Warm welcome to the 70'" Annual General Meeting of ITI Limited. The Notice relatedto this Meeting Directors' Report Audited Annual Accounts together with the Auditor'sReport Comments of the Comptroller and Auditor General of India on the accounts of theCompany are already with you and with your permission; I shall take them as read. FurtherI am pleased to inform you that the Company has complied with the guidelines on CorporateGovernance for CPSEs. On behalf of ITI and the Board of Directors it is indeed an honourand a privilege to share my thoughts with you through the Annual Report2019-20.
The Financial Year 2019-20 of the Company has been yet another year of immense growthand thriving success. We have registered a profit for third consecutive year after a longperiod of hard work and perseverance for 16 years. Your Company's performance for thefinancial year 2019-20 has been phenomenal. The Company has posted a Profit After Tax of150.86 Crore which is a growth of 63.02% compared to the previous year and gross turnoverrose to 2403.45 Crore which is 27% higher compared to the previous year ended March 312019.
The most important achievement of this year is that the Net Worthof our Company hasbecome positive for the first time after a long hiatus of close to 2 decades now. I amvery happy to announce that your Company is making efforts to comeback and regain marketdominance and strong leadership position in the telecommunications segment of the country.As on date our order book including POs APOs and orders in pipeline is around Rs. 19540Cr and our MoU target for the year 2020 -21 is Rs. 2600 Cr. The above facts and figuresadequately demonstrate that your Company's excellent performance for the current year isnot a one-time phenomenon but a testament to the herculean efforts made by the managementto guarantee a bright future ahead.
This excellence in financial performance is achieved by effective execution andpersistent monitoring of the projects in hand. We have redefined our project managementstyles and this has reflected in the performance of the turnkey projects we have beenexecuting under BharatNet in the states of Gujarat & Maharashtra and NFS project forthe Defense. The GujaratNet project is expected to be completed by November this yeardespite the challenges brought in by the COVID situation. ITI has been awarded acertificate of appreciation by the Government of Gujarat for our exemplary work which is aproof of our commitment towards dedication and timely execution.
Further the NFS project will be completed by end of this year and MahaNet project isalso likely to be accomplished as per the project schedule. These mega turnkey projectshave contributed to nearly 80% of the revenue this year. In addition we have been able tosupply HOPE OFC to these projects which has made our infrastructure set up for theseproducts to be utilised for the first time after being established. The paradigm shift inour strategy of manufacturing marketing and management of projects has contributed to ourgrowth and improved profits. Another feather in the cap of ITI projects has been signingof the ASCON Phase IV contract recently. An order worth Rs. 7796 Cr. is the biggest everorder received in the history of ITI and we are gearing up to execute this. Continuingfurther to contribute for self-reliance in the area of Telecommunication ITI has signed aMemorandum of Understanding (MoU) with Tech Mahindra a leading provider of digitalbusiness services & solutions to work together in the areas of 4G & 5G WirelessTechnology Equipment Manufacturing SmartCities Health Care services.
The initiative is to build local competence by synergising the offerings of ITI &Tech Mahindra to create a next generation wireless network that will help India to becomeself-sufficient in the area of Telecommunications. Our Company with its efficient &innovative state-of-art facilities and capabilities for manufacturing Telecom equipmentplans to manufacture eNodeB and 5G NR products in its various plants. !Tl is also in talkswith other Indian companies to provide end to end solutions for 4G & 5G networksacross the country through an ecosystem of the local technologies. Similarly ITI has alsosigned MoU with TCS a leading IT and ITeS services organization. With these tie ups twostreams of solutions for 4G upgradeable 5G can be worked out with ITI being the commonmanufacturing partner. The Company also plans to manufacture secure IP/MPLS routers whichare very essential for secure data transfer in the defence network as well as for thenetworks of TSPs.
For this ITI has already entered into Technology Collaboration Agreement with aBangalore based leading start-up company in this area. On the similar lines our Companyis also planning to tie up for manufacturing of EN band Radios which are very essentialwith the emerging technologies of 4G & 5G. The partnerships with these Indiancompanies and the products with Indian IPR not only help to reduce dependency on import ofTelecom equipment but also address the concerns in building a strategic network fordefence communication. A PSU joining hands with two giant Indian Private sector leadingcompanies shows the commitment of ITI towards the AatmaNirbhar Bharat initiative ofGovernment of India.
The COVID-19 virus is unique in a way that assumptions of common well-being which waslargely taken for granted is no longer true. The bane of this virus is affecting all ofhumanity impacting economies business and lifestyles. This pandemic poses unprecedentedhealth economic and stability issues. This outbreak along with the on-going bordertensions has dealt an exceptional blow to India as a whole. However the pandemic hasshown us the importance of local manufacturing local market and local supply chains. Asour respected Prime Minister rightly put it "Local is not only our necessity butalso our responsibility." We at ITI believe that every adversity brings its own setof opportunities. Even during the lockdown period the business continuity of the companykept going and to strengthen the objective of Government of India's AatmaNirbhar BharatAbhiyan Company has recently signed a Transfer of Technology (ToT) agreement with DefenceResearch & Development Organization (DRDO) to manufacture portable ventilators at itsmanufacturing plants. The prototypes are ready for testing and once these are cleared byEBEL we intend to mass manufacture ventilators which will be supplied to Defence forcesand other agencies in the country. The Company has been manufacturing Face Shields at itsBengaluru unit which are designed to provide complete protection to facial area includingeyes nose and mouth from sprays and droplets. The Company has already supplied twomillion face shields and expects to enhance production in the coming months. During thispandemic ITI Limited has distributed grocery kits to around 2500 needy families as aCSR measure.
