Notes to Accounts of ITI Ltd.
Mar 31, 2022
1 Corporate information:
ITI Limited is a Public Limited Company incorporated under the provisions of the Companies Act, 2013. The Company is primarily engaged in the business of Manufacture, sale and servicing of Telecommunication equipments.
2 Execution and registration of sale deed for assets sold to DRDO for ''2600 lacs during 2003-2004 is under process .
3 An amount of ''16500 Lakhs has been received from the government towards payment of wage revision arrears during 2014-2015. An Amount of ''15479.79 lakhs has been paid towards payment of wage revision arrears and remaining amount of ''1020.21 lakhs kept under Other Current Liabilities.
4 Balances in the accounts of creditors, advances from customers, debtors, claims recoverable, loans & advances, materials with fabricators , subcontractors/others, material in transit, deposits, loans, and other payables/receivables such as Sales Tax, VAT, Excise Duty, Cenvat, Service Tax, GST, TDS etc., are under confirmation/ reconciliation. Adjustments, if any will be made on completion of such review / reconciliation / receipt of confirmations. However, in the opinion of the management, the Trade Receivables, current assets and loans and advances are realisable in the ordinary course of the business.
5 The Company is primarily engaged in business of manufacturing, trading and servicing of telecommunication equipments and rendering other associated / ancillary services and there are no other reportable segments. The Company is primarily operating in India, which is considered as a single geographical segment. The company is also engaged in Defence projects. The MCA vide its notification dt.23.02.2018 has exempted companies engaged in the Defence production from the requirement of Segment Reporting.
6 a) As per Indian Accounting Standard (Ind AS) 24 on Related Party Disclosures the following transactions are entered into with the Joint Ventures of the company viz. India Satcom Ltd.,(ISL).
i. ) Due to the financial crunch, there have been delayed remittance of some of the statutory dues including contribution to the provident fund. The company has provided interest for the delay on an estimated basis as the actual amount of interest/penalty payable is unascertainable.
ii. ) The company has disclosed a contingent liability of '' 14,139.51 lakhs (Previous Year '' 19,929.54 Lakhs) towards additional central sales tax liability for non-collection/submission of C/D forms for the past years on the estimated basis. The actual liability may vary based on the collection and submission of the statutory forms and adopting the applicable tax rate at the time of tax assessments.
iii. ) Out of the claims against the company not acknowledged as debt of '' 21380.42 Lakhs which includes '' 16700.00 Lakhs towards M/s Alphion Corporation, Company has to recover '' 17096 Lakhs from BSNL on back to back basis contract related to GPON.
b) Pending litigations:-
(i) Claim Recoverable - in land - ''1049.41 lakhs due from M/S Himachal futuristic communications. The Company has filed a legal case and the matter is pending before Delhi High court.
(ii) Vendors have filed the case against the company involving total amount ''100.00 lakhs and the case is pending before various forums.
(iii) Disputed statutory liabilities of ''17030.26 lakhs.
(iv) LERC is using the temporary road in ITI land measuring 5310 sq.ft. belonging to ITI without permission and the matter is subjudiced.
(v) Bruhat Benguluru Mahanagara Palike (BBMP) constructed road in ITI land in Krishnarajapuram without permission of ITI which is used by general public despite the stay order from High court of Karnataka.
(vi) Interest and penalties on arrears of all overdue statutory liabilities (including undisputed) could arise as and when assessed and determined by the respective authorities.
(vii) One employee has filed case against the company for claiming interest on 39 months wage revision arrears for '' 28.28 Lakhs and the case is pending in High Court.
12 Write-back of liabilities of earlier years amounting to ''289.18 1akhs comprises Rae Bareli Unit ''161.46 lakhs and NSU ''127.72 lakhs (Previous year ''2043.71 Lakhs comprises Palakkad unit ''1.13 Lakhs, Mankapur unit ''2010.40 Lakhs, and ROs ''32.18 Lakhs).
Value of Imported Raw Materials, Store and Spare parts consumed and Value of Indigenous Materials Consumed and percentage of each to the total consumption
|
13 |
Particulars |
2021-22 |
% |
2020-21 |
% |
|
Imported |
53.38 |
0.44 |
2093.87 |
11.92 |
|
|
Indigenous |
12042.06 |
99.56 |
15470.60 |
88.08 |
|
|
TOTAL |
12095.44 |
100.00 |
17564.47 |
100.00 |
14 Accretion/Decretion to stock-in-trade is arrived at after considering due adjustment to difference in excise duty element in respect of opening stock.
15 The Company is a Sick Company as per provisions of Sick Industrial Companies Act (SICA), 1985. CCEA has approved a financial assistance of ''4156.79 Crores in February, 2014, for revival of ITI under Rehabilitation Scheme. As a part of the approved financial assistance, a sum of ''192 Crores has been received towards share application money as Capital Grant during the financial year 2014-15 and shares allotted during financial year 2016-17 and additionally ''80 Crores received as share capital in financial year 2016-17. During the year 2017-18 ''337 Crores has been received towards Capital Grant in Aid, out of this ''200 Crores alloted during 2017-18 and balance ''137 Crores during 2018-19. The Company also received ''55 Crores during 2018-19 which was lying in share application money for pending allotment. During the FY 2019-20 the company has received capital grant of ''105 Crores. For the total Capex amount of Rs 160 Crores (Rs 50 Crores Rs 5 Crores Rs 35 Crores Rs 70 Crores) received by ITI, the company alloted 2,81,19,508 equity shares @ '' 56.90 per share (Each ''10 fully paid up at premium of Rs 46.90 per share) to The President of India. The allotment was made in accordance with the Ministry of Communications vide order no. 20-36/2012-FAC.II(Pt) dated 06.09.2019 & dated 14.01.2020 at prevailing market price or average share price for three months prior to the date of allotment whichever is lower.
"During the FY 2020-21 the company has received capital grant of ''105 Crores and the company has alloted the 84,03,361 equity shares @ '' 124.95 per share (Each ''10 fully paid up at premium of Rs 114.95 per share) to The President of India. The allotment was made in accordance with the BIFR order dated 08.01.2013 read with Ministry of Communications order no. 20-86/2014-FAC.II dated 02.08.2019 at prevailing market price or average share price for three months prior to the date of allotment, whichever is lower.
"Further to the above, during the FY 2021-22 the company has received capital grant of ''7156.30 lakhs which is lying in share application money pending allotment During the Year, the Dept of Telecommunications (DoT), GOI has allocated Grant of ''21429 lakhs to the company towards meeting the liability of PF and Gratuity of the employees who were in service as on 30.06.2018 which was approved by Dept of Expenditure,MoF. In accordance with Ind AS 20 the Grant amount of ''21429 lakhs has been recognised as Income.
The company has received ''15500 lakhs towards VRS expenditure, out of which ''3658.19 lakhs has been spent towards VRS during FY 2016-17 and 2017-18 and ''3350 lakhs have been transfered to units/Ros for meeting the expenditure during 2016-17 and the balance ''308.18 lakhs has been transfered during FY 2018-19. During FY 2018-19 the company has not paid VRS expenditure and during FY 2019-20 the company has paid VRS expenditure of ''439.33 lakhs and during FY 202021, '' 6675.00 lakhs was paid to VRS optee.During FY 2021-22 Company has paid '' 481.49 lakhs to VRS optees and the balance amount is lying in the account.
16 Land proposed to be leased to Bangalore Metropolitan Transport Corporation, BMTC , measuring 12.15 acres is in possession of the BMTC. Pending Government
of India approval for the lease, lease terms and agreement yet to be finalised. Lease rental will be recognised on finalisation of the terms. An amount of 285 lakhs received earlier from the BMTC under an agreement to sell is held under deposits.
17 Liquidated Damages (LD) of Rs 1049.41 lakhs on a supplier claimed by Bangalore Plant, rejected by the Arbitral Tribunal and the matter is pending before High Court of Delhi.
18 Karnataka Power Transmission Corporation Limited is using 5 Acres of Land and no lease agreement has been entered for the same.
19 Lease agreement with ESIC has expired in the month of July 2016 and renewal lease agreement has not been entered, as the revised lease rent is not settled with ESIC.
|
20 Value of Imports on CIF basis |
||
|
Raw Materials and Production Stores |
53.38 |
1697.18 |
|
Components and Spare Parts |
0.00 |
0.00 |
|
Material in transit |
0.00 |
0.00 |
|
Capital Goods |
946.87 |
274.83 |
|
TOTAL |
1000.25 |
1972.01 |
21 Rent from C-DoT, Government of India aggregating '' 5847.90 lakhs has not been realised for the years 2005-06 to 2010-11. Due to uncertainty of realisation, recognition of gross rental revenue aggregating '' 10879.92 lakhs for the financial years 2011-12,2012-13,2013-14,2014-15,2015-16, 2016-17, 2017-18,2018-19, 2019-20,2020-21 & 2021-22 on accrual basis is deferred, which is in conformity with Ind AS.
22 Write off of Trade receivables of earlier years amounting to '' 323.02 lakhs pertains to NSU and Provision for Bad & Doubtful debt amounting to Rs.700 lakhs pertains to Bangalore Plant
23 The title deeds of all the immovable properties , as disclosed in Note 1 and Note 3 to the financial statements are held in the name of the Company except those mentioned below:
Land Measuring 77 Acres at Palakkad valuing '' 19470 Lakhs (Carrying Value) have been resumed by the Govt of Kerala and under adjudication of the Apex Court. The value of Land as shown in the Balance Sheet includes the value of Land resumed by the Govt of Kerala pending decision by the Apex court.
ITI Complex land 174.69 acres valuing '' 9282 lakhs (Carrying Value) was handed over to Naini Unit by District Industrial Officer in 1969 which is not in the name of the Company
Transfer of title of 196.37 acres of land (factory area) valuing '' 11620 Lakhs (Appx) acquired against Gazette No 10574(1) . SHA.U/18.II.666/Bha-72 dted 09.01.1973 pertaining to Villages Ballapur, Chhajlapur & Malikmau Aima, Raebareli transfereed by Industries Department , Raebareli dated 12.11.1973 is pending due to non submission of proof of compensation paid by ITI Limited to the land owners at the time of land acquirement
24 The Company has not revalued its Property, Plant & Equipment during the Current or Previous year
25 No loans or advances in the nature of loans are granted to promoters, directors, KMPs and the related parties (as defined under Companies Act, 2013), either severally
or jointly with any other person that are (a) repayable on demand or (b) without specifying any terms or period of repayment.
26 No proceedings has been initiated or pending against the Company for holding any benami property under the Benami Transactions (Prohibition) Act 1988 (45 of 1988) and the rules made there under.
27 The Company has borrowings from Banks on the basis of security of current assets. The Stock and Debtors Statement filed by the Company with banks are in agreement with the books of accounts
28 The Company has not been declared as a Wilful Defaulter by any banks or other Financial Institutions or other lenders
29 As per the information available with the management , the Company does not have any transactions with Companies stuck off under Section 248 of the Companies
Act 2013 or Section 560 of the Companies Act 1956, in respect of Investments in Securities, Receivables, Payables, Shares held by Stuck off Company and other
outstanding balances.
30 The Company does not have any charges or satisfaction of charges which is yet to be registered with ROC beyond the statutory period
32 No funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in
any other person or entity, including foreign entities (âIntermediariesâ) with the understanding, whether recorded in writing or otherwise, that the Intermediary shall
lend or invest in party identified by or on behalf of the Company (Ultimate Beneficiaries). The Company has not received any fund from any party(Funding Party) with the understanding that the Company shall whether, directly or indirectly lend or invest in other persons or entities identified by or on behalf of the Company (âUltimate Beneficiariesâ) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries
33 The Company does not have any transactions not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act 1961
34 The Company has not traded or invested in Crypto or Virtual Currency during the Current or Previous year.
35 The borrowings obtained by the Company from banks and financial institutions have been applied for the purpose for which such loans are taken
38 The spread of Covid-19 pandemic and subsequent restrictions during the year adversely impacted several businesses across the globe. There was a moderate impact on the company''s operations/performance for the quarter and year ended on 31-03-2021. Based on the information (internal, as well as external) available up to the date of approval of these financial results, Company expects to recover the carrying amounts of trade receivables and other financial assets. The company will continue to closely monitor the developments, future economic and business outlook, and its impact on the company''s future performance.
39 ITI Limited, being a Public Sector Undertaking, the Directors on the Board of the company are appointed by the order of Government of India. The composition of Board of Directors is not as per provisions of SEBI Listing Regulations due to insufficient number of Independent Directors including women Independent Director. However, the proposal for the appointment of requisite number of Independent Directors including Women Independent Director on the Board of the company is under process with the Administrative Ministry.
40 Pending approval from the concerned ministry on the finalisation of the lease terms and agreement, rental income on the land the newly constructed building leased out to NIFT by the Raebareli Unit has not been recognised.
41 Figures in brackets indicated in the Accounts reflect negative balances.
42 Previous year''s figures have been re-grouped, re-classified & re-stated wherever necessary to conform to current year''s classification.
Mar 31, 2021
1. There is a charge of t7 lakhs on 400 D type and 624 E type quarters in favour of Govt. of Karnataka towards subsidy received in terms of Subsidised Industrial housing Scheme.
2. Factory building is on the leased land,measuring 36 Kanals and 13 Marlas for which extension for lease is under process with J&K Government.
3. There is a charge on title of property, plant and equipment, and other assets of the company in favour of various lenders for an aggregate amount of Rs. 357694 lakhs as these assets are pledged as security for liabilities.
4. Non Availability of Title Deeds
Bangalore: - ITI Ltd is in possession of435 acres of land at K.R. Puram. Out of this, the Company is having title deeds for an area of approximately 375 acres. For balance area, only record of rights exist with the Company for use of land and proper title deeds are not held by the Company.
Mankapur: Out of 191.03 acres of land purchased from private owners, title deed for 41.77 acres land are not available with the management.
Naini: - ITI Complex land (174.69 acres) was handed over by District Industrial Officer in 1969. The title deed of this land is still not transferred in the name of M/s ITI Ltd.
Palakkad: - The Company has Title/Lease deeds properties except in respect of land admeasuring 77 acres which has been resumed by Govt of Kerala and is under adjudication before apex court
i) (a) Land measuring 4653.75 sq.metres has been leased to Department of Telecommunications for a period of 99 years commencing from 3.10.1983.
(b) Formal Conveyance/lease deeds in respect of Land (excepting part of lands at Bangalore & Mankapur) are yet to be executed by the respective State Governments.
(c) Land measuring 1256.86 Sq. metres has been leased to Dept. of Telecommunications for a period of 99 years commencing from 10.07.1991.
