the Company has not issued shares or granted stock options or sweat equity.

As on 31st March 2016, none of the Directors of the Company hold any shares of the Company.

Government of India vide letter no.20-36/2012- FAC- II dated 20-07-2016 has communicated the approval of Cabinet Committee on
Economic Affairs to transfer requisite number of shares of President of India to Special National Investment Fund to meet SEBI''s
Minimum Public Shareholding requirement. The Board of Director in its meeting held on 11.08.2016 has approved allotment of
19,20,00,000 equity shares of Rs, 10 each at par amounting to Rs, 192,00,00,000 to President of India.

DIVIDEND

As your Company still have accumulated losses the Directors are not in a position to recommend any dividend for the year
2015-2016.

HIGHLIGHTS OF THE PRODUCTION PLANTS AND SERVICE UNITS:

BANGALORE PLANT:

Bangalore Plant achieved a turnover of Rs, 158.17 crs (with ED & Service tax) and the net turnover of Rs, 148.60 crs.

Projects / Major orders successfully completed in FY 2015-16

The supply consisted of NGN supplies worth Rs, 63.22 crs under the Government''s prestigious Digital India Initiative. Under
services, the unit executed Rs, 65.11 crs for GSM-SZ AMC, Rs, 8.6 crs for Defense AMC, Rs, 0.09 crs for CDMA WLL AMC and Rs,
13.97 crs for Data Centre Business.

The Unit also supplied Defense Equipments worth Rs, 3.82 crs, ISAT for CRPF – Rs, 1.23 crs, Telephones for Defense and BSNL worth
Rs, 0.47 crs; Primary MUX for BSNL for Rs, 0.45 crs, Contract Manufacturing and Reliability Lab services Rs, 0.9 crs and Spares
Rs, 0.07 crs.

Future outlook

Bangalore Plant addressed apprx Rs, 6000 Crs worth major tenders during the year viz. ASCON Phase IV - Main & Secrecy, NFS
Secrecy, Defense telephones, ARC & ARI Cards for CDOT ANRAX, Flexi Encryptions for NTRO, Bulk Encryptions for Defense, IP
Encryptions for Assam Rifes, PCM MUX cards for BSNL and Tablet PC for Chhattisgarh Infotech promotion society.

Under the Nation''s Digital India Programme, ITI Bangalore applied for AUA/ASA/KUA/KSA registration from EUIDAI, got pilot order
for generating secure QR code from CBSE board for class X and XII as part of SaaS, there by entering the ICT Business. Future
orders are anticipated on regular basis under SaaS, from various Educational Institutions and Aadhar related services.

ITI Bangalore has signed an MOU with TSSC (Telecom Sector skill council) and has trained 83 Candidates on the PCB Module
Fabricator.

Implementation of Revival Projects.

Under the revival plan of BGP an amount of Rs, 138 crs was allocated (Rs, 89.5 crs for production and Rs, 48.5 crs for R&D). 6
projects were identified viz Legacy secrecy projects, 1 Gigabit encrypt or, Multichannel Encryption Unit, PSU Business, SCADA,
MUX, Telephone, Data Centre and IT Projects.

All the manufacturing areas viz. IGI, Component Test Labs, PCB Plant, SMT Line, Central Machine Shop, Coil Winding, Injection
Moulding, Inspection and Testing, Material Handling, Reliability Chambers, Air conditioning Plants, Power backups like UPS, DG
sets, Safety Equipments, Servers, Desktops, Laptops etc. were upgraded with modern equipments to take care of latest technology
in Electronics Manufacturing. Similarly, R&D upgraded the research facilities by inducting latest development tools for future
requirements.

Measures taken for energy conservation

Energy Consumption for the year is 20,62,883 units compared to 21,92,638 units during the same period last year. Resulting in a
saving of 6.3 % With the upgraded infrastructure for Electronic Manufacturing in place and Rs, 6000 crs worth tenders on the
anvil, the mother plant is all set for a historic turn around.

- MANKAPUR PLANT

Prestigious NFS project for package F for construction of exclusive optical NLD backbone and optical access route on turnkey
basis for Defense network allocated to ITI Mankapur is worth Rs, 844 Crs excluding AMC. Out of this, cable laying and services
work worth Rs, 260.93 Crs have been completed.

Mankapur Plant has achieved a turnover of Rs, 353.00 Crs (including ED & Service Tax) which is highest in the last ten years .The
plant supplied C-DoT equipments worth Rs, 0.21 Crs; Bank Mechanizing products approx. Rs, 1.06 Crs and LED based products worth
Rs, 0.0139 Crs.

ITI Mankapur undertakes repair of the cards for ongoing AMC work through NSU and GSM projects which contributed in revenue
generation in support of AMC activities being done by ITI NSU and GSM unit. ITI Mankapur effectively and substantially
contributed in the business through cards repairing of CSN, C-DoT, E-10B and GSM projects. During the year ITI Mankapur generated
SSU revenue worth Rs, 5.09 Crs., out of which Rs, 2.7 Crs is from SSU cards repair and Rs, 2.3 Crs is from BTS card repair.

ITI Mankapur Plant has made a new beginning in Contract Manufacturing by bagging orders from HAL and C-DOT.

An agreement for licensing of C-DOT technology for BBWT Base version has been signed between C-DOT and ITI and this product has
been allocated to Mankapur unit.

ITI Mankapur is organizing "Finishing Schools" for the engineering under graduates pursuing higher studies or skill development.
Under Finishing School project towards the knowledge based activities, ITI Mankapur earned revenue of approx. Rs, 0.09 Crs while
imparting training on technical innovation and skill up gradation to the engineering students from various reputed Engg. Colleges
of the country, for their better career opportunities.

Human resource Development center at Mankapur has taken initiative to be the active associate of "Kaushal Vikas" drive of the
Uttar Pradesh Government. They are also making efforts to be implementing agency for Pradhan Mantri Kaushal Vikas Yojna –PMKY.

MoU was signed between Our Unit and NIELIT, Gorakhpur. The MoU will pave way for regular and hands-on training of NIELIT students
right from Diploma to M.Tech level at the Unit besides innovative and developmental technical support to us.

During the Financial year 2015-16, the plant has bagged National Safety Awards for Performance Year 2013- Runner-Up for Lowest
Average Accident Frequency rate.

The efforts to monetize the buildings and houses have generated approx. Rs, 0.64 Crs. by way of rents.

Austerity measures undertaken at ITI Mankapur have resulted in reduction of expenses on different accounts especially in the area
of energy conservation. Reduction in expenditure towards electricity during 2015-16 is approx. 25.19%. in comparison with that
of 2014-15.This has been achieved by taking various measures like replacement of old mechanical energy meters by new electronic
energy meters in the residential quarters, keeping the machines and lights switched-off where ever possible, partial replacement
conventional lights by led lights etc.

Reduction in expenditure towards transport service during 2015-16 is 30.63% in comparison with that 2014-15. This is mainly due
to reduction of route buses.

- RAE BARELI PLANT

Rae Bareli Plant achieved a performance of Rs, 308.49 Crore; Rs, 274.36 Crore from dispatch of NFS Cable laying, Rs, 6.66 Crores
of GPON equipment, Rs, 6.65 Crores from the supply of SMPS & Misc. equipments, Rs, 20.70 Crore worth of GSM Franchisee business
and 0.12 Crores of SMPS Repairs.

Major orders received up to 31st March 2016

ITI Limited had bagged purchase orders of Rs, 2111 Crores from BSNL, out of which Raebareli Unit has been allotted to Rs, 1267
Crores towards NFS Project (Package G). Orders worth Rs, 274 Crores executed up to 31st March, 2016. Balance Rs, 993 Crores to be
executed during 2016-17.

Future Outlook

Raebareli is taking up manufacture of C-DOT based GPON equipments, HDPE Pipe, Li-ion battery and OFC.

GPON Project

Giga-bit Passive Optical Network (GPON) is a family of products for high speed broadband communication through fiber backbone. It
caters to variety of services, like voice, video, data, internet etc. Active transmission equipment in GPON network consists
mainly of Optical Line Termination (OLT) and Optical Network Unit (ONU).

ITI Raebareli plant has experience in supplying GPON equipments to BSNL and MTNL. Currently ITI has tied-up with C-DOT for GPON
technology products. As per the ToT agreement, C-DOT''s role is limited to technology transfer for manufacturing. ITI will be
fully responsible for marketing, manufacturing, installation and maintenance support. Currently, ITI is LI against the BBNL
tender for the supply, Installation, Commissioning & Maintenance of 2000 OLTs and 50,000 ONTs for the NOFN. ITI has already
bagged an order worth Rs, 206 Crs. against this tender. ITI is also participating in BSNL tender of GPON for 1700 OLT and 42500
ONT.

PLB HDPE PIPE Project

PLB HDPE (Permanently Lubricated High Density Poly-ethylene) Pipe is used for laying of optical fber cable (OFC) underground.

ITI Raebareli has already set up one line of PLB HDPE Pipe manufacturing with a capacity of 3600 Kms/annum. Further, it is
planned to set up additional 2 lines of PLB HDPE Pipe manufacturing, as per Report of the Committee on National Optical Fibre
Network (NOFN), Dated March 31, 2015. As per the report, HDPE Pipe still required to be laid in NOFN (Baronet) to the tune of
2,32,746.0 Km. ITI may expect 30% RQ against this requirement.

Li-ion Battery Project

Lithium is a good conductor of electricity and can combine with many other metals to form alloys. Lithium ion batteries provide
more and more energy in a smaller container. The small size, more life and fast changing Qualities of Li-ion battery makes it
more suitable for rural telecom applications. Lithium- ion batteries have many applications like cell phones, FTTX installations,
remote terminals (such as in FTTX installations), access networks, BTS (Base Transceiver Stations) for wireless networks, cable
networks, central offices, fuel cell powered system cars, artificial pacemakers, PCs, laptops, audio players, clocks, toys,
cameras, automobiles etc.

For USOF projects, Li-ion Battery is more suitable and ITI expects to grab this order. Initially Raebareli plant is taking up the
assembly of Li-ion Batteries as per TECGR specifically to meet the requirements of BTS Sites. Raebareli Plant will be responsible
for manufacturing, Marketing, installation and maintained support.

Optical Fiber Cable(OFC) Project

An optical fiber cable is a cable containing one or more optical fibers that are used to carry light. The optical fiber elements
are typically individually coated with plastic layers and contained in a protective tube suitable for the environment where the
cable will be deployed. Different types of cable are used for different applications.

Fiber optic cables find many uses in a wide variety of industries and applications. Some uses of fiber optic cables include
Medical, Defense/Government, Data Storage, Telecommunications, Networking, Industrial/Commercial, FTT-X technology.

ITI Raebareli plans to enter into OFC manufacturing area with an annual Capacity of 30,000 Kms. As per the Report of the
Committee on National Optical Fiber Network (NOFN), Dated March 31, 2015, total OFC (Ground & Aerial) required in NOFN (Bharat
Net) is 10.13 lacs Km and ITI may expect 30% RQ against this requirement.

- NAINI PLANT

Products Description Naini Plant 2015-16

Solar Panel Manufacturing: ITI Naini Plant is having installed capacity of manufacturing Solar modules up to 300 W for yearly
capacity of 5 MW approx. ITI Naini has acquired IEC certification for low voltage up to 50 W solar panels. For higher wattage, in
house manufactured solar module samples (up to 300 W) were submitted to M/s UL India Bangalore for testing against various
applicable clauses (IEC 61215, 61730 and 61701). Our samples passed all the tests and Naini module production facility has been
awarded IEC certification of module manufacturing of Modules from 30 W to 300 W power capacity.

The solar panel manufacturing was manual and manpower intensive facility. However due to depleting skilled manpower of ITI Naini
up gradation of facility was planned under the revival plan. During 2015- 16 ITI Naini was allocated Rs, 3 Cr as capital sanction
for solar project infrastructure up gradation against ITI revival plan (phase-I). The civil and plant works are in progress and
in advance stage of completion. The automated Tabber and Stringer Machine has been commissioned in July 2016. This will make our
manual production facility semi automatic concurrent and improve the quality of the product and also lower down the cost of
production significantly.

Under revival plan phase-II establishment of New Automatic SPV module manufacturing line of capacity 40 MW (Part-I: 18MW,
Part-II: 22 MW) process has been initiated which will make our production facility fully automatic to cater upcoming mega Power &
Communication projects substantially.

Plant has initiated rental activities for available Optical & Transmission test instruments on chargeable basis to external
vendors.

ITI Naini Plant is pursuing energy saving measures. During the year sanctioned Plant load reduced from 2000 KVA to 1000 KVA
resulting in the saving of Rs, 2 Lac per month.

Training Centre: Total revenue earned during the year was Rs, 5.62 Lacs.

a. 15 days skill development training program of solar module technician conducted for 4 batches and 100 students are trained.

b. 4/6 weeks vocational summer training was conducted for 456 Degree/diploma students.

c. 18 in house training programs conducted for ITI employees.

Naini Plant is ISO 9001 and ISO 14001 certified. Surveillance audit of ISO 9001 and ISO 14001 are conducted in the year.

Under the revival plan activities, Disaster Recovery (DR) site of Data Centre will be established at ITI Naini with the main Data
Centre at Bangalore. Carrier Ethernet project will also be initiated to address business under Digital India Program through
BBNL/ BSNL for installation of Broadband access network across rural areas.

- PALAKKAD PLANT

This plant has achieved a turnover of Rs, 153.39 Crs. for the year 2015-16 registering profit. This plant has completed the work
of SECC and NPR Project in allotted States and were successful in further getting additional orders for Data Digitization for Rs,
31 Crs, Data Merging and Permanent Data Centers for Rs, 23 Crs. Also efforts are on for getting for orders for Aadhar seeding
work from Kerala, Uttar hand and Uttar Pradesh to the tune of Rs, 75 Crs.

As a part of diversification of products, the plant has made inroads in the Defense Manufacturing area and Space Electronics by
supplying Cables, Bare PCBs and Assembled PCBs to NPOL, HVF Avadi, VSSC etc. This plant has setup a separate Manufacturing area
for Space Electronics fabrication to meet the requirements of stringent quality norms of Space Related products. This plant has
the only public sector shortlisted by VSSC as a partner for PSLV Launch Systems.

Also, towards the steps to regain the manufacturing mode, products were identified as HDPE Pipe, Smart Energy meter, Set top
Boxes and have identifie the Technology Partners. Also, towards smart card manufacturing efforts are on to find Technology
partner.

This plant was successful in identifying the Projects for Revival Packages under the heads of MLLN, VSSC and Smart Cards and Rs,
35 Crs were allotted against this under CAPEX. The plant has installed machineries for the above worth Rs, 33 Crs. against
various project.

AMC Department was successful in renewing the contract worth Rs, 62.22 Crs with BSNL and MTNL for MLLN Equipments for further 3.5
years and 4 years respectively. The plant is also successful in getting orders worth Rs, 12.63 Crs for MLLN Modems, Rs, 5.44 Crs
for Data Base License for SSTP, Rs, 6.20 Crs for NMS Sever up gradation from BSNL / MTNL during 2015-16.

Towards Energy saving front, the plant has started replacing Mercury Vapour Lightings by LED Lighting and are switching off all
our lightings for half an hour daily. Also we are keeping the 1.6 MVA Transformers shut down for approximately 9 months. Annual
energy saving is expected is approximately 3000 KW per month by these steps. Also on experimental baisis we have implemented drip
irrigation for garden by saving approximately 3000 liters of water daily.

Kerala Government has selected Palakkad plant as one of their Training Service Provider of ASAP Scheme (Additional Skill
Acquisition Programme) and last year we have conducted training for two Batches of 20 Students each for PCB Course and One batch
of 20 students for FTCP.( Field Technician and Computing Peripherals).

The plant has successfully completed the surveillance audit for Quality Management System and Environment Management System and
is working towards certification of QMS and EMS with 2016 standards. In the Industrial Safety front the plant is the runner up
for the Outstanding Safety performance in the large size Engineering Industries Group from National Safety Council Kerala
Chapter.

- SRINAGAR PLANT

Srinagar Plant achieved a turnover of Rs, 3.06 lakhs for the year 2015-16.

- NETWORK SYSTEMS UNIT

Continuing its consistently good performance, this Unit achieved a turnover of Rs, 135.41 Cr. and registered a profit of Rs,
28.77 Cr. Revenue from AMC for ASCON remained the major contributor at Rs, 104.59 Cr. while OCB 283 AMC for BSNL and MTNL
contributed Rs, 21.99 Cr. and Rs, 8.82 Cr. respectively.

Fresh Composite Annual Maintenance Contract for ASCON was signed between NSU and Ministry of Defense on 31.07.2015. This AMC is
valid with retrospective effect from 01.12.2014 and expires on 30.11.2019. Under this AMC, average annual fixed charge is valued
at Rs, 56 Cr. and variable charges at Rs, 32.63 Cr. AMC for 12 1 Up gradation Project, also under MoD, was signed on 30.07.2015
and is valid up to 24.02.2020. Average annual value of the contract is Rs, 11.30 Cr.

For the current fiscal, OCB 283 AMC for BSNL and MTNL have been renewed and are valued at Rs, 26.16 Cr. and Rs, 11.41 Cr.

HIGHLIGHTS OF REGIONAL OFFICES

Performance:

- Sundry Debtor realization during 2015-16 is Rs, 90.11 Crs.

- Order bagged in 2015-16 is Rs, 75.35 Crs ,

- Rs, 82.51 Crs orders on hand as on 01.04.2016.

- Cost cutting measures undertaken by ROs resulted in a saving of Rs, 1.65 Crs.

New Projects taken up in 2015-16 :

- Integrated University Management System (IUMS) for Universities of total approx value Rs, 13 Crs - RO Delhi

- CCTV surveillance for FCI of approx valueRs,2 Crs. - RO Delhi

- IT Services for online examination activities for TNPSC & SSB for 3 years, estimated business is Rs, 8 Crs - RO Chennai

- SITC of HPC cluster with storage etc for NMAIST, ARUSHA, Tanzania against CDAC order. - RO LKO Big orders successfully
completed in 2015-16

- e Tendering business of value Rs, 41.02 Crs - RO Delhi, Bangalore, Kolkata & Luck now

- RO Bhubaneswar has successfully completed Odisha Wide Area Network (OSWAN) project. This was on BOOT model spanning for 5
years and the total project value was approx. Rs, 69 Crs.

- RO Delhi has completed two Integrated University Management Systems (IUMS) orders of value Rs, 5.11 Crs.

Future Prospects:

RO Hyderabad shortly taking up implementation of Network Management System (NMS) for

BSNL and is expected to bill approx. Rs, 32 crore in FY 2016-17

Uttarakhand Govt. has shortlisted ITI Limited, RO Luck now for implementation of work related to IT.

RO Luck now presently working on the order, received for implementation of W Fi Zone at important tourist spots in the state of
Uttarakhand.

RO Luck now shall be establishing Audio Video Infra for Luck now Development Authority (LDA).

The order value is Rs,29.5 Crs. RATING IN MEMORANDUM OF UNDER STANDING

The company''s rating for the year 2014-15 is "Very Good" with a composite score of 2.41 This composite score is BEST during
thirteen years, i.e 2002-03 to 2014-15. The company has signed Memorandum of Understanding with the Administrative Ministry for
sales turnover of Rs, 1800 Crores for the year 2015-16.

FUTURE OUTLOOK:

The following projects are planned for implementation under revival plan.

- HDPE pipe and Optical Fiber cable manufacturing:

Laying of optical fiber cable (OFC) underground is to be carried out through PLB HDPE (Permanently lubricated high density Poly
ethylene) Pipe only. The demand for HDPE Pipes has quickly risen due to several Government projects like, NFS, ASCON, NOFN etc.
As per Govt. of India initiative for "DIGITAL INDIA" programme, optical fiber network is to be established in the whole country
for easy inter-net accessibility. Therefore, there is huge demand of PLB HDPE pipes. Apart from BSNL and BBNL, other service
providers are also requiring such type of PLB HDPE pipes for their telecom service. ITI Raebareli plant has established one
number of HDPE manufacturing line. The plant is now ready for bulk production. Considering the huge market available for this
product in projects like NFS and NOFN, ITI is planning to establish more lines of manufacturing in Raebareli plant and similar
facility in Palakkad plant also.

Similar to HDPE pipes, there is huge demand for optical fiber cables also. Company has proposed to manufacture these cables in
Raebareli and Palakkad Plants.

- Encryption Products for Defense:

The encryption products for Defense communication networks are being supplied by ITI for long time. ITI has been the leader in
this field. The products are evolved in tune with the evolution in the digital communication technology. There are major
requirements of encryption products for Defense for their NFS network, ASCON network etc.

- G-PON manufacturing:

In the recent tender foated by BBNL for G-PON equipments, ITI has been emerged as L1 bidder with C-DOT technology. ITI is gearing
to start manufacturing of this product at Raebareli plant from component level with C-DOT as the technology provider.

- Manufacture of Smart Cards:

As an extension of National Population Register project, which is under execution by ITI as a consortium partner with BEL and
ECIL, ITI is looking at the huge opportunity of manufacturing Smart card based identity cards for the citizens in the Country. In
addition, there are opportunities regarding supply of smart cards for unorganized workers, driving licenses, motor vehicle
registration etc. ITI is already having smart card manufacturing facility at its Palakkad plant. This is being further augmented
to take manufacture of various types of identity cards.

- Manufacturing of Li-Ion Batteries:

High density back up power solutions using Li- Ion technology have been proved in all fields of consumer electronics like PCs,
Mobile phones, Tablet PCs etc,. They are also making inroads into other applications like powering GSM towers. ITI is planning to
take up assembling of Li-Ion batteries in one of its plants, specifically for supplying to the BTS sites.

- Component Screening Project:

Component Screening is a Project suggested by VSSC for ITI Palakkad to take up for meeting their requirement of approximately 5
Lakh screened components per year. Screened Components are required regularly for VSSC for their space missions. Basic component
screening facility has already been established in the plant. Currently, based on the indications from VSSC, the company proposes
to augment the component screening infrastructure to test integrated devices.

- Data Center and IT Business:

Company has planned investment to address the huge growth in the service sector related to Information Technology. Currently ITI
has been operating one Data Center in its Bangalore plant in partnership with a private company. However, the company plans to
build its own Data Center under the revival plan. In addition, company has planned to launch some IT solutions, like E-Banking,
Aadhaar based authentication etc. on SaaS basis from the Data Center.

ITI is also planning to address the opportunities arising out of the Digital India and Smart Cities projects where in several
products in the latest IT technology, like, sensors.

- Wi-Fi products:

Wi-Fi products have revolutionized the way we communicate. In addition to low power Wi-Fi products in residences, Wi-Fi hot
spots are coming up all around the country. Further, Wi-Fi products are also expected to be part of the Digital India programme
to connect every citizen to Broadband network and also in setting up of Smart Cities. ITI is planning to address this business
opportunity in association with a technology partner.

- Managed Leased Line Network (MLLN) Equipments:

ITI has been the leader in supplying MLLN equipments for BSNL and MTNL. The existing MLLN networks of these PSUs have been set
up by ITI and ITI hopes to address their future requirements. In addition, ITI is getting good revenue for giving maintenance
support to the existing networks.

- Low Power BTS systems for remote villages:

Low power BTS systems have been planned as a means to extend mobile connectivity to cover all the unconnected villages in the
country. USOF has planned to fund such programmes so that every village in the country is connected through mobile communication
networks. ITI is hoping to get orders for supply of equipments required for such networks.

- Business with PSUs/ Contract Manufacturing:

Contract manufacturing for PSUs is an existing activity in ITI. ITI is already executing job works for PSUs like, BHEL, BEL,
VSSC, NPOL etc. With up gradation of infrastructure in ITI, there is more scope for getting new business in the area of contract
manufacturing.

CONTRIBUTION TO EXCHEQUER:

During the year, your company has contributed Rs, 9640.22 lakhs to the exchequer towards duties and taxes.

PUBLIC DEPOSITS:

Value of deposits held by the company is NIL. Deposits aggregating to Rs, 0.24 Crore had matured for payment, but were not
claimed on due dates.

REVIEW OF ACCOUNTS BY INDIAN AUDIT AND ACCOUNTS DEPARTMENT:

The comments on the accounts for the year 2015-16 by the Comptroller and Auditor General of India is appended.

JOINT VENTURES:

INDIA SATCOM LIMITED (ISL)

ISL was incorporated in the year 1987 and the present shareholding of ITI in ISL is 49% with M/s. Chris Tech Systems Pvt Limited
holding 51% shares. The Board of ISL planned to revive the operations of the company through a JV proposal with National
Building Construction Corporation Ltd, a Govt. of India Enterprises. In this regard, Board of ISL is awaiting Ministry''s
direction and final disposal of the case initiated by Karnataka Industrial Area Development Board (KIADB) which is pending before
Hon''ble High Court of Karnataka.

The salient features of the Joint Venture Companies are furnished in form AOC -1 which is appended to this report.

QUALITY

Quality policy of ITI is to " deliver high quality, secure and reliable products, services and solutions" by empowering every
employee. Quality Assurance wings are functioning in all the manufacturing units of ITI Ltd. The QA wings are responsible for
delivery of Quality products and services. The Units have been well equipped with necessary test facilities and test systems for
carrying out elaborate tests, conducting reliability evaluations on all the products to ensure quality. This is achieved by sound
and effective Quality Management System.

The five manufacturing plants at Bengaluru, Palakkad, Mankapur, Rae -Bareli and Naini have been accredited with ISO 9001-2008,
NSU Bangalore is also accredited With ISO 9001-2008. The periodical Surveillance Audit & Recertification Audits have been
conducted successfully, Keeping in tune with the Global concern for Environmental Management all the plants have also gone in for
ISO 14001-2004 EMS certifications. The guidance and support to all the units for training implementation surveillance audits &
recertification audits of ISO 9001-2008 and EMS 14001-2004 are provided by Corporate Quality Assurance .

MANPOWER

Employee strength at the end of the year 31st March, 2016 was 5229 out which 503 were female employees.

As on 31.03.2016, there were 861 employees belonging to Scheduled Castes and 50 belonging to Scheduled Tribes.

29 Officers on Tenure basis 27 contract Engineers & 25 Contract Technicians were recruited during the year 2015-2016.

Employees belonging to Physically Challenged Persons numbering 74 and Ex-servicemen category numbering 21 were on the rolls of
the company as at the end of the financial year.

INDUSTRIAL RELATIONS

The Industrial Relations scenario in the Company was cordial during the year. Employees'' Union and Officers'' Association extended
their co-operation and support in ensuring smooth work fow and helped to meet the Company''s objective.

PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE

As per the requirement of the Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013 (''Act'') and
Rules made there under, Company has constituted Internal Complaints Committees (ICC) to redress complaints received regarding
Sexual Harassment at our all Units. All employees (permanent, Contractual, Temporary, trainees) are covered under this policy

No. of complaints received during the year 2015- 2016 is NIL.

HUMAN RESOURCE DEVELOPMENT:

The Indian Telecommunication is zooming up the growth curve with feverish pace. With the rapid development in telecom, India is
one of the most rapidly growing telecom markets in the world. India is also a market where new technologies are slated to be used
aggressively. In the present scenario of fast changing technology and increasing competition, IT imparts training as to enable
its employees to remain updated of knowledge and skills to offer surpassing technological obsolesce and competitive edge in their
services.

Keeping in view the Company MoU target on HRM – Training for the FY 2015-16, the HRD initiatives were more oriented towards
imparting Training to Executives / Non-Executives for knowledge / skill development in Telecom and IT. Training Programmes and
Workshops were organized in Broadband, OFC, Mobile, NGN, Cyber Security and Communication Technologies. Towards digitalization
and to improve computer literacy in the company both basic and advance course in computer skills, training programmes in
Microsoft Office were imparted throughout the Company. Training programmes were also organized in-house on Soft Skills, Stress
Management, Safety, besides organizing awareness programmes on Health, Environment, Energy Management;

ITI takes up Govt. of India initiatives like Digital India and Skill India to fully comply with the directives of the Govt of
India and in HRD sphere, skill development training sessions are being organized particularly for the students across India
utilizing the infrastructure facilities in the HRD Centers of our Units. These short-courses are devised to enable them to take
up employment immediately/ enhance the employability, in association with Governmental authorities and Skill Sector Councils and
other Training Partners in all ITI Units over and above internal enrichment of course contents. During the financial year ITI
imparted telecom skill development training to 2104 trainees, out of which 310 in TSSC/ ESSCI Qualifications packs and 1794 have
been trained in ITI modules.

ITI always achieves its targets and in fact overwhelmingly surpasses given targets of MOU with DOT. Additionally, the skill gaps
arising out of newer technologies and changed product portfolio among the employees are also continuously monitored and
effectively plugged in periodically.

In a nutshell, as against the MoU target in respect of HRM performance indicators, 124 training programmes have been organized In
house/ sponsored outside. The company trained 1699 Executives and 813 Non-Executives achieving 5834 and 1838 training man-days
respectively.

2104 students have been trained in telecom skill development training and achieved ''Excellent'' MoU ratings in all the HRM
training parameters for the year 2015-16.

OFFICIAL LANGUAGE:

All Units / Offices have established "Check-points" in their departments to make effective implementation of the Official
Language Policy. Monitoring is being done by the respective Official Language Implementation Committees constituted in every Unit
/ Office.

The Progress of Implementation of Official Language in our Corporate Office as well as in our all subordinate Units / Offices is
also being periodically reviewed by the OLIC Committee of Corporate office.

In order to enhance the working knowledge of Official Language of our employees, they have been sent to various Training Programs
organized by the government for imparting training in Hindi awareness, Hindi typing and Hindi Stenography as per our requirement.
However, the Official Language Cells of the different Units / Offices have also conducted internal training programs. Besides,
employees were encouraged to take part in Hindi Prabodh, Praveen & Pragya examinations for which financial incentives have also
been sanctioned.

Our Units / Offices at Naini, Rae Bareli, Mankapur, New Delhi, Mumbai, Luck now & Corporate Office have been notified in the
Gazette of India as per OL Rules 10 (2) & (4), 1976 after more than eighty percent (80%) of the staff working have acquired a
working knowledge of Hindi in these Units/ Offices.

After reviewing our quarterly reports, regular appreciation letters have been received from Dy. Director-OL, Official Language
Department DoT, New Delhi as well as Dy. Director (Implementation), Regional Implementation Office, Bangalore.

A Joint Hindi Fortnight Program for Bangalore based PSUs / Organizations was organized by TOLIC (Town Official Language
Implementation Committee) Bangalore between 13.07.2015 & 14.08.2015. Various types of competitions were arranged during this
period. On this occasion many officers/Non- officers of ITI Limited, Bangalore based Units / Offices also participated in these
competitions and more than 05 Officers / Non-Officers have got the prizes. Valedictory function was held on 28.10.2015 and cash
prizes and certificates to the wining participants were given by President, TOLIC.

"Hindi Fortnight" was celebrated and various Hindi Workshops were organized for encouraging progressive use of Hindi during
2015-16. Bilingual (i.e. English and Hindi) website of company is being regularly updated.

VIGILANCE :

During the year, Vigilance Department focused on the preventive vigilance activities in order to bring more transparency and
efficiency in the organization. CVC guidelines and Government policies in this regard have been strictly followed.

To achieve the above objectives, periodical inputs were intimated to the Management regarding publishing of NITs, ''Contracts
concluded'' in the company website, implementation of Rotational Transfers of Executives in Sensitive Areas, implementation of
Integrity Pact and periodical review for ensuring probity & effcacy among employees. Several System Improvement Measures have
also been suggested to various departments as a part of preventive vigilance.

