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ITI Ltd.

BSE: 523610 Sector: Telecom
NSE: ITI ISIN Code: INE248A01017
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VOLUME 11934
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P/E 147.94
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OPEN 100.20
CLOSE 100.35
VOLUME 11934
52-Week high 129.50
52-Week low 80.35
P/E 147.94
Mkt Cap.(Rs cr) 9,553
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

ITI Ltd. (ITI) - Auditors Report

Company auditors report

TO THE MEMBERS OF ITI LIMITED

Bengaluru

Report on the Audit of the Standalone Financial Statements QualifiedOpinion

We have audited The accompanying standalone financial statements of ITILimited ("the Company") which comprise the Balance Sheet as at March 31 2022the Statement of Profit and Loss (including Other Comprehensive Income) the Statement ofChanges in Equity and the Statement of Cash Flows for the year then ended and a summaryof the significant accounting policies and other explanatory information (hereinafterreferred to as "the Standalone financial statements") in which are incorporatedthe returns for the year ended on that date audited by the branch auditors of thecompany's branches located at Naini Mankapur Raebareli Srinagar and Palakkad.

In our opinion and to the best of our information and according to theexplanations given to us except for the effects of the matter described in the Basis forQualified Opinion section of our report the aforesaid financial statements give theinformation required by the Companies Act 2013 (‘the Act') in the manner so requiredand give a true and fair view in conformity with the Indian Accounting Standardsprescribed under section 133 of the Act read with the Companies (Indian AccountingStandards) Rules 2015 as amended ("Ind AS") and other accounting principlesgenerally accepted in India of the state of affairs of the Company as at March 31 2022the profit and total comprehensive income changes in equity and its cash flow for theyear ended on that date.

Basis for Qualified Opinion

1. The Company has not made provision for bad and doubtful debts(expected credit losses) in respect of the following items included under CurrentFinancial Assets which are also doubtful of recovery:

a) Rs.5847.90 lakhs as receivable from C-DOT towards rent frompremises leased out to them up to the period ended 31-3-2011.

b) Recoverable from HCL Infosystems Limited of Rs.1690.20 lakhs ascompensation on account of excess amount spent by the Mankapur Unit of the Company basedon the agreement between ITI HCL and Alcatel.

c) Recoverable from Himachal Futuristic Communications Ltd of

Rs.1049.41 lakhs towards Liquidated Damages.

d) Receivable from Mindarray towards encashment of letter of credit of

Rs.1023.00 lakhs

e) Accordingly if provision for credit losses were made by theCompany the profit for the year and the net current assets would have been reduced byRs.9610.51 lakhs.

2. The Company does not have confirmations and reconciliation ofbalances from sundry debtors. The effect of the adjustment arising from reconciliation andsettlement of old dues and possible loss which may arise on account of non-recovery orpartial recovery of such dues is not ascertained. We are unable to comment on the impactof non-provisioning for such loss on the result or financial position of the Company.

3. The company is in the process of an assessment on ageingusefulness and serviceability of the inventories held at various units to ascertain theprovision for obsolete inventory. At the Raebareli unit the branch auditor has emphasisedthat the valuation of inventory is not as per the applicable accounting standard. As theseamounts are unascertained we are unable to comment on the impact of the same on theresult or financial position of the Company.

4. The company's process for identifying suppliers covered by theMicro Small and Medium Enterprises Development Act of 2006 and the payment of interest incases of delays in payment appears to be inadequate and unverifiable. As a result we areunable to comment on MSMED Act 2006 compliance or disclosure requirements under ScheduleIII of the Companies Act 2013.

5. The Company has not reversed the wrong GST input tax credit ofRs.889 lakhs taken during 2019-20 at the Palakkad Unit of the Company. Accordingly costof sales would have been increased by Rs.889 lakhs and the net profit andshareholders' funds would have been reduced by the same amount.

6. Regarding Goods & Services Tax in certain cases entries/balances as per the books of accounts do not match with the returns filed and input taxcredit reflected in the portal. Adjustment entries and reversal of ineligible input taxcredit are pending. In the absence of quantification we are unable to comment on theimpact of the same on the result or financial position of the Company.

We conducted our audit of the standalone financial statements inaccordance with the Standards on Auditing (SAs) specified under section 143 (10) of theCompanies Act 2013. Our responsibilities under those Standards are further described inthe Auditor's Responsibilities for the Audit of the Financial Statements section of ourreport. We are independent of the Company in accordance with the Code of Ethics issued bythe Institute of Chartered Accountants of India together with the ethical requirementsthat are relevant to our audit of the standalone financial statements under the provisionsof the Companies Act 2013 and the Rules thereunder and we have fulfilled our otherethical responsibilities in accordance with these requirements and the Code of Ethics. Webelieve that the audit evidence we have obtained is sufficient and appropriate to providea basis for our opinion on the standalone financial statements.