ITI has initiated to bring up a Global Electronics Manufacturing Hub in the siliconcity of Bengaluru and for this purpose it has ear marked 200 acres of land in the firstphase. With this venture ITI plans to create world class infrastructure for manufacturingincluding common facilities to attract major global electronics manufacturers along withtheir supply chain to set up units in the country. This is in line with the ElectronicsManufacturing Cluster (EMC) 2.0 scheme of MeitY released during May of this year.
There is scarcity of testing labs in the country and to fill up the gap in testinginfrastructure ITI has set up EMI/EMC & Safety Labs in collaboration with DOT andTEC. Further SAR and Security Labs will be commissioned shortly. This would be an extendedfacility for the companies in the Manufacturing Hub as well as Start-upHub. ITI hascreated Six Training Centers (TCs) within its plants including a Smart Skill DevelopmentCentre at Srinagar Plantto promote the Skill India Mission.
ITI Tier 3 compliant Data Center of 350 racks capacity in Bangalore is operational forlast more than 10 years and the Company plans to expand this by additional 1000 rackscapacity. More so now it is going to be cloud enabled Data Centre and would launch cloudservicesthat include Infrastructure as a Service (laaS) Platform as a Service(Paa$)Software as a Service (Saa$) and Storage as a Service (STaaS). The Cloud facility isexpected to achieve optimum utilization of the infrastructure and speed up the developmentand deployment of various ICT-IOT based applications for customers. It would also helpgovernment and non-government enterprises to procure ICT services on demand. This willgreatly help the Digital India initiative of Government.
In order to increase value addition through manufacturing we are incorporatingtransfer of technology in all the agreements being concluded. This will not only engagethe infrastructure we have set up but would also augment the Make in India initiative ofGovernment. We plan to utilize the facilities set up for manufacturing of HOPE OFC SolarPanels Smart Cards Smart Energy Meter WiFi Access Points Micro PCs in differentplants.
On the marketing front ITI is consolidating its brand identity by getting into variousnew technology verticals like Bharatnet Smart Cities 4G/5G AMI solutions Cybersecurity loT cloud based data center solutions etc. ITI is entering into technologyalliances with market leaders and is bidding aggressively in tenders of these verticals.ITI has also started undertaking projects for private customers like Airtel. Company isadopting centralized empanelment of business partners to address various opportunities panIndia basis through ITl's countrywide marketing service and project offices. The idea isto handhold upcoming Indian technology companies in order to create win-win businessopportunities.
Dear Shareholders in the last 3 years ITI has improved its performance and has alsobuilt up sizeable order book. Our renewed strategies with radical approach towardsbusiness are aiming to make ITI one of the best PSUs of the country in the coming years.With our sheer perseverance and hard work the Company is now eligible for MiniRatna PSUstatus for which requisite application has already been submitted. This is just abeginning for us but the goal is to attain the Navaratna status in next 3 years. We havebeen meticulously working on every aspect be it technology project executionmanufacturing or marketing. This will enable ITI to achieve excellence in its business andkeep its employees economically elated. At the same time it is also important to give abetter value to our shareholders for their significant investment in ITI. As committed wehave made significant strides towards achieving the old glory of the yesteryears.
Shedding our losses we have transitioned into a profit making company. To achieveMiniRatna status and to move towards Navaratna we have already started minimizing ourdebt burden and channelizing all our talents & ingenuity towards accomplishment oflarger goal. Our commitment to achieve this is unshakable. Our drive to excel isresolute. With the support of DoT and Government of India we shall move towards financialself-reliance to sustain through the market turbulence.
With a mix of new initiatives new approaches new business segments I assure you thatITI shall continue to sustain the growth achieved during last 3 years to ensure sustainedreturns to all stakeholders.
I am grateful to the Government of India Ministry of Home Affairs Ministry for RuralDevelopment Ministry of Defence MeitY Ministry of Finance Department ofTelecommunications Telecom Commission BSNL MTNL BBNL USOF Defence TCIL IndianRailways all departments of Central and State Governments and other valued customersdepositors banks financial institutions overseas collaborators Auditors Committee onPublic Undertakings [COPU] Standing Committee on Information Technology and StandingConference of Public Enterprises [SCOPE] for their continued co-operation and support. Ialso take this opportunity to extend my thanks to all the employees and shareholders fortheir support and understanding.
|Place: Bengaluru ||R.M. Agarwal |
| ||Chairman & Managing Director |