The Company celebrated Vigilance Awareness Week from 26th October, 2015 to 31st October, 2015 in all manufacturing units,
business establishments and corporate Office.

The Vigilance department is endeavoring to lay far more emphasis on preventive vigilance, scrutinizing the documents, conducting
CTE type examination and surprise checks in sensitive departments. These actions had good impact for creating awareness amongst
Company Executives on Vigilance aspects of Company Governance.

RIGHT TO INFORMATION:

During the year 2015-16, out of 336 RTI requests, information was provided against 290 requests, 28 requests rejected and 5
requests were transferred to another Public Authority. The RTI returns on quarterly basis is being submitted to the Ministry for
forwarding the same to Central information Commission and the same is published on our Company website.

With a view to achieve total transparency, the requests and responses are being uploaded on our website by FAA/CPIO/Public
Information Officers of Units under the specific link given to each unit. All cases referred to CIC as second appeal have been
successfully addressed.

AUDITORS

ä STATUTORY AUDITORS

M/s. Sundar Srini & Sridhar, Chartered Accountants, Bangalore, were appointed by Comptroller & Auditor General of India as
Statutory Auditors for the year 2015-16. The Statutory Audit Report for the year 2015-16 and reply to the observations of the
Statutory Auditor are appended as an Annexure to this Report

ä BRANCH AUDITORS

The following firms of chartered Accountants were appointed as Branch Auditors for different plants of the Company for the year
2015-16

Unit Name of Auditor

1. Bangalore Sundar Srini & Sridhar, Bangalore

2. Naini Neeraj Prakash & Associates, Allahabad

3. Rae Bareli Rajesh Srivastava & Associates, Luck now

4. Mankapur Sri Prakash & Co. Gorakhpur

5. Palakkad Mahadevan & Sivarajan, Palakkad

6. Srinagar M/s. S D M & Co, Srinagar

ä COST AUDITORS

M/s GNV Associates, Cost Accountants, Bengaluru was appointed as Cost Auditors for the year 2015-16 for the cost audit of south-
based units located at Bangalore, Palakkad and also consolidation for the Company and M/s. Aman Malviya & Associates, Luck now
as Branch auditors for the Cost Audit of North based units located at Naini, Rae Bareli, Mankapur and Srinagar.

ä SECRETARIAL AUDITORS

The Company has appointed Shri D Venkateswarlu, Company Secretary in practice, to undertake the Secretarial Audit of the Company.
The Secretarial Audit Report for the year 2015-16 and reply to the observations of the Secretarial Auditor are appended as an
Annexure to this Report

CORPORATE SOCIAL RESPONSIBILITY INITIATIVES

The Company has constituted Corporate Social Responsibility Committee and the details of same are furnished in Corporate
Governance report. For the year under review, the Company was not required to spend on CSR activities. However the Company has
set up Hospitals, Schools and Playgrounds at various Manufacturing Units for the benefit of employees and the local community.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

The President of India is empowered to appoint the Directors of the Company from time to time and also to determine the terms of
office of such Directors in terms of the Articles of Association of the Company. Accordingly, the following changes on the Board
of your Company were effected during the year as per the directives of the President of India.

Independent Director

Shri Dhirendra Singh and Dr M J Zarabi relinquished the position as Directors w.e.f 02.10.2015 on completion of three year
tenure. Prof Ramesh Bhat also relinquished the position as Director w.e.f 02.01.2016 on completion of three year tenure.

Shri Shri Saday Krishna Kanoria was appointed as an Independent Director w.e.f 24.11.2015. The terms and conditions of the
Independent Directors are posted on the web-site of the Company.

Independent Directors shall not be liable to retire by rotation. The Independent Directors of your Company have given the
certificate of independence to your Company stating that they meet the criteria of independence as mentioned under Section 149
(6) of the Companies Act, 2013.

Government Nominee Directors

Dr Janaki Ananthakrishnan was appointed as Government Director in the place of Shri R K Mishra w.e.f. 13.05.2015.

Shri Srikanta Panda, DDG (LF-I) was appointed as Government Director w.e.f. 29.07.2015 in the place of Dr Janaki Ananthakrishnan
who has since been appointed as Director Finance.

Shri R M Agarwal, DDG(SU) was appointed as Government Director in the place of Shri Srikanta Panda, w.e.f 08.06.2016

Changes in Functional Directors

Shri K K Gupta, then Director Production was granted additional charge as Chairman and Managing Director in the place of Shri K L
Dhingra w.e.f 04.06.2015. Shri K K Gupta relinquished the position as a Director on 31.10.2015 on attaining the age of
superannuation.

Dr Janaki Ananthakrishnan was appointed as Director Finance, vide Ministry of Communications & IT order No. F.No.14-3/2013-PSA
(Pt-1) dated 10th June 2015, as per directives of President of India. Dr Janaki Ananthakrishnan took charge as Director Finance
on 13.07.2015.

Shri S.Gopu, Director-HR was granted additional charge as Director-Production for a period of 3 months from 01.11.2015. He held
the position as Director-Production till 28.01.2016.

Shri P K Gupta, Director Marketing was granted additional charge of Chairman and Managing Director w.e.f. 01.11.2015

Shri K Alagesan was appointed as Director Production vide Ministry of Communications & IT order No. F.No.14-5/2014-PSA dated
28.01.2016, as per directives of President of India. Shri K Alagesan took charge as Director Production w.e.f 29.01.2016

Shri S.V.R.Murthy, AGM-CF, was appointed as Chief Financial Officer with effect from 29.05.2015 subsequently Dr Janaki
Anathakrishnan was appointed as Chief Financial Officer w.e.f 11.08.2015. Chief Financial Officer and Company Secretary
continues to be Key Managerial Personnel along with the Functional Directors of the Company.

The Board placed on record its deep appreciation of the valuable services rendered by the Directors whose term of office ended
during the year.

In accordance with the provisions of the Companies Act, 2013. Shri S.Gopu and Dr Janaki Ananthakrishnan retire by rotation and
are eligible for re-appointment.

The policy on Director''s appointment and remuneration and also remuneration for Key Managerial Personnel forms part of Corporate
Governance Report of this Annual Report.

NUMBER OF MEETINGS OF BOARD:

During the year, 6 meetings of the Board were held on 29.05.2015, 11.08.2015, 23.09.2015, 09.11.2015, 19.12.2015 and 10.02.2016.

PARTICULARS OF EMPLOYEES:

There were no employees of the Company who received remuneration in excess of the limits prescribed under Companies Act, 2013
read with Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2015.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT AND CORPORATE GOVERNANCE REPORT

A report on Corporate Governance and Management Discussion and Analysis Report along with a Compliance Certificate from Statutory
Auditors as required under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is appended to this
report.

EXTRACT OF ANNUAL RETURN

The extract of annual return in Form MGT 9 as required under Section 92(3) and Rule 12 of the Companies (Management and
Administration) Rules, 2014 is appended as an Annexure to this Report.

RELATED PARTY TRANSACTIONS

In line with the requirements of the Companies Act, 2013 and Equity Listing Agreement, your Company has formulated a Policy on
Related Party Transactions which is also available on Company''s website at http://www.itiltd-india.com/financial _ information.
The Policy intends to ensure that proper reporting; approval and disclosure processes are in place for all transactions between
the Company and Related Parties.

All Related Party Transactions entered during the year were in Ordinary Course of the Business and on Arm''s Length basis. No
Material Related Party Transactions, i.e. transactions exceeding ten percent of the annual consolidated turnover as per the last
audited financial statements, were entered during the year by your Company. Accordingly, the disclosure of Related Party
Transactions as required under Section 134(3) (h) of the Companies Act, 2013 in Form AOC 2 is not applicable.

DIRECTORS'' RESPONSIBILITY STATEMENT

The Directors confirm that

(a) In the preparation of the annual accounts for the year ended 31st March 2016, the applicable accounting standards had been
followed along with proper explanation relating to material departures;

(b) That such accounting policies have been selected and applied consistently and judgments and estimates have been made that are
reasonable and prudent so as to give a true and fair view of the state of affairs of the company at 31st March 2016 and of the
profit of the company at that date;

(c) That proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of
Companies Act, 2013 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

(d) That the annual financial statements have been prepared on a going concern basis; and

(e) That proper internal financial controls were in place and that the financial controls were adequate and were operating
effectively.

(f) That systems to ensure compliance with the provisions of all applicable laws were in place and that such systems were
adequate and operating effectively.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in
the notes to the Financial Statements.

ENTERTAINMENT EXPENDITURE AND FOREIGN TRAVEL:

The expenditure on entertainment was Rs, -3.93 lakhs. Expenditure on Official travel abroad by the Officials of the Company
amounted to Rs. NIL during the year.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE

EARNINGS AND OUTGO:

Particulars with respect to Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo, required to be
disclosed under the Section 134 of the Companies Act 2013 read with Rule 8 of Companies (Accounts) Rules, 2014 are annexed.

ACKNOWLEDGEMENT:

The Board of Directors place on record their sincere thanks for the assistance and continued support extended by the Ministry of
Communications & IT and various other Ministries of Central and State Governments where we have operations and look forward for
their continued support and co-operation in future. The support and cooperation by the Comptroller and Auditor General of India,
the Statutory Auditors, Branch Auditors, Cost Auditors and Secretarial Auditor needs special mention and directors acknowledge
the same. Your Directors take this opportunity to place on record their appreciation for the dedicated effort put forth by the
employees at all level. The gradual turnaround of the Company is made possible by their hardwork, solidarity, Cooperation and
Support

For and on behalf of the

Board of Directors

(P. K. Gupta)

Director Marketing

Addl Charge Chairman and Managing Director

Place: Bangalore

Date : 11th August 2016

---

Mar 31, 2015

To The Members of ITI Limited

The Directors have pleasure in presenting the 65th Annual Report of the Company together with Audited Accounts thereon for the year ended 31st March 2015.

PERFORMANCE

The Company has achieved Sales and Production of Rs. 619.81Crore and Rs. 617.81 Crore respectively during the year 2014-15 against Rs.769.90 Crore and 767.91 Crore respectively during the previous year 2013-14. The Company could achieve this turnover in spite of the fact that our major customers BSNL and MTNL have not placed any major orders like earlier years. The net loss of the Company for the year 2014-15 is Rs. 297.12 Crore against the fgure of Rs.344.26 Crore for the year 2013-14.

The net loss for the year 2014-15 is the lowest ever loss in the last 13 financial years (if the financial assistance by way of grant from the Government is not taken into account).

The contribution (net of material cost) for the year is Rs 172.25 crore, which is comparable for that of previous year at Rs. 184.99 crore.

IMPLEMENTATION OF REVIVAL PACKAGE

The CCEA approval with a financial package of Rs. 4156.79 Crores for the revival of ITI was accorded on 12th February 2014. This consists of Rs. 2264 Crores towards capex for implementation of various projects in 18 technology domains in all the plants of ITI and Rs. 1892.79 Crores as grant-in-aid to meet part of ITI's liabilities.

Against the capex grant of Rs. 2264 Crores, Government has released Rs. 192 Crores to ITI in February 2015. Sixteen projects have been identifed for the investment of this amount. Advance action for implementation of these projects has been initiated in the plants as early as mid 2014, after the approval of the projects by ITI Board followed by DoT and the Apex Committee. Immediately on transfer of capex by the Government in February 2015, ITI plants have taken action to place purchase orders for the equipments required as part of infrastructure up- gradation for the implementation of the projects. Multi-pronged approach has been adopted, involving Corporate Management, Unit Management, Trade Unions etc., for successful implementation of the projects. Projects teams have been formed in all the units for project management and also monitoring of implementation of the projects. Regular monitoring of the implementation is also done at ITI Corporate. Periodic review meetings have been held by DoT at the level of Member (Services) and further review meetings by the Apex Committee.

The Government of India Budget BE 2015-16 includes an additional allocation of Rs. 50 Crores for ITI under plan head. Projects for utilization of this amount have been already identified. This money would be required during the third or fourth quarter of 2015-16.

Against the CCEA approval of Rs. 1892.79 Crores to ITI as grant-in-aid under the revival plan, Rs. 165 Crores was released in November 2014 towards payment of 1997 wage arrears. The 39 month wage arrears corresponding to the period from January 1997 to March 2000 have been paid to almost all the employees including retirees and only a few cases having some dispute or unclaimed cases are pending.

HIGHLIGHTS

The turnover for the year 2014-15 is mainly constituted from National Population Register (NPR), NGN, AMC for GSM-SZ, GSM-WZ, OCB, MLLN & ASCON, Defence and IT Solutions.

The company is executing turnkey project of Registrar General of India (RGI) for creation of Multi Purpose National Identification card under National Population Register Project for the country.

The Company has received the Purchase Order for NFS Project from BSNL for Rs.2984 Crore which involves procurement, Supply trenching, laying, Installation, testing and maintenance of Optical Fiber Cable, PLB Duct and accessories for construction of exclusive Optical NLD backbone and Optical access routes on turnkey basis in the Eastern and North- eastern region of the country.

PRODUCTION

(Rs,in Crore)

2014-15 2013-14 (including (including Sl. Product/Project ED & ED & No. Service Service Tax) Tax)

1 C-DOT Products 0.34 0.16

2 Diversifed Products/ 68.40 16.63 Cont.Mfg.

3 Solar Panel 0.15 18.85

4 PCM MUX 1.73 1.33

5 MLLN 38.42 105.45

6 GSM - WZ (Incl. BTS, 19.72 84.04 RTT, Shelter & AMC )

7 GSM - MTNL 5.43 0

8 GSM - SZ 48.30 0.96

9 Misc. Services 29.03 26.12 10 Defence / ASCON 81.72 69.02

11 OCB AMC Business 36.86 37.82

12 SIM / USIM / SMART 0.89 0.35 Cards

13 NPR/SECC Projects 51.10 234.25 (Data)

14 SMPS 5.75 1.27

15 G-PoN 14.83 8.77

16 ROs / CCO / IT 158.09 150.27

17 Data Centre 11.56 14.61

18 NGN 47.49 0.00

TOTAL (Incl. ED & Ser. Tax) 619.81 769.90

Projects executed during the year 2014-15:

- Next Generation Network (NGN)

ITI Bangalore plant successfully executed the purchase order worth Rs.47.20 Cr. for NGN products received from BSNL. Further, Advance Purchase Order (APO) from BSNL to the tune of Rs 120 Cr is available for execution of this project during 2015-16.

- National Population Registration (NPR) and Socio Economic & Caste Census (SECC) projects ITI is one among the consortium of three PSUs (other two PSUs being M/s BEL & M/s ECIL) for the execution of prestigious National Population Register (NPR) Project under Ministry of Home Affairs (MHA). The job involves collection of citizen data including biometrics which is under execution. The above consortium is also executing SECC project for the Ministry of Rural Development (MoRD).

- GSM

ITI has implemented GSM Projects in BSNL West Zone and MTNL-Mumbai in technology alliance with M/s Alcatel-Lucent & in South Zone in technology alliance with M/s Huawei. The Annual Maintenance Contract related works have been carried out in these zones.

- Defense projects

ITI is the leader in supplying encryption equipments for the secured communication in the Defense networks. In the year 2014-15, ITI had executed orders from Defense sector for IP encryptions, NGN (BU), 5C telephone instruments etc.

- Fiber Cable Laying for Network for Spectrum (NFS)

In the tender foated by BSNL for laying optical fiber cables under NFS project, ITI was L1 for 2 zones (out of seven) and has received Purchase Orders from BSNL worth Rs 2111 Crore (excluding AMC) for laying of optical fiber cable in the east and north eastern part of the country. The project is currently under execution with support from technology partners.

- Switch Mode Power Supply (SMPS)

ITI Raebareli plant is manufacturing SMPS systems and executing the orders from BSNL / MTNL.

- Data center & IT Projects

ITI has already established Tier 3 state-of- art Data center at Bangalore on PPP model. Presently this Data Center is fully booked for co- location services. ITI is also playing a major role in implementing IT projects. The Government is pursuing E-Governance projects for taking the benefit of IT to the Village Panchayats and a substantial budget provision has been made by the Government for the same. ITI is aggressively pursuing this market segment. ITI has executed SWAN (State Wide Area Network) projects of Maharashtra, Odisha and Mizoram. ITI is also executing Accelerated Power Development and Reform Programme (APDRP) of Tamil Nadu state.

- Maintenance Contracts

ITI had earlier established the ASCON network for Indian Army. ITI was also the major supplier of fixed line switches to BSNL and MTNL. Currently ITI has been extending maintenance assistance to Indian Army for ASCON and to BSNL and MTNL for OCB exchanges, MLLN and STP Networks under Annual Maintenance Contracts.

FINANCE

The performance of the Company for the year 2014- 2015 as compared to the previous year is as follows:

(Rs,in Crore)

SI. Particulars 2014-2015 2013-2014 No.

i. Sales including 620 770 services

ii. Value of 618 768 Production

iii. Loss before tax 297 344

iv. Loss after tax 297 344

v. Financing 157 122 Expenses

vi. Depreciation 15 17

vii. Capital Employed 1112 952 (Net Fixed Assts Net Current Assets)

viii. R&D Expenditure 13 17



SHARE CAPITAL

The shareholders at the Extra Ordinary General Meeting held on 9th January 2015 has approved the increase in authorized share capital from Rs. 700 crores to Rs. 1200 crores in total. Accordingly, the Equity share capital has been increased from Rs. 300,00,00,000 (Rupees Three Hundred crores) divided into 30,00,00,000 (Thirty Crores) equity shares of Rs. 10 each to Rs.800,00,00,000 (Rupees Eight Hundred crores) divided into 80,00,00,000 (Eighty Crores) equity shares of Rs.10 each. The existing Preference Share Capital of 4,00,00,000 Redeemable Cumulative preference shares of Rs.100/- each remains the same.

The paid up Equity Share Capital as on 31st March 2015 was Rs.288,00,00,000.

During the year under review, the Company has received Rs.192 crores from Ministry of Communications and IT for meeting the expenditure towards CAPEX implementation of various projects in its various plants, during February 2015. The Process of allotment of shares to Government of India and ensuring minimum public shareholding, is being done as per directions of Ministry of Communications and IT.

During the year under review, the Company has not issued shares or granted stock options or sweat equity.

As on 31st March 2015, none of the Directors of the Company hold any shares of the Company.

DIVIDEND

As your Company has incurred a loss, the Directors are not in a position to recommend any dividend for the year 2014-2015.

HIGHLIGHTS OF THE PRODUCTION PLANTS AND SERVICE UNITS

- BANGALORE PLANT

Bangalore plant achieved a turnover of Rs. 157.04 Crores (with ED) & the Net turnover of Rs. 145.02 Crores.

The Supply consisted of Defence equipment worth Rs. 19.32 Crores, Telesets, Magneto & Naval telephone equipment worth of Rs. 1.64 Crores, Primary Mux, Data cards worth Rs. 3.13 Crores, Service & Def. AMC worth Rs. 10.52 Crores, Contract manufacturing worth Rs. 1.04 Crores and Data Centre turnover worth of Rs.13.9 Crores. NGN supplies worth Rs. 47.66 Crores, GSM AMC (South Zone) worth Rs. 42.71 Crores, CDMA WLL AMC worth Rs. 7.2 Crores, IFWT equipments worth Rs. 1.63 Crores, GSM South Zone Projects worth Rs. 5.66 Crores, Tablet PC supplies worth of Rs. 1.06 Crores and ISAT Phone (CRPF) usage charges of Rs. 1.57 Crores.

During the year, the plants also addressed tenders for MIL PCM 1000 nos. AWAN II project E3CR, 5C telephones and other Secrecy equipments like STM1 and 2Mb/s. The total value of the tenders is approximately Rs.350 Crores.

During the year, the plant signed a MoU with M/s HAL "to work together for manufacturing of contract products and services".

Reliability Labs have been opened up for external agencies to utilize the facilities, thus making it an independent revenue generating centre.

Energy Consumption for the year is 21,92,638 Units compared to 25,12,700 Units during the same period last year, a saving of 12.74%.

The turnover of the plant is 3 times more that of last year and the Operating Profit is Rs.3 Crores.

- MANKAPUR PLANT

Prestigious NFS project for package F in six states for construction of exclusive optical NLD backbone and optical access route on turnkey basis for Defense network has been allocated to ITI Mankapur. It is worth approx. Rs. 1150 Crs. including AMC. The project is currently under execution

Mankapur Plant achieved a turnover of Rs. 1.84 Crs. (including ED) during 2014-15. Under NPR- 40 project in Bihar and Chhattisgarh, Biometric Enrolment worth Rs. 0.046 Cr. has been done. The plant supplied C-DOT equipments worth Rs. 0.40 Cr., Bank Mechanization products of approx. Rs. 1.17 Cr, LED based products worth Rs. 0.029 Cr. and BTS worth Rs. 0.19 Cr.

ITI Mankapur undertakes repair of the cards for ongoing AMC work through NSU and GSM project groups. During the year ITI Mankapur generated SSU revenue worth Rs. 6.11 Crs, out of which Rs 2.95 Crs. is from SSU cards repair and Rs. 3.03 Crs. is from BTS card repair.

ITI Mankapur has established "Finishing Schools" for the engineering under graduates pursuing higher studies or skill development. Under Finishing School project towards the knowledge based activities, ITI Mankapur earned revenue of approx. Rs 0.16 Cr. while imparting training on technical innovation and skill up gradation to the engineering students from various reputed Engineering. Colleges of the country, which helps them in getting better career opportunities.

During the Financial year 2014-15, the plant has bagged 2 National Safety Awards for Performance Year 2012 - WINNER for Lowest Average Accident Frequency rate and WINNER for Accident Free year accumulating to 26 such awards in past 14 years.

Austerity measures undertaken at ITI Mankapur have resulted in reduction of expenses on different accounts especially in the area of energy conservation. The major steps undertaken for energy conservation during the year 2014-15 are optimization in usage & running of central air conditioning plant, power factor management to get electricity billing benefits etc. As a result, the physical units consumed in the year 2014-15 in the factory has reduced by about 10 lakh units i.e. more than 25% saving as compared to year 2013-14.

- RAE BARELI PLANT

NFS cable laying project

Rae Bereli plant is Executing purchase order for laying of optical fiber for the G package for the prestigious NFS project. This order is Valued at approximately Rs.1800 Crores (including AMC).

Solar Charge Controller Unit (CCU)

CDAC(T), and ITI Ltd submitted a joint proposal for the "Development of Solar Charge Controller Unit for Telecom Application" as a technology development project under NaMPETPh-II. The National Steering Committee of NaMPETPh-II has approved this proposal for funding, by DeitY. The major objectives of the proposal involve the "design, development, testing, and fabrication of prototypes and for this purpose.

Memorandum of Agreement is entered into with Centre for Development of Advanced Computing, Vellayambalam, Thiruvananthapuram (CDAC-T).

These equipments are required for supplying power to BTS of cellular network. A huge market is expected from BSNL/MTNL and other cellular operators.

SMPS Project

With a CAPEX of Rs 3.4 Crores SMPS Power Plant business has been expanded with high capacity power plant which includes all ranges of power plants required by BSNL/MTNL as given below:

- 25A , Ultimate Capacity 200A Indoor

- 25A , Ultimate Capacity 200A Outdoor

- 50A , Ultimate Capacity 450A Indoor

- 50A , Ultimate Capacity 450A Outdoor

- 100A , Ultimate Capacity 3000A Indoor

Contract Manufacturing

With a CAPEX of Rs. 1.54 Crores following contract manufacturing business has been taken up

- Signed rate contract with BHEL Jagdishpur for repair of tools/ contract manufacturing of items. Already executed small value of order.

- Registered with Rail Coach Factory as approved vendor and tenders are being addressed.

- Discussion with CDAC Noida is in process for Rate contract of PCB assembly.

- Manufactured 500 nos. of VTS card of M/s Sway using SMT line as a job work and based on the performance report rate contract to be signed for future orders.

PLB HDPE PIPE

With a CAPEX of Rs. 3.0 Crores a production line of PLB HDPE (Permanently lubricated High Density Poly Ethylene) Pipe, used for laying of optical fiber cable (OFC) is being set up. Orders for all the machinery have been placed. Installation & commissioning of 350 kg/hr capacity HDPE production line has been completed. The probable customers are BSNL/ MTNL/Defense and other Telecom Service Providers.

3D Printer

RB unit is entering into a new era of manufacturing with 3D Printing Technology. 3D printing is evolving rapidly, for fast prototype development requirements in numerous industries including defense, aerospace, automotive and healthcare. 3D printing products are far superior (lighter, stronger, customized, already assembled) and cheaper than those designed with traditional manufacturing processes. That is because 3D printing can control exactly how material is deposited (built up), making it possible to create structures that cannot be produced using conventional means. The planned CAPEX for this project is Rs. 4.40 Crores.

VTS Project

ITI-RB has signed MoU with M/s Sway Techno Solutions Pvt Ltd, Noida, for Vehicle Tracking System(VTS), Personnel Tracking and Object/ Asset Tracking. ITI RB unit will be manufacturing the hardware and Application software portion will be taken care by MoU partner.

The plant has already addressed a few tenders for these products and following potential customers are being identified.

- Defence & Para-military forces ITBP Delhi

- Coal mines/Oil Marketing Companies

- Banks

Proof of Concept (POC) for the safety of ATM of State Bank of Patiala at Jalandhar and other fve locations have been successfully completed. Estimated CAPEX for this project is Rs. 3.0 Crores.

Skill Development

The plant has initiated many programmes for skill development in partnership with Telecom Sector Skill Council (TSSC).

- ITI RB is the first unit in ITI to conduct Training for trainers programme for BSS support course.

- About 50 Engineering students of 3rd year, E&C branch are expected to register for training on BSS support QP.

- Training is planned during the month of March & May, 2015.

- Such training programme will generate good revenue for ITI.

- NAINI PLANT

ITI Naini is gearing up for addressing Solar Projects- particularly production of SPV modules of both low and high capacity/wattage. For supply of Solar panels, IEC certification is mandatory in most of the cases. In this direction, ITI Naini has already got IEC certification for low wattage (up to 50W) modules.

Highlights for the year 2014-15

Reduction of sundry debtors from Rs. 15.18 Crores to Rs. 8.88 Crores by focusing on realization against opening balance (net of provision) as on 01.04.14.

1. High Wattage production line with manual Tabbing and Stringing has been stabilized.

2. The plant is ready for bulk production of SPV up to modules 300W.

3. The card repair and other service activity performed to the tune of approx. Rs. 14.75 Lakhs.

4. Skill development training program on"Solar module Technician" conducted for ITI students = 02 Programs (for 62 students).

5. In-house fifteen (15 no.) training programs conducted for ITI employees.

6. Surveillance audit of ISO 9001 and ISO 1401 are conducted.

- PALAKKAD PLANT

The Unit has achieved a turnover of Rs. 146 Crs. for the year 2014-15 registering profit. The work of SECC and NPR Project in the allotted States has been completed and additional orders for Data Digitization, Data Merging and Permanent Data Centers worth Rs. 55 Crs under these Projects would be executed by the plant.

As a part of diversification of products, plant has made inroads in the Defense Manufacturing area and Space Electronics by supplying Cables, Bare PCBs and Assembled PCBs to NPOL, HVF Avadi, VSSC etc. Separate manufacturing area for Space Electronics fabrication has been set up to meet the requirements of stringent quality norms of Space Related products.

AMC contract worth Rs 93 Crs has been renewed with BSNL and MTNL for MLLN and SSTP Equipments for further 5 years and 3 years respectively. Orders worth Rs 11.83 Crs for MLLN RNP Cards and Modems, Data Base License for SSTP, NMS Sever up gradation orders from BSNL / MTNL have been received during 2014-15.

Palakkad plant has successfully completed re- certification audit for Quality Management System and surveillance audit for Environment Management System. In the Industrial Safety front, Palakkad has been the winner for the Outstanding Safety performance in the large size Engineering Industries Group from National Safety Council Kerala Chapter.

- SRINAGAR PLANT

The sales performance of Srinagar Unit for FY 2014- 15 is Rs.0.01 Crore against Services. ITI Srinagar Plant has been facing various difficulties for retaining or posting talented manpower in Srinagar. With a view to motivate and develop the skills of the employees posted at Srinagar area, the company has envisaged training plans during November 2014. Priority will be given for training of employees working in J&K region, so that they can be employed on jobs requiring various skill sets by deputing them to other units, wherein training will be imparted in the specific skill set/ project etc. In accordance with the training plan, ten employees of Srinagar Plant initially have been trained in two batches on "Assembly and Testing of SPV Modules" at ITI Naini Plant, UP State.

Srinagar Plant is also exploring the possibilities of initiating skill development training programmes of telecom sector skills for the students of Srinagar State. To begin with the Skill Development training in Base Station Support Engineer (BSS) of TSSC Qualification Pack is contemplated.

- NETWORK SYSTEMS UNIT

Network Systems Unit achieved a performance of Rs 93.58 Crores. The performance mainly comprises of annual maintenance contract for fixed line OCB exchanges worth Rs 36.50Crs. for BSNL& MTNL and AMC for ASCON up to November 14 worth Rs 56.93 Crs.

From Dec-14, the renewal of AMC for ASCON for another five years with average annual value of around Rs. 88 Cr has been finalized with MoD. Also another AMC proposal for 12 1 up gradation project for Indian Army with average annual value of around Rs. 11 Cr/annum has also been finalized.

HIGHLIGHTS OF REGIONAL OFFICES

Performance:

- Performance of ROs for the FY 2014-15 is Rs. 155.67 Crs.

- Sundry Debtor realization during 2014-15 is Rs. 99.18 Crs.

- Order bagged in 2014-15 is Rs. 77.97 Crs.

- Rs. 179.88 Crs orders on hand as on 01.04.2015.

- RO Kolkata completed frst phase of NPR in West Bengal, enabling Palakkad Unit to bill Rs. 17 Crs.

New Projects taken up in 2014-15

- E-Tendering services for DDA, Delhi. Estimated business Rs. 100 Crs. in 5 years - RO Delhi

- Supply, I&C of EPABX Systems of value Rs. 6.18 Crs. for Cabinet Secretariat- RO Lucknow

- Establishment of LAN / WAN for East Delhi Municipal Corp. of value Rs. 3.1 Crs. - RO Delhi

- Implementation of Online Admission & Exam for University, value Rs. 1.8 Crs. - RO Lucknow

Major orders successfully completed in 2014-15

- E-Tendering business of value Rs. 38.24 Crs. - RO Delhi, Bangalore, Kolkata & Lucknow

- Establishment of Police Control Room of value Rs. 6.82 Crs. for UP Police – RO Lucknow

- Supply, I&C of EPABX Systems of value Rs. 6.18 Crs. for Cabinet Secretariat- RO Lucknow

GSM Projects:

The Company carried out AMC services for GSM Network worth Rs.83.43 Crore against BSNL orders in West Zone.

RATING IN MEMORANDUM OF UNDERSTANDING

The company's rating for the year 2013-14 is "GOOD" with a composite score of 2.86. This composite score is BEST during twelve years, i.e. 2002-03 to 2013-14. The company has signed Memorandum of Understanding with the Administrative Ministry for a Sales Turnover of Rs.1800 Crores for the year 2014-15.

FUTURE OUTLOOK

In the Union budget 2014-15, Government had approved Rs 192 Crore as first phase disbursement to the Company towards capital expenditure under revival plan. This amount has already been received by ITI and several projects under Defence business, SCADA, MLLN, Smart cards, HDPE Pipe manufacturing, SMPS, Component screening, Vehicle Tracking System (VTS), 3D printing, Contract manufacturing, Business with PSUs etc., have been identified. The infrastructure up gradation for implementation of these projects is in progress in Bangalore, Rae bareli and Palakkad plants. The Company is looking at the following business opportunities in the future.