Emphasis of matter

We draw attention to the following matters under various notes(referred against each item) of the financial statements. Our opinion is not modified inrespect of these matters

The Company has received funds towards capital expenditure as part ofthe financial assistance approved by CCEA when the Company was declared a Sick Company asper provisions of Sick Industrial Companies Act 1985. [Note No.31.15]

The Company has postponed revenue recognition in respect of rent from afew parties due to uncertainty of ultimate collection owing to several reasons includingbut not limited to finalisation of the terms of the lease and not entering into formalagreements. [Note Nos. 31.16 31.18 31.19 31.21]

The Company carries as under ‘other financial assets-current' accumulated unbilled revenue of Rs.230501.32 lakhs that were recognisedduring the current as well as the last few years. [Note No.9 (b)]

The Company is not in compliance with the requirements of having aspecified proportion/ number of independent directors. [Note No.31.39]

The Company continues to carry a land admeasuring 77 acres having acarrying value of Rs.19470 lakhs under Property Plant & Equipment after receivingintimation of re-possession by the Government of Kerala as the company has disputed thesame and the matter is under adjudication of the Apex Court. [as reported by the branchauditor]. [Note No.31.23]

Non-disclosure of fair value on the balance sheet date in respect of

Investment Properties [Note No.3-sub note(iv)]

Key Audit Matters

Key audit matters are those matters that in our professional judgementwere of most significance in our audit of the financial statements of the current periodThese matters were addressed in the context of our audit of the standalone financialstatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters We have determined the matters described below to bethe key audit matters to be communicated in our report

Key Audit Matters Auditor's Response
Unbilled Revenue: Principal Audit Procedures
Accounting for unbilled revenue is an exercise of recognising revenue based on accounting policies when an invoice/ charge on the customer is yet to be made for supply of goods or services. Revenue on Projects (Service/ Construction Contracts) such as fixed-price fixed-time frame contracts where the performance obligations are satisfied over time is recognized using the input (percentage-of- completion) method. Efforts or costs expended are used to determine progress towards completion as there is a direct relationship between input and productivity. Progress towards completion is measured as the ratio of costs or efforts incurred to date (representing work performed) to the estimated total costs or efforts. Our audit procedures related to estimates of total expected costs or efforts to complete fixed-price contracts included among others the following:
Use of the percentage-of-completion method requires the Company to determine the actual efforts or costs expended to date as a proportion of the estimated total efforts or costs to be incurred. The estimation of total efforts or costs involves significant judgment and is assessed throughout the period of the contract to reflect any changes based on the latest available information. We tested the effectiveness of controls relating to
We identified the recognition of unbilled revenue as a key audit matter as the estimation of efforts or costs involves significant judgment throughout the period of the contract and is subject to revision as the contract progresses based on the latest available information. This estimate has a high inherent uncertainty and requires consideration of progress of the contract efforts or costs incurred to- date and estimates of efforts or costs required to complete the remaining contract performance obligations over the life of the contracts. (1) reviewing the efforts or costs incurred and estimation of efforts or costs required to complete the remaining contract performance obligations and
(2) reviewing the controls pertaining to recording & allocation systems which prevent unauthorised changes to recording of efforts incurred.
We selected a sample of fixed price contract accounted using percentage-of-completion method and performed the following :
Compared efforts or costs incurred with Company's estimate of efforts or costs incurred to date to identify significant variations and evaluate whether those variations have been considered appropriately in estimating the remaining costs or efforts to complete the contract.
Review the computations of total revenue recognisable and comparisons with the billing done up to the balance date to identify the unbilled revenue

Information Other than the Standalone Financial Statements andAuditors' Report Thereon

The Company's Board of Directors is responsible for the preparation ofthe other information. The other information comprises the information included inManagement Discussion and Analysis Board's Report including Annexures to Board's ReportBusiness Responsibility Report Corporate Governance and Shareholder's information butdoes not include the standalone financial statements and our auditor's report thereon.

Our opinion on the financial statements does not cover the otherinformation and we do not express any form of assurance or conclusion thereon.

In connection with our audit of the standalone financial statementsour responsibility is to read the other information and in doing so consider whether theother information is materially inconsistent with the financial statements or ourknowledge obtained in the audit or otherwise appears to be materially misstated. If basedon the work we have performed we conclude that there is a material misstatement of thisother information we are required to report that fact. We have nothing to report in thisregard.

Management's Responsibility for the Standalone Financial Statements

The Company's Board of Directors is responsible for the matters statedin Section 134(5) of the Companies Act 2013 ("the Act") with respect to thepreparation of these financial statements that give true and fair view of the financialposition financial performance total comprehensive income changes in equity and cashflows of the Company in accordance with the Ind AS and other accounting principlesgenerally accepted in India This responsibility also includes maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding theassets of the company and for preventing and detecting frauds and other irregularities;selection and application of appropriate accounting policies; making judgments andestimates that are reasonable and prudent; and design implementation and maintenance ofadequate internal financial controls that were operating effectively for ensuring theaccuracy and completeness of the accounting records relevant to the preparation andpresentation of the financial statements that give a true and fair view and are free frommaterial misstatements whether due to fraud or error.