(d) 3 acres of land is leased to State Government for construction of Mini-Vidhana Soudha for a period of 99 years commencing from March, 1994.
ii) 1.83 acres of land is leased to Southern Railways and 0.286 acres of land is leased to ESI corporation.
iii) (a) BSNL Telephone Exchange having area of 0.5733 acres of land
(b) HPCL Petrol bunk, ITI Colony having area of 0.2222 acres of land
(c) HPCL Petrol bunk, Old Madras Road, K.R.Puram having area of 0.3025 acres of land
(d) EPFO, F-28 Bldg. having area of 0.6069 acres of land
(e) Thumby Aviation [Halipad - EC Plant] having area of 0.9182 acres of land
(f) Embassy Services Pvt. Ltd. having area of Land and Building 0.776 acres and 6300 Sq.meters respectively.
iv.) The company is still in the process of obtaining the fair values of various investment properties and hence the disclosure of this information could not be given.
1 Corporate information:
ITI Limited is a Public Limited Company incorporated under the provisions of the Companies Act, 2013. The Company is primarily engaged in the business of Manufacture, sale and servicing of Telecommunication equipments.
2 Execution and registration of sale deed for assets sold to DRDO for T2600 lacs during 2003-2004 is under process .
3 An amount of T16500 Lakhs has been received from the government towards payment of wage revision arrears during 2014-2015.An Amount of T15466.48 lakhs has been paid towards payment of wage revision arrears and remaining amount of T1033.52 lakhs kept under Other Current Liabilities.
4 Balances in the accounts of creditors, advances from customers, debtors, claims recoverable, loans & advances, materials with fabricators , subcontractors/others, material in transit, deposits, loans, and other payables/receivables such as Sales Tax, VAT, Excise Duty, Cenvat, Service Tax, GST, TDS etc., are under confirmation/reconciliation. Adjustments, if any will be made on completion of such review / reconciliation / receipt of confirmations. However, in the opinion of the management, the Trade Receivables, current assets and loans and advances are realisable in the ordinary course of the business.
5 The Company is primarily engaged in business of manufacturing, trading and servicing of telecommunication equipments and rendering other associated / ancillary services and there are no other reportable segments. The Company is primarily operating in India, which is considered as a single geographical segment. The company is also engaged in Defence projects. The MCA vide its notification dt.23.02 2018 has exmpted companies engaged in the Defence production from the requirement of Segment Reporting.
6. a) As per Indian Accounting Standard (Ind AS) 24 on Related Party Disclosures the following transactions are entered into with the Joint Ventures of the company viz. India Satcom Ltd,(ISL).
''i.) Due to the financial crunch, there have been delayed remittance of some of the statutory dues including contribution to the provident fund. The company has provided interest for the delay on an estimated basis as the actual amount of interest/penalty payable is unascertainable.
ii.) The company has disclosed a contingent liability of Rs. 19,929.54 Lakhs towards additional central sales tax liability for non-collection/submission of C/D forms for the past years on the estimated basis. The actual liability may vary based on the collection and submission of the statutory forms and adopting the applicable tax rate at the time of tax assessments.
iii) Out of the claims against the company not acknowledged as debt of T20909.26 Lakhs which includes T13700.00 Lakhs towards M/s. Alphion Corporation,
Company has to recover T14025 Lakhs from BSNL on back to basis contract related to GPON.
b) Pending litigations:-
(i) Claim Recoverable - in land - T1049.41 lakhs due from M/S Himachal futuristic communications. The Company has filed a legal case and the matter is pending before Delhi High court.
(ii) Vendors have filed the case against the company involving total amount T100.00 lakhs and the case is pending before various forums.
(iii) Disputed statutory liabilities of T16753.35 lakhs.
(iv) LERC is using the temporary road in ITI land measuring 5310 sq.ft. belonging to ITI without permission and the matter is subjudiced.
(v) Bruhat Benguluru Mahanagara Palike (BBMP) constructed road in ITI land in Krishnarajapuram without permission of ITI which is used by general public despite the stay order from High court of Karnataka.
(vi) Interest and penalties on arrears of all overdue statutory liabilities (including undisputed) could arise as and when assessed and determined by the respective authorities.
(vii) One employee has filed case against the company for claiming interest on 39 months wage revision arrears for T28.28 Lakhs and the case is pending in High Courts.
1. Write-back of liabilities of earlier years amounting to T2043.71 Lakhs comprises Palakkad unit ?1.13 Lakhs, Mankapur unit T2010.40 Lakhs, and ROs T32.18 Lakhs.
14 Accretion/Decretion to stock-in-trade is arrived at after considering due adjustment to difference in excise duty element in respect of opening stock.
15 The Company is a Sick Company as per provisions of Sick Industrial Companies Act (SICA), 1985. CCEA has approved a financial assistance of T4156.79 Crores in February, 2014, for revival of ITI under Rehabilitation Scheme. As a part of the approved financial assistance, a sum of t192 crores has been received towards share application money as Capital Grant during the financial year 2014-15 and shares allotted during financial year 2016-17 and additionally t80 crores received as share capital in financial year 201617. During the year 2017-18 t337 crores has been received towards Capital Grant in Aid, out of this t200 crores alloted during 2017-18 and balance t137 crores during 201819. The Company also received Rs.55 crores during 2018-19 which was lying in share application money for pending allotment.
During the FY 2019-20 the company has received capital grant of Rs.10500 lakhs. For the total Capex amount of Rs 160 Crores (Rs 50 Crores Rs 5 Crores Rs 35 Crores Rs 70 Crores) received by ITI, the company alloted 2,81,19,508 equity shares @ Rs. 56.90 per share (Each Rs.10 fully paid up at premium of Rs 46.90 per share) to The President of India. The allotment was made in accordance with the Ministry of Communications vide order no. 20-36/2012-FAC.II(Pt) dated 06.09.2019 & dated 14.01.2020 at prevailing market price or average share price for three months prior to the date of allotment whichever is lower.
During the FY 2020-21 the company has received capital grant of Rs.10500 lakhs and the company has alloted the 84,03,361 equity shares @ Rs. 124.95 per share (Each Rs.10 fully paid up at premium of Rs 114.95 per share) to The President of India. The allotment was made in accordance with the BIFR order dated 08.01.2013 read with Ministry of Communications order no. 20-86/2014-FAC.II dated 02.08.2019 at prevailing market price or average share price for three months prior to the date of allotment, whichever is lower.
The company has received T15500 lakhs towards VRS expenditure, out of which T3658.19 lakhs has been spent towards VRS during FY 2016-17 and 2017-18 and T3350 lakhs have been transfered to units/Ros for meeting the expenditure during 2016-17 and the balance T308.18 lakhs has been transfered during FY 2018-19. During FY 2018-19 the company has not paid VRS expenditure and during FY 2019-20 the company has paid VRS expenditure of Rs.439.33 lakhs. During FY 2020-21 Company has paid Rs. 6675.00 lakhs to VRS optees and the balance amount is lying in the account.
16 Land proposed to be leased to Bangalore Metropolitan Transport Corporation, BMTC (which has not been revalued), measuring 12.15 acres is in possession of the BMTC. Pending Government of India approval for the lease, lease terms and agreement yet to be finalised. Lease rental will be recognised on finalisation of the terms. An amount of t285 lakhs received earlier from the BMTC under an agreement to sell is held under deposits.
17 Liquidated Damages (LD) of Rs 1049.41 lakhs on a supplier claimed by Bangalore Plant, rejected by the Arbitral Tribunal and the matter is pending before High Court of Delhi.
18 Karnataka Power Transmission Corporation Limited is using 5 Acres of Land (which has not been revalued) and no lease agreement has been entered for the same.
19 Lease agreement with ESIC has expired in the month of July 2016 and renewal lease agreement has not been entered, as the revised lease rent is not settled with ESIC.
20 Land Measuring 77 Acres valuing t 3850 Lakhs (Carrying Value) have been resumed by the Govt of Kerala and under adjudication of the Apex Court. The value of Land as shown in the Balance Sheet includes the value of Land resumed by the Govt of Kerala pending decision by the Apex court.
21 Value of Imports on CIF basis
Raw Materials and Production Stores 1697.18 3183.51
Components and Spare Parts 0.00 0.00
Material in transit 0.00 0.00
Capital Goods 274.83 1214.87
TOTAL 1972.01 4398.38
22 Rent from C-DoT, Government of India aggregating T5847.90 lakhs has not been realised for the years 2005-06 to 2010-11. Due to uncertainty of realisation, recognition of gross rental revenue aggregating T9979.92 lakhs for the financial years 2011-12,2012-13,2013-14,2014-15,2015-16, 2016-17, 2017-18,2018-19, 2019-20 & 2020-21 on accrual basis is deferred, which is in conformity with Ind AS-18.
23 Write off of Trade receivables of earlier years amounting to t7.04 Lakhs pertains to Srinagar Unit & t1.66 Lakhs partains to ROs.
25 The spread of Covid-19 pandemic and subsequent restrictions during the year adversely impacted several businesses across the globe. There was a moderate impact on the company''s operations/performance for the quarter and year ended on 31-03-2021. Based on the information (internal, as well as external) available up to the date of approval of these financial results, Company expects to recover the carrying amounts of trade receivables and other financial assets. The company will continue to closely monitor the developments, future economic and business outlook, and its impact on the company''s future performance.
26 ITI Limited, being a Public Sector Undertaking, the Directors on the Board of the company are appointed by the order of Government of India. The composition of Board of Directors is not as per provisions of SEBI Listing Regulations due to insufficient number of Independent Directors including women Independent Director. However, the proposal for the appointment of requisite number of Independent Directors including Women Independent Director on the Board of the company is under process with the Administrative Ministry.
27 Pending approval from the concerned ministry on the finalisation of the lease terms and agreement, rental income on the land the newly constructed building leased out to NIFT by the Raebareli Unit has not been recognised.
28 The company had received a claim for an amount of Rs. 338 Lakhs towards refund of the additional expenditure incurred by Advanced Numerical Research and analysis group, Hyderabad against supplies made by the company in the past. This claim was erroneously not provided for in the financial year 2019-20. The error is rectified by restating the comparative amounts for 2019-20 (the prior period presented) in which the error occurred under the line items ''Other Expenses'' and ''Other Financial Liabilities'' by Rs. 338 Lakhs. The impact on the Basic & Diluted Earnings Per Share is negligible.
29 Figures in brackets indicated in the Accounts reflect negative balances.
30 Previous year''s figures have been re-grouped, re-classified & re-stated wherever necessary to conform to current year''s classification.
Mar 31, 2018
Indiaâs first Public Sector Unit (PSU) - ITI Ltd was established in 1948. Ever since, as a pioneering venture in the field of telecommunications, it has contributed to 50% of the present national telecom network. With state-of-the-art manufacturing facilities spread across six locations and a countrywide network of marketing/ service outlets, the company offers a complete range of telecom products and total solutions covering the whole spectrum of Switching, Transmission, Access and Subscriber Premises equipment.
ITI joined the league of world class vendors of Global System for Mobile (GSM) technology with the inauguration of mobile equipment manufacturing facilities at its Mankapur and Rae Bareli Plants in 2005-06. This ushered in a new era of indigenous mobile equipment production in the country. These two facilities supply more than nine million lines per annum to both domestic as well as export markets.
1) Property, plant and equipment, Capital Work-in progress
Property, plant and equipment is stated at historical cost less accumulated depreciation and impairment losses if any. Cost comprises of the purchase price and any attributable cost of bringing the PPE to its working condition for its intended use. Borrowing and other attributable costs relating to acquisition of the PPE which takes substantial period of time to get ready for its intended use are also included to the extent they relate to the period till such PPE are ready to be put to use. PPE are eliminated from the financial statements, either on disposal or when retired from such use. When significant parts of Plant and Equipment are required to be replaced at intervals, the same is recognised as a separate component.
Assets acquired free of cost or received as gift are stated at fair value which is credited to Other Equity at the time of acquisition or receipt less accumulated depreciation and impairment losses.
Capital work-in-progress
Assets under installation or under construction as at the Balance Sheet date are shown as Capital Work-In-Progress.
Income pertaining to construction period such as interest on advance to contractors, sale of tender documents etc., is set off against expenditure during construction.
Expenditure on development of leasehold land is capitalised as Land Development Expenditure and amortised over the lease period or useful, life whichever is lower.
In the event of revaluation of entire class of PPE, if the revalued amount is greater than the carrying amount of the PPE, such difference is taken to the Revaluation Reserve. If the revalued amount is lower than the carrying amount of the PPE and if the class of PPE has already been revalued, difference is set off against the amount available under the Revaluation Reserve for the same class of PPE and excess thereof, life any, is charged to the statement of Profit and Loss.
2) Intangible Assets, Intangible Asset under Development
a. Cost of software (which is not an integral part of the related hardware) acquired for internal use and resulting in significant future economic benefits, is recognised as an intangible asset when the same is ready for use. Intangible Assets not yet ready for their intended use as at the Balance Sheet date are classified as âIntangible Assets under Development
b. Cost of developmental work which is completed, wherever eligible, is recognized as an Intangible Asset.
c. Cost of developmental work under progress, wherever eligible, is classified as âIntangible Assets under Developmentâ.
d. Carrying amount includes amount funded by the Company to external agencies towards developmental project(s) and expenditure incurred by the Company towards material cost, employee cost and other direct expenditure.
3) Research and development expenses:
Research expenditure is charged to the Statement of Profit and Loss. Development costs of products are also charged to the Statement of Profit and Loss unless a productâs technical feasibility has been established, in which case such expenditure is capitalized. Tangible assets used in research and development are capitalized.
Expenditure incurred towards other development activity where the research results or other knowledge is applied for developing new or improved products or processes, are recognised as an Intangible Asset if the recognition criteria specified in Ind AS 38 are met and when the product or process developed is expected to be technically and commercially usable, the company has sufficient resources to complete development and subsequently use or sell the intangible asset, and the product or process is likely to generate future economic benefits.
4) Impairment of Non-financial assets
At the end of each Balance Sheet date, carrying amount of assets are reviewed, if there is any indication of impairment based on internal/external factors. If the estimated recoverable amount is found to be lower than the carrying amount, then the impairment loss is recognised and assets are written down to the recoverable amount.
5) Depreciation /Amortisation
Depreciation is calculated on a straight-line basis over the estimated useful lives of the assets.
Depreciation on additions and deletions to fixed assets during the year is provided on pro-rata basis as under:
a. Depreciation is reckoned in full for the month of addition for the assets commissioned on or before 15th day of a month while no depreciation is reckoned for the month of addition for the assets commissioned after 15th of the month.
b. In respect of assets sold, discarded, damaged or destroyed on or before 15th day of a month no depreciation is reckoned for the month of deletion while for the assets sold, discarded, damaged or destroyed after 15th of the month depreciation is reckoned in full for the month of deletion.
c. Where cost of a part of the asset is significant to the total cost of the asset and useful life of that part is different from the useful life of the remaining asset, useful life of that significant part is determined separately and depreciated on straight line method over its estimated useful life.
d. The Residual values, useful lives and methods of depreciation of property, plant and equipment are reviewed at each financial year end and adjusted prospectively, if appropriate.