- Defence projects

Being one of the leading suppliers of encryption equipments for the secured communication in the Defence networks, ITI is looking at Defence market as a great opportunity for its business. With greater thrust towards domestic manufacturing of Defence equipments, ITI proposes taking up manufacturing of new products for Defence like, Software Defned Radio (SDR), High Frequency Radio Handsets, TR modules for RADAR, equipments for Army Wide Area Network (AWAN Phase II) etc.

The Ministry of Defence had approved in principle for the establishment of Strategic Business Units (SBUs) at ITI at Bangalore and Raebareli plants to take up manufacture of DRDO designed products at ITI. The formation of SBUs is aimed at establishing facilities at ITI for the production of strategically important network and communication components, modules, systems designed and developed by DRDO. Necessary action is under progress to achieve the above objective.

Another major project which has been launched by Indian Army is ASCON Phase IV. Earlier three phases of ASCON project have been executed by ITI successfully. ITI is hopeful of winning the order for ASCON phase IV for which a tender has been released by Indian Army.

- Solar Project:

There has been special emphasis by the Government of India to implement the renewable energy sources including solar to overcome the environmental hazards and meeting the growing energy needs. ITI, having requisite expertise and experience for implementing Solar solutions, is planning to augment the solar panel manufacturing infrastructure in its Naini plant and is also planning to install one more manufacturing facility at its Srinagar plant. Naini plant has earlier executed Solar project for UP Police and BSNL. More orders are expected in this market.

- Core Telecom Products:

ITI is pursuing on addressing the core telecom market like GSM, Next Generation Networks (NGN), Long Term Evolution (LTE), Managed Leased Line Network (MLLN), SSTP etc.

- LED Lighting:

LED lighting is an environmental friendly option due to non-use of mercury. Market potential for this product is very good. ITI is planning to address this market. Potential areas of business opportunities are from National Highway Authority, State Governments and Municipal Corporations, CPWDs/ PWDs, Railways, Hotels and Hospital Industry etc.

- Wi-Fi for NOFN network:

Huge orders are anticipated for Wi-Fi equipments for deployment in NOFN (National Optic Fiber cable Network) project of Government of India. ITI is in the process of empanelling the back end partners for the execution of anticipated orders.

- Manufacture of Citizen ID Cards:

As an extension of NPR project which is under execution by ITI as a consortium partner with BEL and ECIL, ITI is also looking at the huge opportunity of manufacturing SMART card based citizen identity cards for all the citizens in the Country. ITI is already having SMART card manufacturing facility at its Palakkad plant. This will be further augmented to take manufacture of citizen ID cards.

- Manufacturing of Li-Ion Batteries:

High density back up power solutions using Li-Ion technology have been proved in all fields of consumer electronics like PCs, Mobile phones, Tablet PCs etc,. They are also making inroads into other applications like powering GSM towers. ITI is planning to take up manufacturing of Li-Ion batteries in one of its plants.

CONTRIBUTION TO EXCHEQUER

During the year, your company has contributed Rs. 97.37 Crore to the exchequer towards duties and taxes.

PUBLIC DEPOSITS

Value of deposits held by the company was NIL. Deposits aggregating to Rs. 0.24 Crore had matured for payment, but were not claimed on due dates.

REVIEW OF ACCOUNTS BY INDIAN AUDIT AND ACCOUNTS DEPARTMENT

The comments on the accounts for the year 2014- 15 by the Comptroller and Auditor General of India is appended.

JOINT VENTURES

INDIA SATCOM LIMITED

India Satcom Ltd., (ISL) is a Public Limited Company incorporated in the year 1987 by ITI, Unit Trust of India (UTI) and Equatorial Pacifc International Company (EPIC). Both UTI and EPIC sold their respective stakes in ISL to M/s Chris Tech Systems Pvt Ltd (CTSPL) during 2006. ITI also took steps to sell its entire 49% stake but the Government of India, Ministry of Communications & IT did not approve the proposed sale of ITI shares in ISL. Presently the shareholders in the Joint Venture are ITI (49%) and CTSPL (51%). ISL planned to revive the operations of the company through a JV proposal of National Building Construction Corporation Ltd, a Govt. of India Enterprises (NBCC), on a land purchased by ISL from Karnataka Industrial Area Development Board (KIADB). ISL will take steps to obtain the required approvals for ISL-NBCC JV proposal as directed by ITI and BIFR, once the Forest case on this ISL land purchased from KIADB is resolved in the Hon'ble High Court of Karnataka.

QUALITY

Quality policy of ITI is to "deliver high quality, secure and reliable products, services and solutions" by empowering every employee. Quality Assurance wings have been established in all the manufacturing units of ITI Ltd. The QA wings are responsible for Quality of products and services. The Units have been well equipped with necessary test facilities and test systems for carrying out elaborate tests, conducting reliability evaluations on all the products to ensure quality. This is achieved by sound and effective Quality Management System.

The five manufacturing plants at Bangalore, Palakkad, Mankapur, Rae Bareli and Naini have been accredited with ISO 9001:2008.NSU Bangalore is also accredited with ISO 9001-2008. The periodical Surveillance Audit & Recertification Audits have been conducted successfully. Keeping in tune with the Global concern for Environmental Management, all the plants have gone in for ISO 14001:2004 EMS certifications. The guidance and support to all the units for training, implementation surveillance audits & recertification audits of ISO 9001-2008 and EMS 14001: 2014 are provided by Corporate Quality Assurance.

BSNL has granted AIS (Approved Inspection Scheme) status by BSNL QA for SIM Cards. Localization activities continued during the year to procure items such as cables, connectors and PCBs for GSM- BTS Project with Alcatel approval and after approval from VDA, VRC, Standards Components Testing and Reliability Labs provide Qualification Approval Standardizations of electronic components Vendor Development and Vendor Rating after stringent evaluation in Testing in Reliability and Environment al laboratory.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

The President of India is empowered to appoint the Directors of the Company from time to time and also to determine the terms of office of such Directors in terms of the Articles of Association of the Company. Accordingly, the following changes on the Board of your Company were effected during the year as per the directives of the President of India.

- Shri P K Gupta appointed as Director Marketing w.e.f 27.03.2014

- Shri S Gopu was appointed as Director-HR w.e.f 16.04.2014

- Shri R K Mishra was appointed as Government Director in the place of Shri N K Joshi, w.e.f 25.07.2014

- Dr Janaki Ananthakrishnan, has been appointed as Government Director in the place of Shri R K Mishra, w.e.f 13.05.2015. Subsequently, Government of India has appointed her as Director Finance w.e.f 10th June 2015.

- Shri K K Gupta, Director Production was granted extension of tenure w.e.f 01.06.2015. Shri K K Gupta, Director Production was also entrusted with additional charge as Chairman and Managing Director in the place of Shri K L Dhingra, who was holding post as Chairman and Managing Director from 07.04.2010 Shri K L Dhingra was relieved from services w.e.f 03.06.2015

- Shri Srikanta Panda, has been appointed as Government Director in the place of Dr Janaki Ananthakrishnan, w.e.f 29.07.2015, since she has been appointed as Director Finance.

The Board placed on record its deep appreciation of the valuable services rendered by the Directors whose term of office ended during the year.

In accordance with the provisions of the Companies Act, 2013, Shri P K Gupta and Shri S Gopu retire by rotation and are eligible for re-appointment.

Independent Directors shall not be liable to retire by rotation. The Independent Directors of your Company have given the certificate of independence to your Company stating that they meet the criteria of independence as mentioned under Section 149 (6) of the Companies Act, 2013

The policy on Director's appointment and remuneration and also remuneration for Key Managerial Personnel forms part of Corporate Governance Report of this Annual Report.

NUMBER OF MEETINGS OF BOARD

During the year, 6 meetings of the Board were held on 07.04.2014, 30.05.2014, 13.08.2014, 13.11.2014, 09.01.2015 and 13.02.2015.

PARTICULARS OF EMPLOYEES

There were no employees of the Company who received remuneration in excess of the limits prescribed under Companies Act, 2013 read with Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014.

CORPORATE GOVERNANCE

The new Companies Act, 2013 and amended Listing Agreement have strengthened the governance regime in the country. Accordingly, a separate section on corporate governance practices followed by the Company, together with a certificate from the Company's Auditors confirming compliance forms an integral part of this Report. A Certificate of the CEO and CFO of the Company in terms of Clause 49 of Equity Listing Agreement, inter alia, confirming the correctness of the financial statements and cash fow statements and adequacy of the internal control measures, is also annexed.

During the year, Secretarial Audit was carried out by Shri D Venkateswarlu, Company Secretary in practice, and the Secretarial Auditor of the Company for the financial year 2014-15. There were observations given by Secretarial Auditor of the Company. The detailed report on Secretarial Audit and reply of the Board of Directors to the observation made in the sand report are appended as an Annexure to this Report

The extract of annual return in Form MGT 9 as required under Section 92(3) and Rule 12 of the Companies (Management and Administration) Rules, 2014 is appended as an Annexure to this Report.

Related Party Transactions

In line with the requirements of the Companies Act, 2013 and Equity Listing Agreement, your Company has formulated a Policy on Related Party Transactions which is also available on Company's website at www.itiltd-india.com. The Policy intends to ensure that proper reporting, approval and disclosure processes are in place for all transactions between the Company and Related Parties. All Related

Party Transactions entered during the year were in Ordinary Course of the Business and on Arm's Length basis. No Material Related Party Transactions, i.e. transactions exceeding ten percent of the annual consolidated turnover as per the last audited financial statements, were entered during the year by your Company. Accordingly, the disclosure of Related Party Transactions as required under Section 134(3) (h) of the Companies Act, 2013 in Form AOC 2 is not applicable.

AUDITORS

ä STATUTORY AUDITORS

M/s. Sundar Srini & Sridhar, Chartered Accountants, Bangalore, were appointed by Comptroller & Auditor General of India as Statutory Auditors for the year 2014-15.

ä BRANCH AUDITORS

The following forms of chartered Accountants were appointed as Branch Auditors for different plants of the Company for the year 2014-15

Unit Name of Auditor

1. Bangalore Sundar Srini & Sridhar, Bangalore

2. Naini Nagendra Gupta & Company,Allahabad

3. Rae Bareli Rajesh Srivastava & Associates,Lucknow

4. Mankapur Sri Prakash & Co. Gorakhpur

5. Palakkad Mahadevan & Sivarajan,Palakkad

6. Srinagar S D M & Co, Srinagar

ä COST AUDITORS

Your Company has appointed M/s GNV Associates, Cost Accountants, Bangalore, as Cost Auditors for the year 2014-15 for the cost audit of south-based units located at Bangalore, Palakkad and also consolidation for the Company and M/s. Aman Malviya & Associates, Lucknow as Branch auditors for the Cost Audit of North based units located at Naini, Rae Bareli, Mankapur and Srinagar with the approval of the Board and Ministry of Corporate affairs.

SECRETARIAL AUDITORS

The Company has appointed Shri D Venkateswarlu, Company Secretary in practice, to undertake the Secretarial Audit of the Company.

CORPORATE SOCIAL RESPONSIBILITY INITIATIVES

The Company has set up Hospitals, Schools and Playgrounds at various Manufacturing Units for the benefit of employees and the local community.

DIRECTORS' RESPONSIBILITY STATEMENT

The Directors confirm that

(a) In the preparation of the annual financial statements for the year ended 31st March 2015, the applicable accounting standards had been followed along with proper explanation relating to material departures;

(b) that such accounting policies have been selected and applied consistently and judgments and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at 31st March 2015 and of the loss of the company at that date;

(c) that proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of Companies Act, 2013 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

(d) that the annual financial statements have been prepared on a going concern basis; and

(e) that proper internal financial controls were in place and that the financial controls were adequate and were operating effectively.

(f) that systems to ensure compliance with the provisions of all applicable laws were in place and that such systems were adequate and operating effectively.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements.

PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE

As per the requirement of The Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013 ('Act') and Rules made there under, your Company has constituted Internal Complaints Committees (ICC) to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy.

The following is a summary of sexual harassment complaints received and disposed off during the year 2014-15

No. of complaints received and disposed off: Nil

MANPOWER

Employee strength at the end of the year 31st March, 2015 was 6177 out which 542 were female employees.

As on 31.03.2015, there were 992 employees belonging to Scheduled Castes and 58 belonging to Scheduled Tribes.

41 Contract Engineers / Contract Technicians and 8 Tenure Officers were recruited during the year 2014- 2015.

Employees belonging to Physically Challenged Persons numbering 88 and Ex-servicemen category numbering 30 were on the rolls of the company as at the end of the financial year.

HUMAN RESOURCE DEVELOPMENT

Keeping in view the Company MoU target on HRM – Training for the FY 2014-15, the HRD initiatives were more oriented towards imparting Training to Executives / Non-Executives for skill / knowledge development in Telecom and IT. Training Programmes and Workshops were organized in Broadband, OFC, Mobile, NGN, Cyber Security and Communication Technologies. Towards improving computer literacy in the company, need based Microsoft Office training programmes were imparted at Plant levels. Executives were nominated to external training programmes in advanced / specialized technologies like Encryption etc.

Training programmes were also organized in-house on Soft Skills, Stress Management, Safety, besides organizing awareness programmes on Health, Environment, Energy Management; Government of India's initiative "Make in India – Zero Defect - Zero Effect" etc., were organized

In a nutshell, as against the MoU target in respect of HRM performance indicators, 56 training programmes have been organized as against the target of 40 training programmes. The company trained 1117 Executives and 438 Non-Executives achieving 1195 and 608 training mandays respectively.

The MoU target on HRM Training has been fully met and achieved 'Excellent' MoU Rating for the year 2014-15.

INDUSTRIAL RELATIONS

The Industrial Relations scenario in the Company was cordial during the year. Employees' Union and Officers' Association extended their co-operation and support in ensuring smooth work fow and helped to meet the Company's objective in revival of the company.

OFFICIAL LANGUAGE

All Units / Offices have established Check-points in their concerned offices to make more efforts for effective Implementation of the Official Language Policy, monitored by the Official Language Implementation Committees constituted in every Unit / Office.

The Progress of Implementation of Official Language in Corporate Office as well as in all subordinate Units / Offices is also being periodically reviewed by the OLIC Committee of Corporate office.

In order to enhance the working knowledge of Official Language amongst our employees, officials have been sent to Training Programme organized by the government for imparting training in Hindi, Hindi typing and Hindi Stenography as per our requirement. The Official Language Cell of the different Units / Offices have also conducted internal training programmes. Besides, employees were encouraged to take part in Hindi Prabodh, Praveen & Pragya examinations and have been sanctioned financial incentives.

Since eighty percent (80%) of the staff working in our Units / Offices like Naini, Rae Bareli, Mankapur, New Delhi, Mumbai, Lucknow & Corporate Office have acquired a working knowledge of Hindi, such Units / Offices have been notified in the Gazette of India as per OL Rules 10 (2) & (4), 1976.

For Bangalore based Units/Offices, a short term workshop for Hindi Unicode training programme was organized in the HRD department of Corporate Office, with the help of Deputy Manager-OL&HR, BHEL, Bangalore. More than 30 officers/non-officers participated and they were trained how to use the Hindi Unicode Fonts in day-to-day typing work.

After reviewing our quarterly report, an appreciation letter was also received from Deputy Director-OL, Official Language Department DoT, New Delhi as well as Deputy Director (Implementation), Regional Implementation Office, Bangalore.

A Joint Hindi Fortnight Programme for Bangalore based PSUs / Organizations between 30.07.2014 & 27.08.2014 was organized by TOLIC (Town Official Language Implementation Committee), Bangalore and various types of competitions were arranged during this occasion. On this occasion many officers/ Non-officers of ITI Limited, Bangalore based Units / Offices participated in these competitions and more than 14 Officers / Non-Officers have got the prizes. Hindi Workshops were organized for encouraging progressive use of Hindi during 2014-15. Company's website has been made bilingual (i.e. English and Hindi).

VIGILANCE

During the year, Vigilance Department functioned effectively. The prime focus of the vigilance activities was on Preventive Vigilance and Reduction in pendency of complaints by expediting Investigations.

Vigilance Department has suggested several System Improvement Measures to various departments to improve the transparency and efficiency of the procedures. Constant and continuous efforts have been made in this direction as a part of Preventive Vigilance. Keeping in view the emphasis laid by Company-Vigilance, Project Management Manual for Telecom Infrastructure Projects has been brought out by the Company.

The Company observed Vigilance awareness week from 27th October 2014 to 1st November 2014 at Manufacturing Units, Business Establishments, as well as Corporate Office.

The Vigilance department is endeavoring to lay far more emphasis on preventive vigilance, scrutinizing the APR documents and conducting periodic / surprise checks in sensitive departments.

RIGHT TO INFORMATION

During the year 2014-15, out of 221 RTI requests, information was provided against 175 requests, 21 requests rejected and 2 requests were transferred to another Public Authority. The RTI returns on quarterly basis is being submitted to the Ministry for forwarding the same to Central information Commission and the same is published on our Company website.

ENTERTAINMENT EXPENDITURE AND FOREIGN TRAVEL

The expenditure on entertainment was NIL. Expenditure on official travel abroad by the officials of the Company amounted to Rs. NIL during the year.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

Particulars with respect to Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo, required to be disclosed under the Section 134 of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014, are annexed.

ITI signs MoU with Department of Telecommunications

ITI Limited signed the Memorandum of Understanding (MoU) for the year 2015-16 with the Department of Telecommunications, Ministry of Communications & IT, Government of India. Shri Rakesh Garg, Secretary, Department of Telecommunications and Shri K.L. Dhingra, former Chairman and Managing Director, ITI Limited signed the MoU on March 30, 2015.

The MoU focuses on ITI's role in the field of Telecommunications in the current market scenario and pursue opportunities arising out of Government's "Make in India" campaign for indigenous electronic equipment manufacturing for diversified areas like Railways, Defense, etc. in addition to telecommunications also to play a vital role in Government of India funded Projects like Network for Spectrum (NFS).

ITI Limited has been conferred with "Certificate of Excellence" award by the Institute of Economic Studies, Delhi (IES) at the time of the Seminar on "Economic Development" on 13th of August 2014 at hotel Lalit Ashok, Bangalore.

ACKNOWLEDGEMENT

Your Directors place on record their sincere thanks for the assistance and support extended by the Ministry of Communications & IT and various other Ministries of Central and State Governments viz., Karnataka, Uttar Pradesh, Kerala and Jammu & Kashmir and look forward for their continued support and co-operation in future.

Your Directors also wish to express their gratitude for the co-operation and assistance extended by BSNL and MTNL, Banks, Suppliers, Shareholders, Bondholders, Depositors, Agents, Customers and Foreign Collaborators, Committee on Public Undertakings (COPU), Standing Committee on Public Enterprises (SCOPE) and Standing Committee on Information Technology.

Your Board also expresses its sincere thanks to the Comptroller and Auditor General of India, Chairman and Members of the Audit Board and Statutory and Branch Auditors.

Your Directors take this opportunity to place on record their appreciation for the valuable contribution made and excellent co-operation rendered by the employees at all levels for the progress and prosperity of the Company.

For and on behalf of the Board of Directors



(K. K. Gupta)

Director Production

Addl Charge Chairman and Managing Director

Place: Bangalore

Date : 11th August 2015

---

Mar 31, 2014

The Members

ITI Limited

The Directors have pleasure in presenting the 64th Annual Report of the Company together with Audited Accounts and Auditors'' Report thereon for the year ended 31st March 2014.

1. PERFORMANCE:

The Company has achieved Sales and Production of Rs. 769.90 Crore and Rs. 767.91 Crore respectively during the year 2013-14 against Rs. 921.04 Crore and Rs. 910.16 Crore respectively during the previous year 2012-13. The Company could achieve this turnover in spite of the fact that our major customers BSNL and MTNL have not placed orders like earlier years. The net loss of the Company for the year 2013-14 is Rs. 344. 26 Crore against the figure of Rs. 182.06 Crore for the year 2012-13, which however, was after considering a grant of Rs. 177.23 Crore by the Government.

The net loss for the year 2013-14 is the lowest ever loss in the last twelve financial years (if the financial assistance by way of grant from the government is not taken into account).

The contribution (net of material cost) for the year is Rs. 184.99 Crore, which is comparable for that of previous year at Rs. 187.27 Crore.

2. SANCTION OF REVIVAL PROPOSAL :

The Directors are pleased to inform that ITI''s Revival Plan has been approved by the Cabinet Committee on Economic Affairs (CCEA) on 12th February 2014. The financial package approved by CCEA includes funding support for Rs. 1892.79 Crore as grant-in-aid towards clearing of part of its liabilities and Rs. 2264 Crore as equity for upgradation and implementation of several projects as part of revival plan. The Government has already approved release of Rs. 460 Crore as frst stage disbursement to the Company towards capital expenditure in the recent budget for the year 2014-15.

In the Revival plan, around 18 projects have been identified for implementation. This includes expansion of capacities for manufacturing of existing telecom products like Encryptors for Defence sector, G-PON, DWDM, MLLN, Ethernet, Broadband equipments, SMART cards etc. and also diversified products like Solar, LED lightings, Data center and Defence projects.

These projects are allocated to all the six units of ITI for their revival. The project implementation will be done in three phases. For the implementation of projects in the 1st phase an amount of Rs. 460 crore has already approved by the Government in the recent budget. The amount required for the implementation of projects in 2nd and 3rd phases is expected to be released subsequently. For monitoring of the implementation of the projects, committees have been formed at unit level, corporate level at ITI and at DoT level and also at APEX level.

As part of diversifcation, all the Units have taken various initiatives for enhancement of production and sales.

Mankapur Unit developed and entered into production of various LED based lighting products. ITI Mankapur executed an order from ONGC under their Corporate Social Responsibility (CSR) "Swach Roshni Abhiyan" Project.

Naini Unit established High Wattage Solar Panels manufacturing line of 280 W SPV panel and tested internally. For commercial orders, IEC certification is under process.

Rae Bareli Unit developed ''Total Solution for Lightening & Surge Protection Unit (LSPU) and the frst lot of 39 units were supplied to Ahmedabad BSNL Gujarat Circle.

Palakkad Unit has established inroads in the Defence manufacturing area by supplying to NPOL (National Physical Oceanographic Laboratory), HVF (Heavy Vehicle Factory) Avadi, etc. The Plant has opened a separate manufacturing area for meeting the requirements of production of Space related products and have supplied to VSSC (Vikram Sarabhai Space Centre) both bare and assembled PCBs.

3. HIGHLIGHTS:

- The turnover for the year 2013-14 is mainly constituted from National Population Register (NPR), GSM-WZ, GSM-SZ, G-PoN, AMC for OCB & ASCON, Defence and IT solutions.

- The Company is executing Turnkey Project of Registrar General of India (RGI) for creation of Multi Purpose National Identifcation Card under National Population Register (NPR) project for the country.

- Company is executing Restructured Accelerated Power Development Reforms Program (RAPDRP) of value Rs. 307 Crore from Tamil Nadu Electricity Board (TNEB).

PRODUCTION

(Rs. in Crore) 2013-14 2012-13 (including (including Sl. Product/Project ED & ED & No. Service Service Tax) Tax)

1 C-DOT Products 0.16 1.61

2 Diversifed 16.63 9.37 Products / Cont. Mfg.

3 Solar Panel 18.85 22.76

4 PCM MUX 1.33 0.52

5 MLLN 105.45 11.07

6 GSM – WZ (Incl. BTS, 84.04 61.62 RTT, Shelter & AMC )

7 GSM – MTNL 0 1.15

8 GSM – SZ 0.96 1.75

9 ADSL – CPE 0 2.89

10 Misc. Services 26.12 24.82

11 Defence / ASCON 69.02 60.96

12 OCB AMC Business 37.82 42.05

13 SIM / USIM / SMART 0.35 26.54 Cards

14 NPR/SECC Projects 234.25 410.14 (Data)

15 SMPS 1.27 1.65

16 G-PoN 8.77 16.29

17 ROs / CCO / IT 150.27 207.80

18 Data Centre 14.61 18.05

TOTAL (including ED & 769.90 921.04 Service Tax)

Projects executed during the year 2013-14:

National Population Registration (NPR) and Socio Economic & Caste Census (SECC) projects:

ITI is one among the consortium of three PSUs (other two PSUs being BEL & ECIL) for the execution of prestigious National Population Register (NPR) Project under Ministry of Home Affairs (MHA). The job involves collection of citizen data including biometrics. The above consortium is also executing SECC project for the Ministry of Rural Development.

MLLN (Managed Leased Line Networks):

ITI has successfully rolled out countrywide MLLN network for BSNL in technical collaboration with a technology partner. ITI had received an expansion order from BSNL and the same has been executed during 2013-14.

GSM:

ITI has implemented GSM Projects in BSNL West Zone and in technology alliance with M/s Alcatel- Lucent & in South Zone in technology alliance with Huawei. The Annual Maintenance Contract related works have been carried out for West zone network.

G-PON (Gigabit Passive Optical Network):

ITI has been a major supplier of this product to BSNL and MTNL using the imported technology. Some G-PON equipments against the earlier orders have been supplied during 2013-14. Requirements are anticipated for this product in future also for applications like FTTH.

Defence Projects:

ITI is the leader in supplying encryption equipments for the secured communication in the Defence networks. ITI has supplied telecom equipment like Telephones, Ruggedized Telephone Exchanges, Transmission equipments, VSAT etc. to the Defence sector. ITI has also executed ASCON project (Phase I, II, & III) successfully.

Solar Project:

Naini Plant of ITI is having requisite expertise and experience for implementing Solar solutions. ITI has executed solar projects for BSNL as well as UP police. BSNL and other Service Providers are planning to upgrade their outdoor GSM Telecom BTS sites with Solar Power especially in rural areas where grid power supply position is poor. ITI Naini is planning to augment the solar panel manufacturing infrastructure in its plant.

Data Center & IT Projects:

ITI has already established Tier 3 state-of-art Data center at Bangalore on PPP model. Presently this Data Center is fully booked for co-location services. ITI is also playing a major role in implementing IT projects. The State Governments are pursuing E-Governance projects for taking the benefit of IT to the Village Panchayats and they have made a substantial budget provision for the same. ITI is aggressively pursuing this Market segment. ITI is also executing Accelerated Power Development and Reform Programme (APDRP) of Tamil Nadu state.

Maintenance Contracts:

ITI had earlier established the ASCON network for Indian Army. ITI was also the major supplier of fixed line switches to BSNL and MTNL. Currently ITI has been extending maintenance assistance to Indian Army, BSNL and MTNL under Annual Maintenance Contracts. (AMC)

4. FINANCE:

The performance of the Company for the year 2013- 2014 as compared to the previous year is as follows:

(Rs.. in Crore)

SI. Particulars 2013-2014 2012-2013 No.

i. Sales including 770 921 services

ii. Value of 768 910 Production

iii. Loss before tax 344 182

iv. Loss after tax 344 182

v. Financing 122 85 Expenses

vi. Depreciation 17 18

vii. Capital Employed 952 1226 (Net Fixed Assts Net Current Assets)

viii. R&D Expenditure 17 18

5. DIVIDEND:

As your Company has incurred a loss, the Directors are not in a position to recommend any dividend for the year 2013-2014.

6. HIGHLIGHTS OF THE PRODUCTION PLANTS AND SERVICE UNITS:

BANGALORE PLANT:

Bangalore Plant achieved a performance of Rs. 51.12 Crore. This performance consist of supply of Defence equipment of Rs. 17.11 Crore, Data Centre services worth Rs. 14.61 Crore, AMC, repair and Miscellaneous products worth Rs. 19.40 Crore.

During the year, the Plant has bagged National Safety Award for the Performance Year 2011 – RUNNER for accident free category on September 18, 2013.

MANKAPUR PLANT:

Mankapur Plant achieved a performance of Rs. 11.27 Crore. The Plant has executed 2.157 Million Nos. of Biometric Data entry against NPR-40 Project worth Rs. 8.29 Crore and Banking/Miscellaneous products worth Rs. 2.98 Crore.

During the year, the Plant has bagged 2 National Safety Awards – Performance Year 2011 – WINNER for ''Lowest Average Accident Frequency Rate'' Category and Performance Year 2011 – WINNER for ''Accident Free Year'' Category on September 18, 2013.

RAE BARELI PLANT:

Rae Bareli Plant achieved a performance of Rs. 61.52 Crore; Rs. 8.77 Crore from dispatch of ONT of GPON equipment, Rs. 1.42 Crore from the supply of SMPS & Misc. equipments, Rs. 22.81 Crore worth of GSM Franchisee business and 73.25 lacs nos. of Biometric Entry against NPR-40 project valuing Rs. 28.52 Crore.

NAINI PLANT:

Naini Plant achieved a performance of Rs. 20.60 Crore. The Plant has supplied 131 Nos. of Solar Panel equipment worth Rs.18.86 Crore, Misc./ Contract Manufacturing worth of Rs. 0.06 Crore and 4.37 lacs nos. of Biometric Entry against NPR-40 project valuing Rs. 1.68 Crore.

PALAKKAD PLANT:

Palakkad Plant achieved a performance of Rs. 300.60 Crore. The Plant has captured Bio-metric data collection/data entry against NPR/SECC Projects worth Rs. 193.66 Crore, Supply of MLLN & AMC Project worth Rs. 105.45 Crore and Miscellaneous/ Contract Manufacturing worth Rs. 1.49 Crore.

In the Industrial Safety front, consecutively for the second year, Plant was runner up for the Outstanding Safety performance in the large size Engineering Industries Group from National Safety Council, Kerala Chapter and third prize winner from Directorate of Factories, Kerala Government for large scale industries.

SRINAGAR PLANT:

Srinagar Plant achieved a performance of Rs. 0.04 Crore against services.

A high level committee visited Srinagar Plant from 15th to 16th November 2013 comprising Shri K.L. Dhingra, CMD; Shri N.K. Joshi, DDG (SU) and Shri Shahbaz Ali, DDG (TPF) to review the functioning of Srinagar Plant.

The committee in its report recommended short term, mid term and long term measures for revival of the Unit.

Government allocation of Rs. 460 Crore for ITI Ltd under the budget for year 2014-15 includes a provision for Srinagar Unit. The same will be utilised for implementing the recommendations of the Committee.

NETWORK SYSTEMS UNIT:

Network Systems Unit achieved a performance of Rs. 89.73 Crore. The performance mainly comprises of Annual Maintenance Contract for fixed line OCB exchanges worth Rs. 37.82 Crore for BSNL & MTNL and AMC for ASCON worth Rs. 51.91 Crore.

REGIONAL OFFICES

Regional offices and its Customer Care Organization (CCO) achieved a performance of Rs. 151.59 Crore. This performance consists of Rs. 64.54 Crore supplies of ITI''s manufacturing products and other traded products, Rs. 51.17 Crore of Services, Rs. 3.30 Crore by various CCOs and Rs. 32.58 Crore towards IT Projects.

HIGHLIGHTS OF REGIONAL OFFICES

Performance:

- Performance of ROs for the FY 2013-14 is Rs. 151.59 Crore.

- Order bagged in 2013-14 is Rs. 68.82 Crore.

- Rs. 379.35 Crore orders on hand as on 01.04.2014.

- RO-Mumbai collected C-Form worth Rs. 88.57 Crore for other units.

- RO Mumbai realized payment of Rs. 17.59 Crore for

other units.