In preparing the standalone financial statements Management of Companyis responsible for assessing the Company's ability to continue as a going concerndisclosing as applicable matters related to going concern and using the going concernbasis of accounting unless the Management of Company either intends to liquidate theCompany or to cease operations or has no realistic alternative but to do so.

The Board of Directors are responsible for overseeing the Company'sfinancial reporting process.

Auditor's Responsibilities for the Audit of the Standalone FinancialStatements

Our objectives are to obtain reasonable assurance about whether thefinancial statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditor's report that includes our opinion Reasonable assuranceis a high level of assurance but is not a guarantee that an audit conducted in accordancewith SAs will always detect a material misstatement when it exists. Misstatements canarise from fraud or error and are considered material if individually or in theaggregate they could reasonably be expected to influence the economic decisions of userstaken on the basis of these standalone financial statements.

As part of an audit in accordance with SAs we exercise professionaljudgment and maintain professional skepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of the financialstatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations or the override of internal control.

Obtain an understanding of internal financial controls relevant to theaudit in order to design audit procedures that are appropriate in the circumstances. Undersection 143(3)(i) of the Companies Act 2013 we are also responsible for expressing ouropinion on whether the company has adequate internal financial controls system in placeand the operating effectiveness of such controls.

Evaluate the appropriateness of accounting policies used and thereasonableness of accounting estimates and related disclosure made by the management.

Conclude on the appropriateness of management's use of the goingconcern basis of accounting and based on the audit evidence obtained whether a materialuncertainty exists related to events or conditions that may cast significant doubt on theCompany's ability to continue as a going concern If we conclude that a materialuncertainty exists we are required to draw attention in our auditor's report to therelated disclosures in the financial statements or if such disclosures are inadequate tomodify our opinion Our conclusions are based on the audit evidence obtained up to thedate of our auditor's report. However future events or conditions may cause the Companyto cease to continue as a going concern.

Evaluate the overall presentation structure and content of thestandalone financial statements including the disclosures and whether the standalonefinancial statements represent the underlying transactions and events in a manner thatachieves fair presentation.

Materiality is the magnitude of misstatements in the standalonefinancial statements that individually or in aggregate makes it probable that theeconomic decisions of a reasonably knowledgeable user of the financial statements may beinfluenced. We consider quantitative materiality and qualitative factors in (i) planningthe scope of our audit work and in evaluating the results of our work; and (ii) toevaluate the effect of any identified misstatements in the financial statements.

We communicate with those charged with governance regarding amongother matters the planned scope and timing of the audit and significant audit findingsincluding any significant deficiencies in internal control that we identify during ouraudit.

We also provide those charged with governance with a statement that wehave complied with relevant ethical requirements regarding independence and tocommunicate with them all relationships and other matters that may reasonably be thoughtto bear on our independence and where applicable related safeguards.

From the matters communicated with those charged with governance wedetermine those matters that were of most significance in the audit of the standalonefinancial statements of the current period and are therefore the key audit matters. Wedescribe these matters in our auditor's report unless law or regulation precludes publicdisclosure about the matter or when in extremely rare circumstances we determine that amatter should not be communicated in our report because the adverse consequences of doingso would reasonably be expected to outweigh the public interest benefits of suchcommunication

Other Matters

We did not audit the financial statements of Mankapur RaebareliSrinagar Naini & Palakkad Branches included in the standalone financial statements ofthe Company whose financial statements reflect total assets of Rs.494049.06 lakhs as atMarch 31 2022 and total income of Rs.19561.38 lakhs for the year ended on that date asconsidered in the standalone financial statements (excluding inter-unit balances andtransactions). The financial statements of these branches have been audited by the branchauditors whose report has been furnished to us and our opinion in so far as it relates tothe amounts and disclosures included in respect of these branches is solely on the reportof such Branch Auditors. Our opinion is not modified in respect of these matters.

Report on Other Legal and Regulatory Requirements

1) As required by the Companies (Auditor's Report) Order 2016("the Order") issued by the Central Government of India in terms of sub-section(11) of section 143 of the Act we give in the "Annexure A" a statement on thematters specified in paragraphs 3 and 4 of the Order to the extent applicable.

