ITI Ltd

Dear Members,

It is an honour and a great privilege to present the 73rd Annual Report of ITI Limited for the Financial Year 2022-23. I am pleased to inform you that the Company has complied with the guidelines on Corporate Governance for CPSEs. On behalf of ITI Limited and the Board of Directors, it is indeed an honour and a privilege to share my thoughts with you through the Annual Report 2022-23.

Dear Shareholders, before I talk about the performance of the last financial year, I would like to share with you all that ITI Limited has bagged completely indigenous 4G technology Order from BSNL which is worth Rs 2421.49 Crores including Supply, Installation & Commissioning of 4G Radio in 23,633 sites in West Zone. This was the most awaited order and is very important for ITI Limited as it opens new avenues in 5G technology arena also. Let me now talk about the Financial Year 2022-23. This year of the Company has been a year of several challenges and unexpected issues. The most expected projects did not mature during this year due to some concerns of the customers. PoC of the ASCON Phase IV project has not been concluded delaying the project rollout and the cash flow. Similarly, there has been an undue delay in the completion of PoC of BSNL 4G Project, thus delaying the RQ order from BSNL. These two unwarranted events have caused a big blow to our performance, and the Company's turnover as well as profits have dwindled in this year. Company has achieved a turnover of Rs 1588.60 Crores, with a loss of Rs 359.85 Crores. Despite big disappointment from the two mega projects, the above turnover was made possible by the contribution mainly from Turnkey Projects like ASCON Phase IV, Mahanet, TanfiNet, NFS Project, Gujnet, and IAF project for Upgradation of 3G network to 4G/LTE. This year's contribution from Manufacturing was mainly from supply of various products viz HDPE, OFC, Encryption Products, Solar Panels, FDMS, Mini PC, and Solar Street Lights. Services like AMC for ASCON, OCB, GSM-SZ & MLLN, Data Centre, VSSC Business, Third Party Audit Services (TPA) and also business generated by MSPs have contributed for this achievement.

Dear Shareholders, as mentioned above, the Company is going in a big way addressing the latest technology opportunities for 4G which is expected to pave way for the next generation that is 5G. We have collaborated with TCS for rolling out the project as well as for manufacturing the 4G Radios. Other than Radios, ITI Limited also plans to manufacture outdoor cabinets and cables required for the roll out.

ITI Limited has also signed MOU with C-DOT for Transfer of Technology for manufacturing of 4G Radios. Despite supply chain long lead time for components, we have been able to roll out first Prototypes within 6 to 7 months and they are already deployed by ITI Limited at Ambala for PoC. We have already received a PO for POC (20 sites of 4G & 5 sites for 5G) from BSNL. Manufacturing of 4G Radios will enable ITI Limited for manufacturing 5G Radios which is expected to be a path- breaking change for the Company. Another opportunity in 4G Radios manufacturing is also expected out of USOF approved pilot projects. The Company is coordinating with 4 start-up firms to deploy these pilot projects. This is expected to give the Company more openings on the technology front for addressing emerging technology business coming from BSNL and other customers.

Dear Shareholders, I am happy to inform that our R&D developed Electronic Voting Machine (EVM) has been approved by Technical Evaluation Committee. ITI Limited has initiated for mass manufacturing of EVMs. The Company is also pursuing with State Election Commissions (SECs) for marketing the EVMs. Another product developed by R&D is the Digital Mobile Radio (DMR) and prototypes have been demonstrated to Indian Railways. Good market demand is expected from agencies like MHA, State Police, Defence Forces in addition to Railways.

We are also making all out efforts to market the services offered from our Data Centre. Data Centre has been equipped to offer wide range of services including Cloud services, Managed Security Services, On-demand Services, Professional Services, Security (SoC), and Managed IT Services. Out of the Data Centre, we have an initiative to set up SoC platform to offer services to customers and MSMEs to monitor, prevent, detect, investigate, and respond to cyber threats round the clock. Telecom Test Labs offer vide range of test services across customers ranging from commercial, communication, medical, automotive, railways, industrial, IT, and domestic sectors. EMI/ EMC Lab is upgraded for Military standards and the lab is accredited by NABL and TEC Conformity Assessment Body (CAB), TEC Delhi. The Start-up Hub is making good progress in attracting start-up firms and there is a need to identify start-ups in telecom domain to be part of this Hub so that we could encourage the innovative products in the Telecom, IoT and other areas by way of manufacturing & marketing of successful products. Our R&D has been a pioneer for last 5 decades in the design & supply of encryption devices to Defense sector.