New Projects taken up by ROs in 2013-14 :

- Supply and Implementation of College Management Software - RO Delhi

- Establishment of Police Control Room – RO Lucknow

- NPR project taken up for the state of Meghalaya - RO Kolkata

Big orders successfully completed by ROs in 2013-14

- Supply & Installation of Video Conferencing Systems of value Rs. 6.62 Crore-RO Lucknow

- Supply of Anti Riot Equipments of value Rs. 4.62 Crore to UP Police - RO Lucknow

- e Tendering business of value Rs. 35 Crore - RO Delhi

GSM Projects:

The Company carried out AMC services for GSM Network worth Rs. 83.43 Crore against BSNL orders in West Zone.

7. RATING IN MEMORANDUM OF UNDERSTANDING

The Company''s rating for the year 2012-13 is "GOOD" with a Composite Score of 2.94.

This Composite Score is BEST during Eleven years, i.e. 2002-03 to 2012-13.

The Company has signed Memorandum of Understanding with the Administrative Ministry for a Sales Turnover of Rs. 1500 Crore for the Company for the year 2014-15.

8. FUTURE OUTLOOK:

Defence projects

ITI is looking at Defence market as a great opportunity for its business. With greater thrust towards domestic manufacturing of Defence equipments, ITI proposes taking up manufacturing of new products for Defence like, Software Defined Radio (SDR), High Frequency Radio Handsets, TR modules for RADAR, Electronic Fuzes, equipments for Army Wide Area Network (AWAN Phase II) etc.

Other major projects which have been launched by Indian Army are ASCON Phase IV and Battlefeld Management System (BMS). Earlier three phases of ASCON project have been executed by ITI successfully and ITI is hopeful of getting order for ASCON phase IV project also. ITI has also responded to the RFI against the BMS project and has presented details on BMS solution to the Indian Army.

Solar Project

There has been special emphasis by the Government of India to implement the renewable energy sources including solar to overcome the environmental hazards and meeting the growing energy needs. ITI, having requisite expertise and experience for implementing solar solutions, is planning to augment the solar panel manufacturing infrastructure in its Naini plant and is also planning to install one more manufacturing facility at its Srinagar plant.

Tablet PC manufacturing

Ministry of Human Resources Development has an ambitious plan of distributing Tablet PCs to all students at College level for empowering students to access educational data through internet. Similar programmes are being launched by State Governments also. These devices are also being used by common man for e-enabled applications similar to mobile phones. Since the requirements are huge, ITI is planning to take up manufacture of this product at its various units. ITI has already been qualified for the low cost tablet PC supplies announced by the Ministry of HRD and has been listed by DGS&D.

Core Telecom Products

ITI is pursuing on addressing the core telecom market like GSM, Next Generation Networks (NGN), Long Term Evolution (LTE), and Managed Leased Line Network (MLLN) etc. The LTE technology is expected to be the future technology in mobile communications. ITI is planning to take up manufacturing of these products by entering into collaboration agreements with technology providers.

NFS

The Government funded projects like Network for Spectrum (NFS) require many types of telecom equipments like DWDM, Carrier Ethernet, Microwave, IP-MPLS equipments etc. in huge volumes. ITI is planning to take up manufacture of these products with suitable technology collaborations. In the tender foated by BSNL for laying optical cables under

NFS project, ITI was L1 and has recently received Advance Purchase Order (APO) from BSNL worth Rs. 2111 Crore (excluding AMC) for establishment of optical fber network in two (out of seven) zones in the Country.

LED Lighting

LED lighting is an environmental friendly system due to non-use of Mercury. Market potential for this product is very good. ITI is planning to address this market. Potential areas of business opportunities are expected from National Highway Authority, State Governments and Municipal Corporations, CPWDs/ PWDs, Railways, Hotels and Hospital Industry.

Data Center

Considering the huge scope existing in the market of Data Center particularly in the Government sector, for projects of national importance like NPR, UIDAI and other Projects/Schemes envisaged by Government agencies & PSUs, ITI is planning to establish its own Data Center.

Manufacture of Citizen ID Cards

As an extension of NPR project which is under execution by ITI as a consortium partner with BEL and ECIL, ITI is also looking at the huge opportunity of manufacturing SMART card based citizen identity cards for all the citizens in the Country. ITI is already having SMART card manufacturing facility at its Palakkad plant. This will be further augmented to take manufacture of citizen ID cards.

Manufacturing of Li-Ion Batteries

High density back up power solutions using Li-Ion technology have been proved in the felds of consumer electronics like PCs, Mobile phones, Tablet PCs etc. They are also making inroads into other applications like powering GSM towers. ITI is planning to take up manufacturing of Li-Ion batteries in one of its plants.

9. CONTRIBUTION TO EXCHEQUER:

During the year, your Company has contributed Rs. 45.01 Crore to the exchequer towards duties and taxes.

10. PUBLIC DEPOSITS:

Value of deposits held by the Company was NIL. Deposits aggregating to Rs. 0.24 Crore had matured for payment, but were not claimed on due dates.

11. REVIEW OF ACCOUNTS BY INDIAN AUDIT AND ACCOUNTS DEPARTMENT:

The comments on the accounts for the year 2013-14 by the Comptroller and Auditor General of India is appended.

12. JOINT VENTURES :

INDIA SATCOM LIMITED

India Satcom Limited (ISL) is a Joint Venture Company incorporated on 5th October, 1987 by ITI, Unit Trust of India (UTI) and Equatorial Pacifc International Company (EPIC). Both EPIC and UTI sold their respective stakes in ISL to M/s Chris Tech Systems Pvt. Ltd. (CTSPL) and ITI also took steps to sell its entire 49% equity stake in ISL to CTSPL. The Government of India, Ministry of Communications & IT vide its letter dated 28.01.2011 has not approved the above said sale of 49% ITI''s equity stake in ISL to CTSPL, therefore the transfer of ITI shares could not be effected. Now, the shareholders in the Joint Venture are ITI (49%) and CTSPL (51%).

13. QUALITY:

Quality policy of ITI is to "deliver high quality, secure and reliable products, services and solutions". Quality Assurance wings have been established in all the manufacturing units of ITI Ltd. The QA wings are responsible for Quality of products and services. The Units have been well equipped with necessary test facilities and test systems for carrying out elaborate tests, conducting reliability evaluations on all the products to ensure quality. This is achieved by sound and effective Quality Management System.

The five manufacturing plants at Bangalore, Palakkad, Mankapur, Rae Bareli and Naini have been accredited with ISO 9001:2008. NSU Bangalore is also accredited with ISO 9001-2008. The periodical Surveillance Audit & Recertification Audits have been conducted successfully. Keeping in tune with the Global concern for Environmental Management, all the plants have gone in for ISO 14001:2004 EMS certifications. The guidance and support to all the units for training, implementation surveillance audits & recertification audits of ISO 9001-2008 and EMS 14001: 2014 are provided by Corporate Quality Assurance.

BSNL QA has granted AIS (Approved Inspection Scheme) status for SIM Cards. Localization activities continued during the year to procure items such as cables, connectors and PCBs for GSM-BTS Project with Alcatel Lucent approval and after approval from VDA and VRC. VDC, VRC, Components Testing and Reliability Labs provide Qualifcation Approval Standardizations of electronic components Vendor Development and Vendor Rating after stringent evaluation in Testing in Reliability and Environmental laboratory.

14. MAN POWER:

Employee strength at the end of the year 31st March, 2014 was 7311 out of which 623 were female employees.

As on 31st March 2014, there were 1203 employees belonging to Scheduled Castes and 67 belonging to Scheduled Tribes.

1 Chief Manager on permanent basis, 51 Contract Engineers & 34 Contract Technicians were recruited during the year 2013-2014.

Employees belonging to Physically Challenged Persons numbering 102 and Ex-servicemen category numbering 36 were on the rolls of the company as at the end of the financial year.

15. HUMAN RESOURCE DEVELOPMENT:

Human Resource Development (HRD), keeping in view the initiatives taken for organizational turnaround, diversifcation and the Company''s MOU target on HRM – Training for 2013-14, focused on imparting need based training for executives and non-executives in the areas of New Technology, Information Technology and General Management Development.

To keep pace with the advancements in Telecom & Information Technology, training programmes on the topics like GPON, OFC Networks, Mobile Communications, Cloud Computing, MLLN, Networking, Cyber Security, etc., were organized. Management Development programmes focused on Leadership, Finance, Human Resource, Vigilance, Quality, Personality Development, etc., besides organizing a host of awareness programmes.

The MoU HRM Training performance indicators were to train the company executives and non-executives and impart Risk Management training for senior executives. Following the MoU targets, the company, for knowledge / skill up-gradation of it''s manpower working at Corporate office, Corporate marketing – including Regional and sub offices, Manufacturing plants, Network Systems Unit, located across the country, has organized 49 exclusive training programmes covering 1134 executives and 27 training programmes covering 711 non-executives achieving totally 2868 training mandays. Besides, 45 need based awareness training programmes have been organised in the areas of safety, health, energy, environment management etc., by Plant HR (ED) Centres. 1184 personnel have been benefited by these programmes and the company records 1369 training mandays on these awareness programmes. An in-house Training on ''Risk Management'' was conducted for senior executives. A group of 23 executives, consisting of DGMs and above, participated in the training.

During the year, the company has sponsored 11 executives/non-executives for external training through renowned organizations / training institutions.

In a nutshell the Company trained 2040 executives, 989 non-executives achieving 2061 and 1176 training mandays respectively.

16. INDUSTRIAL RELATIONS:

The Industrial Relations scenario in the Company was cordial during the year. Employees'' Union and officers'' Association extended their co-operation and support in ensuring smooth work fow and helped to meet the Company''s objective.

17. OFFICIAL LANGUAGE:

All Units/offices have established Check-points in their concerned offices to make more efforts for effective Implementation of the Offcial Language Policy, monitored by the Offcial Language Implementation Committees constituted in every Unit/ office.

The Progress of Implementation of Offcial Language in Corporate office as well as in all subordinate Units/ offices is also being periodically reviewed by the OLIC Committee of Corporate office.

In order to enhance the working knowledge of Offcial Language amongst our employees, offcials have been sent to Training Programme organized by the government for imparting training in Hindi, Hindi typing and Hindi Stenography as per our requirement. However, the Offcial Language Cell of the different Units/ offices has also conducted internal training programmes. Besides, employees were encouraged to take part in Hindi Prabodh, Praveen & Pragya examinations and have been sanctioned financial incentives.

Since eighty percent (80%) of the staff working in our Units / offices like Naini, Rae Bareli, Mankapur, New Delhi, Mumbai, Lucknow & Corporate office have acquired a working knowledge of Hindi, such Units / offices have been notifed in the Gazette of India as per OL Rules 10 (2) & (4), 1976.

For Bangalore based Units/offices, a short term workshop for Hindi Unicode training programme were organized in the HRD deptt. of Corporate office, with the help of Dy. Manager-OL & HR, BHEL, Bangalore. More than 30 officers/non-officers participated and they were trained how to use the Hindi Unicode Fonts in day-to-day typing work.

After reviewing our quarterly report, an appreciation letter was also received from the Deputy Director-OL, Offcial Language Department DoT, New Delhi as well as Deputy Director (Implementation), Regional Implementation office, Bangalore.

A Joint Hindi Fortnight Programme for Bangalore based PSUs / Organisations between 16th September 2013 and 23rd October 2013 was organized by TOLIC (Town Offcial Language Implementation Committee), Bangalore and various types of competitions were arranged during this occasion.

18. VIGILANCE :

During the year, Vigilance Department functioned effectively and efficiently being a part of Corporate Governance Structure. The prime focus of the vigilance activities was to reduce the pendency of complaints by expediting Investigation. Greater emphasis was laid on preventive vigilance. CVC guidelines and Government policies in this regard have been followed. To achieve the above objectives, periodical inputs were given to the Management regarding review of Administrative expenses, implementation of Rotational Transfers of Executives in sensitive areas in the company.

To improve the transparency and effciency of the procedures, several System Improvement Measures have been suggested to various departments. Constant and continuous efforts have been made in this direction as a part of Preventive Vigilance.

Logical conclusions on Vigilance Cases were arrived at and Special emphasis was taken to reduce the Pendency of Complaints, MIS Reports were sent to Statutory / Government Agencies like DoT-Vigilance and CVC.

The Company observed Vigilance awareness week from 28th October 2013 to 2nd November 2013 to 5th November 2013 at all Manufacturing Units including its administrative offices, as well as Corporate office.

Periodical appraisals were also made to the Board of Directors on Vigilance Matters.

The Vigilance department is endeavoring to lay far more emphasis on preventive vigilance, scrutinizing the documents and conducting surprise checks in sensitive departments. These actions had good impact for creating awareness amongst Company Executives on Vigilance aspects of Company Governance.

19. RIGHT TO INFORMATION:

The RTI requests have been on the increase constantly. During the year 2013-14, out of 254 RTI requests, information was provided against 203 requests, 17 requests were rejected and 1 request was transferred to another Public Authority. The RTI returns on an quarterly basis have been submitted to the Ministry for forwarding the same to Central Information Commission and the same is published on our Company website also.

20. ENTERTAINMENT EXPENDITURE AND FOREIGN TRAVEL:

The expenditure on entertainment was NIL. Expenditure on offcial travel abroad by the offcials of the Company amounted to Rs. 0.86 lakh during the year.

21. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO:

Particulars with respect to Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo, required to be disclosed under the Companies (Disclosure of particulars in the report of Board of Directors) Rules, 1988 are annexed.

22. PARTICULARS OF EMPLOYEES:

The statement of particulars of employees drawing remuneration of Rs. 60.00 lakhs and above per annum or Rs. 5.00 lakhs and above per month are required to be included in the Directors'' report as per Section 217(2A) of the Companies Act, 1956, read with Companies (Particulars of employees) Amendment Rules, 2011, are NIL for 2013-2014.

23. AUDITORS:

Pursuant to Section 619(2) of the Companies Act, 1956, M/s. Sundar Srini & Sridhar, Chartered Accountants, Bangalore were appointed as Statutory Auditors of the Company for the year 2013-2014 by the Comptroller & Auditor General of India.

The following firms of Chartered Accountants were appointed /re-appointed as Branch Auditors for different Plants of the Company for the year 2013- 2014:- M/s. Nagendra Gupta & Co. Naini Plant, Allahabad

M/s Mahadevan & Sivarajan, Palakkad Palakkad Plant

M/s S D M & Co, Srinagar Srinagar Plant

M/s Habibullah & Co., Gorakhpur Mankapur Plant

M/s Rajesh Srivastava & Associates, Lucknow Rae Bareli Plant

24. COST AUDITORS

Your Company has appointed M/s GNV & Associates, Bangalore, as Cost Auditors for the cost audit of south-based units located at Bangalore, Palakkad and also Consolidation for the Company and M/s Aman Malviya & Associates, Lucknow, as branch auditors for the cost audit of North-based units, located at Naini, Rae Bareli, Mankapur and Srinagar for the year 2013-14, with the approval of Board and Ministry of Corporate Affairs.

25. BOARD OF DIRECTORS:

The following changes took place in the Directorate of your Company since the last Report.

Shri R.K. Agarwal ceased to be a Director of the Company on 30th November 2013 on attaining the age of superannuation. In accordance with the requirements of the Companies Act, 1956, Shri P.K. Gupta, Director-Marketing joined on 27th March 2014 and Shri S. Gopu, Director-Human Resources joined on 16th April 2014 will retire by rotation at this Annual General Meeting and eligible, offer themselves for re- appointment.

Lt Gen Nitin Kohli joined the Board on 26th October

2013 will retire at this Annual General Meeting and eligible offer himself for re-appointment as Director not liable to retire by rotation. Shri R.K. Mishra joined as Director not liable to retire by rotation on 25th July 2014 in place of Shri N. K. Joshi.

26. CORPORATE GOVERNANCE:

A report on Corporate Governance along with a Compliance Certifcate from the Auditors as prescribed under the Listing Agreement with the Stock Exchanges on which the Company''s shares are listed, is annexed to this report.

27. MAJOR ORDERS RECEIVED AFTER 31ST MARCH 2014

ITI Ltd bags the Prestigious Orders against NFS Project

ITI Limited has bagged two advance purchase orders from BSNL amounting to Rs. 2984 Crore.

These orders are part of Network For Spectrum (NFS) project for establishment of Optical Fiber Network through out the country.

ITI is the only Central Public Sector Undertaking to bag two packages out of seven packages for NFS tender against stiff competition from multiple players. These are the biggest orders ITI has ever got by competing in an open tender. These are the frst major orders received after the approval of the revival package of ITI, by Cabinet Committee on Economic Affairs (CCEA) and will open the doors for turning around the company.

28. DIRECTORS'' RESPONSIBILITY STATEMENT:

Pursuant to the provisions under Section 217(2AA) of the Companies Act, 1956 your Directors state that:

(i) in the preparation of annual accounts, the applicable accounting standards have been followed and that there were no material departures.

(ii) the accounting policies adopted by the Company have been applied consistently, judgments and estimates that are reasonable and prudent have been made so as to give a true and fair view of the state of affairs of the Company as at 31st March 2014 and Loss of the Company for the period ended 31st March 2014.

(iii) they have taken proper and suffcient care 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;

(iv) the annual accounts have been prepared on a going concern basis.

29. AWARDS

ITI Limited Mankapur Unit has bagged the prestigious "National Safety Awards" from the Ministry of Union Labour & Employment for the performance year 2011 and adjudged winner in two categories of ''Accident Free Year'' and ''Lowest Frequency Rate'' for the performance year 2011. ITI Ltd., Bangalore Unit is also adjudged runner up in ''Accident Free Year'' category for the same year. The awards were received on 18th September 2013.

30. SALES PROMOTION

ITI Limited participated in SES 2013 Exhibition

ITI participated in the ''Strategic Electronics Summit: Defence & Aerospace – SES 2013''. Organized by Electronic Industries Association of India (ELCINA) at HAL Convention Center, Bangalore on 2nd August 2013. ITI displayed SDR systems at the exhibition.

Dr. Ajay Kumar Joint Secretary, Department of Electronic & IT, Shri M.N. Vidyashanker, Secretary IT, Govt of Karnataka, Defence Offcials and other PSU Executives visited our stall.

ITI Limited participated in INDIA TELECOM 2013 EXHIBITION at Vigyan Bhavan, New Delhi

ITI participated in India Telecom-2013 Exhibition which was held at Vigyan Bhavan, New Delhi from 5th to 7th December 2013.

Dr. Manmohan Singh, Hon''ble Prime Minister of India, inaugurated the India Telecom 2013 Exhibition. The theme of the event was "Internet of People to Internet of Things: Future of Communication". Inauguration at the Exhibition Venue was done by Shri Kapil Sibal, Hon''ble Minister for Communication and IT & Law and Justice. The other dignitaries present at the ceremony with the Hon''ble Minister were Shri M.F. Farooqui, Secretary, DoT; Smt. Rita Teaotia, Addl. Secretary, DoT; Shri Umashankar, Joint Secretary, DoT.

Products Displayed at ITI Stall:

- Tablet PCs

- Field Telephones

- Decorative LED Lights

- Solar Lantern with Panel

- Biometric Hand Held Terminal (with charger)

- Note Counting Machine

- Fake Note Detector

NSIC Buyer Seller Meet-2013

ITI Mankapur has participated in the vendor development programme and Buyer and Seller Meet- 2013 organized by NSIC, Kanpur at Feroz Gandhi Inter College, Rae Bareli. The meet was held on May 15th & 16th, 2013. ITI Mankapur has exhibited Note Counting Machine (both Desk Top and Floor Model), Fake Note Detector, LED Decorative Lights (seven types), LED Bulb and LED Tube lights. There was a very warm response from the visitors to the stall who showed keen interest in our products.

Shri K.H. Muniyappa, Hon''ble Minister of Micro, Small and Medium Enterprises, Govt. of India also visited our stall.

31. EVENTS

Observance of Vigilance Awareness Week - 2013 Celebration

Theme "Promoting Good Governance – Positive Contribution of Vigilance".

As per the directives of CVC, ITI observed the Vigilance Awareness Week from 28th October 2013 to 2nd November 2013, in all the Production Units as well as the Administrative offices of ITI Limited.

The Vigilance Awareness week started with administration of the pledge on 28th October 2013 in all the Units and Administrative offices. At Corporate office, Shri K. L. Dhingra, CMD, administered the Vigilance pledge both in English and Hindi.

World Telecommunication and Information Society Day - 2013 celebrated at ITI Bangalore Plant

World Telecommunication and Information Society day was celebrated on 17.05.2014 at ITI Bangalore Plant. The Theme for this year''s celebration was "BROAD BAND FOR SUSTAINABLE DEVELOPMENT". Shri S. Gopu, Director (HR) welcomed the gathering.

Shri K. L. Dhingra, CMD, presided over the function and emphasized the need of Broadband for sustainable development in his address.

The Chief Guest of the function, Shri D.M. Ezhil Buddhan, GM-Telecom, Broadband Networks, BSNL delivered the Key note address.

National Productivity Week – 2014

National productivity week was observed from 12th to 18th February 2014 at Bangalore plant. During the week, several Posters and Banners on Productivity Week and related messages were displayed all over the Factory premises. Essay and Slogan competitions were held on theme of the Year : "Lean management to enhance productivity." Valedictory function of the Productivity week 2014 was held on 18th February 2014.

Public Sector Day Celebrations at Corporate office and Bangalore Plant

5th Public Sector Day was celebrated at ITI Corporate office on 16th April 2014. Shri K.L. Dhingra, CMD, and Vice Chairman, SCOPE addressed the gathering of all functional Directors and Senior officers of

Corporate office and explained the importance of the PSU day and the contribution which Public Sector has made in the Economic Development of the Country.

APEX Meeting Deliberates Key Issues

APEX Meeting was held on 27th & 28th May 2013 at Banaglore Plant to deliberate key issues related to Company''s Revival, Orders, Financial status, Production targets and Marketing challenges. Shri K.L. Dhingra, CMD, Chaired the Meeting and called upon all the segments of ITI to redouble their efforts in every feld to turn around the Company. Functional Directors, Unit Heads, other Senior officers and representatives from the Employees'' Union and officers'' Association of all the Units participated in the deliberations.

DoT team visits ITI Ltd Bangalore

Smt. Rita A Teaotia, IAS, Additional Secretary (T), DoT visited ITI Corporate office on 3rd July 2013, along with Shri V. Uma Shankar, IAS, Joint Secretary (T) DoT, Shri N.K. Joshi, DDG (SU) and Shri R.K. Kaushik Director (PSU IV). Smt. Rita A Teaotia, planted a sapling in the garden area of Corporate office in the presence of DoT Team and Shri K.L. Dhingra, CMD ITI Limited.

32. ACKNOWLEDGEMENT:

Your Directors place on record their sincere thanks for the assistance and support extended by the Ministry of Communications & IT and various other Ministries of Central and State Governments viz., Karnataka, Uttar Pradesh, Kerala and Jammu & Kashmir and look forward for their continued support and cooperation in future.

Your Directors also wish to express their gratitude for the cooperation and assistance extended by BSNL MTNL, Banks, Suppliers, Shareholders, Bondholders, Depositors, Agents, Customers and Foreign Collaborators, Committee on Public Undertakings (COPU), Standing Committee on Public Enterprises (SCOPE) and Standing Committee on Information Technology.

Your Board also expresses its sincere thanks to the Comptroller and Auditor General of India, Chairman and Member of the Audit Board and Statutory and Branch Auditors.

Your Directors take this opportunity to place on record their appreciation for the valuable contribution made and excellent cooperation rendered by the employees at all levels for the progress and prosperity of the Company.

For and on behalf of the Board of Directors

(K. L. Dhingra) Chairman and Managing Director

Place: Bangalore Date: 13th August 2014

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Mar 31, 2013

To The Members of ITI Limited

The Directors have pleasure in presenting the 63rd Annual Report of the Company together with Audited Accounts and Auditors'' Report thereon for the year ended 31st March 2013.

PERFORMANCE:

ITI Limited has reported a net loss of Rs. 182.06 Cr in the financial year 2012-13 which is the lowest ever loss reported by the Company in the last eleven financial years. The net loss has come down by 50.77% from a net loss of Rs. 369.80 Cr. reported in the financial year 2011-12.

The Company was having Moll target of Rs. 4430 Cr. (sales) for the year 2012-13. Against this Moll target, the Company has achieved Sales (including ED & Service Tax) and Production of Rs. 921.04 Cr. and Rs. 910.16 Cr. during the year 2012-13 as against Rs. 993.12 Cr. and Rs. 995.96 Cr. respectively during the previous year 2011-12. Due to reduced market share of telecom PSUs, major orders could not be finalized and hence resulted in reduced sales.

Despite the reduced Sales turnover, contribution in the year 2012-13 has increased to Rs.187.27 Cr. as compared to Rs. 180.51 Cr. in the year 2011-12.

During the year 2012-13, the Company received approximately fresh orders of Rs. 1104 Cr only.

The Company has signed MoU of Rs. 4500 Cr. (Level-3) for the year 2013-14 with projected gross margin of Rs.130 Cr. and Net Profit of Rs. 1.00 Cr.

As part of diversification, all the Units have taken various initiatives to enhance production.

Bangalore Plant has entered into a TOT for manufacturing and supply of SDR (Software Defined Radio Products) it is expected to be in demand for defence forces in future.

Mankapur Unit has developed LED bulbs of 5W to replace 60W filament bulbs, LED streetlights (40W-excellent replacement of 250W sodium vapor lamp), LED streetlight (75W) and LED based tube lights (18W) for domestic/business/industrial applications. These LED based products will go a long way towards energy saving.

Naini Unit established a new line for manufacturing of High Wattage Solar Panels of capacity 5 MW.

Palakkad Unit has established inroads in the Defence manufacturing area by supplying to NPOL, HVF Avadi, etc. The Plant has opened a separate manufacturing area for meeting the requirements of production of Space research related products and have supplied to VSSC both bare and assembled PCBs.

HIGHLIGHTS:

- The turnover for the year 2012-13 is mainly constituted by GSM, G-PoN, Defence, IT solutions Projects and services sector for NPR and SECC projects.

- The Company is executing Turnkey Project of Registrar General of India (RGI) for creation of Multi Purpose National Identification Card under National Population Register (NPR57) project for the country.

PRODUCTION

The product-wise details of performance achieved by the Company during the year 2012-13 as compared to the previous year is as given below:

(Rs. in Crores)

SI. No. Product/Project 2012-13 2011-12

1 Radio Modem - 17.50

2 SSTP/IPTAX - 12.28

3 C-DOT Products 1.61 4.57

4 Diversified Products / 10.61 4.15 Cont.Mfg.

5 Solar Panel 22.76 6.87

6 PCM MUX 0.52 3.84

7 DWDM - 9.21

8 MLLN 9.77 -

9 GSM - WZ (Incl. BTS, 55.11 32.70 RTT, Shelter & AMC)

10 GSM-MTNL 1.02 18.44

11 GSM - SZ 1.75 13.64

12 WLL-INFRA -14.88

13 ADSL-CPE 2.89 5.13

14 Misc. Products & 24.78 34.37 Services

15 Defence / ASCON 55.35 52.20

16 OCB AMC Business 37.74 47.14

17 SIM / USIM / SMART 20.09 0.28 Cards

18 NPR/SECC Projects 371.37 438.07 (Data)

19 SMPS 1.65 3.76

20 G-PoN 16.29 24.24

21 ROs/CCO/IT 198.23 197.89

22 Data Centre 15.44 10.69

Total Service Tax 74.06 71.03

TOTAL (Incl. ED & Ser. Tax) 921.04 993.12

New Products:

- National ID Card manufacturing :

ITI is already a part of the consortium of PSUs along with BEL and ECIL for executing the National Population Register (NPR) project under the Ministry of Home Affairs. The next phase of the project is to manufacture national identity cards for all citizens in the country (above 18 years age). The project is expected to be awarded to the consortium during this year and is expected to be valued more than Rs. 1200 Crore (for ITI) in a period of three years. Also, there will be continuous requirement of these cards beyond this period even though volume would be lower. The cards are planned to be manufactured at Palakkad plant which is already engaged in manufacturing this type card in its plant.

- Software Defined Radio (SDR):

Software Defined Radio cater to single radio covering HF, VHF and UHF range for voice and low bit-rate voice and data applications. Defence sector plans to replace existing radios namely combat net radios with SDR. These radios have Electronic counter Measures (ECCM) features to avoid jamming. ITI has entered into an Moll with a technology partner and signed Transfer of Technology (TOT) agreement with the party to start component level manufacturing of this product in ITI. Tenders are awaited from Defence sector for this product.

- Next Generation Networks:

Next Generation Network (NGN) is a Soft Switch based Telecommunication network capable of providing services, viz., Voice, Data & Video by encapsulating them into packets. Manufacturing of IP TAX equipment (or, Class IV switches) and local exchanges (or, class V switches), based on Soft Switch architecture is planned. BSNL and MTNL''s plans to migrate their TDM switches to NGN in order to provide new services to customers will boost the NGN market.

- Carrier Ethernet:

Carrier Ethernet is the next generation transport technology for high bandwidth packet access for internet and business communication. The projects like NFS (Network for Spectrum), are expected to have a huge requirement for Carrier Ethernet switches. ITI is in the process of identifying a technology partner for the execution of anticipated orders from the customer.

- G-PON (Gigabit Passive Optical Network):

G-PON is a promising transmission technology in terms of its low operating expenses, low power requirements and ease of network deployment. Huge requirements are anticipated from projects like National Optical Fiber Network (NOFN) and Network for Spectrum (NFS) and others. ITI has already been a major supplier of this product to BSNL and MTNL using the imported technology. ITI has now entered into a ToT agreement with C-DOT and plans are afoot to take up manufacture of G-PON equipments from component level at Raebareli plant. This will boost indigenous manufacturing in India.

- MLLN (Managed Leased Line Networks):

ITI has successfully rolled out countrywide MLLN network for BSNL in technical collaboration with M/s Tellabs. During the year 2012-13, ITI received expansion order for MLLN project to the tune of Rs. 82 crore.

EXPORT:

The exports of the Company for the year 2012-2013 were NIL.

FINANCE:

The performance of the Company for the year 2012- 2013 as compared to the previous year is as follows:

(Rs. in Crs.)

SI Particulars 2012-2013 2011-2012 No.

i. Sales including 921 993 services

ii. Value of 910 996 Production

iii. Loss before tax 182 370

iv. Loss after tax 182 370

v. Financing 89 85 Expenses

vi. Depreciation 18 21

vii. Capital Employed 1778 1895 (Net Fixed Assts Net Current Assets)

viii. R&D Expenditure 18 21

DIVIDEND:

As your Company has incurred a loss, the Directors are not in a position to recommend any dividend for the year 2012-2013.

HIGHLIGHTS:

The performance value for 2012-13 is mainly from National Population Register (NPR), GSM Projects, GPoN, Solar Panel, IT Project and Service Contracts through ROs, Defence and Civil Networks.

The Company is executing Turnkey Project of Registrar General of India (RGI) for creation of Multi Purpose National Identification Card under National Population Register, AMC and Misc. services.

HIGHLIGHTS OF THE PRODUCTION PLANTS AND SERVICE UNITS:

BANGALORE PLANT:

Bangalore Plant achieved a performance of Rs. 30.62 Crores. This performance consist of supply of Defence equipment ofRs. 6.27 Cr, Data Centre services worth Rs. 18.05 Cr., AMC, repair and Miscellaneous products worth Rs. 6.30 Cr,

MANKAPUR PLANT:

Mankapur Plant achieved a performance of Rs. 6.35 Crores. The Plant has dispatched 40K Nos. of ADSL- CPE worth Rs. 2.89 Cr., C-DoT Products worth Rs.1.61 Crs. and Banking/Miscellaneous products worth Rs. 1.81 Crs.