2) As required by Section 143 (3) of the Act based on our audit wereport that:

a) We have sought and obtained all the information and explanationswhich to the best of our knowledge and belief were necessary for the purposes of ouraudit.

b) In our opinion proper books of account as required by law have beenkept by the company so far as it appears from our examination of those books. and properreturns adequate for the purpose of our audit have been received from the branches notvisited by us.

c) The reports on the accounts of the branch offices of the Companyaudited under Section 143(8) of the Act by branch auditors have been sent to us and havebeen properly dealt with by us in preparing this report.

d) The Balance Sheet the Statement of Profit and Loss (including othercomprehensive income) Statement of Changes in Equity and the Statement of Cash Flow dealtwith by this Report are in agreement with the books of accounts.

e) In our opinion the aforesaid financial statements comply with theIndian Accounting Standards prescribed under Section 133 of the Act read with Companies(Indian Accounting Standards) Rules 2015.

f) In terms of Notification no. G.S.R. 463 (E) dt. 05-06-2015 issued byMinistry of Corporate Affairs the Provision of Section 164(2) of the Companies Act 2013in respect of disqualification of directors are not applicable to the Company being aGovernment Company.

g) The provisions of Section 197 are not applicable to a governmentCompany (in terms of MCA Notification NO.GSR 463 (E) dated 05th June 2015) as themanagerial remuneration is paid as per the appointment letter from the Government ofIndia.

h) With respect to the adequacy of the internal financial controls overfinancial reporting of the Company and the operating effectiveness of such controls referto our separate Report in "Annexure B".

i) With respect to the other matters to be included in the Auditor'sReport in accordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 inour opinion and to the best of our information and according to the explanations given tous:

i) The company has disclosed the impact of pending litigations on itsfinancial position in its standalone financial statements. (Refer Note 31.11 to thefinancial statements and clause vii (b) of Annexure A to this Report )

ii) The company has made provision as required under the applicablelaw or accounting standards for material foreseeable losses if any on long-termcontracts including derivative contracts.

iii) There has been no delay in transferring the amount required to betransferred in accordance with the relevant provisions of the Companies Act 2013 and therules made thereunder to the Investor Education and Protection Fund by the Company.

iv) The management has represented that

(1) to the best of its knowledge and belief other than as disclosed inthe notes to the accounts no funds have been advanced or loaned or invested (either fromborrowed funds or share premium or any other sources or kind of funds) by the Company toor in any other person(s) or entity(ies) including foreign entities"intermediaries" with the understanding whether recorded in writing orotherwise that the Intermediary shall whether directly or indirectly lend or invest inother persons or entities Identified in any manner whatsoever by or on behalf of theCompany ("Ultimate Beneficiaries") or provide any guarantee security or thelike on behalf of the Ultimate Beneficiaries;

(2) to the best of its knowledge and belief other than as disclosed inthe notes to the accounts no funds have been received by the Company from any person(s)or entity(ies) including foreign entities ("Funding Parties") with theunderstanding whether recorded in writing or otherwise that the Company shall whetherdirectly or indirectly lend or invest in other persons or entities identified in anymanner whatsoever by or on behalf of the Funding Party ("UltimateBeneficiaries") or provide any guarantee security or the like on behalf of theUltimate Beneficiaries; and

(3) Based on such audit procedures we have considered reasonable andappropriate in the circumstances; nothing has come to our notice that has caused us tobelieve that the representations under sub-clause (a) and (b) contain any materialmisstatement.

v) The Company has neither declared nor paid any dividend during theyear and hence commenting on the compliance with section 123 of the Companies Act 2013does not arise.

3) On the basis of such checks of the books and records of the Companyas we considered appropriate and according to the information and explanations given tous we are enclosing our report in terms of Section 143(5) of the Act on the directionsand sub directions issued by the Comptroller and Auditor General of India in"Annexure C".

Place: Bangalore For gRSM & ASSOCIATES
Date: 25 May 2022 Chartered Accountants
[FRN: 000863S]
UDIN: 22028113AKDUWP6065
V.MADHAVAN
Partner
M.No.028113

"Annexure A" to Independent Auditors' Report

(Referred to in Paragraph 1 under the heading "Report on OtherLegal and Regulatory Requirements" of our report of even date on the standalonefinancial statements of ITI Limited ("the Company") for the year ended March31 2022) i. (a) (A) The Company has maintained proper records showing fullparticulars including quantitative details and situation of its fixed assets except in thecase of Bangalore Plant NS Unit and R&D Unit at Bangalore where the records are notupdated. (B) The Company does not have intangible assets.

(b) According to the information and explanations given to us fixedassets have been physically verified by the management except for the assets located atthe Bangalore Plant Bangalore NS Unit Bangalore RO and Corporate Office and no materialdiscrepancies were noticed on such verification. Pending physical verification of fixedassets in the above units discrepancies if any could not be ascertained and accountedfor.

(c) We are unable to comment on whether the title deeds of immovableproperties are held in the name of the Company as sufficient information and appropriateevidence supporting the same in the Units where we have audited are not made available tous. The details of title deeds of immovable properties in the opinion of the managementthat not held in the name of the Company are given in note no. 1 to the FinancialStatements and are given below:

Description of property gross carrying value (Rs. In lakhs) Held in name of Whether promoter director or their relative or employee Period held – indicate range where appropriate Reason for not being held in name of company (also indicate if in dispute)
Land 19470 Title resumed by Government of Kerala No Over 10 years Company has disputed the resumption
Land 9282 Absolute Sale Deed not yet executed No Over 10 years Pending
Land 11620 Absolute Sale Deed not yet executed No Over 10 years Pending due to non-submission of proof of compensation paid by ITI Limited to the landowners at the time of land acquirement

(d) The Company has not revalued any of its Property Plant andEquipment (including right-of-use assets) and intangible assets during the year.

