To, The Members of ITI Limited
Report on Standalone Financial Statements of ITI Limited
Disclaimer of Opinion
We were engaged to audit the accompanying Standalone Financial Statements (‘SFS) of ITI Limited ("The Company") which comprise the Balance Sheet as at March 31, 2026, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Cash Flows, Statement of Changes in Equity for the year then ended and a summary of material accounting policies and other explanatory information.
We do not express any opinion on the accompanying SFS of the Company. Because of the significance of the matters described in the ‘Basis for Disclaimer of Opinion section of our report, we have not been able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion on these SFS.
Basis for Disclaimer of Opinion
1. The Standalone Financial Statements (SFS) of the Company for the year ended March 31, 2025, as approved by the Board of Directors on May 27, 2025, was reported upon by us vide our audit report issued on June 13, 2025. Vide this report, we had issued a Disclaimer of Opinion on the said SFS due to the significance of the matters described in the ‘Basis for disclaimer of opinion section of the said report and our inability to quantify/ascertain the impact of matters covered therein on the SFS for the said financial year. Those comments and observations may continue to impact the SFS for the current year ended March 31, 2026.
2. The Company did not have adequate internal financial controls with reference to its financial statements as required by section 134 of the Companies Act, 2013 (the ‘Act), which may in turn result in errors and misstatements therein which may remain undetected and have a material impact thereof. This includes non-establishment of a sound information systems security policy and general controls inter alia with adequate controls, safeguards and oversight over access, use of passwords, change management, modifications/edits made to data through the application or to the database/backend changes, with adequate audit trails and periodical reviews of the same.
3. The Company has recognized the sale of a portion of its land and its old buildings at Krishnaraja Puram Bangalore to Central Taxes, department (GST), Government of India (GoI) at an agreed consideration of Rs. 91,431 lakhs and the consequent profit on sale thereof amounting to Rs. 83,219.21 lakhs, pursuant to an agreement to sell dated March 27, 2026, and approvals from Department of Telecommunications, Government of India for the sale. Pending receipt of balance consideration of Rs. 3,011.02 lakhs, pending execution of sale deed in favor of the buyer, pending (possession from the Central Tax department pending as at March 31, 2026) and bank release mortgage deed not received by the Company as at the year end, consequent transfer of control over the said property to the latter was not satisfied and accordingly the derecognition criteria laid down in IndAS-16 ‘Property, Plant and Equipment (‘PPE) was not satisfied. Had the Company not recognized the said sale, ‘Non - Current Assets held for sale would have reflected a balance of Rs. 28,861.08 lakhs, ‘Other current assets would have been lower Rs. 2,096.71 lakhs, Current Tax Assets (Net) would have been lower by Rs. 914.31 lakhs, ‘Loss for the year and ‘Total comprehensive income (loss) would have been more by Rs. 83,219.21 lakhs, Current Liabilities would have been more by Rs. 88,419.98 lakhs, debit balance in Profit and Loss account would have been more by Rs. 83,219.21 lakhs, ‘Earnings per share would be lower at Rs. (8.65) as against the reported amount of Rs. 3.04
4. We had in paragraph 4 under the head ‘Basis for Disclaimer of Opinion vide our report dated June 13, 2025, on the standalone financial statements for the financial year ended March 31, 2025, reported certain assets though put to use in prior years and not capitalized as Property Plant and Equipments (PPE)/ Investment Property(‘IP). Further Company did not comprehensively identify all adjustments relating to prior years/periods during the financial years ended March 31, 2026 and March 31, 2025. During the year Company has made certain write off adjustments of identified old receivables/inventories amounting to Rs. 38,148.21 lakhs which is disclosed as exceptional items in the Statement of Profit and Loss. Consequently, we are unable to ascertain the impact of all the adjustments to be made in terms of ‘Prior period errors within the meaning of Ind AS 8 - Accounting Policies, Changes in Accounting estimates and Errors. The Company ought to have restated its prior years figures effecting its assets & liabilities as at March 31, 2025 and income & expenses for the year ended March 31, 2025 and opening balance sheet including equity as at April 1, 2024. Pending such comprehensive identification and want of full information, we are unable to quantify the impact/consequent disclosures on the above said periods and its impact on earnings per share for March 31, 2026 and March 31, 2025.
5. The Company is in the process of reconciling the value of land as per the asset register with the respective title deeds/ documents across various locations of the Company. Company has an independent list of land owned at various locations, wherein the respective title deeds are being correlated to the records maintained by civil engineering department. We have relied on the documents furnished for verification of title deeds and do not express any independent opinion on the same. Further, the auditors of Naini (M/s Vinay Kumar & Co), Palakkad (M/s Balaram & Nandakumar) and the auditors of Raebareli (M/s Chandnani Singh & Associates) units have commented on the limitations in respect of title deeds of the units. Land measuring 77 Acres at Palakkad valuing
Rs. 6,090.31 lakhs (carrying value) have been resumed by the Govt of Kerala and is under adjudication of the Apex Court. The value of Land as shown in the Financial Statements includes such land resumed by the Govt of Kerala pending decision by the Apex court.