During the year, the Plant has bagged 2 Nos. National Safety Award - Performance Year 2010 - WINNER for lowest average accident frequency rate and Performance Year 2010 - RUNNER for accident free year.

ITI Limited, Mankapur has done a yeoman''s service in maintaining a balanced environment and ecology since its establishment in 1983 in the Gonda District of Uttar Pradesh. Since inception, the Unit is continuously making efforts to upgrade the environment.

RAE BARELI PLANT:

Rae Bareli Plant achieved a performance of Rs. 42.76 Crores. The Plant has dispatched 31,9K Nos. of ONT of GPoN equipment worth Rs. 16.29 Cr., Rs. 1.65 Cr. from the supply of SMPS equipments, Rs. 24.82 Cr worth of GSM Franchise business.

During the year, the Plant has bagged National Safety Award for outstanding performance in Industrial Safety during performance year 2010 for accident free year.

NAINI PLANT:

Naini Plant achieved a performance of Rs. 22.91 Crores. The Plant has dispatched 117 Nos. of Solar Panel equipment worth Rs. 22.76 Cr. and Misc. / Contract Manufacturing worth of Rs. 0.15 Cr.

PALAKKAD PLANT:

Palakkad Plant achieved a performance of Rs. 449.33 Crores. The Plant has captured Bio- metric data collection/data entry against NPR/ SECC Projects worth Rs. 409.98 Cr., supplied 20.14 million Nos. of Smart Cards for NPR Project worth Rs. 26.54 Cr, Supply of MLLN & AMC Project worth Rs.11.07 Cr. and Misc. / Contract Manufacturing worth Rs. 1.74 Cr.

In the Industrial Safety front, Plant was runners up for the Outstanding Safety performance in the large size Engineering Industries Group from National Safety Council, Kerala Chapter and third prize winner from Directorate of Factories, Kerala Government for large scale industries.

SRINAGAR PLANT:

Srinagar Plant achieved a performance of Rs. 0.01 Crores against services.

NETWORK SYSTEMS UNIT:

Network Systems Unit achieved a performance of Rs. 98.01 Crores. The performance mainly comprises of Annual Maintenance Contract for fixed line OCB exchanges worth Rs. 42.05 Cr. for BSNL & MTNL, AMC for ASCON worth Rs. 54.69 Cr. and Misc./ contract jobs worth of Rs. 1.27 Cr.

REGIONAL OFFICES:

Regional Offices and its Customer Care Organization (CCO) achieved a performance of Rs. 206.53 Crores. This performance consists of t 75.89 Crs. supplies of ITI''s Mfg. products and other traded products, Rs. 45.23 Crs. of Services and Rs. 5.77 Crs. by various CCOs and Rs. 79.64 Cr. towards IT Projects.

Highlights of Regional Offices Performance:

a) Performance of ROs for the FY 2012-13 is Rs.206.53 Cr against Rs.206.82 Cr in the FY 2011-12.

b) Sundry Debtor realization for 2012-13 is Rs. 120.63 cr Realisation for FY 2011-12 was 170.49 Cr.

- Total order bagged in 2012-13 is Rs. 209.52 Crs. against the order bagged of Rs. 122.86 Crs. in 2011-12.

Rs. 453.74 Crs. orders on hand as on 01.04.2013. Order value on hand as on 01-04.2012 was Rs. 457.20 Crs.

New Projects taken up in 2012-13:

- CCTNS Bihar - RO Lucknow (Rs. 68 Crs)

- CCTNS Nagaland - RO Kolkata (Rs. 9.6 Crs)

- APDRP Puducherry - RO Chennai (Rs. 12.8 Crs)

- In the State of Assam - NPR (estimated work of Rs. 35 Crs.) being executed by RO (Kolkata)

Austerity Measures:

- Closure of 8 Area Offices in last three years.

- Cost reduction in office rent by shifting office to a smaller area.

- Fixed expenditure reduced by surrendering the rented premises & operating from residence.

GSM Projects:

The Company rolled out GSM Network worth of t 63.38 Cr. (with Service Tax) against BSNL orders in West Zone & South Zone and Rs. 1.15 Cr against Orders of MTNL, Mumbai.

CONSERVATION OF ENERGY:

The Company has undertaken following energy saving measures:

1. Recommendations of Bureau of Energy Efficiency have been implemented from time to time.

2. Optimum usage of Plant & Utilities

3. Monitoring of power factor at regular interval.

4. Replacement of old high capacity equipments with multiple optimum size capacity energy efficient ones.

5. Replaced conventional electro-magnetic ballast fluorescent fitting with electronic ballast fluorescent tri-phosphate lamp fitting.

6. Offloading of Central Air Conditioning plant in winter season.

7. Use of timer control devices in street lighting, etc.

8. Diverting the load on single transformer to reduce no-load losses.

9. Training programmes / competitions among employees to create awareness on energy conservation.

New Product & New Technology Initiatives:

Mankapur Unit has developed LED bulbs of 5W to replace 60W filament bulbs, LED streetlights (40W-excellent replacement of 250W sodium vapor lamp), LED streetlight (75W) and LED based tubelights (18W) for domestic applications. These LED based products will go a long way towards energy savings.

Future Outlook:

- Telecom projects like NOFN and NFS:

The Government funded projects like National Optical Fiber Network (NOFN) and Network for Spectrum (NFS) require many types of telecom equipments like GPON, DWDM, Carrier Ethernet, DSL equipments etc. in huge volumes. Some of equipments required in these projects have been designed by C-DOT, with whom ITI has tie-up for technology transfer. For other products also, ITI has tied up with technology partners for technology transfer to ITI with an intention of taking up manufacturing of these products.

- Core Telecom Products:

ITI is pursuing on addressing the core telecom market like GSM, Long Term Evolution (LTE), and Managed Leased Line Network (MLLN) etc.

The LTE technology is expected to be taking over in the next decade ITI is planning to take up manufacturing of these products.

- Defence projects:

ITI is looking at Defence market as a great opportunity for its business. ITI has already supplied telecom equipment like Telephones, Ruggedized Telephone Exchanges, Transmission equipments, VSAT etc. to the Defence sector. ITI is the leader in supplying encryption equipments for the secured communication in the Defence networks With greater thrust towards domestic manufacturing of Defence equipments, ITI proposes taking up manufacturing of new products for Defence like, Software Defined Radio (SDR), High Frequency Radio Handsets, TR modules for RADAR, Electronic Fuses, equipments for Army Wide Area Network (AWAN Phase II) etc. ITI is discussing with DRDO for setting up of SBIJ in two units of ITI One major project which has been now launched by Indian Army is ASCON Phase IV. Earlier three phases of this project have been executed by ITI successfully and ITI is hopeful of getting order for this project also

- Solar Project:

There has been special emphasis by the Government of I ndia to implement the renewable energy sources including solar to overcome the environmental hazards and meeting the growing energy needs. ITI is having requisite expertise and experience for implementing Solar solutions in its Naini plant. ITI has already executed solar projects for BSNL as well as - UP police. BSNL and other Service Providers are planning to upgrade their outdoor GSM Telecom BTS sites with Solar Power specially in rural areas where power supply position is not good. ITI Naini is planning to augment the solar panel manufacturing infrastructure in its plant

- LED Lighting:

LED lighting is an environmental friendly option due to non-use of Mercury. Market potential for this product is very good. ITI is planning to address this market. Potential areas of business opportunities are expected from National Highway Authority, State Governments and Municipal Corporations, CPWDs/ PWDs, Railways, Hotels and Hospital Industry.

- Data Center:

ITI has already established Tier 3 state-of- art Data center at Bangalore on PPP model. Presently this Data Center is fully booked for co-location services. Big scope exists in the market of Data center considering the immense potential in the Government sector to store data for projects of national importance like NPR, UIDAI and other Projects/Schemes envisaged by Government agencies & PSUs. In line with the business opportunities, ITI is planning to build another Data center as main and disaster recovery sites.

- IT Projects:

All the State Governments are pursuing E-Governance projects for taking the benefit of IT to the Village Panchayats and they have made a substantial budget provision for the same. ITI is aggressively pursuing this Market segment. ITI has already executed SWAN (State Wide Area Network) projects of Maharashtra, Odisha and Mizoram. ITI is also executing Accelerated Power Development and Reform Programme (APDRP) of Tamil Nadu state, Crime & Criminal Tracking Network System (CCTNS) for Bihar and Nagaland. e-Tendering is another project being executed by ITI. ITI plans to pursue more such IT projects in future.

CONTRIBUTION TO EXCHEQUER:

During the year, your Company has contributed Rs. 46.12 Crs to the exchequer towards duties and taxes.

PUBLIC DEPOSITS:

Value of deposits held by the Company was NIL.

Deposits aggregating to Rs. 0.24 Cr. had matured for payment, but were not claimed on due dates.

REVIEW OF ACCOUNTS BY THE COMP- TROLLER AND AUDITOR GENERAL OF INDIA:

The comments on the accounts for the year 2012-13 by the comptroller and Auditor General of India appended.

JOINT VENTURES :

1. INDIA SATCOM LIMITED

India Satcom Limited (ISL) is a Joint Venture Company incorporated on 5th October, 1987 by ITI, Unit Trust of India (UTI) and Equatorial Pacific International Company (EPIC). Both EPIC and UTI had sold their respective stakes in ISL to M/s Chris Tech Systems Pvt. Ltd. (CTSPL) and ITI had also took steps to sell its entire 49% equity stake in ISL to CTSPL. The Government of India, Ministry of Communications & IT vide its letter dated 28.01.2011 has not approved the above said sale of 49% ITI''s equity stake in ISL to CTSPL, therefore the transfer of ITI shares could not be effected. Now, the shareholders in the Joint Venture are ITI (49%) and CTSPL (51%).

In the 408th Board meeting held on 6.08 2013, it has been decided that ISL will sign a MOU with NBCC for joint development of the land of ISL for commercial purpose, after obtaining approval from Govt., and after taking necessary approval from statutory bodies. This will go a long way in the revival of the ISL.

QUALITY:

In all the production units of ITI Ltd., the Quality Assurance (QA) wings have been well established. The QA wings are responsible for Quality of products & services rolling out of units. A variety of Environmental test facilities are in force in all the Units. Test systems and instruments for carrying out elaborate tests for conducting Reliability Evaluation on all products to ensure customer satisfaction. This is achieved by sound and effective Quality Management Systems. The Quality Policy of ITI is to ''provide Competitive and Reliable Products, Solutions and Services".

All the five manufacturing Plants at Bangalore, Palakkad, Mankapur, Rae Bareli & Naini of the Company have been accredited with and periodically upgraded to International ISO 9001:2008 Standards of Quality Management as on date.

Keeping in tune with the Global concern for Environmental Management, all the plants of the Company have gone in for ISO 14001:2004 EMS certification for all of the Plants and are periodically being upgraded.

The guidance and support to all Units for Training, Implementation, Surveillance and Recertification of ISO 9001:2008, Quality Management System (QMS) and ISO 14001:2004 Environmental Management System (EMS) are provided by Corporate Quality Department. Quality related MOU targets and Quality related issues like AIS, SPC, Six Sigma, 5S, TQM Quality Cost etc., have been achieved.

AIS (Approved Inspection Scheme) status has been granted by BSNL QA for SIM Cards. Localisation activities continued during the year to procure items such as cables, connectors and PCBs for GSM-BTS Project with Alcatel approval and after approval from VDC & VRC of R&D, Bangalore. CAG, VDC, VRC, Standards, Component Testing and Reliability Labs provide Qualification Approval, Standardisation of Electronic components, Vendor Development and Vendor Rating after stringent evaluation in Testing in Reliability and Environmental laboratory.

MANPOWER

Employee Strength at the end of the year 31st March 2013 was 8516 compared to previous year''s strength 9512.

As on 31.03.2013, there were 1429 employees belonging to Scheduled Castes and 79 belonging to Scheduled Tribes, thus constituting 16% and 0.92% respectively of the total strength of employees on the rolls of the Company. 10 Contract Engineers belonging to SC category and 3 belonging ST category, 4 Technicians belonging to SC and none belonging to ST were recruited on contract basis during the year 2012-2013.

Employees belonging to Ex-servicemen category numbering 37 and Physically Challenged Persons numbering 108 were on the rolls of the Company as at the end of the financial year.

HUMAN RESOURCES DEVELOPMENT:

During the year 2012-13 the HR (ED) initiated several programmes, keeping in view, the continued organizational turnaround and capacity building efforts and the MoU HRM Training targets, focussed on employee skill development through various need-based in-house training programmes on Management Development, New/Advanced Technology and Multi-skilling. A special emphasis was given to developing leadership skills amongst middle and senior executives. Besides, the company sponsored Senior Executives (GM''s and above) for advanced training programmes that provide platform for exploring the organizational growth opportunities.

As part of Organization Development initiatives, for the first time in the company, ''Mentor-Mentee System'' has been successfully developed and implemented. To begin with around 30 Executives have been trained as mentors and around 50 officials have been selected as Mentees. During the year, the company successfully carried out Employee Engagement Survey. Quality Circles have also been revived in the company.

On HRM Training, in fulfillment of the MoU parameters, in the General Management area 115 in- house training programmes were organized covering 3835 employees which include training programmes on Stress Management, Medicare etc., 8 training programmes were conducted on Leadership covering 246 employees. As an exclusive initiative to develop multi-skills amongst non-executives, 11 programmes were organized covering 182 non-executives as against the target of conducting 10 Multi-skill training programmes. Similarly, on New/Advanced Technology, 11 programmes were conducted covering 263 employees as against the target of five training programmes. In total, the company has organized 161 programmes as against the target of 120 training programmes. Also, the company has sponsored 16 nominations to renowned external training institutions which included nominations of four Senior Executives (GM''s and above).

In total, during the year, 4532 employees have been trained achieving more than 6100 training mandays. In terms of percentage of number of training programmes organized, the company has achieved 120% on New/ Advanced Technology, 160% on Leadership, 115% on MDPs and 110% on Multi-skilling. With respect to the target of 0.4 training mandays per employee per year, the company achieved 0.64 by imparting training to a total of 4532 employees achieving 6100 training mandays. Similarly, against the target training budget of Rs. 3.21 lakhs - 0.008% of the manpower cost - the company has spent Rs. 3.72 lakhs i.e., 0.0092% of the manpower cost.

During the year, against every Moll HRM training performance indicator the company''s achievements surpassed the targets.

INDUSTRIAL RELATIONS

The Industrial Relations scenario in the Company was cordial during the year. Employees'' Union and Officers'' Association extended their co-operation and support in ensuring smooth work flow and helped to meet the Company''s objective.

OFFICIAL LANGUAGE:

All Units / Offices have established Check-points in their concerned offices to make more efforts for effective Implementation of the Official Language Policy, monitored by the Official Language Implementation Committees constituted in every Unit / Office.

The Progress of Implementation of Official Language in our Corporate Office as well as in our all subordinate Units / Offices is also being periodically reviewed by the OLIC Committee of Corporate office.

In order to enhance the working knowledge of Official Language amongst our employees, officials have been sent to Training Programme organized by the government for imparting training in Hindi, Hindi typing and Hindi Stenography as per our requirement. However, the Official Language Cell of the different Units / Offices has also conducted internal training programmes. Besides, employees were encouraged to take part in Hindi Prabodh, Praveen & Pragya examinations and have been sanctioned financial incentives.

Since eighty percent (80%) of the staff working in our Units / Offices like Naini, Rae Bareli, Mankapur, New Delhi, Mumbai, Lucknow & Corporate Office have acquired working knowledge of Hindi, such Units / Offices have been notified in the Gazette of India as per OL Rules 10 (2) & (4), 1976.

For Bangalore-based Units/Offices, a short term Hindi Unicode training programme were organized in the HRD deptt. of Corporate Office, with the help of Senior Hindi Officer, NAL, Bangalore. More than 30 officers/non-officers participated and they were trained how to use the Hindi Unicode Fonts in day- to-day typing work.

After reviewing our quarterly report, an appreciation letter was also received from Dy. Director-OL, Official Language Department DoT, New Delhi as well as Dy. Director (Implementation), Regional Implementation Office, Bangalore.

A Joint Hindi Fortnight Programme for Bangalore based PSUs / Organisations between 03.10.2012 & 31.10.2012 was organized by TOLIC (Town Office Language Implementation Committee), Bangalore and various types of competitions were arranged during this occasion. On this occasion many officers/ Non-officers of ITI Limited, Bangalore based Units / Offices participated in these competitions and more than 14 Officers / Non-Officers have got the prizes. On the TOLIC Meeting & valedictory function held on 22.01.2013, the President, TOLIC gave the cash prizes and certificate to the wining participants.

"Hindi Fortnight" was celebrated and Hindi Workshops were organised for encouraging progressive use of Hindi during 2012-13. Company''s website has been made bilingual (i.e. English and Hindi).

VIGILANCE :

During the year, Vigilance Department functioned effectively and efficiently being a part of Corporate Governance Structure. The prime focus of the vigilance activities was to sensitize the employees towards transparent, ethical and professional approach towards their duties and responsibilities. Greater emphasis was laid on preventive vigilance. CVC guidelines and Government policies in this regard have been strictly followed. To achieve the above objectives, periodical inputs were given to the Management regarding review of Administrative expenses, review of Procedure being followed for selection of technology Partners, implementation of Rotational Transfers of Executives in Sensitive Areas in the Company.

To improve the transparency and efficiency of the procedures, several System Improvement Measures have been suggested to various departments. Constant and continuous efforts have been made in this direction as a part of Preventive Vigilance.

Logical conclusions on Vigilance Cases were arrived at and Special emphasis was taken to reduce the Pendency of Complaints MIS Reports were sent to Statutory / Government Agencies like DOT-Vigilance and CVC.

The Company observed Vigilance awareness week from 31st October 2012 to 5th November 2012 at all Manufacturing Units including its administrative offices, as well as Corporate Office. Open-house discussions were held with Middle Management Executives of the Company, with specific emphasis on streamlining the System and Procedures in Procurement and recording the Reasons for proposing / taking requisite Commercial /Administrative decisions. The main thrust was to enhance the Vigilance Awareness across the Company and to sensitize employees in work areas and their role in preventing corruption. This also provided a platform for the participants to interact, seek more information and clarify doubts on vigilance concepts and functions. Emphasis was also laid on leveraging IT,creating awareness for transparency and accountability.

Management facilitated up-gradation of Computer Infrastructure in Corporate Vigilance Department and suitable deployment of manpower in Vigilance department across ITI offices. Management established another Vigilance wing at RO office at Lucknow, to monitor vigilance functions at Northern ROs and other North-lndia based Commercial wings of the Company. Impetus was given to review the pendency of Cases periodically to expedite logical conclusion of the pending cases. Periodical apprisals were also made to the Board of Directors on Vigilance Matters.

The Vigilance department is endeavoring to lay far more emphasis on preventive vigilance, scrutinizing the documents and conducting surprise checks in sensitive departments. These actions had good impact for creating awareness amongst Company Executives on Vigilance aspects of Company Governance.

RIGHT TO INFORMATION:

As a part of imparting training on RTI Act, an in- house training programme was conducted in two batches. The first phase was held at Mankapur on 25th & 26th February 2013 for Northern Units and a few regional offices which was attended by a good number of participants. The second phase of the programme for Southern Units/Regional office was held on 21st & 22nd March 2013 at Bangalore. Both the programme were conducted using the internal faculty of Corporate office.

The programme was aimed at providing in-depth knowledge of the RTI Act. The training was well received by the participants with interactive sessions and lively discussions on several case studies. The programme was rated "Excellent" by all the participants.

Ever since the introduction of RTI Act, the awareness among citizens has been on the increase and during the year 2012-13 RTI cell received and processed 204 requests.

AWARDS:

ITI Bags National Safety Awards from Ministry of Labour & Employment

ITI Ltd. has bagged the prestigious ''National Safety Awards'' from the Ministry of Labour & Employment for the performance year2010. Shri K. L. Dhingra, CMD, ITI Ltd, received the awards from Shri Mallikarjun Kharge, Horrble Union Minister for Labour & Employment at a function in New Delhi on September 17, 2012.

ITI''s Mankapur Plant, Gonda Dist. Uttar Pradesh, emerged for outstanding performance in Industrial Safety Awards as winner during the Performance Year 2010 based on the Lowest Average Frequency Rate and Runner-Up in Accident Free Year.

SALES PROMOTION:

ITI Limited participated in DEFCOM India 2012 Exhibition 111 Limited participated in DEFCOM India 2012 held during 8th & 9th November, 2012 at Manekshaw Centre, Delhi. The posters depicting latest products of ITI and the products for which ITI has tie-ups with OEMs were displayed.

In line with the theme of the exhibition, "Tactical Communication System", the following products were showcased :

1) NGN BEU (New Generation Bulk Encryption Unit)

2) SDR ( Software Defined Radio)

3) HF Radio Set

On the first day i.e. 8th November 2012, CMD of ITI shared the dais with Shri Vivek Rae, Secretary MSME, Ad. Secretary (A), Lt. Gen. S.P. Kochar, AVSM, S.M., VSM, ADC, SO-in-C, Maj, Gen. Johar, ADG-TAC and other top officials of telecom companies and presented his views on "ICTEC : Challenges and Opportunities".

ITI participated in India Telecom-2012 Exhibition

ITI participated in India Telecom-2012 Exhibition which was held at Pragathi Maidan, New Delhi from 13th to 15th December 2012.

Products Displayed:

1) Hand Held Terminal

2) Charge Control Unit (CCU)

3) Solar Panel

4) Solar Structure

5) Multi Channel NGN BEU

Shri Milind Deora, Hon ble Minister of State for Communications and Information Technology, inaugurated ITI stall in the presence of Shri Kapil Sibal, Hon''ble Union Minister for Communications and Information Technology and Shri R. Chandrasekhar, Secretary, DoT along with Shri K.K. Gupta, Director Production.

EVENTS:

Secretary DPE Visits ITI

Shri O.P. RAWAT, Secretary, Department of Public Enterprises, Ministry of Heavy Industries and Public Enterprises, Gol, has visited ITI Corporate Office on 07th February 2013 and discussed with Shri K.L. Dhingra, Chairman and Managing Director, Shri R.K. Agarwal, Director Marketing, Shri K.K. Gupta, Director Production, Shri Ravi Khandelwal, Director Finance and other Management Officials regarding revival of ITI Limited.

National Productivity Week-2013

National Productivity week was observed from 12th to 18th February 2013 at Bangalore Plant. The Productivity week 2013 was inaugurated at ITI Bangalore Plant on 12th February 2013 by Lt.Col. (Retd) A.M. Uniyal, General Manager, Bangalore Plant. The Chief Guest at the function Shri C. Narendra, Senior Deputy Director, National Productivity Council, Bangalore, presented his key note address and highlighted the importance of "Productivity and Innovation for Sustainable Development".

Shri K.L. Dhingra, CMD, ITI Ltd. addressed the gathering and shared his views on the subject.

ITI Ltd, has bagged the prestigious ''National Safety Awards'' from the Ministry of Labour & Employment for the performance year2010. Shri K, L. Dhingra, CMD, ITI Ltd, received the awards from Shri Mallikarjun Kharge, Hon ble Union Minister for Labour & Employment at a function in New Delhi on September 17, 2012.

ITI''s Mankapur Plant, Gonda Dist. Uttar Pradesh, emerged for outstanding performance in Industrial Safety Awards as winner during the Performance Year 2010 based on the Lowest Average Frequency Rate and Runner-Up in Accident Free Year.

SALES PROMOTION:

ITI Limited participated in DEFCOM India 2012 Exhibition 111 Limited participated in DEFCOM India 2012 held during 8th & 9th November, 2012 at Manekshaw Centre, Delhi- The posters depicting latest products of ITI and the products for which ITI has tie-ups with OEMs were displayed.

In line with the theme of the exhibition, "Tactical Communication System", the following products were showcased :

1) NGN BEU (New Generation Bulk Encryption Unit)

2) SDR ( Software Defined Radio)

3) HF Radio Set

On the first day i.e. 8th November 2012., CMD of ITI shared the dais with Shri Vivek Rae, Secretary MSME, Ad. Secretary (A), Lt. Gen. S.P. Kochar, AVSM, S.M., VSM, ADC, SO-in-C, Maj. Gen. Johar, ADG-TAC and other top officials of telecom companies and presented his views on "ICTEC : Challenges and Opportunities".

ITI participated in India Telecom-2012 Exhibition

ITI participated in India Telecom-2012 Exhibition which was held at Pragathi Maidan, New Delhi from 13th to 15th December 2012.

Products Displayed:

1) Hand Held Terminal

2) Charge Control Unit (CCU)

3) Solar Panel

4) Solar Structure

5) Multi Channel NGN BEU

Shri Milind Deora, Hon''ble Minister of State for Communications and Information Technology, inaugurated ITI stall in the presence of Shri Kapil Sibal, Hon''ble Union Minister for Communications and Information Technology and Shri R. Chandrasekhar, Secretary, DoT along with Shri K.K. Gupta, Director Production.

EVENTS:

Secretary DPE Visits ITI

Shri O.P. RAWAT, Secretary, Department of Public Enterprises, Ministry of Heavy Industries and Public Enterprises, Gol, has visited ITI Corporate Office on 07th February 2013 and discussed with Shri K.L. Dhingra, Chairman and Managing Director, Shri R.K. Agarwal, Director Marketing, Shri K.K. Gupta, Director Production, Shri Ravi Khandelwal, Director Finance and other Management Officials regarding revival of ITI Limited.

National Productivity Week-2013

National Productivity week was observed from 12th to 18th February 2013 at Bangalore Plant. The Productivity week 2013 was inaugurated at ITI Bangalore Plant on 12th February 2013 by Lt.Col. (Retd) A.M. Uniyal, General Manager, Bangalore Plant. The Chief Guest at the function Shri C. Narendra, Senior Deputy Director, National Productivity Council, Bangalore, presented his key note address and highlighted the importance of "Productivity and Innovation for Sustainable Development".

Shri K.L. Dhingra, CMD, ITI Ltd. addressed the gathering and shared his views on the subject.

Inauguration of New Solar Module Production Plant at ITI, Naini

Shri K.L. Dhingra, CMD, ITI Ltd. inaugurated High Wattage SPV (Solar Photo Voltaic) Module Manufacturing Production Plant on 9th March, 2013 at ITI Naini. He appreciated the exemplary efforts and initiative taken by Naini Plant. He also congratulated Shri P.K. Gupta, GM, Naini & his team for new leap towards diversification. He expressed that this project will contribute towards National Solar Mission in a big way & bring long term sustainable business to ITI.

On this occasion he also addressed senior officers, the representatives of Workers ''Union & Officers'' Association and stressed upon the need of identification of more such diversified products for turn around of ITI Limited.

ITI MoU Concentrates on Revival Plans

ITI has signed a Memorandum of Understanding (MoU) with the Government for the year 2013-14. Shri R. Chandrasekhar, Secretary, DoT and Chairman, Telecom Commission and Shri K.L. Dhingra, CMD, ITI Ltd. signed the MoU on 22nd March 2013 at New Delhi. The thrust areas of the MoU include pursuing growth opportunities in telecom sector and exploiting diversified business such as renewable energy. The MoU envisages that ITI concentrate on revival plans with due approval of the Government agencies.

World Telecommunication and Information Day Celebrations at Bangalore Plant

World Telecommunication and Information Society Day was celebrated at Bangalore Plant and the theme selected by International Telecom Union (ITU) for the year 2013 is "ICTs and Improving Road Safety".

As part of the programme, a combined valedictory function was held at Old R & D Conference Hall. Shri Sridhar Rao, AGM ( B ) welcomed the gathering. The Chief Guest Shri Bhaskar Rao, IPS, IGP (Anti- Terrorist Cell), delivered the keynote address on the subject and enlightened the employees about the revival of KSRTC when he was the Commissioner of Transport Dept. & Road Safety, Government of Karnataka. Shri K.L.Dhingra, CMD, ITI Ltd., presided over the function and delivered presentations address.

Function was attended by other dignitaries are Shri R.K. Agarwal, Director Marketing, Shri K.K. Gupta, Director Production, Shri R.Venkataraman, CVO and other Senior Officers, Office bearers of OA, Union and all other employees participated in the function.

ENTERTAINMENT EXPENDITURE AND FOREIGN TRAVEL:

The expenditure on entertainment was NIL. Expenditure on official travel abroad by the officials of the Company amounted to Rs. 0.74 lakh during the year.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO:

Particulars with respect to Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo, required to be disclosed under the Companies (Disclosure of particulars in the report of Board of Directors) Rules, 1988 are annexed.

PARTICULARS OF EMPLOYEES:

The statement of particulars of employees drawing remuneration ofRs. 60.00 lakhs and above per annum or Rs. 5.00 lakhs and above per month are required to be included in the Directors'' report as per Section 217(2A) of the Companies Act, 1956, read with Companies (Particulars of employees) Amendment Rules, 2011, are NIL for 2012-13.

AUDITORS:

Pursuant to Section 619(2) of the Companies Act, 1956, M/s. Badari, Madhusudhan & Srinivasan, Chartered Accountants, Bangalore were appointed as Statutory Auditors of the Company for the year 2012-13 by the Comptroller & Auditor General of India.

The following firms of Chartered Accountants were appointed /re-appointed as Branch Auditors for different Plants of the Company for the year 2012-13:-

M/s Nagendra Gupta S. R. Gupta & Co.,

Naini Plant, Allahabad

M/s Thrivikraman & Co.,

Palakkad, Palakkad Plant

M/s Samriti & Associates,

Jammu, Srinagar Plant

M/s Habibullah & Co.,

Gorakhpur, Mankapur Plant

M/s S.C. Singh & Co.,

Rae Bareli, Rae Bareli Plant

COST AUDITORS

Your Company has appointed M/s.GNV & Associates, Bangalore, as Cost Auditors for the cost audit of south-based units located at Bangalore, Palakkad and also Consolidation for the Company and M/s. Aman Malviya & Associates, Lucknow, as branch auditors for the cost audit of north-based units, located at Naini, Rae Bareli, Mankapur and Srinagar for the year 2012-13, with the approval of Board and Ministry of Corporate Affairs.

BOARD OF DIRECTORS:

The following changes took place in the Directorate of your Company since the last Report.

In accordance with the requirements of the Companies Act, 1956, Shri Dhirendra Singh, Independent Director, Prof. M.J.Zarabi, Independent Director joined on 03.10.2012 and Prof. Ramesh Bhat, Independent Director joined on 03.01.2013 will retire by rotation at this Annual General Meeting and being eligible, offer themselves for re-appointment.

On completion of tenure, Shri T.S. Narayanasami, Prof.M. Balakrishnan and Dr. S.K. Chaudhuri, Independent Directors were relieved from the duties from March, 2013.

CORPORATE GOVERNANCE:

A report on Corporate Governance along with a Compliance Certificate from the Auditors as prescribed under the Listing Agreement with the Stock Exchanges on which the Company''s shares are listed, is annexed to this report.

DIRECTORS'' RESPONSIBILITY STATEMENT:

Pursuant to the provisions under Section 217(2AA) of the Companies Act, 1956 your Directors state that

(i) in the preparation of annual accounts, the applicable accounting standards have been followed and that there were no material departures.

(ii) the accounting policies adopted by the Company have been applied consistently, judgments and estimates that are reasonable and prudent have been made so as to give a true and fair view of the state of affairs of the Company as at 31st March 2013 and Loss of the Company for the period ended 31.3.2013.

(iii) they have taken proper and sufficient care 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;

(iv) the annual accounts have been prepared on a going concern basis.