(e) No proceedings have been initiated during the year or are pendingagainst the Company as at March 31 2022 for holding any benami property under the BenamiTransactions (Prohibition) Act 1988 (as amended in 2016) and rules made thereunder.

ii. (a) According to the information and explanations given tous inventories (excluding those with third parties) have been physically verified by themanagement at reasonable intervals other than at (i) Bangalore Plant; (ii) NSU Unit &(iii) Raebareli Unit. According to the information and explanations given to us and basedon the Report of the Other Auditors no material discrepancies were noticed on physicalverification of the inventories at the locations where Management had carried out physicalverification. However at Bangalore Plant since documents supporting the comparison ofphysical stocks with book records are not made available we are unable to comment on thediscrepancies

(b) In our opinion and according to the books of account and recordsexamined by us in the normal course of audit the quarterly returns or statements filed bythe company with banks who have sanctioned working capital limits to the Company are inagreement with the books of account of the Company.

iii. According to the information given to us during the yearthe Company has not made investments in provided any guarantee or security or granted anyloans or advances in the nature of loans secured or unsecured to companies firmsLimited Liability Partnerships or any other parties. Therefore clauses (iii) (a) to (f)Paragraph 3 of the Order are not applicable to the Company.

iv. The Company has complied with the provisions of Sections 185and 186 of the Companies Act 2013 in respect of loans granted investments made andguarantees and securities provided as applicable.

v. The Company has not accepted any deposit or amounts which are deemedto be deposits. Hence reporting under clause 3(v) of the Order is not applicable.

vi. We have broadly reviewed the books of account and recordsmaintained by the Company pursuant to the Companies (Cost Records and Audit) Rules 2014prescribed by the Central Government under section 148(1) of the Companies Act 2013 andare of the opinion that prima facie the prescribed accounts and records have been made andmaintained. However we are not required to and have not carried out any detailedexamination of such accounts and records.

vii. According to the information and explanations given to us inrespect of Statutory dues:

(a) The company is generally not regular in depositing undisputedstatutory dues including Goods and Services Tax provident fund employees' stateinsurance income-tax sales-tax service tax duty of customs duty of excise valueadded tax cess and any other statutory dues to the appropriate authorities. The extent ofthe arrears of outstanding statutory dues as on 31-3-2022 for a period of more than sixmonths from the date they became payable is given in the below table:

Sl. No. Name of the statute Nature of dues Amount in Rs. Lakhs (As on 31.03.2022) Period to which the dispute relates Forum where the dispute is pending Unit
1 Central Excise Act 1944 Nil rate of duty availed on Software disputed by CE dept (Net of Pre deposit Rs.200.00 lakhs) 637.00 2003-2005 Custom Excise & Service Tax Appellate Tribunal BGP
2 Central Excise Act 1944 ED Demanded on R&D prototype modules for field trail. Stay extended ( net of pre deposit Rs.30.00 lakhs) 299.00 2006-07 Custom Excise & Service Tax Appellate Tribunal BGP
3 Central Excise Act 1944 Nil Rate of Duty availed on software disputed by Central excise dept (Net of Pre deposit Rs.14.00 lakhs) 497.28 2001-2002 2002-2003 Custom Excise & Service Tax Appellate Tribunal BGP
4 Central Excise Act 1944 CENVAT Credit 376.00 2007-2008 Custom Excise & Service Tax Appellate Tribunal BGP
5 UP VAT Sales Tax 264.89 1986-1989 UP Government MKP
6 UP VAT Sales Tax 15.32 1989-1996 UP Government MKP
7 Finance Act 1994 Service Tax 8435.14 2009-10 to 2013-14 CESS Tax Allahabad MKP
8 Finance Act 1994 Service Tax 1992.19 2009-10 to 2013-14 CESS Tax Allahabad MKP
9 Central Sales Tax (CST) Demand of other dues and Additional Tax against FORM 'C' 1013.98 2005-2006 Joint Commissioner(Appeals) Commercial Tax Allahabad NNI
10 Central Sales Tax Demand of Additional Tax against FORM 'C' 2.64 2007-08 Additional Commissioner(Appeals) Commercial Tax Allahabad NNI
11 CST/UPVAT/ Entry Tax Demand of other dues 9.23 2008-09 Addl Commissioner (Appeals) Commercial Tax Allahabad NNI
Rs in Lakhs
Particulars Bg Plant (Including Ros & NSU) Srinagar NAINI Raebareli Mankapur Palakkad TOTAL
Statutory Dues PF 1888.36 - 2833.13 13646.49 7210.60 221.73 25800.31
WCT 8.08 8.08
Excise Duty 0.44 0.44
Sales Tax 1.23 57.13 58.36
TDS 58.40 200.33 471.64 730.37
Service Tax 2417.74 2417.74
Total 1888.36 - 2901.28 16321.69 7682.24 221.73 29015.30

b )According to the information and explanations given to us thestatutory dues mentioned in the below table have not been deposited on account of anydispute