Amortization
Intangible assets are amortized over their respective individual estimated useful lives on a straight-line basis, from the date that they are available for use. Amortization methods and useful lives are reviewed periodically at each financial year end.
In the case of depreciable assets which have been revalued, depreciation is calculated on straight line method on the revalued amount. Incremental depreciation on account of Revaluation is recouped as a credit to the general Reserve, as per the Schedule II of the Companies Act 2013.
Disposal of property, plant and equipment
An item of property, plant and equipment and any significant part initially recognised is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the statement of Profit and Loss when the asset is derecognised.
6) Leases
A lease is classified at the inception date as a finance lease or an operating lease.
Company as a Lessee
Finance leases are capitalised at lower of fair value and the present value of the minimum lease payments on commencement of the lease. Finance charges are recognised as Finance Costs in the Statement of Profit and Loss. A leased asset is depreciated over the useful life of the asset or lease term, whichever is lower.
Operating lease payments are recognised as an expense in the Statement of Profit and Loss on a straight-line basis over the lease term, except when the lease payments escalate in accordance general inflation or are otherwise justified
Company as a lessor
Operating lease income is recognised over the lease term on straight line basis, except when the escalations are due to general inflation or otherwise justified. Contingent rents, if any, are recognised as revenue in the period in which they are earned.
In case of a finance lease, amounts due from lessees are recorded as receivables as the Companyâs net investment in the leases. Finance lease income is recognised in the Statement of Profit and Loss.
7) Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale is capitalised as part of the cost of the asset.
General borrowing costs are capitalised to qualifying assets by applying a capitalisation rate, which is the weighted average of the borrowing costs applicable to the general borrowings outstanding, other than specific borrowings, to the expenditure on that asset. All other borrowing costs are expensed in the period in which they occur. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds, as also exchange differences to the extent regarded as an adjustment to the borrowing costs.
8) Government Grants
Grants from Government are measured at fair value and initially recognized as Deferred Income.
Amount lying under Deferred Income on account of acquisition of Fixed Assets is transferred to the credit of the Statement of Profit and Loss in proportion to the depreciation charged on the respective assets to the extent attributable to Government Grants utilised for the acquisition.
Amount lying under Deferred Income on account of revenue expenses is transferred to the credit of the Statement of Profit and Loss to the extent of expenditure incurred in the ratio of the funding to the total sanctioned cost, limited to the grant received.
9) Investments in joint venture and associates
Company accounts for its interests in associates and joint ventures at cost or in accordance with Ind AS 109 in the standalone financial statements but in the consolidated Financial statements under equity method.
10) Inventories
Raw materials, components and stores purchased for manufacturing/production activities are valued at lower of cost and net realizable value, after providing for obsolescence, if any. Cost is calculated on weighted average rate as at the end of the year. Where same items are purchased as also manufactured, manufacturing costs are generally adopted.
Raw materials and production stores with ancillaries and fabricators are valued at lower of cost at the time of such issue and net realizable value, after providing for obsolescence, if any.
Manufactured items in stock and stock-in-trade are valued at lower of cost excluding interest charges, administration overheads & sales overheads and at the net realisable value, after providing for obsolescence, if any.
Precious metals scrap is brought to books at the year end at net realizable value.
11) Work-in-process
a. Work-in-process (production) is valued on the basis of physically verified quantities at lower of cost excluding interest charges, administration & sales overheads and at the net realisable value, after providing for obsolescence, if any.
b. Work-in-process (Installation) is valued at lower of cost as recorded in the work orders and net realizable value, after providing for obsolescence, if any.
12) Tools and Gauges
Expenditure on special purpose tools and fixtures is initially capitalized at cost and then amortized over production on a systematic basis, based on technical assessment.
Loose tools are charged to revenue at the time of issue.
13) Financial assets (Trade Receivables & Other receivables)
Receivables are initially recognized at fair value, which in most cases approximates the nominal value. If there is any subsequent indication that the assets may be impaired, same is reviewed for impairment.
14) Errors and Estimates
The Company revises its accounting policies, if the change is required due to a change in the Ind AS or if the change provides more relevant and reliable information to the users of the financial statements. Changes in accounting policies are applied prospectively.
A change in an accounting estimate that results in changes in the carrying amounts of recognised assets or liabilities or to statement of Profit or Loss is applied prospectively in the period(s) of change.
Discovery of errors and results in revisions retrospectively by restating the comparative amounts of assets, liabilities and equity of the earliest prior period in which the error is discovered. Opening balances of the earliest period presented are also restated.
15) Income taxes
Income tax comprises of current and deferred income tax
Current income tax
Current tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities. Tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted at the reporting date. Current tax relating to items recognised directly in equity is recognised in equity and not in the Statement of Profit and Loss.
Deferred tax
Deferred tax is provided using the Balance sheet method on temporary differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes at the reporting date.
Deferred tax assets are recognised for all deductible temporary differences, the carry forward of unused tax credits and any unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences can be utilised.
Carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised.
16) Warranty Liability
Warranty liability for contractual obligation in respect of equipment sold to customers is accounted for the basis of an annual technical assessment.
17) Foreign currencies
Transactions in foreign currencies are initially recorded by the Company at their respective currency exchange rates at the date the transaction first qualifies for recognition. Monetary assets and liabilities denominated in foreign currencies are translated at the functional currency exchange rate at the reporting date.
Differences arising on settlement or translation of monetary items are recognised in the Statement of Profit and Loss.
Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the functional currency exchange rate at the dates of the initial transactions.
18) Employee benefits
a. Short-term employee benefits are recognised as an expense at the undiscounted amount in the Statement of Profit and Loss of the year in which the related service is rendered.
b. Post-employment benefit viz. gratuity and other long-term employee benefits viz. Privilege Leave, Sick Leave and LLTC are recognised as an expense in the Statement of Profit and Loss of the year in which the employee has rendered services. Expense is recognised at the present value of the amounts payable determined using actuarial valuation techniques.
c. Actuarial gains and losses and the return on plan assets (excluding interest) and the effect of the asset ceiling (if any, excluding interest), are recognised immediately in Other Comprehensive Income (OCI). Net interest expense (income) on the net defined liability (assets) is computed by applying the discount rate, used to measure the net defined liability (asset), to the net defined liability (asset) at the start of the financial year after taking into account any changes as a result of contribution and benefit payments during the year. Net interest expense and other expenses related to defined benefit plans are recognised in the Statement of Profit and Loss.
d. Expenditure related to voluntary retirement scheme (VRS) is written off in the year of incidence.
19) Provision & Contingent Liabilities
Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. When the Company expects some or all of a provision to be reimbursed, for example, under an insurance contract, the reimbursement is recognised as a separate asset, but only when the reimbursement is virtually certain. Expense relating to a provision is presented in the Statement of Profit and Loss net of any reimbursement.
If the effect of the time value of money is material, provisions are discounted using a current pretax rate that reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.
Contingent liabilities and contingent assets are not recognised in the financial statements but are disclosed in the notes.
Onerous Contracts
A provision for onerous contracts other than construction contracts is recognized when the expected benefits to be derived by the Company from a contract are lower than the unavoidable cost of meeting its obligations under the contract.
Provision is measured at the present value of the lower of the expected cost of terminating the contract and the expected net cost of continuing with the contract.
Before a provision is established, the Company recognizes any impairment loss on the assets associated with that contract.
20) Fair value measurement
The Company measures certain financial instruments, such as derivatives and other items in its financial statements at fair value at each balance sheet date.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy based on the lowest level input that is significant to the fair value measurement as a whole:
Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
Level 3 - Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs).
For purposes of fair value disclosures, the Company has determined classes of assets and liabilities on the basis of the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy.
21) Investment property
Investment properties are measured initially at cost, including transaction costs. Subsequent to initial recognition, investment properties are stated at cost less accumulated depreciation and accumulated impairment loss, if any.
22) Financial Instruments
a. Initial recognition and measurement
All financial assets are recognised initially at fair value. In the case of financial assets not recorded at fair value through the Statement of Profit and Loss, transaction costs that are attributable to the acquisition of the financial asset are included in the cost of the asset.
b. Subsequent measurement
c. For purposes of subsequent measurement, financial assets are classified in four categories:
i. Debt instruments at amortised cost,
ii. Debt instruments at fair value through other comprehensive income (FVTOCI),
iii. Debt instruments, derivatives and equity instruments at fair value through Profit or Loss (FVTPL),
iv. Equity instruments measured at fair value through other comprehensive income (FVTOCI).
Derecognition
A financial asset or part of a financial asset is derecognised when The rights to receive cash flows from the asset has expired
Embedded derivative
Embedded derivative, if required, is separated from host contract and measured at fair value.
23) Forward Contracts
The Company uses derivative financial instruments such as forward currency contracts to hedge its foreign currency risks. Such derivative financial instruments are initially recognised at fair value on the date on which a derivative contract is entered into and are subsequently remeasured at fair value. Derivatives are carried as financial assets when the fair value is positive and as financial liabilities when the fair value is negative.
24) Cash and cash equivalents
Cash comprises of cash on hand and demand deposits. Cash equivalents are short-term highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash, which are subject to an insignificant risk of change in value.
Bank overdrafts, if any, are shown within borrowings in current liabilities on the balance sheet.
25) Impairment of financial assets
In accordance with Ind AS 109, the Company applies the expected credit loss (ECL) model for measurement and recognition of impairment loss on financial assets with credit risk exposure.
a. Time barred dues from the Government / Government Departments / Government Companies are generally not considered as increase in credit risk of such financial asset.
b. Where dues are disputed in legal proceedings, provision is made if any decision is given against the Company even if the same is taken up on appeal to higher authorities / courts.
c. In case of dues outstanding for a significant period of time, on a case to case basis.
ECL impairment loss allowance (or reversal) recognized during the period is recognized as expense/ (income) in the Statement of Profit and Loss. This amount is reflected in a separate line in Profit and Loss Statement as an impairment gain or loss.
26) Financial Liabilities
a. Initial recognition and measurement
Financial liabilities are classified, at initial recognition, at fair value through Profit and Loss as loans, borrowings, payables, or derivatives, as appropriate.
Loans, borrowings and payables, are stated net of transaction costs that are directly attributable.
b. Subsequent measurement
Measurement of financial liabilities depends on their classification, as described below:
i. Financial liabilities at fair value through profit or loss.
ii. Financial liabilities at fair value through Profit or Loss include financial liabilities designated upon initial recognition as at fair value through profit or loss. This category also includes derivative financial instruments entered into by the Company that are not designated as hedging instruments in hedge relationships as defined by IndAS 109. Separated embedded derivatives are also classified as held for trading unless they are designated as effective hedging instruments.
Gains or losses on liabilities held for trading are recognised in the Statement of Profit and Loss.
c. Loans and borrowings
After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using the Effective Interest Rate (EIR) method. Gains and losses are recognised in profit or loss when the liabilities are derecognised as well as through the EIR amortisation process.
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires.
d. Trade and other payables
Liabilities are recognised for amounts to be paid in future for goods or services received, whether billed by the supplier or not.
27) Reclassification of Financial Instruments
The Company determines classification of financial assets and liabilities on initial recognition. After initial recognition, no reclassification is made for financial assets which are equity instruments and financial liabilities. For financial assets which are debt instruments, a reclassification is made only if there is a change in the business model for managing those assets. If the Company reclassifies financial assets, it applies the reclassification prospectively.
28) Offsetting of financial instruments
Financial assets and financial liabilities are offset and the net amount is reported in the balance sheet if there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, to realise the assets and settle the liabilities simultaneously.
29) Cash dividend and non-cash distribution to equity shareholders
The Company recognises a liability to make cash or non-cash distributions to equity holders when the distribution is authorised and the distribution is no longer at the discretion of the Company.
30) Earnings per share
Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period. For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.
31) Events after the reporting period
Adjusting events are events that provide further evidence of conditions that existed at the end of the reporting period. The financial statements are adjusted for such events before authorisation for issue.
Non-adjusting events are events that are indicative of conditions that arose after the end of the reporting period. Non-adjusting events after the reporting date are not accounted but disclosed.
32) New standards and interpretations not yet effective:
A number of new standards, amendments to standards and interpretations are not yet effective for the yearended 31 March 2017 and have not been applied in preparing these financial statements. The effect of the sameis being evaluated by the Company.
Notes:
1. There is a charge of Rs.7 lakhs on 400 D type and 624 E type quarters in favour of Govt. of Karnataka towards subsidy received in terms of Subsidised Industrial housing Scheme.
2. Factory building is on the leased land,measuring 36 Kanals and 13 Marlas for which extension for lease is under process with J&K Government.
3. With reference to Accounting Policy No.6 depreciation has been charged on Fixed assets over their assessed useful life as under.
Fixed Assets (Years)
A. (a) Building (other than factory buildings) 60
(c) Purely temporary erections 3
(d) Building with dwelling units each with plinth area not exceeding 80 sqm. 30
C. Plant & Machinery
(a) General Rate (on double shift basis) 15
(b) Special Rate : - Servers & Networks 6 Data Processing Machines including Computers 3
D. Roads and compound Walls 10
E. Office Machinery and Equipment 5
G. Assets costing less than Rs.5,000/- are depreciated @ 100%
However, in respect of assets having original cost of Rs.50,000/- and above, a residual balance of Rs.5/- has been retained in the books.
* i) Includes Rs.25 Lakhs value of land (Before revaluation) gifted by UP Govt. credited to Capital Reserve.
ii) Registered valuers have revalued Land of the company on 31.3.2006.
*** i) Includes Rs.85 Lakhs of plant & machinery given free of cost by UNIDO.
ii) Includes Rs.60 Lakhs of plant & machinery cost of which is borne by Ministry of Information Technology.
iii) Includes cost of fixed assets worth Rs.5000 Lakhs procured out of Grant received from Government of India during 2004-05.
iv) includes Rs.937 Lakhs of plant, machinery and Equipments received free of cost by Rae Bareli unit.
**** Includes Rs.26.94 Lakhs payment made to J&K Govt for which lease deed proceedings are in process.
AA Includes a sum of Rs.15.31 lakhs charged on the assets whose useful life is exhausted as on 1st April 2015 as per Schedule II of the Companies Act 2013 and the said amount has been adjusted against Retained Earnings during the year.
Notes:
i) (a) Land measuring 4653.75 sq.metres has been leased to Department of Telecommunications for a period of 99 years commencing from 3.10.1983.
(b) Formal Conveyance/lease deeds in respect of Land (excepting part of lands at Bengaluru & Mankapur) are yet to be executed by the respective State Governments.
(c) Land measuring 1256.86 Sq. metres has been leased to Dept. of Telecommunications for a period of 99 years commencing from 10.07.1991.