ACKNOWLEDGEMENT:

Your Directors place on record their sincere thanks for the assistance and support extended by the Ministry of Communications & IT and various other Ministries of Central and State Governments viz , Karnataka, Uttar Pradesh, Kerala and Jammu & Kashmir and look forward for their continued support and co-operation in future

Your Directors also wish to express their gratitude for the co-operation and assistance extended by BSNL and MTNL, Banks, Suppliers, Shareholders, Bondholders, Depositors, Agents, Customers and Foreign Collaborators, Committee on Public Undertakings (COPU), Standing Committee on Public Enterprises (SCOPE) and Standing Committee on Information Technology.

Board of Directors also express its sincere thanks to the Comptroller and Auditor General of India, Chairman and Member of the Audit Board and Statutory and Branch Auditors.

Your Directors take this opportunity to place on record their appreciation for the valuable contribution made and excellent co-operation rendered by the employees at all levels for the progress and prosperity of the Company.

For and on behalf of the

Board of Directors

(K. L. Dhingra)

Place: Bangalore Chairman and

Date: 29.05.2013 Managing Director

---

Mar 31, 2012

To The Members ITI Limited

The Directors have pleasure in presenting the 62nd Annual Report of the Company together with Audited Accounts and Auditors' Report thereon for the year ended 31st March 2012.

PERFORMANCE:

The Company was having MoU target of Rs.5300 Cr. (sales) for the year 2011-12. Against this MoU target, the Company has achieved Sales and Production of Rs. 922.09 Cr. and Rs. 924.94 Cr. during the year

2011-12 as against Rs. 2138.93 Cr. and Rs. 2052.18 Cr. respectively during the previous year 2010-11.

Due to reduced market share of Telecom PSUs, volume of ITI's business with these customers has been severely affected resulting in to reduction in sales.

The Company's loss as worked out is Rs.369.80 Cr. for the year 2011-12. Despite the reduced sales turn- over, contribution in the year 2011-12 has increased to Rs 180.51 Cr. as compared to Rs. 160.10 Cr. in the year2010-11.

During the year 2011-12, the Company received fresh orders of Rs. 1610 Cr. approximately.

The Company has signed MoU of Rs. 4430 Cr. (Level-3) for the year 2012-13 with projected gross margin of Rs. 164 Cr. and Net Profit/loss at par.

HIGHLIGHTS:

The turnover for 2011-12 is mainly from National Population Register (NPR), GSM Projects, GPoN, IT Project and Service Contracts of Defense and Civil networks.

Your Company executed e-Governance Project of Registrar General of India (RGI) on a large scale as part of consortium of BEL & ECIL and registers sales of Rs.438.07 Cr. during the year. Another milestone achieved by the Company in execution of APDRP Project of Tamil Nadu State. The Company did a total business of around Rs.200 Cr. In IT and other turnkey projects mainly through its presence of Regional Offices situated in various parts of Country.

The supplies of Major Products and execution of projects during the year are as follows:

NPR Project of Rs. 438.07 Cr., GSM Rs.59.16 Cr., G-PoN, Rs. 24.24 Cr., Defence Projects and Services Rs.52.20 Cr., ADSL-CPEs Rs. 5.27 Cr., SMPS Rs.3.76 Cr. Radio Modem Rs. 17.50 Cr., AMC of OCB 283 exchanges Rs. 47.14 Cr., IT Project Rs. 90.02 Cr. and business through Regional Offices Rs. 107.87 Cr.

PRODUCTION

The product-wise details of performance achieved by the Company during the year 2011-12 as compared to the previous year is as given below:

f1 in Crores

Sl.No. Product/Project 2011-12 2010-11

1. OCB-283 CORE inc. I/C _ 3.81

2. Radio Modem 17.50 -

3. SSTP/IP TAX 12.28 1.77

4. C-DOT Products 4.57 4.38

5. Diversified 4.15 32.84 Products/Cont.Mfg.

6. Optic Fibre Equipments _ 45.67

7. Solar Panel 6.87 -

8. PCM MUX 3.84 14.34

9. DWDM 9.21 56.96

10. MLLN _ 2.41

11. EPBT/CLIP Phones _ 8.11

12. GSM - WZ (Incl. BTS, 32.70 909.09 RTT, Shelter & AMC )

13. GSM - MTNL 18.44 19.37

14. GSM - SZ 13.64 593.06

15. WLL - INFRA 14.88 14.96

16. ADSL-CPE 5.13 37.47

17. Misc. Products & Services 34.37 16.93

18. Defence / ASCON 52.20 54.77

19. OCB AMC Business 47.14 45.22

20. USIM / SIM Cards 0.28 6.09

21. NPR 438.07 11.46

22. SMPS 3.76 14.94

23. G-PoN 24.24 119.98

24. ROs / CCO / IT 197.89 125.28

25. Data Centre 10.69 -

TOTAL (Incl. ED) 922.09 2138.93

NEW PRODUCTS:

b" Carrier Ethernet: Carrier Ethernet is the next generation transport technology for high bandwidth packet access for internet and business communication. ITI has identified a technology partner to address anticipated tender from BSNL. The NFS (Network for Spectrum) project is expected to have a huge requirement for Carrier Ethernet switches. Tender are expected in

2012-13.

b" G-PON: G-PON is a promising transmission technology in terms of its low operating expenses, low power requirements and ease of network deployment. Huge requirements are anticipated from projects like NOFN, NFS and others. ITI has already been a major supplier of this product to BSNL and MTNL using the technology from M/s Alphion, USA. ITI has now entered into a TOT agreement with M/s C-DOT and manufacturing of G-PON equipments from component level is under process at Raebareli plant using C-DOT technology. This will boost indigenous manufacturing in India.

b" National Population Registration (NPR) and Socio Economic & Caste Census (SECC) projects: ITI is one among the consortium of three PsUs selected for the execution of prestigious NPR project. The job involves collection of citizen data including biometrics followed by issue of ID cards. ITI has already received an order to the tune of Rs 750 crore against this project from RGI for data collection including Biometrics which is under execution. Further orders are also anticipated.

An order to the tune of ? 450 crore has also been received for SECC ( Socio-Economic Caste Census) project from the Ministry of Rural Development which is also under execution by the same consortium. This project involves additional census data of all the citizens in the Country.

b" Migration of C-DoT TDM switches to NGN: ITI has manufactured the control card for migration of existing C-DoT exchanges to NGN. The manufacturing and testing of card has been approved by C-DoT. It is in line to the initiative of Ministry for bringing synergy in various organization under its control.

b" GSM : ITI has been implementing GSM Projects in BSNL West Zone & South Zone and MTNL- Mumbai, in technology alliance with M/s Alcatel- Lucent [BSNL-West Zone & MTNL] and with M/s Huawei [BSNL-South Zone]. Huge demands are anticipated for GSM-3G equipments for expansion of BSNL/MTNL and other private operators networks. ITI is manufacturing BSS network equipments in-house.

Non-Telecom products :

b" Solar Project: There has been special emphasis by the Government of India to implement the renewable energy sources including solar to overcome the environmental hazards. ITI is having requisite expertise and experience for implementing Solar solutions.

BSNL and other Service Providers are planning to upgrade their outdoor GSM Telecom BTS sites with Solar Power specially in rural areas where power supply position is not good. The requirement will be around 4,000 BTS sites/year. ITI Naini has installed equipments required for assembly and testing of solar module for 40 MW capacity. ITI has bagged two orders for supply of Solar Equipment of value Rs.35 Cr.

b" LED Lighting: LED lighting is an environmental friendly option due to non-use of Mercury. Market potential for this product is very good. ITI is planning to address this market. Potential areas of business opportunities are expected from National Highway Authority, State Governments and Municipal Corporations, CPWDs/ PWDs, Railways, Hotels and Hospital Industry.

b" Data Center: ITI established Tier 3 state-of-art Data center at Bangalore on PPP model. Presently this Data Center is fully booked for co- location services.

Big scope exists in the market of Data center considering the immense potential in the Government sector to store data for projects of national importance like NPR, UIDAI and other Projects/Schemes envisaged by Government agencies & PSUs. In line with the business opportunities, ITI is planning to build its own Data centers as main and disaster recovery sites at 2-3 locations.

b" IT Projects: All the State Governments are pursuing E-Governance projects for taking the benefit of IT to the Village Panchayats and they have made a substantial budget provision for the same. ITI is aggressively pursuing this Market segment. ITI has already executed SWAN (State Wide Area Network) projects of Maharashtra, Odisha and Mizoram. ITI is also executing Accelerated Power Development and Reform Programme (APDRP) of Tamil Nadu state. e-Tendering is another major project being

executed by ITI. ITI has also got orders of IT projects from Bihar & Nagaland States and UID projects in various States.

EXPORT:

The exports of the Company for the year 2011-2012 was NIL

FINANCE:

The performance of the Company for the year 2011-2012 as compared to the previous year is as follows:

(Rs.in Crs.)

SI Particulars 2011-2012 2010-2011 NO.

1 Sales including services 922 2139

ii. Value of Production 925 2052

iii. Loss before tax 370 358

iv. Loss after tax 370 358

v . Financing Expenses 85 66

vi. Depreciation 21 22

vii. Capital Employed 1893 2142

viii. R&D Expenditure 21 19

DIVIDEND:

As your Company has incurred a loss, the Directors are not in a position to recommend any dividend for the year 2011-2012.

HIGHLIGHTS OF THE PRODUCTION PLANTS AND SERVICE UNITS: BANGALORE PLANT:

Bangalore Plant achieved a turnover of Rs.45.24 Cr. Supplies consists of, Defense equipment of Rs.10.08 Cr, ADSL-CPEs worth Rs. 0.29 Cr., PCM MUX, etc. worth Rs.3.84 Cr., Switching equipment, OCB-CSN / C-DoT / Microwave items, AmC & repair etc. worth Rs. 4.08 Cr, Data Centre's turnover worth Rs. 10.69 Cr, and Radio Modem worth Rs. 17.50 Cr. and roll back of Rs. 14 88 Cr. against WLL CDMA earlier PO value.

MANKAPUR PLANT:

Mankapur Plant has achieved a turnover of Rs.57.41 Cr ., Out of this C-DoT products worth Rs 4.57 Cr., ADSL-CPE worth Rs.4.98 Cr. Banking product worth Rs.2.04 Cr, and Misc. Products worth Rs.0.30 Cr. were supplied.

The Plant has bagged 2 Nos. National Safety Award - Performance Year 2009 - WINNER for lowest

average accident frequency rate and Performance Year 2009 - WINNER for accident free year.

Smt. Mamta Dubey and Smt. Suman Srivastava of these plant bags Prime Minister's Shram Devi Award for the year 2008 and 2009 respectively.

RAE BARELI PLANT:

Rae Bareli Plant achieved a turnover of Rs.61.73 Cr, SMPS worth Rs. 3.76 Cr., Rs. 24.24 Cr. from the supply of G-PoN equipments, Rs. 28.40 Cr worth of GSM Franchise and GSM (BTS) TRU Expansion worth Rs. 5.33 were supplied.

The Plant has bagged National Safety Award for lower average frequency rate of accident Scheme-1 (Runner) & longest accident free period Scheme-2 (Winner) from Ministry of Labour & Employment for "Performance year 2008" conferred on 27th September 2010.

NAINI PLANT:

Naini Plant achieved a turnover of Rs.16.20 Cr. Supplies consist of DWDM equipment worth Rs. 9.21 Cr., Solar Panel worth Rs. 6.87 Cr. and misc./ contract mfg. worth of Rs. 0.12 Cr. This plant has initiated for upgrading the manufacturing facility of manufacturing of PV Solar Panels during the year.

PALAKKAD PLANT:

Palakkad Plant achieved a turnover of Rs.451.74 Cr. Which is highest ever since its inception. The Plant supplied MLLN equipment worth Rs. 12.28 Cr, NPR Project worth Rs.438.07 Cr. and Misc. / Contract Manufacturing worth Rs. 1.40 Cr.

The Plant has achieved notable performance in NPR 57 Data collection, Bio-metric Enrolment, Data Capture and for SECC Project, NPR Card production.

Palakkad Plant received First Prize in Industrial Safety from National Safety Council, Kerala Chapter for Medium Size Engineering Industries and also from Department of Factories and Boilers, Government of Kerala.

SRINAGAR PLANT:

Srinagar Plant achieved a turnover of Rs.0.02 Cr. against services.

NETWORK SYSTEMS UNIT:

Network Systems Unit achieved a turnover of Rs.91.86 Cr mainly comprising of Annual Maintenance Contract for OCB exchanges worth Rs 47.14 Cr. for BSNL & MTNL, AMC for ASCON Project worth Rs. 42.12 Cr. and Misc./ contract jobs worth of Rs 2.60 Cr.

REGIONAL OFFICES :

Regional Offices and its Customer Care Organization (CCO) achieved a turnover of Rs. 197.89 Crs. Overall growth was 58% higher compared to previous year's performance. This turnover consists of Rs. 69.77 Crs supply of ITI's mfg. products and other traded products, Rs.33.58 Crs. of Services and Rs.5.07 Crs. by various CCOs and Rs 90.02 Cr. towards IT Projects of services of old exchanges. During the year 2011- 12, 6 Regional offices out of 8 have reported gross profit for the first time in last 5 years and 5 have reported net profit.

GSM Projects:

The Company rolled out GSM Network worth of Rs. 40.72 Cr. against BSNL orders in WZ & SZ and Rs 18.44 Cr against Orders in MTNL, Mumbai.

Future Outlook:

b" Software Defined Radio (SDR): Software defined radio cater to single radio covering HF, VHF and UHF range for voice and low bit-rate voice and data applications. Defence sector plans to replace existing radios namely combat net radios with SDR. These radios have Electronic counter Measures (ECCM) features to avoid jamming. ITI is planning ToT with an Original Design agency for manufacturing and supply of SDRs for both Defence and Civilian use.

b" Network for Spectrum (NFS): This project is allocated to BSNl by Ministry of Communications for setting up of a communication backbone network in lieu of release of spectrum by Defence. ITI is anticipating substantial order from BSNL for laying of Optical fiber cables for this project as well as supply and installation of transport equipment.

b" Broadband to rural sector: In line with the Government's mission to provide Broadband

connectivity to the rural masses under "Bharat Nirman", 2,50,000 villages are planned to be connected by optical fiber under National Optical Fiber Network (NOFN) project. ITI is leveraging this opportunity using the G-PON technology of C- DOT.

b" Defence projects: ITI has supplied telecom equipment like Telephones, Ruggedized Telephone Exchanges, Transmission equipments, VSAT etc. to the Defence sector. ITI has successfully implemented communication network to Indian Army viz. ASCON Phase-I, II, III on turnkey basis and also maintaining the project under AMC.

ITI is the major supplier of Encryption equipment to Defence for its communication network.

To enhance product portfolio in Defence segments following technologies are being planned by ITI :

b" Satellite Trans-Receiver and Access equipments.

b" RADARs and Allied Equipments.

b" Weapon Control Systems.

b" Navigation Systems and Equipment.

b" Missile systems and Equipments.

b" Electronic fuzes.

b" ASCON Phase IV for Indian army: ITI has already executed ASCON Phase I, II & III projects. Total maintenance support is also being given for these projects by ITI. The ASCON Phase IV order is also anticipated by ITI.

b" Citizen ID cards: As a part of National Population

Register, ITI, along with its consortium partners, looks at the huge opportunity of manufacturing Smart card based citizen identity cards for all the citizens in the Country.

CONTRIBUTION TO EXCHEQUER:

During the year, your Company has contributed '.

57.64 Crs to the exchequer towards duties and taxes.

PUBLIC DEPOSITS:

Value of deposits held by the Company was NIL.

Deposits aggregating to Rs. 0.24 Crs. had matured for

payment, but were not claimed on due dates.

JOINT VENTURES : 1. INDIA SATCOM LIMITED

India Satcom Limited (ISL) is a Joint Venture Company incorporated on 5th October, 1987 by ITI, Unit Trust of India (UTI) and Equatorial Pacific International Company (EPIC). Both EPIC and UTI had sold their respective stakes in ISL to M/s Chris Tech Systems Pvt. Ltd. (CTSPL) and ITI had also took steps to sell its entire 49% equity stake in ISL to CTSPL. The Government of India, Ministry of Communications & IT vide their letter dated 28.01.2011 has not approved the above said sale of 49% ITI's equity stake in ISL to CTSPL, therefore the transfer of ITI shares can not be effected. Now the shareholder in the Joint Venture are ITI (49%) and CTSPL (51%).

QUALITY:

The Quality Policy of ITI is to [provide Competitive and Reliable Products, Solutions and Servicesb. Quality Assurance (QA) wings have been well established in all the production units of ITI Ltd. The QA wings are responsible for Quality of products & services rolling out of units. The Units are well equipped with a variety of Environmental test facilities. Test systems and instruments for carrying out elaborate tests for conducting Reliability Evaluation on all products to ensure customer satisfaction. This is achieved by sound and effective Quality Management Systems.

The guidance and support to all Units for Training, Implementation, Surveillance and Recertification of ISO 9001:2008, Quality Management System (QMS) and ISO 14001:2004 Environmental Management System (EMS) is provided by Corporate Quality. Quality related MOU targets and Quality related issues like AIS, SPC, Six Sigma, 5S, TQM Quality Cost etc.

The five Plants at Bangalore, Palakkad, Mankapur, Rae Bareli & Naini of the Company have been accredited with and periodically upgraded to International ISO 9001:2008 Standards of Quality Management as on date.

Keeping in tune with the Global concern for Environmental Management, all the plants of the Company have gone in for ISO 14001:2004 EMS certification for all of the Plants.

BSNL has granted AIS (Approved Inspection Scheme) status by BSNL QA for SIM Cards. Localisation activities continued during the year to procure items such as cables, connectors and PCBs for GSM-BTS Project with Alcatel approval and after approval from VDC & VRC of R&D, Bangalore. CAG, VDC, VRC, Standards, Component Testing and Reliability Labs provide Qualification Approval, Standardisation of Electronic components, Vendor Development and Vendor Rating after stringent evaluation in Testing in Reliability and Environmental laboratory.

MANPOWER

Employees Strength at the end of the year 31st March 2012 was 9512 when compared to previous year's strength at 10616.

As on 31.03.2012, there were 1630 employees belonging to Schedule Castes and 79 belonging to Schedule Tribes employees, thus constituting 17.13% and 0.83% respectively of the total strength of employees on the rolls of the Company. 2 Contract Engineers belonging to SC Category & 1 belonging to ST Category, 25 Technicians belonging to SC and 1 belonging to ST were recruited on contract basis during the year 2011-2012.

Employees belonging to Ex-servicemen category numbering 41 and Physically Challenged Persons numbering 120 were on the rolls of the Company as at the end of the financial year.

HUMAN RESOURCE DEVELOPMENT:

Human Resource Development (HRD) initiatives, with organizational turn around and diversification attempts in focus and in tune with the MOU target on HRM - targets for 2011-12 were set to impart training for 8% of executives and 7% of non-executives strength in the areas of New Technology, Information Technology, Employee Development, besides skill development across various functional areas by organizing 50 and 30 number of training programmes for officers and non-officers respectively. ITI achieved 'excellent rating' under the MOU for this.

Another target for the year was, for the first time in the company - as part of the MOU criteria, to conduct the SKILL Gap Analysis, involving all the trainable employees of the company.

These twin objectives were basically intended to meet the immediate training requirements of the company for the year under reference and to gear up the HRD training initiates on the findings of the Skill GAP Analysis, for subsequent years, to supplement the company's turn around the diversification agenda.

The Company has surpassed the MOU targets for 2011-12 on HRM-Training criteria by internally training 2199 i.e., 45.54% of 4819 officers and 915 i.e., 15.8% of 5797 non-officers strength (as of 1-4- 2011) through organizing a total of 97 in-house training programmes. This performance includes the 31 executives trained externally and the 5 executives trained by MOU partners in Project / Product specific training.

To keep pace with the advancements in Telecom training programmes on the topics like GPON, WiMAX, SDH, DWDM, Broad Band, Migration from IPv4 to IPv6, Embedded System were organized. On the IT front, training programmes were conducted on 'e-tendering' as part of development and implementation of the e-tendering system in the company. IT programmes also included awareness programmes on NPR Projects, Biometrics etc., Management Development programmes focused on Personality Development, Preventive Vigilance, Public Procurement, besides host of other areas like Quality, Finance, Reservation Policy for SC/ST. General Awareness programmes, keeping the company's CSR endeavors, focused on topics like, Environment Management System, Energy Conservation, Industrial Health, Safety etc,., In a nutshell, during the year company had trained over 3078 employees and achieved 3733 training mandays.

Corporate HR (ED), in its efforts to minimize the training costs, thrust was given to, develop and engage more and more officers as internal resource persons for conducting the training programmes, and employ video conferencing method for conducting training programmes company-wide, at a stretch covering more than 200 participants.

INDUSTRIAL RELATIONS

The Industrial Relations scenario in the Company was cordial during the year 2011-12. The Unions and Officers' Associations extended their full co- operation and support in ensuring smooth work flow and helped to meet the Company's objective.

OFFICIAL LANGUAGE:

All Units / Offices have established Check-points in their concerned offices to make more efforts for effective Implementation of the Official Language Policy, monitored by the Official Language Implementation Committees constituted in every Unit / Office.

The Progress of Implementation of Official Language in our Corporate Office as well as in our all subordinate Units / Offices is also being periodically reviewed by the OLIC Committee of Corporate office.

In order to enhance the working knowledge of Official Language amongst our employees, officials have been sent to Training Programme organized by the government for imparting training in Hindi, Hindi typing and Hindi Stenography as per our requirement. However, the Official Language Cell of the different Units / Offices has also conducted internal training programmes. Besides, employees were encouraged to take part in Hindi Prabodh, Praveen & Pragya examinations and have been sanctioned financial incentives.

Since eighty percent (80%) of the staff working in our Units / Offices like Naini, Rae Bareli, Mankapur, New Delhi, Mumbai, Lucknow & Corporate Office have acquired a working knowledge of Hindi, such Units / Offices have been notified in the Gazette of India as per OL Rules 10 (2) & (4), 1976.

For Bangalore based Units/Offices, a short term Hindi Unicode training programme were organized in the HRD deptt. of Corporate Office, with the help of Senior Hindi Officer, NAL, Bangalore. More than 30 officers/non-officers participated and they were trained how to use the Hindi Unicode Fonts in day- to-day typing work. Official Language Cell had achieved the "Best Excellence Performance Award" during the year 2010-2011 from the President, "Town Official Language Implementation Committee", Bangalore for remarkable progress and significant achievements for the use of Hindi and implementation of Official Language in the company.

After reviewing our quarterly report, an appreciation letter was also received from Dy.Director-OL, Official Language Department DoT, New Delhi as well as Dy. Director (Implementation), Regional Implementation Office, Bangalore.

A Joint Hindi Fortnight Programme for Bangalore based PSUs / Organisations between 03.10.2011 & 31.10.2011 was organized by TOLIC, Bangalore and various types of competitions were arranged during this occasion. On this occasion many officers/Non-officers of ITI Limited, Bangalore based Units / Offices participated in these competitions and more than 14 Officers / Non-Officers have got the prizes. On the TOLIC Meeting & valedictory function held on 05.12.2011, the President, TOLIC were given the cash prizes and certificate to the wining participants.

[Hindi Fortnight] was celebrated and Hindi Workshops were organised for encouraging progressive use of Hindi during 2011-12. Company's website has been made bilingual (i.e. English and Hindi).

VIGILANCE:

During the year, Vigilance Department functioned as an effective part of Management. The main focus of the vigilance activities was to sensitize the employees towards transparent, ethical and professional approach towards their duties and responsibilities. Greater Emphasis was laid on preventive vigilance. CVC guidelines and Government policies in this regard have been followed.

To achieve the above objectives, periodical inputs were given to the Management regarding review of Administrative Expenses, review of Procedure being followed for selection of Technology Partners, Securitization of ITI assets, Formulating Project- Specific-Accounting Policies in the Company, implementation of Rotational Transfer of Executives in Sensitive Areas, implementation of Whistle Blower Policy in the Company etc.

The Company observed Vigilance awareness week from 31st October 2011 to 5th November 2011 at all Manufacturing Units of ITI Limited including its administrative offices, as well as at Corporate Office. Open-house discussions were held with Middle Management Executives of the Company, with specific emphasis on streamlining the Systems and Procedures in Procurement and recording the Reasons for proposing / taking requisite Commercial /Administrative decisions. The main thrust was also to enhance the Vigilance Awareness across the Company and provide a platform for the participants to interact, seek more information and clarify doubts on vigilance concepts and functions.

Impetus was given to review the pendency of Cases periodically to expedite logical conclusions of the pending cases. Periodical appraisals were also made to the Board of Directors on Vigilance Matters.

The Vigilance department is endeavoring to lay more emphasis to preventive vigilance, scrutinizing the documents and conducting surprise checks in sensitive departments. These actions had good impact for creating awareness amongst Company Executives on Vigilance Facets of Company Governance.

RIGHT TO INFORMATION:

Ever since the introduction of Right to Information Act, 2005, there has been a reasonable increase in the number of information seekers. The number of requests received during 2011-12 was 358 in comparison to the requests of previous year of 321. As a part of mandatory requirement, the returns are now being submitted every quarter to our Ministry for onward submission to Central Information Commission.

At present, we have a designated Public Information Officer for every unit and a CPIO at Corporate Office. The first appeals are being addressed by Appellate Authority at Corporate level. The Transparency Officer has been nominated to ensure the overall compliance of the RTI Act and as a single window interface with the public and the Central Information Commission.

The retention schedule of records has been formulated and being implemented which is one such step of our dedicated and sincere efforts of RTI Cell in complying with relevant provisions under RTI Act for transparency.

AWARDS:

EVENTS & Awards:

Two ITI Women Employees Honoured with PM's Shram Award

Two employees of ITI Ltd Ms. Mamta Dubey and Ms. Suman Srivastava received the Prime Minister's Shram Award from Dr. Manmohan Singh at a function in New Delhi. Mr.K.L.Dhingra, CMD of ITI Ltd was also present on the occasion. Ms. Dubey developed a machine based test and repair set-up for turret board and main display boards of note counting machine, thus making the product more reliable and reducing the testing time, earlier this was a manual process. Ms. Srivastava's contribution in Transreceiver (TRA module) assembly resulted in process simplification and zero rejection by remodelling the Jigs and has resulted in significant improvement in increasing productivity almost to the time of 23%. Both are employees of ITI Mankapur in Gonda District of Uttar Pradesh.

ITI Ltd. has bagged the prestigious 'National Safety Awards' from the Ministry of Labour & Employment for the performance year 2009. Mr. K. L. Dhingra, CMD, ITI Ltd, received these awards from Mr. Mallikarjun Kharge, Minister for Labour & Employment at a function in New Delhi on November 29,2011.

ITI's Mankapur Plant emerged as the winner in the scheme I (based on the lowest average frequency rate) and scheme II (based on accident free year). ITI's Rae Bareli Plant was runner-up in the lowest average frequency rate of accident (scheme I).

ITI participated in the prestigious INDIA TELECOM 2011

ITI participated in the prestigious INDIA TELECOM 2011, 6lh International Exhibition & Conference organized by DoT and FICCI on December 7-9, 2011 at Pragati Maidan, New Delhi. The theme of event was " Total Solutions for Global Communications".

Mr. Milind Deora Focuses on ITI's Revival, Inaugurates Gas Plant

Mr. Milind Deora, the Union Minister of State for Communication and Information Technology, visited ITI on October 29,2011 and discussed issues related to ITI's revival, its financial performance, manpower, Research and Development, its diversification and revival strategies. "We have to revive and we want to revive ITI", he told the senior executives of the Company at a presentation held on the Company's revival strategy at the Corporate Office. Mr. K. L. Dhingra, CMDof ITI Ltd welcomed Mr. Deora and briefed him about the Company activities.

Honorable Union Minister Mr. Kapil Sibal Inaugurates ITI Lab., Assures A Smile Back on ITI

Mr. Kapil Sibal, Union Minister of Communications & IT and HRD, inaugurated "New Products Lab" at ITI on February 6, 2012 and said his Ministry would do everything possible to revive ITI and "bring back smiles" on faces of employees. "Your company has been a backbone of telecom industry and we will not allow it to go down", he told to the packed audience at ITI Plant. Mr. R. Chandrashekhar, Secretary DoT and Mr. K.L. Dhingra, CMD of ITI, employees and top officials from Defence, Banks and other PSUs were present on the occasion.

DoT Secretary Visits Bangalore Plant

Mr. R. Chandrashekhar, Secretary DOT, visited Bangalore plant on February 6 2012. In the SMT Line, ITI Officials brief in about SMD populated cards. They also explain to him the features and capabilities of the line, as well as in-circuit tester being used.

ITI Moll Concentrates on Revival Plans

ITI signed a Memorandum of Understanding (MoU) with the Government for the year 2012-13. Mr.R.Chandrasekhar, Secretary, DoT and Chairman, Telecom Commission and Mr.K.L.Dhingra, CMD, ITI Ltd. signed the MoU in New Delhi on March 12,2012.

The thrust areas of MoU include pursuing growth opportunities in telecom sector and exploiting diversified businesses such as renewable energy. The MoU envisages that ITI concentrate on revival plans with due approval of the Government agencies. The Company has also committed to follow DPE guidelines for the Corporate Governance, Corporate Social Responsibility, Research & Development and Human Resources Management. The Company will also address other critical issues such as up gradation of plant infrastructure and reduction of surplus manpower through VRS.

ITI's Maiden Venture at DEFEXPO 2012

ITI Ltd has participated in DEFEXPO 2012 for the first time. The exhibition is being held in New Delhi from March 29 to April 1, 2012. ITI has showcased its products and services relevant to the defence sector. Mr. A. K. Antony, Union Defense Minister visited the ITI stall where he was received by Mr.K.L.Dhingra, CMD, ITI Ltd. Dr. M. M. Pallam Raju, Minister of State for Defence and Dr. Vijay Kumar Saraswat, Scientific Advisor to the Minister of Defence were present on the occasion. The dignitaries were briefed about ITI activities and its contribution to the defence sector communication activities.

Secretary DPE Visits ITI

Mr. O.P. Rawat (IAS), Secretary, Department of Public Enterprises (DPE), visited ITI's Corporate Office and Bangalore Plant on April 27, 2012 and discussed several issues related to ITI's business with senior executives at the Corporate Office.

Mr. O.P. Rawat (IAS), Secretary, Department of Public Enterprises (DPE), planting a sapling at ITI's Bangalore Plant. Mr. K.L. Dhingra, CMD, Mr. R. K. Agarwal, Director - Marketing, Mr.K.K Gupta, Director- Production, Mr.Ravi Khandelwal, Director-Finance and other Senior Officers of the Company were present on the occasion.

World Telecommunication and Information Society day

World Telecommunication and Information Society day has been celebrated for the year 2012 and the Theme selected by International Telecommunication Union (ITU) was "WOMEN AND GIRLS IN ICT".

As part of the Program a combined valedictory function of World Telecommunication and Information Society day was held on 17.05.2012 at Bangalore Plant. Lt. Col. A M Uniyal (Retd), GM- B welcomed the gathering. Mr.P.Raghavan, Chief General Manager, BSNL Karnataka Telecom Circle was the Chief Guest of the program and delivered the Key note address. Mr. K L Dhingra, CMD ITI Ltd. in his presidential address emphasized the need of Technology towards Women and Girls in ICT He further stated that ITI will put all out efforts to ensure that women and girls are benefited from the technology. Mr. K K Gupta, Director- Production, Mr. Ravi Khandelwal, Director-Finance, Mr.RVenkataraman, Chief Vigilance Officer gracing the function.