12 Central Sales Tax Demand of other dues and Additional Tax against FORM 'C' 2.12 2009-2010 Deputy Commissioner Commercial Tax Allahabad NNI
13 CST/UPVAT Demand of other duesand additional Tax Against Form C 60.57 2010-2011 Addl Commissioner Appeals Commercial Tax Allahabad NNI
14 CST Demand of other dues and Additional Tax against FORM 'C' 10.96 2011-2012 Tribunal Commercial Tax Allahabad NNI
15 CST/UPVAT Demand of Other dues and Form C 146.75 2012-2013 Dy. Commissioner sector 14 Commercial Tax Allahabad NNI
16 CST/ UPVAT Demand of Tax 86.75 2013-2014 Deputy Commissioner Sector 14 Commercial Tax Allahabad NNI
17 Service Tax Service Tax 109.44 2010-2011 CESTAT Bangalore PKD
18 Service Tax Service Tax 140.34 2011-2012 CESTAT Bangalore PKD
19 Service Tax Service Tax 161.27 2011-2012 CESTAT Bangalore PKD
20 Service Tax Service Tax 2.76 2012-2013 CESTAT Bangalore PKD
21 Service Tax Service Tax 2.69 2012-2013 CESTAT Bangalore PKD
22 CST Sales Tax 28.04 2001-2002 High Court Eranakulam PKD
23 CST Sales Tax 504.13 2003-2004 KVAT Tribunal Palakkad PKD
24 Sales Tax Act Sales Tax 117.70 2010-2011 Trade Tax Tribunal Lucknow RBL
25 Sales Tax Act Sales Tax 87.39 2014-2015 Trade Tax Tribunal Lucknow RBL
26 Karnataka VAT Act 2003 Turnover Suppression 26.47 2013-2014 Commercial Tax Officer Thirpunithura RO BG
27 Karnataka VAT Act 2003 Turnover Suppression 48.92 2014-2015 Appellate Assistant Commissioner Commercial Taxes Ernakulam RO BG
28 Service Tax Non payment of Service Tax on Royalty payments received 44.78 2012-13 to 2014-15 Commissioner of Central Excise RO BG
29 KVAT Turnover suppression 65.87 2012-13 Dy Commr( Appeals) -Commercial Tax Ernakulam RO BG
30 Sales Tax Sales Tax 733.36 1987-88 to 1989-901996- 971999-00 2002-03 High Court J & K SNR
31 Sales Tax Sales Tax 226.05 2013-14 Commissioner of Sales Tax Bhubneshwar RO BBSR
32 Income Tax Income Tax 691.72 2017-18 Commissioner of Income Tax CORP
33 Sales Tax Sales Tax 189.51 2014-15 Sales Tax Tribunal Mumbai RO MBI
Total 17030.26

viii. There were no transactions relating to previously unrecordedincome that have been surrendered or disclosed as income during the year in the taxassessments under the Income Tax Act 1961 (43 of 1961). ix. (a) The Company received asoft loan of Rs.30000 lakhs from the Ministry of Communications & IT Department ofTelecommunications Government of India during the year 2014-15. During the year theCompany received an intimation deferring the repayment. Now the repayment wouldeffectively start from the FY 2022-23. However the terms with respect to servicing ofinterest is unclear. Apart from this the Company has not defaulted in repayment of loansor borrowings to financial institutions banks or Government according to the records ofthe Company examined by us and the information and explanations given to us. The Companyhas not issued any debentures.

(b) The Company has not been declared wilful defaulter by any bank orfinancial institution or government or any government authority.

(c) The Company has not taken any term loan during the year and thereare no outstanding term loans at the beginning of the year and hence reporting underclause 3(ix)(c) of the Order is not applicable (d) On an overall examination of thefinancial statements of the Company funds raised on short-term basis have prima facienot been used during the year for long-term purposes by the Company (e) On an overallexamination of the financial statements of the Company the Company has not taken anyfunds from any entity or person on account of or to meet the obligations of itssubsidiaries.

(f) The Company has not raised any loans during the year on the pledgeof securities held in its subsidiaries joint ventures or associate companies and hencereporting on clause 3(ix)(f) of the Order is not applicable.

x. (a) The Company has not raised moneys by way of initial public offeror further public offer (including debt instruments) during the year and hence reportingunder clause 3(x)(a) of the Order is not applicable.

(b) During the year the Company has not made any preferentialallotment or private placement of shares or convertible debentures (fully or partly oroptionally) and hence reporting under clause 3(x)(b) of the Order is not applicable.

xi. (a) No fraud by the Company and no material fraud on the Companyhas been noticed or reported during the year.

(b) No report under sub-section (12) of section 143 of the CompaniesAct has been filed in Form ADT-4 as prescribed under rule 13 of Companies (Audit andAuditors) Rules 2014 with the Central Government during the year and upto the date ofthis report.