(d) 3 acres of land is leased to State Government for construction of Mini-Vidhana Soudha for a period of 99 years commencing from March, 1994.
ii) 1.83 acres of land is leased to Southern Railways and 0.286 acres of land is leased to ESI corporation.
iii) (a) BSNL Telephone Exchange having area of 0.5733 acres of land
(b) HPCL Petrol bunk, ITI Colony having area of 0.2222 acres of land
(c) HPCL Petrol bunk, Old Madras Road, K.R.Puram having area of 0.3025 acres of land
(d) EPFO, F-28 Bldg. having area of 0.6069 acres of land
(e) Thumby Aviation [Halipad - EC Plant] having area of 0.9182 acres of land
As per Ind AS 109, the receivables in the Company should be put to impairment test using the expected credit loss model. Ind AS 109 allows the use of practical expedients when measuring expected credit loss on trade receivables, and states that a provision matrix is a example of such an expedient. Majority of trade receivables originate from Government owned entities, which are not exposed to high risk, the Company is making specific provisions based on case to case reviews and approved by Board. Whereas, for other customers, provision is determined using expected credit loss model on case to case basis
a) Claims and expenses recoverable - inland- includes Rs.1690.2Lakhs recoverable from M/s HCL Infosystem Ltd. as compensation on account of excess amount spent by ITI Ltd. MANKAPUR. The above is on the basis of agreement entered into between ITI, HCL and Alcatel.
b) Claims and expenses recoverable - inland- includes Rs.140.27 Lakh (Rs.140.27 Lakh) is due from Punjab National Bank towards interest charged in excess of SBAR w.e.f. 01.04.2009 and the same is expected to get realised during 2018-2019
c) Claim Recoverable - in land - includes Rs.1049.41 Lakhs due from M/S Himachal futuristic communications towards LD. The Company has filed a legal case and the matter is pending before Delhi High court.
d) Rent Receivable includes of Rs.5847.9 Lakhs on a premises leased out upto the period ended 31.03.2011 and no rental income for the period subsequent to 31.03.2011 for the same premises has been recognised on accrual basis due to uncertainity of realization
- Each holder of Equity share is entitled to one vote per share.
- In the event of liqudation of the company, the holders of equity shares will be entitled to receive remaining assets of the company, after distribution of all preferencial amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.
- Each holder of the preference shares is entitled to one vote per share only on resolutions placed before the company which directly affect the rights attached to preference shares.
- In the event of liquidation of the company, the holders of preference shares will be entitled to receive assets of the company, before distribution to equity share holdeRs.The distribution will be in proportion to the number of shares held by the shareholders.
NOTE NO. 33
ITI Limited is a Public Limited Company incorporated under the provisions of the Companies Act, 2013. The Company is primarily engaged in the business of Manufacture, sale and servicing of Telecommunication equipments.
2 Execution and registration of sale deed for assets sold to DRDO for Rs.2600 lacs during 2003-2004 is under process.
3 An amount of Rs.16500 Lakhs has been received from the government towards payment of wage revision arrears during 2014-2015. An Amount of Rs.15416.71 lakhs has been paid towards payment of wage revision arrears and remaining amount of Rs.1083.29 lacs kept under Other Current Liabilities.
4 Balances in the accounts of creditors, advances from customers, debtors, claims recoverable, loans & advances, materials with fabricators , subcontractors/others, material in transit, deposits, loans, and other payables/receivables such as Sales Tax, VAT, Excise Duty, Cenvat, Service Tax, GST, TDS etc., are under confirmation/reconciliation. Adjustments, if any will be made on completion of such review / reconciliation / receipt of confirmations. However, in the opinion of the management, the Trade Receivables, current assets and loans and advances are realisable in the ordinary course of the business.
5 The Company is primarily engaged in business of manufacturing, trading and servicing of telecommunication equipments and rendering other associated / ancillary services and there are no other reportable segments. The Company is primarily operating in India, which is considered as a single geographical segment. The company is also engaged in Defence projects. The MCA vide its notification dt.23.02.2018 has exmpted companies engaged in the Defence production from the requirement of Segment Reporting.
6 a) As per Indian Accounting Standard (Ind AS) 24 on Related Party Disclosures the following transactions are entered into with the Joint Ventures of the company viz. India Satcom Ltd.,(ISL).
7 Since the Company has no virtual certainty of sufficient future taxable income, deferred tax asset is not being recognised on unabsorbed depreciation and carried forward losses of the Company under Indain Accounting Standard (Ind AS)-12 âIncome Taxes
b) Pending litigations:-
(i) Claim Recoverable - in land - Rs.1049.41 lakhs due from M/S Himachal futuristic communications. The Company has filed a legal case and the matter is pending before Delhi High court.
(ii) Vendors have filed the case against the company involving total amount Rs.272.21 lakhs and the case is pending before various forums.
(iii) Disputed statutory liabilities of Rs.17725.91 lakhs.
(iv) LERC is using the temporary road in ITI land measuring 5310 sq.ft. belonging to ITI without permission and the matter is subjudiced.
(v) Bruhat Benguluru Mahanagara Palike (BBMP) constructed road in ITI land in Krishnarajapuram without permission of ITI which is used by general public despite the stay order from High court of Karnataka.
Interest and penalties on arrears of all overdue statutory liabilities (including undisputed) could arise as and when assessed and determined by the respective authorities.
8 (a) Other Income includes compensation relating to Srinagar unit losses for the period ended 31st March 2018 awaiting reimbursement from Ministry of Communications & IT. Against the compensation recognized during financial year 2017-18, a sum of Rs. Nil lakhs has been received during financial year 2017-18. A sum of Rs.1228.26 lakhs has been received against the compansation recognised during financial year 2013-14, 2014-15, 2015-16 and 2016-17 on 31st March 2018.
(b) Other Income includes Rs.9211.48 Lakhs compensation recevied from KIADB towards acquisition of Land for BMRCL work.
(c) Write-back of liabilities of earlier years amounting to Rs 112.50 Crore comprises Palakkad unit Rs.47 Crore, Rea Bareli unit Rs.14 Crore, Mankapur unit Rs.44 Crore and Rs.7 Crore Bangalore Plant.
(d) Rs. 7998.00 lacs representing grants received related to previous years towards salaries, PF and Gratuity has been credited to Other Income
d) Rae Bareli Unit has reported that from FY 2012-13 onwards till 31st July 2017 on the basis of provisional invoices for GPON AMC services rendered by a service provider to BSNL for a total amount of Rs.6151 lacs as the turnover based on the provisional invoice and included under the head âRevenue from Operationsâ and the same has been included under the head âUnbilled revenueâ under the head Current Assetsâ in the financial statements.
9 Accretion/Decretion to stock-in-trade is arrived at after considering due adjustment to difference in excise duty element in respect of opening stock.
10 The Company is a Sick Company as per provisions of Sick Industrial Companies Act (SICA), 1985. CCEA has approved a financial assistance of Rs.4156.79 Crore in February, 2014, for revival of ITI under Rehabilitation Scheme. As a part of the approved financial assistance, a sum of Rs.192 Crore has been received towards share application money as Capital Grant during the financial year 2014-15 and shares allotted during financial year 2016-17 and additionally Rs.80 Crore received as share capital in financial year 2016-17. During the year 2017-18 Rs.337 Crore has been received towards Capital Grant in Aid, out of this Rs.200 Crore alloted and balance Rs.137 Crore is pending as Share application money under Other Equity. Rs.132.98 Crore received as Revenue Grant towards employee benefit expense and employee related statutory dues during the financial year 2017-18. Out of Rs.132.98 Crore, Rs.53.00 Crore given towards employee benfit expense for the months of April 2017, May 2017 and July 2017 and towards statutory dues of prior years is treated as other operating income as per accounting policy. The company has also received Rs.15500 lakhs towards VRS expenditure, out of which Rs.3658.19 lakhs has been spent towards VRS during FY 2016-17 and 2017-18 and Rs.3350 lakhs have been transfered to units/Ros for meeting the expenditure during 2016-17 and the balance Rs.307.16 lakhs will be transfered during FY 2018-19. The balance amount lying in Escrow account as on 31.03.2018 is Rs.11842.84 lakhs.
11 Land proposed to be leased to Bengaluru Metropolitan Transport Corporation, BMTC (which has not been revalued), measuring 12.15 acres is in possession of the BMTC. Pending Government of India approval for the lease, lease terms and agreement yet to be finalised. Lease rental will be recognised on finalisation of the terms. An amount of Rs.285 lakhs received earlier from the BMTC under an agreement to sell is held under deposits.
12 National Highways Authority of India (NHAI) has acquired 1.375 acres of land in 2007-08 for public purpose on a compensation of Rs.146 lakhs, which is yet to be received pending submission of certain records by the unit. Proportionate cost of the acquired land aggregating Rs.5.81 lakhs has been withdrawn from Freehold Land under fixed assets and held as Claims Recoverable. On receipt of the compensation from the NHAI, necessary accounting entries will be booked for recognising the profit on sale of land.
13 Karnataka Power Transmission Corporation Limited is using 5 Acres of Land (which has not been revalued) and no lease agreement has been entered for the same.
14 Lease agreement with ESIC has expired in the month of July 2016 and renewal lease agreement has not been entered, as the revised lease rent is not settled with ESIC.
15 Land Measuring 77 Acres valuing Rs.194.70 Crore (Market value) have been resumed by the Govt of Kerala and under adjudication of the Apex Court. The value of Land as shown in the Balance Sheet includes the value of Land resumed by the Govt of Kerala pending decision by the Apex court.
16 Rent from C-DoT, Government of India aggregating Rs.5847.90 lakhs has not been realised for the years 2005-06 to 2010-11. Due to uncertainty of realisation, recognition of gross rental revenue aggregating Rs.7117.92 lakhs for the financial years 2011-12,2012-13,2013-14,2014-15,2015-16, 2016-17 & 2017-18 on accrual basis is deferred, which is in conformity with Ind AS-18.
17 Liquidated Damages (LD) of Rs.1049.41 lakhs on a supplier claimed by Bangalore Plant, rejected by the Arbitral Tribunal and the matter is pending before High Court of Delhi.
18 Previous yearâs figures have been regrouped and reclassified wherever necessary to conform to current yearâs classification.
19 Figures in brackets indicated in the Accounts reflect negative balances.
d. All transactions dealt with related parties are on armâs length basis.
e. All Outstanding balances(other than loan) are Unsecured and is repayable in cash within next 6 months. For Outstanding balance of loans refer note h below.
h. Loans to Related Parties Nil
i. Management Contracts including deputation of Employees:-Nil
j. Transaction with Government and Government Related Entities :-
As ITI is a government entity under the control of Ministry of Telecommunications (MoT), the company has provided detailed disclosures required under Ind AS 24 wrt related party transactions with government and government related entities.
However as required under Ind AS 24, following are the individually significant transactions : -
1. Buyback of Shares.
2. Bonus Issued.
3. Dividend Paid.
In addition to the above, around 89.72% of the Companyâs Turnover, around 98.67% of Trade Receivables and around 99.95% of Customerâs Advance is with respect to government and government related entities.
34 Financial Instruments - Fair Value Measurements 1 Accounting classification and fair values
The following tables shows the carrying amount and fair values of financial assets and liabilities:
Level 1: Level 1 hierarchy includes Financial instruments measured using quoted prices.
Level 2: The fair value of Financial instruments that are not traded in an active market is determined using valuation techniques which maximize the use of observable market data and rely as little as possible on entity specific estimates.
Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in Level 3. This is the case of unlisted equity shares.
The fair value of the Companyâs cash and cash eqivalents, trade receivables,deposits with maturity of 3 to 12 months,loans(except for Security Deposits) and other financial assets,trade payables and other financial liabilities (except employee related liabilities) approximates carrying amount because of the short term nature of theses instruments. The Companyâs cash eqivalents are comprised of cash deposited in certificate of deposits with short term maturities.
Loans to related parties,security deposits, employee related liabilities and borrowings have fair values that approximates to their carrying amounts as it is based on the net present value of the anticipated future cash flows using rates currently available for debt on similar terms,credt risk and remaining maturities.
35 Financial Risk Management
The Companyâs business, operating results and financials are subject to various risks and uncertainities.The Companyâs principal financial liabilities comprise Loans and borrowings, trade and other payables and financial guarantees.The main purpose of these financial liabilities is to finance the Companyâs operations and to provide guarantees to support these operations.The Companyâs principle assets include loans, trade and other receivabes,and cash and cash equivalents that arise directly from its operations.
i. Risk Management framework and policies
âThe Company is broadly exposed to Credit risk, Liquidity risk and Market risk (fluctuations in exchange rates, interest rates and price risk) as a result of financial instruments.The Company has adopted a Risk Management framework,which covers risk management techniques at the time of conceiving or executing the projects.
Board of Directors has the overall responsibility for the establishment, monitoring and supervision of the Companyâs risk management framework. The Board has set up a Risk Management Committee, for this purpose, which is responsible for developing and monitoring the risk management policies.The Company has an established Risk Management Policy that outlines risk management structure and provides a comprehensive frame work for identification, evaluation, prioritization, treatment of various risks associated with different areas of finance and operations.
ii. Market Risk
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate due to changes in market prices such as foreign exchange rates, interest rates, and other price risk. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return. The Companyâs activities expose it primarily to the financial risks of changes in foreign exchange rates and interest rate movements (refer to notes below on currency risk and interest risk).
Currency Risk
ITI is exposed to foreign exchange risk arising from foreign currency transactions primarily relating to purchases made in foreign currencies such as US Dollar, Euro,etc,. Foreign exchange risk arises from existing and future commercial transactions and recognised assets and liabilities denominated in a currency that is not the Companyâs functional currency (INR).
The Company has a Board approved currency risk management policy implemented by a Risk Management Committee that reviews the Companyâs exposure to this risk on a regular basis. The Risk Management Policy recommends hedging upto 100% of the open foreign currency exposure. However the decision to enter into a hedging arrangement is made by the Risk Management Committee based on the relevant data inputs and the advice of the bankers. The imports are benchmarked as per the policy and appropriate decision on covering the risk is taken on a case to case basis. The Companyâs currency risk policy advocates forward contract hedging for mitigating risk wherever required. As on 31 March 2018, there are no outstanding forwards contracts. The company has not entered into any forward contracts during the financial year 2017-18.
Foreign Currency sensitivity
The sensitivity of profit or loss to changes in the exchange rate arises mainly from foreign currency denominated financial instruments. The sensitivity to variations in respect of major currencies is given below . This analysis assumes that all other variables remain constant.
Interest rate risk
Interest rate risk can be either fair value interest rate risk or cash flow interest rate risk. Fair value interest rate risk is the risk of changes in fair values of fixed interest bearing investments because of fluctuations in the interest rates. Cash flow interest rate risk is the risk that the future cash flows of floating interest bearing instruments will fluctuate because of fluctuations in market interest rates. The Companyâs exposure to the risk of changes in Market interest rates relates primarily to the Companyâs long term debt/ short term obligations with floating interest rates.
Equity Price Risk
The companyâs exposure to equity price risk is negligible as its equity investment (other than in subsidiaries and Associate) is nil.