With regard to the contribution of Units, Palakkad Unit in collaboration with Intel has been manufacturing and marketing Laptops. The Laptops developed by Palakkad Unit have acquired certifications from BIS, FCC, RoHS, CE, BEE etc. The Desktop Micro PCs have been supplied to various Educational Organisations and annually around 2000 to 3000 Micro PCs are being shipped from Palakkad Unit. I feel proud to inform that we have received an Appreciation Letter for commendable contribution made by Palakkad Team by way of fabricating avionics packages flown on the launch of LVM3 M2/One Web India-1 Mission, and Chandrayaan-3 (LVM3-M4) Mission, meeting all the quality norms of ISRO and supplying in a time bound manner.

At our Mankapur Unit, HDPE Duct Plant has been converted to manufacture Water Pipes and around 5000 KMs of water pipe has been manufactured till date to address varied opportunities. The Unit has successfully manufactured and supplied around 1140 Nos of Fibre Distribution Management Systems (FDMS) for ASCON PH-IV & TanfiNet projects. Mankapur Plant has also manufactured 8000 Nos of ONTs for RailTel.

Our Raebareli Unit has manufactured around 23,400 KMs of HDPE Duct for ASCON PH-IV, MahaNet, TanfiNet, A&N Projects and also Indian Air Force (IAF) Projects. Further, the Unit has manufactured around 23,407 KMs of OFC and supplied mainly for ASCON, and TanfiNet projects. Marketing Team has been exploring opportunities with private operators like Vodafone, Airtel etc so that the facility runs at the maximum capacity.

The Solar Panels manufactured at Naini Unit have been used to set up roof-top solar power plants in all the Units and Regional Office of ITI Limited. Cumulative capacity of Captive Power Plants is around 5.6 MW of power which reduces the energy expenditure of the Units by 20%. Our Naini Unit has also supplied SPV systems for BharatNet projects. We have a plan to set up Mono Crystalline Solar Panel manufacturing line of 500 Mega Watt capacity. Srinagar Unit focuses on Skill Development Programme and has also established OFC Training Center.

The Company's Order Book needs to be improved year-on-year so as to achieve sustainable growth. Corporate Marketing Team has been aggressively exploring private market for various products. In this regard, ITI Limited is empanelled with Vodafone for HDPE Duct. Many other initiatives of supplying Mini OLT and ONT, Supply of Mini PC to private institutions, contract manufacturing of Tablet PCs, Laptops, OFC, HDPE water pipes, mobile handsets, 15,000 Nos Solar Modules of 125 Watt for Patanjali are under progress/active consideration and we hope to get good revenue from these opportunities.

Network System Unit (NSU) has contributed maximum for the revenue of the last year. The performance achieved in the main projects executed by NSU is ASCON PH-IV & AMC - Rs 390 Cr, Mahanet - Rs 313 Cr, TANFINET- Rs 140 Cr, IAF 4G, Gujnet, NFS, GSM etc -Rs 382 Cr. Rollout of OFC has been under progress across the Western, Northern & North-Eastern regions of India and 5865 Kms of T&D, 1681 Kms of AT has been completed. Civil construction work has also been making good progress. In the TANFINET project, 25% of GP litting work has been completed and 45% of OFC laying work has been completed. We are planning to complete the project by September 2023.

Dear Shareholders, to be competitive in the business, your Company has been trying to adapt to, and catch up & align with the rapid changes in technology. We believe products like 4G/5G Radios, EVM, DMR may be the game-changers for the Company. We have tough path ahead but our resolute focus is to surpass the obstacles and challenge to march towards complete revival. We have to channelize all our talents & ingenuity towards accomplishment of larger goal. Our utmost commitment is required to excel. Meticulous efforts and steadfast march towards our goal is the need of the hour and would enable the Company to scale up to newer heights. By aligning the Company with the various new initiatives of Government, new technology, new business segments, new projects & products, I am confident that, we can become a prominent player in making Indian Telecom sector self-reliant - Aatma Nirbhar in the near future. As the Company would be completing 75 years of inception this year, the fitting way to celebrate ‘Amrit Mahotsav' is through showing improved performance in this Financial year. With the support of DoT and Government of India, we shall achieve best performance that would lead the Company towards market leadership & financial sustenance.

I am grateful to the Government of India, Ministry of Home Affairs, Ministry for Rural Development, Ministry of Defense, Department of Telecommunications, Telecom Commission, BSNL, MTNL, BBNL, Defense, TCIL, Indian Railways, all departments of Central and State Governments and other valued customers, depositors, banks, financial institutions, overseas collaborators, Auditors, Committee on Public Undertakings [COPU], Standing Committee on Information Technology and Standing Conference of Public Enterprises [SCOPE] for their continued co-operation and support. I also take this opportunity to extend my thanks to all the employees and shareholders for their support and understanding.