(c) We have taken into consideration the whistle blower complaintsreceived by the Company during the year (and upto the date of this report) whiledetermining the nature timing and extent of our audit procedures.

xii. The Company is not a Nidhi Company and hence reporting underclause (xii) of the Order is not applicable. xiii. In our opinion the Company is incompliance with Section 177 and 188 of the Companies Act 2013 with respect to applicabletransactions with the related parties and the details of related party transactions havebeen disclosed in the standalone financial statements as required by the applicableaccounting standards. xiv. (a) The Company has an internal audit system. However in ouropinion it is not commensurate with the size and the nature of its business.

(b) We have considered the internal audit reports for the year underaudit issued to the Company during the year and till date in determining the naturetiming and extent of our audit procedures.

xv. In our opinion during the year the Company has not entered into anynon-cash transactions with its Directors or persons connected with its directors. andhence provisions of section 192 of the Companies Act 2013 are not applicable to theCompany. xvi. (a) In our opinion the Company is not required to be registered undersection 45-IA of the Reserve Bank of India Act 1934. Hence reporting under clause3(xvi)(a) (b) and (c) of the Order is not applicable.

(d) In our opinion there is no core investment company within theGroup (as defined in the Core Investment Companies (Reserve Bank) Directions 2016) andaccordingly reporting under clause 3(xvi)(d) of the Order is not applicable.

xvii. The Company has not incurred cash losses during the financialyear covered by our audit and the immediately preceding financial year. xviii. There hasbeen no resignation of the statutory auditors of the Company during the year. xix. On thebasis of the financial ratios ageing and expected dates of realisation of financialassets and payment of financial liabilities other information accompanying the financialstatements and our knowledge of the Board of Directors and Management plans and based onour examination of the evidence supporting the assumptions nothing has come to ourattention which causes us to believe that any material uncertainty exists as on the dateof the audit report indicating that Company is not capable of meeting its liabilitiesexisting at the date of balance sheet as and when they fall due within a period of oneyear from the balance sheet date. We however state that this is not an assurance as tothe future viability of the Company. We further state that our reporting is based on thefacts up to the date of the audit report and we neither give any guarantee nor anyassurance that all liabilities falling due within a period of one year from the balancesheet date will get discharged by the Company as and when they fall due. xx. (a) Inrespect of other than ongoing projects the company has transferred unspent amount to aFund specified in Schedule VII to the Companies Act 2013 within a period of six months ofthe expiry of the financial year in compliance with the second proviso to sub-section (5)of section 135 of the said Act except in respect of the following:

Financial year Amount unspent on Corporate Social Responsibility activities "other than Ongoing Projects" Amount Transferred to Fund specified in Schedule VII within 6 months from the end of the Financial Year Amount Transferred after the due date
2020-21 Rs.64 lakhs Nil Rs.64 lakhs On 28-3-2022
2021-22 Rs.11.46 lakhs

Time not yet elapsed at the time of the issue of the auditor's report

(b) The Company does not have any ongoing projects in respect of anyamount remaining unspent under section (5) of section 135 of Companies Act and hence thequestion of transfer to special account under the provisions of sub section (6) of section135 of the said Act does not arise.

Place: Bangalore For gRSM & ASSOCIATES
Date: 25 May 2022 Chartered Accountants
[FRN: 000863S]
UDIN: 22028113AKDUWP6065
V.MADHAVAN
Partner
M.No.028113

"ANNEXURE B" TO THE INDEPENDENT AUDITORS' REPORT OF EVEN DATEON THE STANDALONE FINANCIAL STATEMENTS OF ITI LIMITED

Report on the Internal Financial Controls under Clause (I) ofSub-section 3 of Section 143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financialreporting of ITI Limited ("the Company") as of March 31 2022 in conjunctionwith our audit of the Standalone financial statements of the Company for the year ended onthat date.

Management's Responsibility for Internal Financial Controls

The Company's management is responsible for establishing andmaintaining internal financial controls based on the internal control over financialreporting criteria established by the Company considering the essential components ofinternal control stated in the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting issued by the Institute of Chartered Accountants of India. Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to Company's policies the safeguarding ofits assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internalfinancial controls over financial reporting based on our audit. We conducted our audit inaccordance with the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting (the "Guidance Note") and the Standards on Auditing issued by ICAIand deemed to be prescribed under section 143(10) of the Companies Act 2013 to theextent applicable to an audit of internal financial controls both applicable to an auditof Internal Financial Controls and both issued by the Institute of Chartered Accountantsof India. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence aboutthe adequacy of the internal financial controls system over financial reporting and theiroperating effectiveness. Our audit of internal financial controls over financial reportingincluded obtaining an understanding of internal financial controls over financialreporting assessing the risk that a material weakness exists and testing and evaluatingthe design and operating effectiveness of internal control based on the assessed risk. Theprocedures selected depend on the Auditor's judgment including the assessment of therisks of material misstatement of the financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the Company's internal financialcontrols system over financial reporting.