Liquidity Risk
Liquidity Risk is the risk that a Company could encounter if it faces difficulty in meeting the obligations associated with financial liabilities by delivering cash and other financial asset or the risk that the Company will face difficulty in raising financial resources required to fulfill its commitments. The Companyâs exposure to liquidity risk is minimal as it has a prudent liquidity risk management process in place which ensures maintaining adequate cash and marketable securities to pay its liabilities when they are due. To ensure continuity of funding, the Company has access to short-term bank facilities in the nature of bank overdraft facility, cash credit facility and short-term borrowings to fund its ongoing working capital requirements and growth needs when necessary.
The table below analyses the companyâs financial liabilities based on their contractual maturities. The amounts disclosed are contractual undisclosed cash flows.
iv. Credit Risk
Credit risk refers to the risk that a counter party will default on its contractual obligations resulting in financial cases to the Company. Credit risk arises from credit exposures from customers, cash and cash equivalent with banks, security deposits and loans.
The credit risk of the Company is managed at a corporate level by the risk management committee which has established the credit policy norms for its customers and other receivables. Significant amount of trade receivables are due from Government/Government Departments, Public Sector Companies (PSUs) consequent to which the Company does not have a credit risk associated with such receivables. In case of non Government trade receivables, sales are generally carried out based on Letter of Credit established by the customer thereby reducing the credit risk.
âThe cash and cash equivalent with banks are in the form of short term deposits with maturity period of upto 1 year. The Company has a well structured Risk Mitigation Policy whereby there are preset limits for each bank based on its net worth and earning capacity which is reviewed on a periodic basis. The Company has not incurred any losses on account of default from banks on deposits.
v. Capital Management
The Companyâs Capital Management objective is to maintain a strong capital base to provide adequate returns to the shareholders and ensure the ability of the company to continue as a going concern. The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requiremnets of the financial covenants.
36 Critical estimates and judgments
While preparing the financial statements, management has made certain judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised prospectively. The estimates at April 01,2016 and at March 31,2017 are consistent with those made for the same dates in accordance with Indian GAAP (after adjustments to reflect any differences in accounting policies). The estimates used by the Company to present these amounts in accordance with Ind AS reflect the conditions at April 01,2016, the date of transition to Ind As and as of March 31,2017.
Judgments made in applying accounting policies that have the most significant effects on the amounts recognised in the financial statements and Estimates that have a significant risk of resulting in a material adjustment are are as under:
i Estimation of defined benefit obligation - Key actuarial assumptions - (Refer Note No. 27)
ii Estimation of provision for warranty claims -Accounting Policy No. 20
Warranty provision computation involves estimation of average warranty cost based on trend based analysis. If the estimations made varies, the same will impact the expense recognised.
iii Recognition of Revenue -Accounting Policy No. 4
Percentage-of-completion method involves estimation of Stage of completion based on actual costs incurred to the estimated total costs expected to complete the contract. If the estimations made varies, the same will impact the Revenue recognised.
iv Impairment of Non-Financial Assets - Accounting Policy No. 8
Recoverable amount of Non Financial Assets has been estimated based on internal/external factors that affects the recoverable amount.
v Estimation of provision other than warranty claims - Accounting Policy No. 23
Provision computation involves estimation of recoverability of the assets based on external factoRs.If the estimations made varies, the same will impact the expense recognised.
37 First Time Adoption of Ind AS Transition to Ind AS
As stated in Significant Accounting Policy No. 1, the financial statements for the year ended March 31,2018 is the Companyâs first financial statements prepared in accordance with Ind AS
The transition to Ind AS has resulted in changes in the presentation of financial statements, disclosures in the notes thereto and accounting policies and principles. The accounting policies attached to the financial statements have been applied in preparing the financial statements for the year ended 31st March 2018 and the comparative information. All applicable Ind AS have been applied consistently and retrospectively, wherever required. For the purpose of transition to Ind AS, the Company has followed the guidance prescribed in Ind AS 101 (first time adoption of Indian Accounting Standards), with 1 April 2016 as the transition date from the previous GAAP. An explanation of how the transition from previous GAAP to Ind AS has affected the companyâs financial position, financial performance and cash flows is set out in the following tables and notes.
I Exemptions and Exceptions Availed
Set out below are the applicable Ind AS 101 optional exemptions and mandatory exceptions applied in the transition from previous GAAP to Ind AS as at the transition date i.e., April 1,2016.
A Ind AS optional exemptions
Property plant and equipment, Intangible assets and Investment Property-Deemed cost
Ind AS 101 permits a first-time adopter to elect to continue with the carrying value for all of its property, plant and equipment as recognised in the previous financial statements as at the date of transition to Ind AS, and use that as its deemed cost on the date of transition after making necessary adjustments for de-commissioning liabilities. This exemption can also be used for intangible assets and investment property.
Accordingly, the company has elected to measure all of its property, plant and equipment, intangible assets and investment property at their previous GAAP carrying value.
Designation of previously recognised financial instruments
Ind AS 101 allows an entity to designate investments in equity instruments (other than equity investments in Subsidiaries, Associates and Joint Ventures) at Fair Value through Other Comprehensive Income (FVOCI) on the basis of the facts and circumstances at the date of transition to Ind AS. The Company has elected to designate its investment in equity instruments (other than equity investments in Subsidiaries, Associates and Joint Ventures) at FVOCI on the date of transition to Ind AS.
Investments in Subsidiaries and Associates
Ind AS 101 permits an entity to measure its investments in Subsidiaries, Associate and Joint Ventures at cost in accordance with Ind AS 27 (Separate Financial Statements). Accordingly, the Company has measured investments in subsidiaries at cost.
Leases
Appendix C to Ind AS 17 requires an entity to assess whether a contract or arrangement contains a lease. In accordance with Ind AS 17, this assessment should be carried out at the inception of the contract or arrangement. Ind AS 101 provides an option to make this assessment on the basis of facts and circumstances existing at the date of transition to Ind AS, except where the effect is expected to be not material.
The company has elected to apply this exemption.
Decommissioning Liabilities included in the cost of Property, Plant and equipment
As per Ind AS 101 a first time adopter need not comply with the requirements regarding changes in the decommissioning, restoration or similar liabilities as specified under Appendix A to Ind AS 16(Changes in Existing Decommissioning, Restoration and Similar Liabilities) for changes that occurred before the transition date.
The company has availed this exemption.
B Ind AS mandatory exceptions De-recognition of financial assets and financial liabilities
As per Ind AS 101 a first time adopter shall apply the de-recognition principles requirements in Ind AS 109 prospectively for transactions occurring on or after the date of transition to Ind AS . However, an entity may apply the de-recognition requirements retrospectively from a date chosen by it if the information needed to apply Ind AS 109 to financial assets and liabilities recognised as a result of past transactions was obtained at the time of initially accounting for those transactions.
The company has elected to apply the de-recognition provisions of Ind AS 109 prospectively from the date of transition to Ind AS.
Classification and measurement of financial assets
As per Ind AS 101 an entity has to assess classification of financial assets on the basis of facts and circumstances existing as on the date of transition i.e., April 1, 2016.
Accordingly, ITI has determined the classification of Financial assets based on facts and circumstances existing at the date of transition to Ind AS.
II Reconciliation between Previous GAAP and Ind AS A Reconciliation of Equity
Previous GAAP (IGAAP) figures have been reclassified to conform to Ind AS and Schedule III presentation requirements.
E Notes to first time adoption
1 Property, Plant and equipment & Investment Property
As required under Ind AS 40 on Investment Property, Land and building that are rented out have been reclassified as Investment property. In the previous GAAP these were classified as Property Plant and Equipment. Accordingly the carrying value of Rs.2771.57 lakhs has been reclassified as Investment property as on 1st April 2016. There is no impact on the total equity on account of this adjustment.
2 Trade Receivables
Trade receivables are financial assets and generally of short term nature. They reflect the fair value themselves at their transaction price. As per Ind AS 109, the receivables in the Company should
4 Preference Share Capital
As the preference shares are non convertible and overdue, the same has been removed from the share capital and classified as current financial liability
5 Government Grants
Unspent portion of government grants (as per the conditions of grant document) are classified separately from other equity and shown as Noncurrent liabilities be put to impairment test using the expected credit loss model. Ind AS 109 allows the use of practical expedients when measuring expected credit loss on trade receivables, and states that a provision matrix is an example of such an expedient. Majority of trade receivables originate from Government owned entities, which are not exposed to high risk, the Company is making specific provisions based on case to case review and approved by Board.
3 Non-Financial Assets
The Company has elected to apply the derecognition provisions of Ind AS 109 prospectively from the date of transition to Ind AS.
The following statutory payments has been classified as Non-Financial Assets and grouped under Other Current Assets:
6 Trade Payables
Trade payables are financial liability and initially measured at fair value which is equivalent to its transaction price. Generally, they are of short term nature and in some cases where there are back to back contractual arrangements with Customers and Suppliers, such items are also classified under trade payables.
7 Non-Financial Liabilities
The Company has elected to apply the derecognition provisions of Ind AS 109 prospectively from the date of transition to Ind AS.
8 Excise Duty
Under previous GAAP revenue from sale of products was presented net of excise duty on sales. Under Ind AS, revenue from sale of goods is presented inclusive of excise duty. The excise duty paid is presented in statement of Profit and Loss as an expense . This change has resulted in an increase in revenue from operations and expenses for the year ended 2016-17 by Rs.2002 lakhs . This change in presentation has no impact on profit.
9 Extraordinary items
According to Ind AS 1 Presentation of Financial Statements, Concept of Extraordinary items has been removed in the Financial Statements. Hence the same grouped under other Income.
10 Remeasurement of Post employment benefit obligations and Planned Assets
Under Ind AS remeasurement of Employee benefit obligations and planned assets i.e., actuarial gains and losses are recognised in Other comprehensive income (OCI). Under previous GAAP these were recognised in Statement of profit and loss. Consequently an amount of Rs.3873 lakhs (before tax) has been reclassified from Employee benefit expenses to Other Comprehensive income during FY 2016-17. However, this has no impact on profit on 31st March 2017.
11 Prior period error and omissions
As required under Ind AS, if errors and omissions relating to prior period are material they have to adjusted by restating the Opening balances of Assets, Liabilities and equity for the earliest prior perio
Mar 31, 2017
1 Corporate information:
ITI Limited is a Public Limited Company incorporated under the provisions of the Companies Act, 1956. The Company is primarily engaged in the business of Manufacture, sale and servicing of Tecommunication equipments.
2 Execution and registration of sale deed for assets sold to DRDO for Rs.2600 lacs during 2003-2004 is under process .
3 An amount of Rs.16500 Lakhs has been received from the government towards payment of wage revision arrears during 2014-2015.An Amount of Rs.15414.75 lakhs has been paid towards payment of wage revision arrears and remaining amount of Rs.1087.91 lacs kept under Other Current Liabilities.
4 Balances in the accounts of creditors, advances from customers, debtors, claims recoverable, loans & advances, materials with fabricators , subcontractors/others, material in transit, deposits, loans, and other payables/receivables such as Sales Tax, VAT, Excise Duty, Cenvat, Service Tax, TDS etc., are under confirmation/reconciliation. Adjustments, if any will be made on completion of such review / reconciliation / receipt of confirmations. However, in the opinion of the management, the Trade Receivables, current assets and loans and advances are not less than as stated, if realized in the ordinary course of the business.
5 The Company is primarily engaged in business of manufacturing, trading and servicing of telecommunication equipments and rendering other associated / ancillary services and there are no other reportable segments. The Company is primarily operating in India, which is considered as a single geographical segment.
6 a) As per Accounting Standard 18 on Related Party Disclosures the following transactions are entered into with the Joint Ventures of the company viz. India Satcom Ltd.,(ISL).
7 Since the Company has no virtual certainty of sufficient future taxable income, deferred tax asset is not being recognised on unabsorbed depreciation and carried forward losses of the Company under Accounting Standard (AS)-22 âAccounting for Taxes on Incomeâ
8 Consequent to the waiver of Government Bond fee during the year ,the company had written back the earlier provision made for Rs.1894.21 lakhs.
9 JOINT VENTURES:
The financial reporting of interests in Joint Ventures as per AS-27:
(a) India Satcom Limited
No.2, Kadugodi Industrial Area,
Whitefield, Bangalore - 560 067
10 Other Income includes compensation relating to Srinagar unit losses for the years 2016-17 awaiting reimbursement from Ministry of Communications & IT.Against the compensation recognized during financial year 2015-16,a sum of tNil lakhs has been received during financial year 2016-17.
11 Accretion/Decretion to stock-in-trade is arrived at after considering due adjustment to difference in excise duty element in respect of opening and closing stock-in-trade.
12 The Company is a Sick Company as per provisions of Sick Industrial Companies Act (SICA), 1985. CCEA has approved a financial assistance of Rs.4156.79 Crores in February, 2014, for revival of ITI under Rehabilitation Scheme. As a part of the approved financial assistance, a sum of Rs.192 crores has been received towards share application money as Capital Grant during the financial year 2014-15 and shares were allotted against that during financial year 2016-17 and additionally Rs.80 Crores received towards equity in financial year 2016-17. Further, Rs.360.71 crores received as Revenue Grant towards employee benefit expense and employee related statutory dues during the financial year 2016-17. Out of Rs.360.71 Crores, Rs.164.71 crores were given towards employee benefit expense incurred during March 2016 and statutory dues pertaining to prior years and the same has been treated as an extra ordinary item as per Accounting Policy adopted by the Company. The company has also received Rs.15500 lakhs towards VRS expenditure, out of which Rs.3371.59 lakhs has been spent towards VRS during FY 2016-17 and Rs.3350 lakhs have been transfered to units/Ros for meeting the expenditure and the balance Rs.21.59 lakhs will be transfered during FY 2017-18. The balance amount laying in Escrow account as on 31.03.2017 is Rs.12150.00 lakhs.
13 Land proposed to be leased to Bangalore Metropolitan Transport Corporation, BMTC (which has not been revalued), measuring 12.15 acres is in possession of the BMTC. Pending Government of India approval for the lease, lease terms and agreement yet to be finalised. Lease rental will be recognised on finalisation of the terms. An amount of Rs.285 lakhs received earlier from the BMTC under an agreement to sell is held under deposits.
14 National Highways Authority of India (NHAI) has acquired 1.375 acres of land in 2007-08 for public purpose on a compensation of Rs.146 lakshs, which is yet to be received pending submission of certain records by the unit. Proportionate cost of the acquired land aggregating Rs.5.81 lakhs has been withdrawn from Freehold Land under fixed assets and held as Claims Recoverable. On receipt of the compensation from the NHAI, necessary accounting entries will be booked for recognising the profit on sale of land.
15 Karnataka Power Transmission Corporation Limited is using 5 Acres of Land (which has not been revalued) and no lease agreement has been entered for the same.
16 No lease agreement has been entered with ESIC for the additional land occupied by them to an extent of 229 sqmt. Management has confirmed that additional land will be included as a part of lease terms which is due for renewal during FY 2016-17.