ENTERTAINMENT EXPENDITURE AND FOREIGN TRAVEL:

The expenditure on entertainment was NIL. Expenditure on official travel abroad by the officials of the Company amounted to' 0.50 lakhs during the year.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO:

Particulars with respect to Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo, required to be disclosed under the Companies (Disclosure of particulars in the report of Board of Directors) Rules, 1988 are annexed.

PARTICULARS OF EMPLOYEES:

The statement of particulars of employees drawing remuneration of 60.00 lakhs and above per annum or 5.00 lakhs and above per month are required to be included in the Directors' report as per Section 217(2A) of the Companies Act, 1956, read with Companies (Particulars of employees) Amendment Rules, 2011, as amended, are NIL for 2011-2012.

AUDITORS:

Pursuant to Section 619(2) of the Companies Act, 1956, M/s. Badari, Madhusudan & Srinivasan, Chartered Accountants, Bangalore were appointed as Statutory Auditors of the Company for the year 2011-2012 by the Comptroller & Auditor General of India.

The following firms of Chartered Accountants were appointed /re-appointed as Branch Auditors for different Plants of the Company forthe year 2011-2012:-

M/s. Nagendra Gupta & Co., Naini Plant, Allahabad

M/sThrivikraman &Co., Palakkad, Palakkad Plant

M/s Samriti &Associates, Jammu, Srinagar Plant

M/s Habibullah &Co., Gorakhpur, Mankapur Plant

M/s S. C. Singh & Co., Rae Bareli, Plant

BOARD OF DIRECTORS:

The following changes took place in the Directorate of your Company since the last Report.

In accordance with the requirements of the Companies Act, 1956, Shri M. Balakrishnan, Independent Director, and Dr. S. K. Chaudhuri, Independent Director will retire by rotation at this Annual General Meeting and eligible, offer themselves for re-appointment.

Your Directors wish to place on record their appreciation of the services rendered by Shri A.K.Srivastava, Shri N.K.Srivastava, Lt. Gen. P. Mohapatra during their tenure.

CORPORATE GOVERNANCE:

A report on Corporate Governance along with a Compliance Certificate from the Auditors as prescribed under the Listing Agreement with the Stock Exchanges on which the Company's shares are listed, is annexed to this report.

DIRECTORS' RESPONSIBILITY STATEMENT:

Pursuant to the provisions under Section 217(2AA) of the Companies Act, 1956 your Directors state that:

(i) in the preparation of annual accounts, the applicable accounting standards have been followed and that there were no material departures.

(ii) the accounting policies adopted by the Company have been applied consistently, judgments and estimates that are reasonable and prudent have been made so as to give a true and fair view of the state of affairs of the Company as at 31st March 2012 and Loss of the Company for the period ended 31.3.2012.

(iii) they have taken proper and sufficient care 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;

(iv) the annual accounts have been prepared on a going concern basis.

ACKNOWLEDGEMENT:

Your Directors place on record their sincere thanks for the assistance and support extended by the Ministry of Communications & IT and various other Ministries of Central and State Governments viz., Karnataka, Uttar Pradesh, Kerala and Jammu & Kashmir and look forward for their continued support and co-operation in future.

Your Directors also wish to express their gratitude for the co-operation and assistance extended by BSNL and MTNL, Banks, Suppliers, Shareholders, Bondholders, Depositors, Agents, Customers and Foreign Collaborators, Committee on Public Undertakings (COPU), Standing Committee on Public Enterprises (SCOPE) and Standing Committee on Information Technology.

Your Board also expresses its sincere thanks to the Comptroller and Auditor General of India, Chairman and Member of the Audit Board and Statutory and Branch Auditors.

Your Directors take this opportunity to place on record their appreciation for the valuable contribution made and excellent co-operation rendered by the employees at all levels for the progress and prosperity of the Company.

For and on behalf of the BOARD OF DIRECTORS

Place : Bangalore (K. L. DHINGRA) Date:11.08.2012 CHAIRMAN AND MANAGING DIRECTOR

---

Mar 31, 2011

The Members

ITI Limited

The Directors have pleasure in presenting the 61st Annual Report of the Company together with Audited Accounts and Auditors' Report thereon for the year ended 31st March 2011.

ITI Limited has reported a net loss of Rs.358 Crs in the financial year 2010-11 which is the lowest ever loss (without considering grants) reported by the Company in the last nine financial years. The net loss have come down by 22% from a net loss of Rs.459 Crs. reported in the financial year2009-10.

PERFORMANCE:

The Company was having MoU target of Rs.8000 Crs. (sales) for the year 2010-11. Against this MoU target, the Company has achieved Sales and Production of Rs.2139 Crs. and Rs.2052 Crs. during the year 2010-11 as against Rs.4660 Crs. and Rs.4630 Crs. respectively during the previous year 2009-10. The decline in overall performance was due to paucity of orders from its major customers i.e. BSNL & MTNL.

The Company's loss has come down from Rs.459 Crs. for the previous year 2009-10 to Rs.358 Crs. for the year 2010-11. Contributionfortheyear2010-11 isRs.160Crs.as compared to Rs.309 Crs. forthe year2009-10.

The Company had entered the year2010-11 with an Order Book position ofRs.2078 Crs. and Advance Purchase Order ofRs. 349 Crs. During the year 2010-2011, the Company received fresh order of Rs. 864 Crs. only.

The Company has signed MoU ofRs. 5300 Crs. (Level-3) for the year 2011-12 with projected gross margin of Rs. 138 Crs. and Net Profit/loss at par.

HIGHLIGHTS:

The turnoverfortheyear2010-11 is mainly constituted from GSM-WZ, GSM-SZ, G-PoN, STM, DWDM, ADSL-CPE and Defence and IT solutions.

The Company is executing Turnkey Project of Registrar General of India (RGI) for creation of Multi Purpose National Identification Card under National Population Register (NPR57) project forthe country.

Company received order for execution of Restructured Accelerated Power Development Reforms Program (RAPDRP) of value Rs. 307 Crs. from Tamil Nadu Electricity Board (TNEB).

PRODUCTION

The product wise details of performance achieved by the Company during the year 2010-11 as compared to the previous year is as given below:

Rs. Crs.

Sl. No. Product/Projects 2010–11 2009 - 10

1 OCB - 283 CORE incl I/C 3.36 19.86

2 OCB - 283 CSN 0.45 7.26

4 SSTP/IPTAX 1.77 101.38

5 C-DOT PRODUCTS 4.38 6.02

6 DIVERSIFIED PRODUCTS 32.84 8.45

7 OPTIC FIBRE EQUIPMENTS 45.67 191.96

8 SATCOM 0.00 2.22

9 PCM MuX 14.34 9.46

10 DWDM 56.96 8.25

11 MLLN 2.41 27.36

12 EPBT/CLIP PHONES 8.11 1.49

13 GSM – WZ(incl. BTS, RTT & 909.09 1139.79 Shelter)

14 GSM – MTNL 19.37 109.91

15 GSM– SZ 593.08 2003.36

16 WLL – INFRA 14.96 409.46

17 IFWT - -

18 ADSL– CPE 37.47 19.78

19 Misc. Products 16.93 17.79

20 DEFENCE/ASCON 54.77 149.72

21 AMC BUSINESS 45.22 66.43

22 USIM/SIM CARDS 6.09 5.84

23 MNID 11.46 9.00

24 SMPS 14.94 16.14

25 G-PoN 119.98 240.14

26 ROs / CCO/IT 125.28 89.25

TOTAL ( including ED) 2138.93 4660.32

NEW PRODUCTS:

National Population Registration (NPR) project: ITI is one of the three Public Sector Undertakings short listed by RGI (Registrar General of India) for providing Multi Purpose National ID cards. The job involves collection of citizen's data including biometrics followed by issue of ID cards. Recently ITI had received an order to the tune of Rs.750 Crs. from RGI for the above project. It is expected that this project will give a substantial turnover in the coming 2 to 3 years with good value addition.

G-PON: ITI is currently manufacturing G-PON equipments at Raebareli Plant in technical collaboration with M/s Alphion Corporation, USA. ITI is the first Indian Company to secure TSEC Certification for this product. Orders received from BSNL have already been executed and further orders are expected. Recently, ITI has also entered into Non- Disclosure Agreement (NDA) with C-DOT to manufacture C-DOT developed G-PON equipments.

Next Generation Networks: Next Generation Network (NGN) is a Soft Switch based Telecommunication network capable of providing services, viz., Voice, Data & Video by encapsulating them into packets. Manufacturing of IP TAX equipment - Class IV, Trunk automatic exchange and Class V, local exchange, based on Soft Switch architecture is planned. BSNL and MTNL's plans to migrate theirTDM switches to NGN in orderto provide new services to customers will boost the NGN market.

Carrier Ethernet: Carrier Ethernet is the next generation transport technology for high bandwidth packet access for internet and business communication. ITI is in the process of finalising a technology partner for this product to address anticipated tender from BSNL. The defence project of Network for Spectrum is also expected to have a huge requirement for Carrier Ethernet switches.

HSDPA (High Speed Data Packet Access): With the successful auction of 3G spectrum, 3G networks are getting deployed and hence there is a huge demand for customer premises equipments like 3G HSDPA Data Cards. ITI is planning to address various opportunities coming from this product.

Non-Telecom products:

(A) Solar power equipments for rural BTS sites: Manufacturing of Solar power equipments for rural BTS sites is under consideration which will help for better penetration of mobile communication into rural areas where availability of power is a major constraint. ITI has successfully demonstrated its capability in this area and is going ahead for upgrading its facility to meet demand.

(B) LED Lighting Products: ITI Mankapur plant is planning to take up the manufacturing of LED Lighting products. Huge market potential is available for this product considering the benefits of very low power consumption and longerlife of LED Lighting systems.

TECHNOLOGYALLIANCES:

ITI has technology alliances with the leading Technology providers for the following product range:

Product Technology provider

GSM-BTS Alcatel-Lucent, France

G-PON Alphion, USA

CDMA Infrastructure equipments. ZTE, China

NGN (Class 4) Huawei, China

NGN (Class 5) ZTE, China

STM 1,4,16 Tejas, India

STM 64 Xalted, India

DWDM ZTE, China

Antenna for GSM / CDMA Mobi, China

Microwave equipments SAF Tehnika, Latvia

CLI phones Pramod Telecom, India

ADSL –CPEs SEM India

MLLN Tellabs, Finland

SSTP Tekelec, USA

Radio Modem Shyam Telecom, India

SIM cards WatchData, China

USIM Cards Bartronics

EXPORT: The exports of the Company for the year 2010-2011 was NIL.

FINANCE:

The performance of the Company for the year 2010-2011 as comparedtothe previous year is as follows:

(Rs. in Crs.)

SI Particulars 2010-2011 2009-2010 NO.

i. Sales including services 2139 4660

ii. Value of Production 2052 4630

iii. Loss before tax 358 459

iv. Loss after tax 358 459

v. Financing Expenses 80 119

vi. Depreciation 22 24

vii. Capital Employed (Net Fixed

Assts Net Current Assets) 2142* 2292*

viii. R&D Expenditure 19 24

*Including Revaluation Reserves

DIVIDEND:

As your Company has incurred a loss, the Directors are not in a position to recommend any dividend for the year 2010-2011.

HIGHLIGHTSOFTHEPRODUCTIONPLANTS

BANGALOREPLANT:

Bangalore Plant achieved a turnover of Rs88.03 Crs. (with ED). supply consisting of WLL-CDMA Infra worth Rs.14.96 Crs., Defense equipment of Rs. 9.01 Crs,ADSL-CPEs worth Rs.24.96 Crs., PCM MUX, etc. Worth Rs.14.34 Crs., Switching equipment, OCB-CSN / C-DoT / Microwave items, AMC & repair etc. Worth Rs.18.12 Crs. and Data Centre's turnover worth Rs.6.64 Crs.

MANKAPURPLANT:

Mankapur Plant has achieved a turnover of Rs.132.40 Crs. (with ED) during the year. The Plant supplied 1236 Nos. GSM (BTS) and 983 Nos. Expansion Kits worth Rs.113.33 Crs. equipments, C-DoT products worth Rs.4.38 Crs.,ADSL- CPE worth Rs.12.51 Crs. and Banking product worth Rs.2.18 Crs.

The Plant has bagged 16th National SafetyAward and 3rd National Energy ConservationAward. This is the first Plant to obtain ISO 9001: 2008 Certificate.

The Plant has bagged National Safety Award for lower average frequency rate of accident Scheme-1 (Winner) & longest accident free period Scheme-2 (Runner) from Ministry of Labour & Employment for "Performance year 2008" conferred on 27th September, 2010.

RAEBARELIPLANT:

Rae Bareli Plant has achieved a turnover of Rs.235.06 Crs. (with ED) during the year. The Plant supplied 1135 Nos. GSM (BTS) 500 TRU Expansion and20nos. Shelter worth Rs.78.64 Crs. equipments and SMPS worth Rs.14.94 Crs. Further, the Plant achieved Rs.119.98 Crs. from the supply of G-PoN equipments and Rs.21.50 Crs. from the sale of BSNL SIM Cards.

The Plant has bagged National Safety Award for lower average frequency rate of accident Scheme-1 (Runner) & longest accident free period Scheme-2 (Winner) from Ministry of Labour & Employment for "Performance year 2008" conferred on 27th September 2010.

NAINIPLANT:

Naini Plant has achieved a turnover of Rs.108.81 Crs. (with ED) during the year. The Supplies consists of STM products worth Rs.45.67 Crs, DWDM equipment worth Rs.56.95 Crs, and CLI Phones and miscellaneous products worth Rs.6.19 Crs.

PALAKKADPLANT:

Palakkad Plant has achieved a turnover of Rs. 27.27 Crs. (with ED) during the year. The Plant supplied MLLN equipment worth Rs. 2.41 Crs, OCB-283 CORE worth Rs.3.36 Crs., SIM/USIM Cards worth Rs. 6.09 Crs., MNID Project worth Rs.11.46 Crs. and Misc/ Contract Manufacturing worth Rs. 3.95 Crs.

ITI was selected as one of the PSU consortium member along with M/s BEL and M/s ECIL by RGI for the NPR Project. This Plant is executing the Project which includes Data Collection, Biometrics, Manufacturing and Personalization of Smart Cards under NPR57 project for Rs.17 Crores of coastal states population.

Palakkad Plant achieved an award from National Safety Council, Kerala Chapter and Runner up award for Outstanding Safety Performance in industrial safety by achieving the lowest frequency rate of accidents.

The Plant is also awarded from Dept. of Factories & Boilers, Govt. of Kerala, Second Prize for Outstanding Safety Performance in Industrial Safety among the category of very Large Factories (Engineering).

Awarded for achieving highest growth in Central Excise RevenueinCalicut Circle during the year 2010-11.

SRINAGARPLANT:

Srinagar Plant has achieved a turnover of Rs. 2.18 Crs. (with ED) during the year mainly on supply of CLI Phones and services.

NETWORKSYSTEMSUNIT:

Network Systems Unit has achieved a turnover of Rs.90.32 Crs. (with ED) mainly comprising of Annual Maintenance Contract for OCB exchanges worth Rs.41.91 Crs. for BSNL& MTNL and AMC for ASCON worth Rs.42.77 Crs. The Unit has undertaken ASCON expansion work worth Rs.2.33 Crs. and other external plant works of Rs.3.31 Crs.

REGIONALOFFICES&CCO:

Regional Offices and Customer Care Organization achieved a turnover of Rs.125.27 Crs. consisting of Rs.70.47 Crs of ITI and other traded products, Rs. 22.33 Crs. of Services and Rs.6.23 Crs. towards CCO and Rs.26.24 Crs. towards IT Projects. ROs have implemented SWAN (State WideArea Network) successfully on BOOT Basis.

GSM Projects:

The Company rolled out Cellular mobile GSM Network against 9 ML Order (Turn-key) in BSNL WZ worth Rs.717.12 Crs. And Rs.19.37 Crs against Orders from MTNL, Mumbai.

Similarly, GSM Network for BSNL(SZ) was rolled out worth ofRs.593.08 Crs. during the year

FUTUREOUTLOOK:

1. Wireless Broadband Equipment for rural: In line with the Government's mission to provide Broadband connectivity to the rural masses under "Bharat Nirman", ITI is planning to enter this area by taking up manufacturing, installation and commissioning of the equipments

2. Network for Spectrum (NFS): This project is allocated to BSNL by Ministry of Communications for setting up of acommunication backbone network in lieu of release of spectrum by Defence. ITI is anticipating substantial order from BSNL for laying of Optical fiber cables for this project as well as supply and installation of transport equipment.

3. IT Projects: All the State Governments are aggressively pursuing e-Governance projects for taking the benefit of IT to the Village Panchayats and they have made a substantial budget provision for the same. ITI is aggressively pursuing this Market segment. ITI through its Regional offices is already implementing e- Tendering in various Govt. Organization.

4. Data Center: ITI has already set up Tier 3 state-of-the- art world class Data center at Bangalore on Private- Public Partnership model. ITI is also exploring setting up of own Data center to encash huge market potential in the area of secured data storage.

5. Solar panel: ITI has plans to diversify into manufacture of Green energy products like Solar power systems. ITI is contemplating to be a significant contributor to the Government's ambitious Solar Mission (Jawaharlal Nehru National Solar mission) with an objective of making India as global leader in the manufacture of Solar power equipments.

6. Biogas project: ITI Bangalore plant is planning to take up manufacture of equipments for this project. The project is a low cost solution to source energy in the form of cooking gas or electricity from kitchen waste or bio waste.

7. Contract Manufacturing Activities: ITI has given renewed thrust to take up Contract Manufacturing Activities and is approaching premier Public Sector Undertakings in this regard. ITI Palakkad plant has already tied up with VSSC, Trivandrum to manufacture PCBs to their requirement. ITI Bangalore Plant is doing work for BHEL& HALon contract manufacturing model to enhance capacity utilization.

CONTRIBUTIONTOEXCHEQUER:

During the year, your Company has contributed Rs.136.67 Crs to the exchequer towards duties and taxes.

PUBLICDEPOSITS:

Value of deposits held by the Company was NIL. Deposits aggregating to Rs. 0.24 Cr. had matured for payment, but were not claimed on due dates.

REVIEW OF ACCOUNTS BY INDIAN AUDIT AND ACCOUNTSDEPARTMENT:

The Accounts for the year 2010-11 under review by the Indian Audit and Accounts Department is appended.

JOINTVENTURES:

1. INDIASATCOMLIMITED

India Satcom Limited (ISL)is a Joint Venture Company incorporated on 5th October, 1987 by ITI, Unit Trust of India (UTI) and Equatorial Pacific International Company (EPIC). Both EPIC and UTI had sold their respective stakes in ISL to M/s Chris Tech Systems Pvt. Ltd. (CTSPL) and ITI had also took steps to sell its entire 49% equity stake in ISL to CTSPL. The Government of India, Ministry of Communications & IT vide its letter dated 28.01.2011 has not approved the above said sale of 49% ITI's equity stake in ISL to CTSPL, therefore the transfer of ITI shares could not be effected. Now, the shareholders in the Joint Venture are ITI (49%) and CTSPL(51%).

2. ITI COMMUNICATIONS PTE. LIMITED, SINGAPORE:

In the year December 1992, a Joint Venture was formed by ITI with M/s Valvas and M/s ISL in the name of M/s ITI Communications Pte Ltd. Singapore. As ITIC was running into losses, Board of Directors in its 314th Meeting held during 1999 decided to close this venture through winding upprocess.

We have received a communication from the Official Receiver, Singapore that the name of ITI Communications, Singapore has been struck off.

QUALITY:

ITI has a well-established Quality Assurance [QA] wing in every Production Unit. Each Unit QA is responsible for Quality of Products and services rolling out of the Unit. The Units are well equipped with a variety of Environmental test facilities. Test systems and instruments for carrying out elaborate tests for conducting Reliability Evaluation on all products to ensure customer satisfaction. The Quality Policy of ITI is to "provide Competitive and Reliable Products, Solutions and Services." ITI is achieving this through sound Quality Management Systems.

Corporate Quality provides guidance and support to all Units for Training. Implementation, Surveillance and Recertification of ISO 9001:2008, Quality Management System(QMS) and ISO 14001:2004 Environmental Management System (EMS). Quality related MOU targets and Quality related issues like AIS, SPC, Six Sigma, 5S, TQM Quality Cost etc.

All the Six manufacturing Plants of the Company stand accredited and upgraded to International ISO 9001:2008 Standards of Quality Management as on date.

Keeping in tune with the Global concern for Environmental Management, the Company has gone in for ISO 14001:2004 EMS Certification for all of the Plants.

ITI has bagged prestigious Global Quality Award, "International Quality Summit Award" in Gold Category in a World Congress organized by Business Initiative Directives (BID) Madrid, Spain in Telecom field worldwide. This is for the first time in the history of ITI that our quality is recognized best in Telecom field.

ITI Palakkad Plant is granted AIS (Approved Inspection Scheme) status by BSNL QA for SIM Cards. Localisation activities continued during the year to procure items such as cables, connectors and PCBs for GSM-BTS Project with Alcatel approval and after approval from VDC & VRC of R&D, Bangalore. CAG,VDC,VRC, Standards, Component Testing and Reliability Labs provide Qualification Approval, Standardization of Electronic components, Vendor Development and Vendor Rating after stringent evaluation in Testing in Reliability and Environmental laboratory.

MANPOWER

Employee Strength at the end of the year 31st March 2011 was 10616 when compared to previous year's strength 11737.

As on 31.03.2011, there were 1842 employees belonging to Scheduled Castes and 96 belonging to Scheduled Tribes employees, thus constituting 17.35 % and 0.90 % respectively of the total strength of employees on the rolls of the Company. 2 Technicians belonging to SC were recruited on contract basis during the year 2010-2011.

Employees belonging to Ex-servicemen category numbering 56 and Physically Challenged Persons numbering 138 were on the rolls of the Company as at the end of the financial year.

Promotions exercise for Senior Management officers was carried out during the year 2010-2011 and the eligible officers were considered for promotion to the next higher level.

HUMANRESOURCEDEVELOPMENT:

During 2010-11, the company, continuing its robust approach to achieve turnaround, besides focus on Technology and Business, greater focus was on the Skill upgradation in the areas of Telecom, Information Technology and Organization Development at all levels in the organization. HR-ED Centres at Corporate and Plant levels were committed to build and mobilize internal expertise for designing / developing technological and management development programmes and in this direction the Centres have notably succeeded by achieving an 'outstanding rating' against the Company MOU target on criteria - Skill upgradation.

Primarily, to keep in pace with and indigenize the advancements in Telecom and Information technologies in- house training programmes were conducted on various topics of core technologies viz., 3-G & 4-G, GPON, GEPON, WIMAX, NGN, MPLS / VPN. Intensive in-depth training programme on Computer Networking was conducted both for Northern and Southern Plants. Conducting of e-Procurement training programmes to facilitate implementation of company-wide e-tendering is a milestone in the company. Also number of training programmes to enhance the operation skills on Computers were conducted for the benefit of all employees.

729 employees have been imparted training in the areas of Telecom Technology and similarly 730 employees have been trained in Information Technology areas achieving 948.5 and 1695 training mandays respectively.

Management Development programmes were conducted in areas of HR, Finance, Materials Management, Quality, and Vigilance Management to mention a few. 1283 employees have been trained achieving nearly 1495.5 training mandays through these MDPs. General Awareness programmes on topics like health care, safety, resource / energy management etc., benefited 587 participants. Company has nominated nearly 37 executives for external training with renowned institutions.

In a nutshell, during the year, the company has trained over 3366 employees and achieved 4575 training mandays in 131 training programmes.

Corporate HR (ED) has set a milestone employing Real Time Video Conferencing methodology in conducting high end technology programmes like NGN, Transmission Technology etc., covering all the Plants targeting more than 150-200 participants in a stretch. It needs no mention that Company has gained considerable opportunity costs through employing high-tech methodology, developing and engaging internal resource persons and minimizing sponsoring nominations for external training programmes.

INDUSTRIALRELATIONS

The Industrial Relations scenario in the Company was cordial during the year. Employees' Union and Officers' Association extended their co-operation and support in ensuring smooth work flow and helped to meet the Company's objective.

OFFICIALLANGUAGE:

All Units / Offices have established Check-points in their concerned offices to make more efforts for effective Implementation of the Official Language Policy, monitored by the Official Language Implementation Committees constituted in every Unit / Office.

The Progress of Implementation of Official Language in our Corporate Office as well as in our all subordinate Units / Offices is also being periodically reviewed by the OLIC Committee of Corporate office.

In order to enhance the working knowledge of Official Language amongst our employees, officials have been sent to Training Programme organized by the government for imparting training in Hindi, Hindi typing and Hindi Stenography asper our requirement. However, the Official Language Cell of the different Units / Offices have also conducted internal training programmes. Besides, employees were encouraged to take part in Hindi Prabodh, Praveen & Pragya examinations and have been sanctioned financial incentives. Since eighty percent (80%) of the staff working in our Units / Offices like Naini, Rae Bareli, Mankapur, New Delhi, Mumbai, Lucknow & Corporate Office have acquired a working knowledge of Hindi, such Units / Offices have been notified in the GazetteofIndiaasperOLRules10(2)&(4),1976.

Official Language Cell was given an appreciation letter by the Director-OL. Official Language Department DoT, New Delhi.

For Bangalore based Units / Offices, a short-term 5 days "Intensive Hindi Workshop" Programme were organized in Corporate Office, HR(ED) Conference Hall w.e.f. 31.01.2011 to 04.02.2011 with the help of Home Ministry, Official Language Deptt., Hindi Teaching Scheme, Bangalore and more than 40 Officers / Non-Officers participated & they were trained during this training programme.

A Joint Hindi Fortnight Programme for Bangalore based PSUs / Organisations between 04.10.2010 & 29.10.2010 was organized by TOLIC, Bangalore and various types of competitions were arranged during this occasion. On this occasion many officers/Non-officers of ITI Limited, Bangalore based Units / Offices participated in these competitions and more than 14 Officers / Non-Officers have got the prizes. On the TOLIC Meeting & valedictory function held on 07.12.2010, the President, TOLIC were given the cash prizes and certificate to the wining participants.

"Hindi Fortnight" was celebrated and Hindi Workshops were organised for encouraging progressive use of Hindi during 2010-11. Company's website has been made bilingual (i.e. English and Hindi).

VIGILANCE:

During the year, Vigilance Department functioned as an effective part of Management. The main focus of the vigilance activities was to sensitize the employees towards transparent, ethical and professional approach towards their duties and responsibilities. Greater emphasis was laid on preventive vigilance. CVC guidelines and Government policies in this regard have been followed.

To achieve the above objectives, the following steps were taken to increase transparency in dealing with vendors / suppliers as under:

a Tenders and Notice Inviting Tenders are invariably put on website along with Government of India website.

b The procedures for vendor registration are also put on company website.

The company observes Vigilance awareness week from 25th October to 1st November at all units of ITI Limited including its administrative offices as well as corporate Office.

The Vigilance department gives more importance to preventive vigilance, scrutinizes the documents and conducted surprise checks in sensitive departments. These actions had good impact for creating a corruption free environment.

RIGHTTOINFORMATION:

The Right to Information Act, 2005 has enabled all the citizens to seek information from a Public Authority. Since introduction of the Act, a mechanism has been drawn to process all requests received by Corporate Office/ Units under the Act. The Units and Regional offices have designated PIOs/APIOs with CPIO, Appellate authority and Transparency Officer at the Corporate Office.

The main objective has been to ensure total transparency. The requests are processed and information is being provided to the Appellants within the stipulated time frame and within the provisions of the RTI Act. The details are also put on the web site www.itiltd-india.com.

During the year 2010-11, 321 requests were processed against which 262 were accepted and 27 were rejected while the remaining 30 are under process with 2 requests being transferred to other Public Authorities. The Annual Return are submitted to the Ministry every year for forwarding to the Central information Commission.

AWARDS:

Rae Bareli and Mankapur units of the Company have won National Safety Award for performance year 2008.

Mankapur unit also got Prime Minister's Shram Award which was presented by Minister of Labour and Employment on September 15, 2010 to Smt. Mamta Upadhyay.

Palakkad Unit won Safety Award for its outstanding safety performance in industrial safety in the category of very large factories.

ITI Limited has bagged the "Top Telecom Turnkey Company of the year 2011" award from voice and Data, an influential Indian Communications magazine from CyberMedia. Shri K.L. Dhingra, Chairman and Managing Director, ITI Limited received the award from Shri R. Chandrashekhar, IAS, Secretary, Ministry of Communications & IT and Chairman, Telecom Commission at a function in New Delhi on July 27, 2011.

SALESPROMOTION:

1. ITI participated in the prestigious Exhibition and Conference, India Telecom 2010 held in New Delhi from December 9-11, 2010. Department of Telecommunications (DoT). The theme of event was 'Broadband for All'.

2. ITI participated in the 19th Convergence India 2011 International Exhibition and Conference organized by Exhibitions India Group from March 24-26, 2011 at Pragati Maidan, New Delhi by putting up a display over an area of 56 sqm. The theme of the event was 'NextGen Applications & Services: Empowering a Billion Lives'

EVENTS:

1. ITI signed Memorandum of Understanding (MoU) with the Telecom Commission for the year 2011-12 on March 16, 2011.

2. ISO Certification for ITI Rae Bareli has been upgraded to New Version ISO 9001; 2008 by certification body NVTQC Bangalore.

3. ITI Ltd. has felicitated Asiad Gold Medalist Ms Sudha Singh, who is daughter of an employee of Rae Bareli Unit, at a function held in Rae Bareli by presenting a cash award of Rs. 5,00,000.00.

4. ITI and Centre for Development of Telemetics (C-DoT) – the premier telecom technology center of India, the two wings of Department of Telecommunications signed an agreement on December 11, 2010 to evaluate, discuss and negotiate contractual relationship concerning the Transfer of Technology for C-DoT.

5. Shri Chewing Phunsog (IAS), Chairman, PESB and Shri V.S. Jain, Member, PESB and former Chairman of steel Authority of India (SAIL) visited ITI's Bangalore Plant and Corporate OfficeonFebruary5,2011.

6. Shri S. Ramaratnam, Dy. Director, VSSC inaugurated the "Space Electronics Fabrication Centre" at ITI Palakkad.

7. Shri Beni Prasad Verma, Hon'ble Minister of State for Steel (Independent Charge) has visited ITI Limited, Mankapur from March4-5, 2011.

ENTERTAINMENT EXPENDITURE AND FOREIGN TRAVEL:

The expenditure on entertainment was NIL. Expenditure on official travel abroad by the officials of the Company amounted to NIL during the year.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS ANDOUTGO:

Particulars with respect to Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo, required to be disclosed under the Companies (Disclosure of particulars in the report of Board of Directors) Rules,1988 are annexed.

PARTICULARSOFEMPLOYEES:

The statement of particulars of employees drawing remuneration of Rs. 60.00 lakhs and above per annum or Rs. 5.00 lakhs and above per month are required to be included in the Directors' report as per Section 217(2A) of the Companies Act, 1956, read with Companies (Particulars of employees) Amendment Rules, 2011, are NIL for 2010-2011.

AUDITORS:

Pursuant to Section 619(2) of the Companies Act, 1956, M/s. Karra & Company, Chartered Accountants, Chennai were appointed as Statutory Auditors of the Company for the year 2010-2011 by the Comptroller & Auditor General of India.