Meaning of Internal Financial Controls Over Financial Reporting

A Company's internal financial control over financial reporting is aprocess designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles. A Company's internal financial control overfinancial reporting includes those policies and procedures that (1) pertain to themaintenance of records that. in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of the Company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of financialstatements in accordance with generally accepted accounting principles and that receiptsand expenditures of the Company are being made only in accordance with authorisations ofmanagement and directors of the Company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of theCompany's assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over FinancialReporting

Because of the inherent limitations of internal financial controls overfinancial reporting including the possibility of collusion or improper managementoverride of controls material misstatements due to error or fraud may occur and not bedetected. Also projections of any evaluation of the internal financial controls overfinancial reporting to future periods are subject to the risk that the internal financialcontrol over financial reporting may become inadequate because of changes in conditionsor that the degree of compliance with the policies or procedures may deteriorate.

Qualified Opinion

According to the information and explanations given to us and based onour audit the following material weaknesses have been identified as at March 31 2022:

i. The company did not have an appropriate internal control systemfor obtaining confirmation of balances on a periodic basis and reconciliation ofunmatched Receivables Advances and Payables.

ii. The company in respect of Goods & Services Tax did not havean effective system for timely accounting of entries reversal of ineligible input taxcredit and reconciling the account balances with the returns filed thereof.

iii. At Raebareli Unit the ERP software BaaN is not updatedappropriately and the audit was completed with information obtained from variousdepartments.

In our opinion except for the effects/possible effects of the materialweaknesses described above on the achievement of the objectives of the control criteriathe Company has maintained in all material respects an adequate internal financialcontrols system over financial reporting and such internal financial controls overfinancial reporting were operating effectively as at March 31 2022 based on the internalcontrol over financial reporting criteria established by the Company considering theessential components of internal control stated in the Guidance Note on Audit of InternalFinancial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.

Other Matter

We did not audit the internal financial controls over financialreporting of Mankapur Raebareli Srinagar Naini & Palakkad Branches included in thestandalone financial statements of the Company whose financial statements reflect totalassets of Rs.494049.06 lakhs as at March 31 2022 and total income of Rs.19561.38 lakhsfor the year ended on that date as considered in the standalone financial statements(excluding inter-unit balances and transactions). The internal financial controls overfinancial reporting of these branches have been audited by the branch auditors whosereport has been furnished to us and our opinion in so far as it relates to the adequacyof the internal financial controls system over financial reporting and such internalfinancial controls over financial reporting were operating effectively as at March 312022 included in respect of these branches is solely on the report of such BranchAuditors.

Our opinion is not modified in respect of these matters.

Place: Bangalore For gRSM & ASSOCIATES
Date: 25th May 2022 Chartered Accountants
[FRN: 000863S]
UDIN: 22028113AKDUWP6065
V.MADHAVAN
Partner
M.No.028113

"ANNEXURE C" TO INDEPENDENT AUDITOR'S REPORT

Directions issued by the Comptroller & Auditor general of Indiaunder Section 143(5) of the Companies Act 2013 indicating the areas to be examined by theStatutory Auditors during the course of audit of annual accounts of ITI Limited(Standalone) for the year 2021-22

Sl. No. Areas Examined Auditors' Observations
1 Whether the company has system in place to process all the accounting transitions through IT system? Yes. The company has a system in place to process all the accounting transitions through IT software. Different units of the Company use different systems.
If yes the implications of processing of accounting transactions outside IT system on the integrity of the accounts along with the financial implications if any may be stated. However sub-systems such as inventory invoicing order processing payroll is outside the accounting software.
We have not come across any adverse implications on the integrity of the accounts.
2 Whether there is any restructuring of an existing loan or eases of waiver/ write off of debts/loan/interest etc. made by a lender to the company due to the company's inability to repay the loan? According to the information and explanations given to us and based on our examination of the records of the company during the year there has been no restructuring of an existing loan or cases of waiver/write off of debts/loan/interest etc. made by a lender to the company due to the company's inability to repay the loan.
If yes the financial impact may be stated. Whether such cases are properly accounted for?
3 Whether funds (grants/subsidy etc) received/receivable for specific schemes from Central/State Government or its agencies were properly accounted for /utilized as per its term and conditions? The Funds (grants/subsidy etc) received/receivable for specific schemes from Central/State Government or its agencies were properly accounted for /utilized as per its term and conditions.
List the cases of deviation. Details of unspent grant/ subsidy as on 31-3-2022 is as follows:
1) Grant towards VRS – Rs.4245.48 lakhs
2) Grant-in-aid (capital)- Rs.7160.94 lakhs
Place: Bangalore For gRSM & ASSOCIATES
Date: 25th May 2022 Chartered Accountants
[FRN: 000863S]
UDIN: 22028113AKDUWP6065
V.MADHAVAN
Partner
M.No.028113

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