17 Land Measuring 77 Acres valuing Rs.194.70 Crores (Market value) have been resumed by the Govt of Kerala and under adjudication of the Apex Court. The value of Land as shown in the Balance Sheet includes the value of Land resumed by the Govt of Kerala pending decision by the Apex court.
18 Rent from C-DoT, Government of India aggregating Rs.5847.90 lakhs has not been realised for the years 2005-06 to 2010-11. Due to uncertainty of realisation, recognition of gross rental revenue aggregating Rs.6087.42 lakhs for the financial years 2011-12,2012-13,2013-14,2014-15,2015-16 & 2016-17 on accrual basis is deferred, which is in conformity with AS-9.
19 Disclsoure On Specified Bank Notes (SBNs)
During the year, the Company had specified bank notes or other denomination note as defined in the MCA notification G.S.R. 308(E) dated March 31, 2017 on the details of Specified Bank Notes(SBN) held and transacted during the period from November 8, 2016 to December, 30 2016, the denomination wise SBNs and other notes as per notification is given below:
20 Extraordinary item represents grants received from Department of Telecommunications as a compensation for the expenses incurred in the earlier accounting periods towards employee benefit expense and employee related statutory liabilities.
21 During the previous year, the company has adopted the estimated useful life of the assets as prescribed under Part C of Schedule II to the Companies Act, 2013 as against the old estimate as assessed by the management. Further, the Management was in the process of identifying the assets whose life is expired as on April 01, 2015 and upon completion of reconciliation of the WDV of those assets whose useful life is expired has been transferred to retained earnings as provided in Note 7(b) to Schedule II of the Companies Act 2013.
22 In the absence of financial statements of Joint Venture Company, India Satcom Limited for the year ended March 31, 2017, consolidated financial statements of the Company could not be prepared.
23 Previous yearâs figures have been regrouped and reclassified wherever necessary to conform to current yearâs classification.
24 Figures in brackets indicated in the Accounts reflect negative balances.
25 The Financial statements for the year as approved by the Board of Directors and the report thereon issued by the statutory Auditors were revised pursuant to C&AGâs audit observation during the course of audit under sec 143 (6)(a) of the Companies Act, 2013, by amending Note No. 40.9 and amending Note No. 40.16. This amendment has no impact on the reported figure in the financial statements.
Mar 31, 2016
Note No. 40
1 Corporate information:
ITI Limited is a Public Limited Company incorporated under the provisions of the Companies Act, 1956. The Company is primarily
engaged in the business of Manufacture, sale and servicing of Telecommunication equipments.
2 Execution and registration of sale deed for assets sold to DRDO for Rs, 2600 lacs during 2003-2004 is under process .
3 An amount of Rs, 16500 Lakhs has been received from the government towards payment of wage revision arrears during 2014-2015.An
Amount of Rs, 13354.46 lakhs has been paid towards payment of wage revision arrears and remaining amount of Rs, 3145.54 lacs kept
under Other Current Liabilities.
4 Balances in the accounts of creditors, advances from customers, debtors, claims recoverable, loans & advances, materials with
fabricators , subcontractors/others, material in transit, deposits, loans, and other payables/receivables such as Sales Tax, VAT,
Excise Duty, Cenvat, Service Tax, TDS etc., are under confirmation/reconciliation. Adjustments, if any will be made on completion
of such review / reconciliation / receipt of confirmations. However, in the opinion of the management, the Trade Receivables,
current assets and loans and advances are not less than as stated, if realized in the ordinary course of the business.
5 The Company is primarily engaged in business of manufacturing, trading and servicing of telecommunication equipments and
rendering other associated / ancillary services and there are no other reportable segments. The Company is primarily operating
in India, which is considered as a single geographical segment.
6 a) As per Accounting Standard 18 on Related Party Disclosures the following transactions are entered into with the Joint
Ventures of the company viz. India Satcom Ltd.,(ISL) and ITI Communications Pte. Ltd, Singapore(ITI-C).
7 Since the Company has no virtual certainty of sufficient future taxable income, deferred tax asset is not being recognized on
unabsorbed depreciation and carried forward losses of the Company under Accounting Standard (AS)-22 "Accounting for Taxes on
Income"
8 The Company has not provided for Rs, 2685 Lakhs being penalty on nonpayment of guarantee fee to the Government of India, since
the Ministry of Communications & IT has agreed in principle to waive the same as part of the Company revival package.
(Above figures are for ISL only and does not include that of ITI-C, Singapore, which is in the process of liquidation) (Bank
account of ISL in SBI-IFB became NPA during September 2009 and referred to Stressed Asset Management Branch of SBI. Under the
securitization and Reconstruction of Financial Assets and enforcement of Security Interest Act 2002 (SARFAESI), SBI has taken
possession of the property of ISL factory at Bangalore in May 2011. The accounts of ISL for the year 2015-16 is yet to be
received).
9. Accretion/Secretion to stock-in-trade is arrived at after considering due adjustment to difference in excise duty element in
respect of opening and closing stock-in-trade.
10.The Company is a Sick Company as per provisions of Sick Industrial Companies Act (SICA), 1985. CCEA has approved a financial
assistance of Rs, 4156.79 Crores in February, 2014, for revival of ITI under Rehabilitation Scheme. As a part of the approved
financial assistance, a sum of Rs, 192 crores has been received towards share application money as Capital Grant during the
financial year 2014-15 and Rs, 494.02 crores as Revenue Grant towards employee benefit expense and employee related statutory
dues during the financial year 2015-16. Out of Rs,494.02 crores, Rs,112.50 crores given towards employee benefit expense for the
period January 2015 to March 2015 is treted as extra ordinary item as per accounting policy.
11. Land proposed to be leased to Bangalore Metropolitan Transport Corporation, BMTC (which has not been revalued), measuring
12.15 acres is in possession of the BMTC. Pending Government of India approval for the lease, lease terms and agreement yet to be
finalized. Lease rental will be recognized on finalization of the terms. An amount of Rs, 285 lakhs received earlier from the
BMTC under an agreement to sell is held under deposits.
b) Pending litigations:- (i) Claim Recoverable - in land - Rs, 1049.41 lakhs due from M/S Himachal futuristic communications
towards LD. The Company has filed a legal case and the matter is pending before Delhi High court.
(ii) Vendors have fled the case against the company involving total amount Rs,272.21 lakhs and the case is pending before various
forums.
(iii) Disputed statutory liabilities of Rs,7125.97 lakhs.
Interest and penalties on arrears of all overdue statutory liabilities (including undisputed) could arise as and when assessed
and determined by the respective authorities.
12 National Highways Authority of India (NHAI) has acquired 1.375 acres of land in 2007-08 for public purpose on a compensation
of Rs, 146 lakshs, which is yet to be received pending submission of certain records by the unit. Proportionate cost of the
acquired land aggregating Rs, 5.81 lakhs has been withdrawn from Freehold Land under fixed assets and held as Claims Recoverable.
On receipt of the compensation from the NHAI, necessary accounting entries will be booked for recognizing the profit on sale of
land.
13 Karnataka Power Transmission Corporation Limited is using 5 Acres of Land (which has not been revalued) and no lease agreement
has been entered for the same.
14 No lease agreement has been entered with ESIC for the additional land occupied by them to an extent of 229 sqmt. Management
has confirmed that additional land will be included as a part of lease terms which is due for renewal during FY 2016-17.
15 Land Measuring 77 Acres have been resumed by the Govt of Kerala and is under adjudication of the Apex Court. The value of Land
as shown in the Balance Sheet includes the value of Land resumed by the Govt of Kerala pending decision by the Apex court.
16 During the year, the company has adopted the estimated useful life of the assets as prescribed under Part C of Schedule II to
the Companies Act, 2013 as against the old estimate as assessed by the management. Further, the Management is in the process of
identifying the assets whose life is expired as on April 01, 2015 and upon reconciliation the WDV of those assets whose life is
expired would be then transferred to retained earnings as provided in Note 7(b) to Schedule II of the Companies Act 2013.
17 In the absence of financial statements of Joint Venture Company, India Satcom Limited for the year ended March 31, 2016,
consolidated financial statements of the Company could not be prepared.
18 Previous year''s figures have been regrouped and reclassified wherever necessary to conform to current year''s classification.
19. Figures in brackets indicated in the Accounts reflect negative balances.
Mar 31, 2015
1 Corporate information:
ITI Limited is a Public Limited Company incorporated under the
provisions of the Companies Act, 1956. The Company is primarily engaged
in the business of Manufacture, sale and servicing of Telecommunication
equipments.
2 Execution and registration of sale deed for assets sold to DRDO for Rs.
2600 lacs during 2003-2004 is under process .
3 An amount of Rs.165 Crores has been received from the government
towards payment of wage revision arrears during 2014-2015. An Amount of
Rs.11740.52 lacs has been paid towards payment of wage revision arrears
and remaining amount of Rs.4759.48 lacs kept under Other Current
Liabilities.
4 Balances in the accounts of creditors, advances from customers,
debtors, claims recoverable, loans & advances, materials with
fabricators , subcontractors/others, material in transit, deposits,
loans, and other payables/receivables such as Sales Tax, VAT, Excise
Duty, Cenvat, Service Tax, TDS etc., are under
confirmation/reconciliation. Adjustments, if any will be made on
completion of such review / reconciliation / receipt of confirmations.
However, in the opinion of the management, the Trade Receivables,
current assets and loans and advances are not less than as stated, if
realized in the ordinary course of the business.
5 The Company is primarily engaged in business of manufacturing,
trading and servicing of telecommunication equipments and rendering
other associated / ancillary services and there are no other reportable
segments. The Company is primarily operating in India, which is
considered as a single geographical segment.
6 Since the Company has no virtual certainty of sufficient future
taxable income, deferred tax asset is not being recognized on
unabsorbed depreciation and carried forward losses of the Company under
Accounting Standard (AS)-22 "Accounting for Taxes on Income"
7 The Company has not provided for Rs. 2685 Lakhs being penalty on non
payment of guarantee fee to the Government of India, since the Ministry
of Communications & IT has agreed in principle to waive the same as
part of the Company revival package.
Particulars Current Year Previous Year
2014-15 2013-14
8 Estimated amount of
contracts remaining to
be executed on capital
account and not provided
for (net of advances) 0.00 0.00
Commitments in respect of
other contracts not
provided for- 0.00 0.00
9 Contingent Liability
in respect of
- Outstanding letters of
credit & guarantees 23803.07 22094.07
- Sales Tax demand /
Service Tax/Income Tax 3145.58 3392.32
- Non receipt of C/D
forms 26070.30 2884.37
- Disputed Excise Duty
Demand/CENVAT
Disallowance 2641.59 2529.81
- ESI demand 0.00 0.00
- Demand of interest &
penalty by KVAT 0.00 13.66
- Claims against the
Company not acknowledged
as debts 3824.75 3725.72
Interest and penalties on arrears of all overdue statutory liabilities
(including undisputed) could arise as and when assessed and determined
by the respective authorities.
10 Other Income includes
compensation relating to
Srinagar unit losses
for the years 2014-15
awaiting reimbursement
from Ministry of
Communications & IT.
Against the compensation
recognized during
financial year 2013-14,
a sum of Rs.500 lacs has
been received during
financial year 2014-15. 864.99 893.83
11 Accretion/Secretion to stock-in-trade is arrived at after
considering due adjustment to difference in excise duty element in
respect of opening and closing stock-in-trade.
12 The Company is Sick Company as per provisions of Sick Industrial
Companies Act (SICA), 1985. CCEA has approved a financial assistance of
Rs. 4156.79 Crores in February, 2014, for Revival of ITI under
Rehabilitation Scheme. As a part of the approved financial assistance, a
sum of Rs.19200 lakhs has been received by the Company towards equity
share application money.
13 Land proposed to be leased to Bangalore Metropolitan Transport
Corporation, BMTC (which has not been revalued), measuring 12.15 acres
is in possession of the BMTC. Pending Government of India approval for
the lease, lease terms and agreement yet to be finalized. Lease rental
will be recognized on finalization of the terms. An amount of Rs. 285
lakhs received earlier from the BMTC under an agreement to sell is held
under deposits.
14 National Highways Authority of India (NHAI) has acquired 1.375 acres
of land in 2007-08 for public purpose on a compensation of Rs. 146 lacs,
which is yet to be received pending submission of certain records by
the units. Proportionate cost of the acquired land aggregating Rs. 5.81
lakhs has been withdrawn from Freehold Land under fixed assets and held
as Claims Recoverable. On receipt of the compensation from the NHAI,
necessary accounting adjustments for booking the proof on sale of land
and squiring of the will be carried out.
15 Karnataka Power Transmission Corporation Limited is using 5 Acres of
Land (which has not been revalued) and no lease agreement has been
entered for the same.
16 No lease agreement has been entered with ESIC for the additional
land occupied by them to an extent of 229 sqmt. Management has confirmed
that additional land will be included as a part of lease terms which is
due for renewal during FY 2015-16.
17 Rent from C-DoT, an autonomous body from Government of India
aggregating Rs. 5847.90 lakhs has not been realized for the years 2005-06
to 2010-11. Due to uncertainty of realization, recognition of gross
rental revenue aggregating Rs. 4026.42 lakhs for the financial year
2011-12, 2012-13, 2013-14 & 2014-15 on accrual basis is deferred, which
is conformity with AS-9.
18 Previous year's figures have been regrouped and reclassified wherever
necessary to conform to current year's classification.
19 Figures in brackets indicated in the Accounts reflect negative
balances
20 The financial statement for the year as approved by the Board of
Directors and the report thereon issued by the Statutory Auditors were
revised pursuant to C&AG's Audit observations during the course of
audit under section 143(6)(a) of the Companies Act, 2013, by amending
Note No.40 Sl.No.23 and incorporating Sl.No.19,20 & 21 of Significant
Accounting policies. This amendment has no impact on the reported figure
in the financial statements.
Mar 31, 2014
1. Company has not adopted the enhanced estimated useful life of the
asset, suggested by registered valuer as this would have resulted in
not complying with the requirment of charging minimum depreciation
contemplated by schedule XIV of Companies Act, 1956. Consquently
company charged off Rs.1670.67 Lakhs (Previous year Rs.1681.80 Lakhs) as
depreciation on revalued asset for the year. However this has no
effect on the losses of the year, as this amount is transferred from
the revaluation reserve.
2. There is a charge of Rs. 7 lakhs on 400 D type and 624 E type
quarters in favour of Govt. of Karnataka towards subsidy received in
terms of Subsidised Industrial housing Scheme.
3. Factory building is on the leased land,measuring 36 Kanals and 13
Marlas for which extension for lease is under process with J&K
Government.
4. With reference to Accounting Policy No.6 depreciation has been
charged on Fixed assets over their assessed useful life as under.
However, in respect of assets having original cost of Rs.50,000/- and
above, a residual balance of Rs.5/- has been retained in the books.