The following firms of Chartered Accountants were appointed /re-appointed as Branch Auditors for different Plants of the Company for the year 2010-2011:- M/s.S.R.Gupta&Co.,Naini Plant, Allahabad M/s Varier&Associates, Palakkad Plant M/s RashidAssociates, Srinagar Plant M/s Habibullah&Co., Gorakhpur, Mankapur Plant M/sS.C.Singh&Co., Rae Bareli Plant

BOARDOFDIRECTORS:

The following changes took place in the Directorate of your Company since the last Report.

On attaining the age of superannuation, Shri B.P.Gupta, Director –Finance was relieved of his duties from the post on 31.01.2011. Shri Ravi Khandelwal has assumed the charge of Director- Finance w.e.f 05.03.2011.

Consequent on attaining age of superannuation, Shri K.K. Khurana, Director -HR is relieved of his duties from the post on 31.03.2011. Shri Ravi Khandelwal, Director –Finance vide DoT's letter dated 25.05.2011 entrusted with additional charge of the post of Director- HR.

On completion of tenure, Shri A.S. Bansal, Shri A.K. Jain, Shri V.H. Ron and Shri Keshav Saran, Independent Directors were relieved from the duties from July, 2011.

Consequent on attaining age of superannuation, ShriA.K. Srivastava, Government Director ceased to be Director of the Company w.e.f. 31.07.2011. Shri N.K. Srivastava, Sr. DDG (TEC) vide letter No. A-12023/5/89-OC/PSA dated 01.08.2011 has been appointed as Government Nominee Directorin place of ShriA.K. Srivastava.

In accordance with the requirements of the Companies Act, 1956, Shri T.S. Narayanasami, Independent Director, Dr. S. K. Chaudhuri, Independent Director and Shri R.K. Agarwal, Director -Marketing will retire by rotation at this Annual General Meeting and eligible, offer themselves for re-appointment.

Your Directors wish to place on record the appreciation of the services rendered by Shri B.P. Gupta, Shri K.K. Khurana, Shri A.S. Bansal, Shri A.K. Jain, Shri V.H. Ron , Shri Keshav Saran and Shri A.K. Srivastava during their tenure.

CORPORATEGOVERNANCE:

A report on Corporate Governance along with a Compliance Certificate from the Auditors as prescribed under the Listing Agreement with the Stock Exchanges on which the Company's shares are listed, is annexed to this report.

DIRECTORS'RESPONSIBILITYSTATEMENT:

Pursuant to the provisions under Section 217(2AA) of the CompaniesAct, 1956 your Directors state that:

(i) in the preparation of annual accounts, the applicable accounting standards have been followed and that there were no material departures.

(ii) the accounting policies adoptedby the Company have been applied consistently, judgments and estimates that are reasonable and prudent have been madeso as to give a true and fair view of the state of affairs of the Company as at 31st March 2011 and Loss of the Company for the period ended 31.3.2011.

(iii) they have taken proper and sufficient care 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.

(iv) the annual accounts have been prepared on a going concern basis.

ACKNOWLEDGEMENT:

Your Directors place on record their sincere thanks for the assistance and support extended by the Ministry of Communications & IT and various other Ministries of Central and State Governments viz., Karnataka, Uttar Pradesh, Kerala and Jammu & Kashmir and look forward for their continued support and co-operation in future.

Your Directors also wish to express their gratitude for the co-operation and assistance extended by BSNL and MTNL, Banks, Suppliers, Shareholders, Bondholders, Depositors, Agents, Customers and Foreign Collaborators, Committee on Public Undertakings (COPU), Standing Committee on Public Enterprises (SCOPE) and Standing Committee on Information Technology.

Your Board also expresses its sincere thanks to the Comptroller and Auditor General of India, Chairman and Member of the Audit Board and Statutory and Branch Auditors.

Your Directors take this opportunity to place on record their appreciation for the valuable contribution made and excellent co-operation rendered by the employees at all levels for the progress and prosperity of the Company.

For and on behalf of the Board of Directors

Sd/-

(K. L. Dhingra)

Chairman and Managing Director

Place : Bangalore

Date : 12.08.2011

---

Mar 31, 2010

The Directors have pleasure in presenting the 60th Annual Report of the Company together with Audited Accounts and Auditors Report thereon for the year ended 31st March 2010.

The Company has recorded the highest turnover in its history of Rs. 4660 Crs. for the year ended March 31, 2010. The turnover achieved this year is more than double its previous high of Rs. 2317 Crs. recorded in year 2001-2002.

PERFORMANCE:

The Company achieved Sales and Production of Rs. 4660 Crs. and Rs.4630 Crs. during the year 2009- 10 as against Rs. 1741 Crs. and Rs. 1762 Crs. respectively during the previous year 2008-09. This is the highest performance ever achieved by the Company since its inception. The sales and production have gone up by 167.66% and 162.77% respectively compared to previous year.

The Companys loss has come down from Rs. 668 Crs. of the previous year 2008-09 to Rs. 459 Crs. for the year 2009-10. Contribution for the year 2009-10 is Rs 309 Crs. as compared to Rs. 170 Crs. for the year 2008-09.

The Company had entered the year 2009-10 with an order book position of Rs. 5950 Crs. and advance purchase order of Rs. 450 Crs. During the year 2009- 2010 the Company received fresh order of Rs. 889 Crs.

HIGHLIGHTS:

- The major projects and products that constituted the turnover of 2009-10 are: GSM West Zone, GSM South Zone, WLL-CDMA, SSTP equipment, GPON, SDH and Defence Products. Leaseline and Broadband equipment

- For the first time in country the Company in collaboration with M/s Alphion Corporation, USA, deployed the G-PoN Technology in BSNL Network.

- The Company has setup State-of-the-art Tier-3+

Data Centre facility at Bangalore.

- The Company is executing Turnkey Project of Registrar General of India (RGI) for creation of Multi Purpose National Identification Card under National Population Register.

- During the year, ITI received a financial assistance from the Government of Rs. 2820 Crs. which helped the Company in partial cleaning of Companys Balance Sheet, as a result of which the Companys financial cost has come down from Rs. 292 Crs. during 2008-09 to Rs. 119 Crs. for the year 2009-10.

- The Productwise details of performance achieved by the Company during the year 2009-10 as compared to the previous year is as given below:

Rs. Crs.

Sl. Product/Projects 2009-10 2008-09

NO.

1. OCB-283 CORE incll/C 19.86 4.76

2.QCB-283CSN 7.26 8.30

3. OCB -TAX /TANDEM - -

4. SSTP/IPTAX 101.38 57.05

5. C-DOT PRODUCTS 6.02 18.87

6. DIVERSIFIED PRODUCTS 8.45 6.34

7 OPTIC FIBRE EQUIPMENT 191.95 78.70

8. SATCOM 2.22 7.48

9. PCM MuX 9.46 16.11

10. DWDM 8.25 128.87

11. MLLN 27.36 66.50

12. EPBT/CLIP PHONES 1.49 0.06

13. GSM WZ(incl. BTS, RTT & 1139.79 590.33

(Shelter ;

14. GSM MTNL 109.91 11.39

15. GSM SZ 2003.36 342.31

16.IWLL-INFRA 409.46 66.94

17. IFWT - 12.44

18. ADSL CPE 19.78 45.86

19. Misc. Products 17.79 17.87

20. DEFENCE/ASCON 149.72 20.72

21. NSU 66.43 90.36

22. SIM CARDS 5.84 21.25

23.JMNID 9.00 -

24. Is MPS 16.14 25.08

25. G-PoN - 240.14

26. Ros/CCO/IT 89.25 103.73

TOTAL (including ED) 4660.32 1741.32

NEW PRODUCTS:

- National Population Registration (NPR) Project: ITI is one of the three Public Sector Undertakings short listed by RGI (Registrar General of India) for providing Multi Purpose National ID cards. The scope of work involves collection of citizen data including biometrics followed by preparation of ID cards. It is expected that this project will give a substantial turnover in the coming 2 to 3 years with good value addition.

4 G-PON: ITI is currently manufacturing G-PON Equipments at Raebareli Plant in technical collaboration with M/s Alphion Corporation, USA. ITI is the first Indian Company to secure TSEC Certification for this product. Most of the Orders received from BSNL have already been executed and further orders are expected.

- Next Generation Networks : Next Generation Network (NGN) is a Soft Switch based Telecommunication network capable of providing services viz., Voice, Data & Video by encapsulating these into packets. Manufacture of IP TAX equipment, (Class IV) which is trunk automatic exchange and local exchange (Class V) based on Soft Switch architecture are planned.

- Wi-MAX / Wi-M AX CPEs : Wi-MAX stands for World wide Interoperability for Microwave Access. This is a new wireless technology for high speed Broadband access. ITI proposes to induct manufacture of Wi-MAX BTS and Wi-MAX CPEs (Customer Premises Equipment). Concurrently, ITIs R&D has initiated action for the development of

Wi-MAX CPEs.

- 10 Gbps DWDM equipments : ITI has set up facilities for manufacture of 10 Gbps DWDM Equipment at Naini Plant. ITI has also secured TSEC Certification for this product.

4 Non-Telecom products : Solar power equipments for rural BTS sites; ITI has plans to manufacture Solar power equipments for rural BTS sites, which will help for better penetration of mobile communication into rural areas where availability of power is a major constraint.

- Restructured Accelerated Power Development & Reforms Programme (RAPDRP): ITI is persuing to enter into this segment and has bagged big order of Rs. 307 Crs. from Tamilnadu State. R&D is also developing some of the products for this sector.

TECHNOLOGY ALLIANCES:

ITI has technology alliances with the leading Technology providers for the following product range:



Product Technology provider

GSM-BTS Alcatel-Lucent, France

G-PON Alphion, USA

CDMA Infrastructure ZTE, China equipments.

NGN (Class 4) Huawei, China

NGN (Class 5) ZTE, China

STM 1,4,16 Tejas, India

STM64 Xalted, India

DWDM ZTE, China

Microwave equipments SAF Tehnika, Latvia

CLI phones Pramod Telecom, India

ADSL -CPEs SEM India

MLLN Tellabs, Finland

SSTP Tekelec, USA

Radio Modem PointRed, India

SIM cards WatchData, China

USIM Cards Bartronics, India



EXPORT:

The exports of the Company for the year 2009-2010 was NIL.

FINANCE:

The performance of the Company for the year 2009- 2010 as compared to the previous year is as follows:

(Rs. in Crs.)

Sl. Particulars 2009-2010 2008-2009

i. Sales including services 4660 1741

ii. Value of Production 4630 1762

iii. Loss before tax 459 668

iv. Loss after tax 459 668

v. Financing Expenses 119 292

vi. Depreciation 24 27

vii. Capital Employed (Net Fixed 2292* 2138*

Assts + Net Current Assets)

viii.R&D Expenditure 24 28

-Including Revaluation Reserves DIVIDEND:

As your Company has incurred a loss, the Directors are not in a position to recommend any dividend for the year 2009-2010.

HIGHLIGHTS OF THE PRODUCTION PLANTS

BANGALORE PLANT:

Bangalore Plant achieved a turnover of Rs.571.41 Crs. (with ED). Supply Consisting of WLL-CDMA Infra worth Rs. 409.46 Crs., Defence equipment of Rs. 126.01 Cr, ADSL-CPEs worth Rs. 19.78 Crs., PCM MUX etc worth Rs.9.46 Crs., Switching equipment-OCB CSN exchange / C-DoT items etc worth Rs. 7.79 Crs. and SATCOM equipment worth Rs. 2.22 Crs.

State of-the-art Tier-3+ Data Centre facility was set up at Bangalore. The Unit achieved saving of Rs. 1 Crs. by Shifting of Water Meter and Regularization of Power.

MANKAPUR PLANT:

Mankapur Plant achieved a turnover of Rs. 216.29 Crs.(with ED). The Plant supplied 2640 Nos. of GSM (BTS) and 20 Nos. Expansion Kit worth Rs. 206.63 Crs. and C-DoT products worth Rs. 5.49 Crs.

The plant has bagged 16th National Safety Award and 3rd National Energy Conservation Award. It is the First Plant to obtain ISO 9001:2008 Certificate.

RAE BARELI PLANT:

Rae Bareli Plant achieved a turnover of Rs.464.00 Crs. (with ED). The Plant supplied 4252 Nos. of GSM (BTS) and 1100 TRU Expansion worth Rs. 179.19 Crs., and SMPS worth Rs. 27.86 Crs. Further, the Plant achieved Rs. 240.14 Crs. from the supply of G PoN equipments, which were supplied for the First Time in the Country and Rs 16.30 Crs. from the sale of BSNL SIM Cards.

NAINI PLANT:

Naini Plant achieved a turnover of Rs.200.51 Crs. (with ED). Supply consisting of STM-16 worth Rs. 121.76 Crs.STM-1 worth Rs. 67.72 Crs., DWDM equipment worth Rs. 8.25 Crs., DDF worth Rs. 1.58 Crs. and STM 64 worth Rs.0.89 Crs.

This Plant has received ISO 14001: Environmental Management System Certification.

PALAKKAD PLANT:

Palakkad Plant achieved a turnover of Rs. 166.90 Crs. (with ED). The Plant supplied SSTP worth Rs. 101.38 Crs. LLN equipment worth Rs. 27.36 Crs. OCB-283 CORE worth Rs. 19.86 Crs. and SIM/USIM Cards worth Rs.5.84 Crs.

ITI was selected as one of the consortium member along with M/s BEL and M/s ECIL by RGI for the NPR Project. This Plant is executing the Project which includes Data Collection, Biometrics, Manufacturing and Personalization of Smart Cards. Turnover against this project in 2009-10 was Rs. 9.0 Crs.

SRINAGAR PLANT:

Srinagar Plant achieved a turnover of Rs.1.49 Crs.(with ED).

NETWORK SYSTEMS UNIT:

Network systems achieved a turnover of Rs. 90.14 Crs.(with ED) mainly comprising of annual maintenance contract for OCB exchanges worth of Rs. 50.22 Cr for BSNL & MTNL and AMC for ASCON worth RSY18.71

Crs. The Unit has undertaken ASCON Expansion work worth Rs. 5 Crs. and other external plants work of Rs 16.21 Crs.

This Unit has obtained ISO 9001: 2008 Certificate for Supply, Installation, Commissioning and Maintenance of Switching, Transmission, Civil Engineering, Cable Laying and Business Development activities.

REGIONAL OFFICES & CUSTOMER CARE ORGANISATION:

Regional Offices and Customer Care Organization achieved a turnover of Rs. 89.25 Crs. consisting of Rs.2.94 Crs. of ITI products, Rs.44.98 Crs. of other products, Rs.24.72 Crs. for Services and Rs. 4.84 Crs. towards CCO and Rs 11.77 Crs. towards IT Projects.

Regional Office, Bangalore bagged ONCO Net Project of NIC value Rs.6 Crs. It is to set up network for teleconsultation centers with facility for oncology treatment in the Country.

ITI bagged order for Security Survielliance from Defence & Para Military Forces.

GSM Projects:

The Company rolled out GSM Network against 9 ML Order in BSNL WZ worth Rs 741.76 Crs. and Rs 109.91 Crs. against 1 MLOrderfor MTNL, Mumbai.

GSM Network for BSNL, SZ was rolled out for a turn over Rs 2003.36 Crs.

FUTURE OUTLOOK:

1. Formation of Joint Venture Companies (JVCs) :

The Government of India has approved formation of three JVCs for manufacturing the following product- mix with equity participation of 51% to 74% by the Strategic Partners who are Global manufacturers and balance equity by the Government.

(Rs. in Crs.)

Sl. Location of NO. Product JVC

1. WiMAX and Associated Customer Rae Premises Equipment (CPE) Bareli

2. GEPON / GPON and Optical Naini Transmission Equipments

3. IP CORE Systems Bangalore

The product lines are chosen in tune with the requirement of Governments "Mission Broadband to AN" with an ambitious goal of providing 100 million broadband connections in the next 3 to 5 years. The formation of JVCs is under process.

2. Data Center : ITI has already set up Tier 3+ state- of-the-art Data center at Bangalore on Private- Public Partnership model. Company is exploring setting up of Data center in other units of ITI to encash huge market potential in the area of secured data storing.

3. Network for Spectrum (NFS):. This project is allocated to BSNL by Ministry of Communications for release of spectrum by Defence. Estimated value of project is Rs 10000 crore. ITI is also trying to get orders for this project.

4. IT Projects: All the State Governments are aggressively pursuing e-Govemance and taking the benefit of IT to the lowest level upto Village Panchayat and they have made substantial budget provision for the same. ITI is aggressively addressing this Market segment.

5. Non-Renewable Energy Products: ITI has plans to diversify into manufacture of Green energy products like Solar power systems. ITI is contemplating to be a significant contributor to the Governments ambitious Solar Mission (Jawaharlal Nehru National Solar mission) with a objective of making India as global leader in the manufacture of Solar power equipments. ITI also has plans to manufacture Solar power equipments and fuel cell power systems for rural BTS sites, which will help for better penetration of mobile communication into rural areas where availability of power is a major constraint.

CONTRIBUTION TO EXCHEQUER:

During the year, your Company has contributed Rs. 370.81 Crs. to the exchequer towards duties and taxes.

PUBLIC DEPOSITS:

Value of deposits held by the Company was NIL. Deposits aggregating to Rs. 0.24 Crs. had matured for payment, but were not claimed on due dates.

REVIEW OF ACCOUNTS BY INDIAN AUDIT AND ACCOUNTS DEPARTMENT:

The Accounts for the year 2009-10 under review by the Indian Audit and Accounts Department is appended.

JOINT VENTURES:

1. INDIASATCOM LIMITED

ITI Limited had sold its entire (49%) equity stake in India Satcom Limited for a sales consideration of Rs. 3 Crs. in favour of M/s Chris Tech Systems Pvt Ltd. and sale proceeds are kept in Escrow Account awaiting Government Approval.

2. ITI COMMUNICATIONS PTE. LIMITED, SINGAPORE (ITI-C):

In the year December 1992, a Joint Venture was formed by ITI with M/s Valvas and M/s ISL in the name of M/s ITI Communications Pte Ltd. Singapore. As ITI-C was running into losses Board of Directors in its 314th Meeting held during 1999 decided to close this venture through winding up process.

QUALITY:

ITI has a well-established Quality Assurance wing in every Production Unit. Each Unit QA is responsible for Quality of Products and services rolling out of the Unit. The Units are well equipped with a variety of Environmental test facilities, Test systems and Instruments for carrying out elaborate tests for conducting Reliability Evaluation on all products to ensure customer satisfaction. The Quality Policy of ITI is to "provide Competitive and Reliable Products, Solutions and Services." ITI is achieving this through sound Quality Management Systems.

ITI Palakkad is granted AIS (Approved Inspection Scheme) status by BSNL QA for SIM Cards. Localisation activities continued during the year to procure items such as cables, connectors and PCBs for GSM-BTS Project with Alcatel approval and after approval from VDC/VRC of R&D, Bangalore.

All the Six manufacturing Plants of the Company stand accredited and upgraded to International ISO Standards of Quality Management as on date. Rae

Bareli & Mankapur plants were upgraded to ISO 9001:2008 during financial year 2008-2009 and Palakkad & Srinagar plants during year 2009-2010. Naini Unit is in the process of upgradation. Network System Unit was awarded ISO 9001:2008 Certification during 2009-2010.

Keeping in tune with the Global concern for Environmental Management, the Company has gone in for ISO 14001: 2004 EMS Certification for most of the Plants. While Units like Bangalore, Palakkad and Mankapur are maintaining the certification to ISO 14001:2004 EMS Standards, Naini and Rae Bareli Units are in the process of certification.

MANPOWER

Employee Strength at the end of the year 31st March 2010 was 11737 compared to 12556 at the end of the previous year.

As on 31.03.2010, there were 2064 employees belonging to Scheduled Castes and 105 belonging to Scheduled Tribes employees, thus constituting 17.59 % and 0.89 % respectively of the total strength of employees on the rolls of the Company. 14 employees belonging to SC and 01 belonging to ST were recruited during the year 2009-10.

Employees belonging to Ex-servicemen category numbering 62 and Physically Challenged Persons numbering 150 were on the rolls of the Company as at the end of the financial year. One PWD person was recruited during the year 2009-10.

Promotions exercise for officers was held during the year 2009 and the eligible officers were considered for promotion / upgradation to the next higher level.

HUMAN RESOURCE DEVELOPMENT:

The year 2009-10 was all set to build futuristic trends in telecom technology, Information Technology and HRM through appropriate Skill upgradation amongst all sections of employees in the company. HRD initiatives were also oriented towards educating the middle and senior management executives, in particular, on the concepts and process of turnaround strategies to provide a philip to the companys revival process.

On telecom technology, skill up gradation training programmes included on 2G, 3G, GPON, GEPON, WiFi, WiMax, RF Planning, SDH, DWDM and so on. 823 employees have been imparted training.

IT related training programmes focused on developing basic computer skills and creating awareness on information security. The programme on "Computer Hardware and Networking" exclusively designed and organized for Marketing Personnel to educate them on the technical and commercial / tendering aspects was one of the highlights. More than 559 employees have been trained in ITdiscipline.

Number of need-based Executive Development Programmes were organized to refresh and update conceptual knowledge and develop soft skills in areas like HR, Quality, Marketing to name a few. Company wide Business Awareness Workshops conducted for Senior Executives, Refresher course on Right to Information Act, 2005 were the highlights of the year in Executive Development. Nearly 950 employees have been trained through Executive Development Programmes. Similarly, number of need-based awareness programmes on health, safety, community etc., were organized all over the company covering 517 employees.

In a nutshell, during the year, company has trained more than 2900 employees scoring 4128 training man days in over 97 in-house and 12 external training programmes. Management was considerate also to train the employees through external renowned institutions in the areas where conducting in-house training programmes was not feasible. 54 employees were trained externally.

INDUSTRIAL RELATIONS

The Industrial Relations scenario in the Company has been cordial during the year. Employees Union and Officers Association extended their co-operation and support in ensuring smooth work flow and helped to meet the Companys objective.

OFFICIAL LANGUAGE:

All Units / Offices have established Check-points in their concerned offices to make more efforts for effective

Implementation of the Official Language Policy, monitored by the Official Language Implementation Committees constituted in every Unit/Office.

The Progress of Implementation of Official Language in our Corporate Office as well as in our all-subordinate Units / Offices is also being periodically reviewed by the OLIC Committee of Corporate office.

In order to enhance the working knowledge of Official Language amongst our employees, officials have been sent to Training Programme organized by the government for imparting training in Hindi, Hindi typing and Hindi Stenography as per our requirement. However, the Official Language CelJ of the different Units / Offices have also conducted internal training programmes. Besides, employees were encouraged to take part in Hindi Prabodh, Praveen & Pragya examinations and have been sanctioned financial incentives.

Since eighty percent (80%) of the staff working in our Units / Offices like Naini, Rae Bareli, Mankapur, New Delhi, Mumbai, Lucknow & Corporate Office have acquired a working knowledge of Hindi, such Units / Offices have been notified in the Gazette of India as per OL Rules 10 (2) & (4), 1976.

Official Language Cell was given an appreciation letter by the Director-OL, Official Language Department DoT, New Delhi.

For Bangalore based Units / Offices, a short-term 5 days "Hindi Translation Training" Programme was organized in Corporate Office, HR(ED) Conference Hall w.e.f. 01.02.2010 to 06.02.2010 with the help of Home Ministry, Official Deptt., Central Translation Bureau, New Delhi & Bangalore and more than 40 Officers7 Non-Officers participated & they were trained during this training programme.

A Joint Hindi Fortnight Programme for Bangalore based PSUs / Organisations between 23.11.2009 & 15.12.2009 was organized by TOLIC, Bangalore and various types of competitions were arranged during this occasion. On this occasion many officers/Non-officers of ITI Limited, Bangalore based Units / Offices participated in these competitions and more than 15

Officers / Non-Officers have got the prizes. On the TOLIC Meeting & valedictory function held on 07.01.2010, the President, TOLIC gave cash prizes and certificate to the wining participants.

"Hindi Fortnight" was celebrated and Hindi Workshops were organised for encouraging progressive use of Hindi during 2009-10. Companys website has been made bilingual (i.e. English and Hindi).

VIGILANCE:

During the year Vigilance Department functioned as an effective part of Management. The main focus of the vigilance activities was to sensitize the employees towards transparent, ethical and professional approach towards their duties and responsibilities. Greater emphasis was laid on preventive vigilance. CVC guidelines and Government policies in this regard have been followed.

RIGHT TO INFORMATION:

The Right to Information Act, 2005 has enabled all the citizens to seek information. Since introduction of the Act, a mechanism has been drawn to process all requests received by Corporate Office/ Units under the Act. The Units and Regional offices have designated PIOs/APIOs with CPIO & Appellate authority at the Corporate Office.

The main objective has been to ensure total transparency. The requests are processed and information is being provided to the Appellants within the stipulated time frame. The details are also put on the web site www. itiltd-india.com.

During the year 2009-10, 176 requests were received, out of which 151 were accepted and 13 were rejected. The Annual Returns are submitted to the Ministry every year for forwarding to the Central information Commission.

AWARD:

Public Relations Council of India (PRCI) has conferred Special Corporate Collateral Award 2010 to ITI Ltd. for its House Journal "Doorvani" at a function held in New Delhi on April 3,2010.

SALES PROMOTION:

1. ITI participated in the 18th Convergence India 2010 International Exhibition & Conference organized by Exhibitions India Group from March 23-25, 2010 at Pragati Maidan, New Delhi by putting up a display in a fabricated stall no. B132 over an area of 36 sqm.

2. ITI participated in the INDIA TELECOM 2009, 4th International Exhibition & Conference organized by DoT/FICCI from December 3-5, 2009 at Pragati Maidan, New Delhi by putting up a display in a fabricated stall no. 18D3 over an area of 55 sqm.

EVENTS:

1. ITI signed a Memorandum of Understanding (MoU) with the Telecom Commission setting a gross sales target of Rs. 8,000 Crores for the year 2010-11 on March 15,2010.

2. Shri Gurudas Kamat, Union Minister of State for Communications and Information Technology inaugurated the new Integrated R&D laboratory at ITI Plant in Bangalore on March 17,2010.

3. Shri Ajay Makan, Union Minister of State for Home Affairs, reviewed the progress of ongoing National Population Register (NPR) project in Kochi on March 20,2010 along with the state govt, authorities of Kerala and the CPSU consortium BEL, ECIL and ITI.

4. Shri Monsieur Augustin, Minister of Telecommunication and Posts, Madagascar and his three-member team visited ITI Bangalore Plant on August 27,2009.

ENTERTAINMENT EXPENDITURE AND FOREIGN TRAVEL:

The expenditure on entertainment was NIL. Expenditure on official travel abroad by the officials of the Company amounted to Rs. 0.80 lakhs during the year.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS ANDOUTGO:

Particulars with respect to Conservation of Energy, Technology Absorption and Foreign Exchange

Earnings and Outgo, required to be disclosed under the Companies (Disclosure of particulars in the report of Board of Directors) Rules, 1988 are annexed.

PARTICULARS OF EMPLOYEES:

The statement of particulars of employees drawing remuneration of Rs.24 lakhs and above per annum or Rs.2 lakhs and above per month are required to be included in the Directors report as per Section 217(2A) of the Companies Act, 1956, read with Companies (Particulars of employees) Rules, 1975, as amended, areNILfor2009-2010.

AUDITORS:

Pursuant to Section 619(2) of the Companies Act, 1956, M/s. Karra & Company, Chartered Accountants, Chennai were appointed as Statutory Auditors of the Company for the year 2009-2010 by the Comptroller & Auditor General of India.

The following firms of Chartered Accountants were appointed /re-appointed as Branch Auditors for different Plants of the Company forthe year 2009-2010:-

M/s. S.R. Gupta & Co., Allahabad, Naini Plant

M/s Varier& Associates, Palakkad, Palakkad Plant

M/s Rashid Associates, Srinagar, Srinagar Plant

M/s D S Shukla & Co., Gorakhpur, Mankapur Plant

M/s S. C. Singh & Co., Rae Bareli, Plant

BOARD OF DIRECTORS:

The following changes took place in the Directorate of your Company since the last Report.

On attaining the age of superannuation, Shri Tejbir Singh, Director Marketing was relieved of his duties from the post on 31.01.2010. Shri R.K. Agarwal has assumed the charge of Director- Marketing w.e.f 09.03.2010.

Government of India, Department of Telecommuni- cations, New Delhi vide their letter No. U 38014-2/2003- FAC dated 09.03.2010 has appointed the following three dignitaries as non-official part-time Directors on the Board of ITI Limited Prof. M. Balakrishnan, Shri T.S. Narayanasami, Dr. S.K. Chaudhuri.

Consequent on attaining the age of 65 years, Shri C.K. Koshy, Special Director appointed by BIFR is relieved of his duties from the post on 25.03.2010.

Consequent on attaining age of superannuation, Shri S.K. Chatterjee, Chairman and Managing Director is relieved of his duties from the post on 31.03.2010. Shri K.L. Dhingra has taken over the charge as Chairman and Managing Director of the Company on 7th April, 2010.

Consequent on attaining age of superannuation, Shri Ravi Agarwal, Director Production is relieved of his duties from the post on 30.04.2010. Shri K.K. Gupta has assumed the charge of Director Production w.e.f 01.05.2010.

In accordance with the requirements of the Companies Act, 1956, Shri V. H. Ron, Independent Director, Shri A.K. Srivastava, Govt. Director and Lt. Gen. P. Mohapatra, Govt Director will retire by rotation at this Annual General Meeting and eligible, offer themselves for re-appointment.

Your Directors wish to place on record their appreciation of the services rendered by Shri Tejbir Singh, Shri S.K. Chatterjee, Shri Ravi Agarwal and Shri C.K. Koshy.

CORPORATE GOVERNANCE:

A report on Corporate Governance along with a Compliance Certificate from the Auditors as prescribed under the Listing Agreement with the Stock Exchanges on which the Companys shares are listed, is annexed to this report

DIRECTORS" RESPONSIBILITY STATEMENT:

Pursuant to the provisions under Section 217(2AA) of the Companies Act, 1956 your Directors state that:

(i) in the preparation of annual accounts, the applicable accounting standards have been followed and that there were no material departures.

(ii) the accounting policies adopted by Company have been applied consistently, judgements and estimates that are reasonable and prudent have been made so as to give a true and fair view of the state of affairs of the Company as at 31st March 2010 and Loss of the Company for the period ended 31.3.2010

(iii) they have taken proper and sufficient care 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;

(iv) the annual accounts have been prepared on a going concern basis.

ACKNOWLEDGEMENT:

Your Directors place on record their sincere thanks for the assistance and support extended by the Ministry of Communications & IT and various other Ministries of Central and State Governments viz., Karnataka, Uttar Pradesh, Kerala and Jammu & Kashmir and look

forward for their continued support and co-operation in future.

Your Directors also wish to express their gratitude for the co-operation and assistance extended by BSNL and MTNL, Banks, Suppliers, Shareholders, Bondholders, Depositors, Agents, Customers and Foreign Collaborators, Committee on Public Undertakings (COPU), Standing Committee on Public Enterprises (SCOPE) and Standing Committee on Information Technology.

Your Board also expresses its sincere thanks to the Comptroller and Auditor General of India, Chairman and Member of the Audit Board and Statutory and Branch Auditors.

Your Directors take this opportunity to place on record their appreciation for the valuable contribution made and excellent co-operation rendered by the employees at all levels for the progress and prosperity of the Company.

For and on behalf of the BOARD OF DIRECTORS

(K. L. DHINGRA)

CHAIRMAN AND MANAGING DIRECTOR

Place : Bangalore

Date : 08.09.2010