* i) Includes Rs.25 Lakhs value of land (Before revaluation) gifted by UP
Govt. credited to Capital Reserve.
ii) (a) Land measuring 4653.75 sq.metres has been leased to Department
of Telecommunications for a period of 99 years commencing from
3.10.1983.
(b) Formal Conveyance/lease deeds in respect of Land (excepting part of
lands at Bangalore & Mankapur) are yet to be executed by the respective
State Governments.
(c) Land measuring 1256.86 Sq. metres has been leased to Dept. of
Telecommunications for a period of 99 years commencing from 10.07.1991.
(d) Registered valuers have revalued Land of the company on 31.3.2006.
Land with original cost of Rs. 1000 Lakhs and written down value of Rs.
1000 Lakhs have been revalued at Rs.228637 Lakhs, resulting in an
increase in value by 227637 Lakhs.
iii) 1.83 acres of land is leased to Southern Railways and 0.286 acres
of land is leased to ESI corporation.
** Registered valuers have revalued Buildings of the company on
31.3.2006. Buildings with original cost of Rs.15277 Lakhs and written
down value of Rs. 4631 Lakhs have been revalued at Rs. 42388 Lakhs,
resulting in an increase in value by Rs. 37757 Lakhs.
*** i) Includes Rs.85 Lakhs of plant & machinery given free of cost by
UNIDO.
ii) Includes Rs.60 Lakhs of plant & machinery cost of which is borne by
Ministry of Information Technology.
iii) Includes cost of fixed assets worth Rs.5000 Lakhs procured out of
Grant received from Government of India during 2004-05.
iv) Includes Rs.937 Lakhs of plant, machinery and Equipments received
free of cost by Rae Bareli unit.
**** Includes Rs.26.94 Lakhs payment made to J&K Govt for which lease
deed proceedings are in process.
Additional Disclosures
Note No. 2
1 Corporate information:
ITI Limited is a Public Limited Company incorporated under the
provisions of the Companies Act, 1956. The Company is primarily engaged
in the business of Manufacture, sale and servicing of Telecommunication
equipments.
2 Execution and registration of sale deed for assets sold to DRDO for Rs.
2600 lacs during 2003-2004 is under process .
3 As per the Presidential directives and Tripartite agreement on wage
settlement with employees, wage revision arrears for the period from
01.01.1997 to 31.03.2000 is to be paid by the Company in a phased
manner on the improvement of Profitability position and also generation
and availability of funds. Since the company has already been declared
by BIFR as a sick company and the condition for payment of wage
revision arrears as per directives/agreement aforesaid are not
prevalent, company has not provided any liability for payment of
arrears of wage revision for this period amounting to Rs. 16500 lakhs.
This amount has been included in the Rehabilitation Scheme approved by
CCEA.
4 Balances in the accounts of creditors, advances from customers,
debtors, claims recoverable, loans & advances, materials with
fabricators , subcontractors/others, material in transit, deposits,
loans, and other payables/receivables such as Sales Tax, VAT, Excise
Duty, Cenvat, Service Tax, TDS etc., are under
confirmation/reconciliation. Adjustments, if any will be made on
completion of such review / reconciliation / receipt of confirmations.
However, in the opinion of the management, the Trade Receivables,
current assets and loans and advances are not less than as stated, if
realized in the ordinary course of the business.
5 The Company is primarily engaged in business of manufacturing,
trading and servicing of telecommunication equipments and rendering
other associated / ancillary services and there are no other reportable
segments. The Company is primarily operating in India, which is
considered as a single geographical segment.
6 As per Accounting Standard 18 on Related Party Disclosures the
following transactions are entered into with the Joint Ventures of the
company viz. India Satcom Ltd.,(ISL) and ITI Communications Pte. Ltd,
Singapore(ITI-C).
8 Since the Company has no virtual certainty of suffcient future
taxable income, deferred tax asset is not being recognised on
unabsorbed depreciation and carried forward losses of the Company under
Accounting Standard (AS)-22 "Accounting for Taxes on Income"
9 The Company has not provided for Rs. 2685 Lakhs being penalty on non
payment of guarantee fee to the Government of India, since the Ministry
of Communications & IT has agreed in principle to waive the same as
part of the Company revival package.
Rs. in lakhs
Particulars Current Year Previous Year
2013-14 2012-13
10 Contingent Liability in respect of
- Outstanding letters of credit &
guarantees 22094.07 44008.37
- Sales Tax demand /Service Tax/Income
Tax 3392.32 3077.91
- Non receipt of C/D forms 2884.37 2179.31
- Disputed Excise Duty Demand/CENVAT
Disallowance 2529.81 2387.47
- ESI demand 0.00 0.00
- Demand of interest & penalty by KVAT 13.66 445.43
- Claims against the Company not
acknowledged as debts 3725.72 3635.77
Interest and penalties on arrears of all overdue statutory liabilities
(including undisputed) could arise as and when assessed and determined
by the respective authorities.
11 Accretion/Decretion to stock-in-trade is arrived at after
considering due adjustment to difference in excise duty element in
respect of opening and closing stock-in-trade.
12 Of the 12.15 acres of land proposed to be leased to Bangalore
Metropolitan Transport Corporation, BMTC (which has not been revalued),
8.22 acres is already in possession of the BMTC. Pending Government of
India approval for the lease, lease terms and agreement yet to be
finalised. Lease rental will be recognised on finalisation of the terms.
An amount of Rs. 285 lakhs received earlier from the BMTC is held under
deposits.
13 National Highways Authority of India (NHAI) has acquired 1.375 acres
of land in 2007-08 for public purpose for which compensation is yet to
be received pending submission of certain records by the unit.
Proportionate cost of the acquired land has been withdrawn from
Freehold Land under fixed assets and compensation amount due is held as
Claims Recoverable. On receipt of the compensation from the NHAI,
necessary accounting adjustments will be carried out.
14 Karnataka Power Transmission Corporation Limited is using 5 Acres of
Land and the same is not revalued.
15 Land Measuring 77 Acres have been resumed by the Govt of Kerala and
is under adjudication of the Apex Court. The value of Land as shown in
the Balance Sheet includes the value of Land resumed by the Govt of
Kerala.
16 Rent from C-DoT, Government of India aggregating Rs. 5847.90 lakhs has
not been realised for the years 2005-06 to 2010-11. Due to uncertainity
of realisation, recognition of gross rental revenue aggregating Rs.
3015.18 lakhs for the financial years 2011-12,2012-13 & 2013-14 on
accrual basis is deferred, which is in conformity with Accounting
Standard 9.
17 Previous year''s figures have been regrouped and reclassified wherever
necessary to conform to current year''s classification.
18 Figures in brackets indicated in the Accounts reflect negative
balances.
Mar 31, 2013
1 Corporate information:
ITI Limited is a Public Limited Company incorporated under the
provisions of the Companies Act, 1956. The Company is primarily engaged
in the business of Manufacture, sale and servicing of Telecommunication
equipments.
2 Execution and registration of sale deed for assets sold to DRDO for
Rs. 2600 lacs during 2003-2004 is under process.
3 As per the Presidential directives and Tripartite agreement on wage
settlement with employees, wage revision arrears for the period from
01.01.1997 to 31.03.2000 is to be paid by the Company in a phased
manner on the improvement of profitability position and also generation
and availability of funds. Since the company has already been declared
by BIFR as a sick company and the condition for payment of wage
revision arrears as per directives/agreement aforesaid are not
prevalent, company has not provided any liability for payment of
arrears of wage revision for this period amounting to Rs. 16500 lakhs.
This amount has been included in the Draft Rehabilitation Scheme(DRS)
submitted to BIFR.
4 Balances in the accounts of creditors, advances from customers,
debtors, claims recoverable, loans & advances, materials with
fabricators, subcontractors/others, material in transit, deposits,
loans, and other payables/receivables such as Sales Tax, VAT, Excise
Duty, Cenvat, Service Tax, TDS etc., are under
confirmation/reconciliation.
5 The Company is engaged in the business of manufacture, sale and
servicing of telecommunication equipments and there are no separate
reportable segments as per Accounting Standard 17 issued by the
Institute of Chartered Accountants of India.
6 As per Accounting Standard 18 on Related Party Disclosures the
following transactions are entered into with the Joint Ventures of the
company viz. India Satcom Ltd.,(ISL) and ITI Communications Pte. Ltd,
Singapore(ITI-C).
7 Since the Company has no virtual certainty of sufficient future
taxable income, deferred tax asset is not being recognised on
unabsorbed depreciation and carried forward losses of the Company under
Accounting Standard (AS)-22 "Accounting for Taxes on Income"
8 In 2012-13, an amount of Rs.13000 lakhs was received by the Company
from the Ministry of Communication & IT, Government of India towards
salary for four months in 2011-12 and the amount is recognized as
income in the year under Extraordinary Item.
9 The Company has not provided for Rs. 2685 Lakhs being penalty on non
payment of guarantee fee to the Government of India, since the Ministry
of Communications & IT has agreed in principle to waive the same as
part of the Company revival package.
10 Other Income includes compensation relating to Srinagar unit losses
for 550.07 707.91 the years 2012-13 awaiting reimbursement from
Ministry of Communications.
11 Value of Imported Raw Materials, Store and Spare parts consumed and
Value of Indigenous Materials Consumed and percentage of each to the
total consumption
12 Accretion/Decretion to stock-in-trade is arrived at after
considering due adjustment to difference in excise duty element in
respect of opening and closing stock-in-trade.
13 Of the 12.15 acres of land proposed to be leased to Bangalore
Metropolitan Transport Corporation, BMTC (which has not been revalued),
8.22 acres is already in possession of the BMTC. Pending Government of
India approval for the lease, lease terms and agreement yet to be
finalised. Lease rental will be recognised on finalisation of the
terms. An amount of Rs. 285 lakhs received earlier from the BMTC is
held under deposits.
14 National Highways Authority of India (NHAI) has acquired 1.375 acres
of land in 2007-08 for public purpose for which compensation is yet to
be received pending submission of certain records by the unit.
Proportionate cost of the acquired land has been withdrawn from
Freehold Land under fixed assets and held as Claims Recoverable. On
receipt of the compensation from the NHAI, necessory accounting
adjustments will be carried out.
15 Karnataka Power Transmission Corporation Limited is using 5 Acres of
Land and the same is not revalued.
16 Rent from C-DoT, Government of India aggregating Rs. 5847.90 lakhs
has not been realised for the years 2005-06 to 2010-11. Due to
uncertainly of realisation, recognition of gross rental revenue
aggregating Rs. 2003.94 lakhs for the financial years 2011-12 & 2012-13
on accrual basis is deferred, which is in conformity with AS-9.
17 Previous year''s figures have been regrouped and reclassified
wherever necessary to conform to current year''s classification.
18 Figures in brackets indicated in the Accounts reflect negative
balances.
Mar 31, 2012
1. Company has not adopted the enhanced estimated useful life of the
asset, suggested by registered valuer as this would have resulted in
not complying with the requirment of charging minimum depreciation
contemplated by schedule XIV of Companies Act, 1956. Consquently
company charged off Rs.1877.88 Lakhs (Previous year Rs.2509.04 Lakhs) as
depreciation on revalued asset for the year. However this has no effect
on the losses of the year, as this amount is transferred from the
revaluation reserve.
2. There is a charge of Rs.7 lakhs on 400 D type and 624 E type quarters
in favour of Govt. of Karnataka towards subsidy received in terms of
Subsidised Industrial housing Scheme.
3. Factory building is on the leased land,measuring 36 Kanals and 13
Marlas for which extension for lease is under process with J&K
Government.
4. With reference to Accounting Policy No.6 depreciation has been
charged on Fixed assets over their assessed useful life as under.
However, in respect of assets having original cost of Rs.50,000/- and
above, a residual balance of Rs.5/- has been retained in the books.
* i) Includes Rs.25 Lakhs value of land (Before revaluation) gifted by UP
Govt. credited to Capital Reserve.
ii) (a) Land measuring 4653.75 sq.metres has been leased to Department
of Tele communications for a period of 99 years commencing from
3.10.1983.
(b) Formal Conveyance/lease deeds in respect of Land (excepting part of
lands at Bangalore & Mankapur) are yet to be executed by the respective
State Governments.
(c) Land measuring 1256.86 Sq. metres has been leased to Dept. of
Telecommunications for a period of 99 years commencing from 10.07.1991.
(d) Registered valuers have revalued Land of the company on 31.3.2006.
Land with original cost of Rs Rs.1000 Lakhs and written down value of
Rs.1000 Lakhs have been revalued at Rs.228637 Lakhs, resulting in an
increase in value by Rs. 227637 Lakhs.
(iii) 1.83 acres of land is leased to Southern Railways and 0.286 acres
of land is leased to ESI corporation.
** Registered valuers have revalued Buildings of the company on
31.3.2006. Buildings with original cost of Rs.15277 Lakhs and written
down value of Rs. 4631 Lakhs have been revalued at Rs. 42388 Lakhs,
resulting in an increase in value by Rs. 37757 Lakhs.
*** i) Includes Rs.85 Lakhs of plant & machinery given free of cost by
UNIDO.
ii) Includes Rs.60 Lakhs of plant & machinery cost of which is borne by
Ministry of Information Technology.
iii) Includes cost of fixed assets worth Rs.5000 Lakhs procured out of
Grant received from Government of India during 2004-05
iv) includes Rs.937 Lakhs of plant, machinery and Equipments received
free of cost by Rae Bareli unit.
**** Includes Rs.26.94 Lakhs payment made to J&K Govt for which lease
deed proceedings are in process.
In respect of Interest charged In excess of State Bank Advance Rate
w.e.f. 01.04.2009, aggregate refund received upto 31.03.2012 is Rs.
241.20 Lakhs from State Bank of Hyderabad,State Bank of Patiala,State
Bank of Travancore and Canara Bank. The remaining Banks vIz.StateBanak
Of India,State banak of Bikaner& Jaipur, State Bank of Mysore, Bank of
Baroda.Central Bank of India,Punjab National Bank.Development Credit
Bank Ltd.Jndus Ind Bank Ltd..Axis Bank Ltd.,Vljaya Bank and Indian Bank
are expected to refund excess Interest during 2012-2013.
1 Corporate information:
ITI Limited is a public Company domiciled in India and incorporated
under the provisions of the Companies Act, 1956. The Company is
primarily engaged in the business of Manufacture and sale of
Telecommunication equipments.
2 Presentation and disclosure of financial statements:
The revised Schedule VI notified under the Companies Act 1956, has
become applicable to the Company, for preparation and presentation of
its financial statements for the year ended 31.03.2012. The adoption of
revised Schedule VI does not impact recognition and measurement
principles followed for preparation of financial statements. However,
it has significant impact on presentation and disclosures made in the
financial statements. The Company has also reclassified the previous
year figures in accordance with the requirements applicable in the
current year.
3 Insurance and Customs Duty Claims are accounted as and when the
claims are accepted by respective authorities.
4 Execution and registration of sale deed for assets sold to DRDO forRs.
2600 lacs during 2003-2004 is under process .
5 As per the Presidential directives and Tripartite agreement on wage
settlement with employees, wage revision arrears for the period from
01.01.1997 to 31.03.2000 is to be paid by the Company in a phased
manner on the improvement of profitability position and also generation
and availability of funds. Since the company has already been declared
by BIFR as a sick company and the condition for payment of wage
revision arrears as per directives/agreement aforesaid are not
prevalent, company has not provided any liability for payment of
arrears of wage revision for this period amounting to Rs. 16500 lakhs.
This amount has been included in the Draft Rehabilitation Scheme(DRS)
submitted to BIFR.
6 Balances in the accounts of creditors, debtors, advances from
customers. Claims recoverable, loans and advances, materials with
fabricators , sub-contractors/others,material in transit, deposits.
Loans, Creditors, and other payables are subject to confirmation.
7 The company is engaged in the business of manufacture and sale of
telecommunication equipments and there are no separate reportable
segments as per Accounting Standard 17 issued by the Institute of
Chartered Accountants of India.
8 As per Accounting Standard 18 on Related Party Disclosures the
following transactions are entered into with the Joint Ventures of the
company viz. India Satcom Ltd and ITI Communications Pte. Ltd,
Singapore.
9 Since the company has no virtual certainty of sufficient future
taxable income, no deferred tax asset is being recognised on unabsorbed
depreciation and carried forward losses of the company under Accounting
Standard (AS)-22 "Accounting for Taxes on Income"
10 Accretion/Decretion to stock-in-trade is arrived after considering
due adjustment to difference in excise duty element in respect of
opening and closing stock-in-trade.
11 Salaries, Wages & Bonus includes Rs. 42.10 Lakhs as Salaries of
Srinagar employees presently posted at different units of ITI due to
disturbed Law & Order situation in Kashmir Vally(P.Y.Rs. 37.51 Lakhs)
12 12.15 acres of land has been agreed to be sold to BMTC not revalued.
Out of which 8.22 acres already in possession of BMTC. Sale deed
registration is pending as Govt, approval is awaited for which an
advance ofRs. 285 lacs has been received.
13 National Highway Authority has acquired 1.375 acres of land for road
widening in Electronics City for a compensation of Rs. 146lacs(yet to be
received) during 2007-08. The land is in possession of NHAI pending
transfer of title. However value of land continues in the books of
Accounts. NHAI has also notified for acquisition of about 0.5495 acres
of land & some building at Palakkad for which compensation is yet to be
decided.
14 KPTCL is in possession of 5 acres of land and not revalued.
15 Rent from C-Dot aggregating to Rs. 5847.90 lakhs has not been received
for the last 6 years. The Company has deferred recognition of revenue
aggregating to Rs. 992.70 Lakhs for the current financial year due to
uncertainty in receiving the amount which is in conformity with AS-9.
16 Previous year's figures have been regrouped and reclassified
wherever necessary to conform to current year's classification.
17 Figures in brackets indicated in the Accounts reflect negative
balances.
Mar 31, 2011
1. Execution and registration of sale deed for assets sold to DRDO for
Rs. 26 Crores during 2003-2004 is under process consequent to the
receipt of Ministry approval.
2. As per the Presidential directives and Tripartite agreement on wage
settlement with employees, wage revision arrears for the period from
01.01.1997 to 31.03.2000 is to be paid by the Company in a phased
manner on the improvement of profitability position and also generation
and availability of funds. Since the company has already been declared
by BIFR as a sick company and the condition for payment of wage
revision arrears as per directives/agreement aforesaid are not
prevalent, company has not provided any liability for payment of
arrears of wage revision for this period amounting to Rs. 165 Crs. This
amount has been included in the Draft Rehabilitation Scheme(DRS)
submitted to BIFR.
3. Interest on Royalty payable to C-DOT has not been provided in view
of substantial dues (which are more than the royalty amount)
outstanding for a long time from C-DOT on account of Rent payable on
our premises leased out to them. The issue is under
correspondence/discussions with DoT and C-DoT.
4. In case of back to back arrangements, Liquidated damages is
accounted on net basis.
5 Redemption installments in respect of the following Cumiulative
Redeemable Preference shares issued by the company have not been paid
on due dates on account of fund constraints
6 A list of micro, small and medium enterprises to whom the Company
owe any sum together with interest outstanding for more than 30 days to
the extent identified.
i. Crystalonics Displays (P) Ltd. Bangalore
ii. Fasteners & Industrial Components Bangalore
iii. Latha Plastronics Bangalore
iv M R Engineers Bangalore
v Maruthi Rubber Products Bangalore
vi Protectron Electromech (P) Ltd. Bangalore
vii S K Electronics Industries Bangalore
viii Sri Kumar Packing Products Bangalore
ix Sri Shakti Industries Bangalore
x Udaya Insulated Cable Co. Bangalore
xi Universal Agencies Bangalore
xii Woody Industries Kerala
7 Balances in the accounts of creditors, debtors, advances from
customers, some bank accounts, Claims recoverable, loans and
advances,materials with fabricators, sub-contractors/others, material
in transit, deposits, Loans, Creditors, Sales Tax,VAT, Excise
Duty,Cenvat, Service Tax are under confirmation/reconciliation
8 Claims and expenses recoverable - inland- schedule 5.04 includes
Rs.16.72 Crores recoverable from M/s HCL Infosystem Ltd. as
compensation on account of excess amount spent by ITI Ltd. MANKAPUR.
The above is on the basis of agreement entered into between ITI, HCL
and Alcatel.
9 Inventory of Pallakad unit includes an amount of Rs. 2.04 lakhs
pending in Stock Correction Suspense Account as on 31.03.2011, the
material is not physically held by the Unit but sent to different
suppliers for rectification/replacement.
10 Debtors and Security Deposit of NSU includes Rs.83.64 Lakhs and Rs.4
Lakhs respectively due from Central Railway. Arbitration proceedings
are under progress for the settlement.
11 Cabinet Committee on Economic Affairs (CCEA) as a part of revival
package approved financial assistance of Rs. 3000 crores to ITI, out of
which Rs. 2820 crores was received by ITI in August 2009. The balance
Rs.180 crores was received in March 2011 and the same been taken to
Capital Reserve.
12 Company has not adopted the enhanced estimated useful life of the
asset, suggested by registered valuer as this would have resulted in
not complying with the requirement of charging minimum depreciation
contemplated by schedule XIV of Companies Act, 1956. Consquently
company charged off Rs.25.09 Crores (Previous year 25.34 crores) as
depreciation on revalued asset for the year. However this has no effect
on the losses of the year, as this amount is transferred from the
revaluation reserve.
13 Construction/ Turnkey Contracts:
The company for the financial year 2010-11 has recognised revenue on
Construction/ Turnkey contracts based on stage of completion as
determined with respect to completion of physical proportion of the
contract as certified and furnished by Company's Engineers.
Consequently,
14 The company is engaged in the business of manufacture and sale of
telecommunication equipments and there are no separate reportable
segments as per Accounting Standard 17 issued by the Institute of
Chartered Accountants of India.
15 As per Accounting Standard 18 on Related Party Disclosures the
following transactions are entered into with the Joint Ventures of the
company viz. India Satcom Ltd and ITI Communications Pte. Ltd,
Singapore.
16 Since the company has no virtual certainty of sufficient future
taxable income, no deferred tax asset is being recognised on unabsorbed
depreciation and carried forward losses of the company under Accounting
Standard (AS)-22 "Accounting for Taxes on Income"
17 JOINT VENTURES:
The financial reporting of interests in Joint Ventures as per AS-27,
the Joint Ventures of the company come under the category of Jointly
controlled entities. The 2 Joint Ventures of the company are:
a. India Satcom Limited
No.2, Kadugodi Industrial Area, Whitefield, Bangalore - 560 067
Company's stake in equity participation-49% Place of incorporation of
JV-India
b. ITI Communications Pte Limited
No.5, Shenton way, #27-01, UIC Building, Singapore-068808 Company's
stake in equity participation-49% Place of incorporation of
JV-Singapore (The above figures does not include ITI-C, Singapore since
it is in the process of liquidation.)
(Bank account of ISL in SBI-IFB became NPA during September 2009 and
referred to Stressed Asset Management Branch of SBI. Under the
securitization and Reconstruction of Financial Assets and enforcement
of Security Interest Act 2002 ( SARFAESI), SBI has taken possession of
the property of ISL factory at Bangalore in May 2011. The accounts of
ISL for the year 2010-11 are yet to be finalised).
18 The Government has communicated vide its letter dated 28.01.2011
that ITI may cancel the proposal of sale of its shares(1621800 Nos) in
ISL to M/s Chris Tech Systems Private Limited. Consequently, the
consideration amount of Rs.3 crores deposited in ESCROW account has
since been released.
Rs.In Crores
Current Year Previous Year
2010-11 2009-10
19 Contingent Liability in respect of
- Outstanding letters of credit &
guarantees 265.12 484.05
- Sales Tax demand /Service Tax 33.58 41.11
- Non receipt of C/D forms 72.40 130.30
- Disputed Excise Duty Demand/CENVAT
Disallowance 41.72 80.77
- ESI demand 0.94 0.98
- Demand of interest & penalty by KVAT 4.45 4.32
- Claims against the Company not
acknowledged as debts 70.29 68.90
20 Previous year's figures have been regrouped and reclassified
wherever necessary to conform to current year's classification.
21 Accretion/Decretion to stock-in-trade is arrived after considering
due adjustment to difference in excise duty element in respect of
opening and closing stock-in-trade.
22 Figures in brackets indicated in the Accounts reflect negative
balances.
Mar 31, 2010
1 Execution and registration of sale deed for assets sold to DRDO for
Rs. 26 Crores during 2003-2004 is under process consequent to the
receipt of Ministry approval.
2 As per the Presidential directives and Tripartite agreement on wage
settlement with employees, wage revision arrears for the period from
01.01.1997.to 31.3.2000 is to be paid by the Company in a phased manner
on the improvement of profitability position and also generation and
availability of funds. Since the company has already been declared by
BIFR as a sick company and the condition for payment of wage revision
arrears as per directives/agreement aforesaid are not prevalent,
company has not provided any liability for payment of arrears of wage
revision for this period amounting to Rs. 165 Crs.
3 Redemption installments in respect of the following
Cumulative Redeemable Preference shares issued by the company have not
been paid on due dates on account of fund constraints
4 Loans and Advances includes an outstanding amount of Rs.3.55 Crs
pending adjustment against pay revision arrears.
5 A list of micro, small and medium enterprises to whom the Company
owe any sum together with interest outstanding for more than 30 days to
the extent identified.
i. ABILTY ENTERPRISES ii. VAIBHAV PLASTIC iii. VEE KAY INDUSTRIES
6 Balances in the accounts of creditors, debtors, advances from
customers, some bank accounts, Claims recoverable, loans and advances,
materials with fabricators , sub-contractors/ others,material in
transit, deposits, Loans, Creditors, Sales Tax,VAT, Excise Duty,Cenvat,
Service Tax are under confirmation/reconciliation.
7 Claims and expenses recoverable - inland- schedule 5.04 includes Rs.
17.60 Crores recoverable from M/s HCL Infosystem Ltd. as compensation
on account of excess amount spent by ITI Ltd. MANKAPUR . The above is
on the basis of agreement entered into between ITI, HCL and Alcatel.
8 In respect of orders received by Company for GSM 2 Million and 3
Million in the minutes of meeting held with Ministry it has been
indicated that BSNL will favourably consider waiver of interest on the
Advances paid to ITI for the above two projects.
9 Inventory of Pallakad unit includes an amount of Rs. 2.04 lakhs
pending in Stock Correction Suspense Account which represent materials
sent to suppliers for rectification/ replacement.
10 Debtors and Security Deposit of NSU includes Rs.83.64 Lakhs and Rs.4
Lakhs respectively due from Central Railway. Arbitration proceedings
are under progress for the settlement.
11 During the year an amount of Rs. 2820 Crores was received by the
Company from Ministry of Communication & IT for discharging liabilities
of the company. As per directions the Company has discharged all
liabilities except to the extent of Rs. 7.50 Crores. As per Companys
Accounting Policy a sum of Rs.311 Crores has been taken to P&L A/c
through Revenue Grant and balance to Capital Reserve.
12 Company has not adopted the enhanced estimated useful life of the
asset, suggested by registered valuer as this would have resulted in
not complying with the requirment of charging minimum depreciation
contemplated by schedule XIV of Companies Act, 1956. Consequently company
charged off Rs. 25.34 Crores (Previous year 26.31 Crores) as depreciation
on revalued asset for the year. However this has no effect on the losses
of the year, as this amount is transferred from the revaluation
reserve.
13 Construction/ Turnkey Contracts:
The company for the financial year 2009-10 has recognised revenue on
Construction/ Turnkey contracts based on stage of completion as
determined with respect to completion of physical proportion of the
contract as certified and furnished by Companys Engineers.
Consequently,
14 The company is engaged in the business of manufacture and sale of
telecommunication equipments and there are no separate reportable
segments as per Accounting Standard 17 issued by the Institute of
Chartered Accountants of India.
15 Since the company has no virtual certainty of sufficient future
taxable income, no deferred tax asset is being recognised on unabsorbed
depreciation and carried forward losses of the company under Accounting
Standard (AS)-22 "Accounting for Taxes on Income"
16 JOINT VENTURES:
The financial reporting of interests in Joint Ventures as per AS-27,
the Joint Ventures of the company come under the category of Jointly
controlled entities. The 2 Joint Ventures of the company are:
a India Satcom Limited,
No.2, Kadugodi Industrial Area, Whitefield, Bangalore - 67 Companys
stake in equity participation-49% Place of incorporation of JV-lndia
17 The company has sold the entire shareholding of 1621800 shares of
ISL (INDIA SATCOM LIMITED) on 02-09-2006 for a consideration of Rs.3
crores. The same is deposited in ESCROW accounts (asper the agreement
sale consideration). Approval of the Central Government is awaited for
the said sale of shares.
18 Current liabilities includes a sum of Rs. 47.43 lakhs being the
principal and interest of unclaimed bonds and public deposit of the
Company. The same has not been transferred to "Investors Education and
Protection Fund"as per sec 205(c) of the Companies Act. The same will
be deposited in that account as soon as the funds position of the
company gets improved.
19 Accretion/Decretion to stock-in-trade is arrived after considering
due adjustment to difference in excise duty element in respect of
opening and closing stock-in-trade.
20 Figures in brackets indicated in the Accounts reflect negative
balances.
21 In respect of rental income received from Hosmat Hospital Bangalore
service tax and penalty is not considered as this issue of
applicability of service tax is sub-judice.
22 The Balance Sheet and Profit and Loss Account adopted by the Board
of Directors on 04r08.2010and reported by the Statutory Auditors on
04.08.2010 have been revised in the light of observations arising from
the audit by the Comptroller and Auditor General of India resulting in
correction of certain notes and increase in net loss by Rs.90.54
Crores.
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