6. Fixed asset records (FAR) maintained in excel sheets are with inadequate description and location of assets, which in turn may impact the rate of depreciation to be applied and the consequent written down value of assets. The FAR is not updated for land held by the Company including revaluation amounts. Management has not assessed assets which are unserviceable/ not in working condition and has not recognized any provision for diminution in value with respect to such assets. The Company has not made available records in support of physical verification of PPE/IP carried. In the absence of such comprehensive data in FAR, documentation in support of physical verification carried out and adjustment of discrepancies, if any arising from reconciliation of the same with book records and non-identification of assets which are unserviceable/ not in working condition, we are unable to comment on compliance with IndAS-16 ‘Property, Plant and Equipment and IndAS 40 – Investment Property.
7. Requisite details of certain land and buildings owned by the Company/taken on lease (sale/lease deed, location, purpose for which property is put to use, categorization between PPE and IP, whether any amortization of the same is required, income derived therefrom, etc.) were not furnished to us. The written down value of such assets as at March 31, 2026, aggregated to Rs. 18,438.55 lakhs. The Company has recognized income during the year and prior years for which either there were no rental agreements or agreements had expired pending renewal. The Company has not furnished required disclosures as per IndAS 40- Investment Property including the fair values (FV) of its IPs, the basis of determining its FV, rental income derived from such properties and direct operating expenses (including repairs and maintenance) arising from IP that generated rental income during the year etc. In the absence of sufficient appropriate audit evidence, we are unable to ascertain impact, if any, on the SFS.
8. In terms of the ‘Material Accounting Policies, the Company has not provided any documentation in support of the evaluation carried out to test for impairment of assets in compliance with IndAS 36 ‘Impairment of Assets. Accordingly, we are unable to satisfy ourselves whether any provision for impairment of assets is required to be recognized in these SFS.
9. Unrealized gains/losses on laptops produced by the Palakkad unit of the Company and transferred to other units for captive use have not been assessed and eliminated. In the absence of sufficient appropriate audit evidence, effect on SFS could not be ascertained.
10. Internally developed software by a unit of the Company for captive use has not been evaluated for recognition in terms of IndAS 38 – Intangible Assets and measured, if required. In the absence of sufficient appropriate audit evidence, effect on SFS could not be ascertained.
11. The Company has not identified lease contracts entered into by it as a lessee/lessor within the meaning of IndAS 116 – Leases and has consequently not adopted the principles of recognition, measurement and disclosure contemplated therein, contrary to accounting policy but has expensed off/recognized as income in the Statement of Profit and Loss as per contractual terms. Security deposits paid/received thereon have not been recognized in the Statement of Profit and Loss in accordance with Ind AS 109 – Financial Instruments. In the absence of sufficient appropriate audit evidence, we are unable to ascertain impact, if any, on the SFS.
12. The Company did not have a system of appropriating payments received against specific bills raised and only maintains a running account of bills raised and payments received. Consequently, the Company has furnished, based on excel workings, age-wise data in respect of trade receivables as mandated by schedule III, part II to the Act. We could not independently validate the ageing data so furnished with the books of account The Company did not furnish bill wise breakup for certain trade receivables. Further, the Company did not obtain confirmation of balances / statements of account for its trade receivables. The Company has not assessed and recognized the quantum of expected credit loss in terms of IndAS 109 – ‘Financial Instruments and has not furnished the requisite disclosures required in respect thereof. The Company did not furnish us requisite analysis/breakup of unbilled revenue of Rs 2,24,111.29 lakhs identifying the milestones to be achieved before the same can be billed, the further costs yet to be incurred to achieve such milestones and the estimate of likely costs of rework/modifications that are to be incurred in the process of achieving certification from its customers. In the absence of sufficient appropriate audit evidence, we are unable to ascertain impact, if any, on the SFS.
13. The Company has several old balances in various receivable accounts in the nature of deposits, claims recoverable and other receivables (both current/ non-current) including certain receivables which are disputed amounting to Rs. 3,589.05 lakhs (after write off of Rs. 3,426.06 lakhs during the year), which are long outstanding and with no adequate supporting. The Company has also not obtained confirmation of balances/ statements of account/ reconciliation with books of accounts/ not assessed and recognized the quantum of expected credit loss in terms of IndAS 109 – ‘Financial Instruments. In the absence of sufficient appropriate audit evidence, we are unable to ascertain impact, if any, on the SFS.
14. The Company had received soft loan from the Government of India in the financial year 2014-15 of Rs. 30,000 lakhs carrying interest at the rate of 1%. This loan was not recognized at fair value after considering the market borrowing rate. The Company has not identified financial assets and financial liabilities within the meaning of IndAS 109 and has consequently not adopted the principles of recognition, measurement and disclosure contemplated therein. In the absence of sufficient appropriate audit evidence, we are unable to ascertain impact, if any, on the SFS.
15. The Company did not carry out physical verification of inventory at all locations, in the absence of which excess/shortages as compared to book records were not assessed. Inventories with book value of Rs. 20,570.75 lakhs (after certain adjustments-write down of inventories amounting to Rs. 2,656.59 lakhs during the current year), lying in the various sites/outside locations/stores for which assessment of net realizable value as at March 31, 2026, was not made available. The Companys inventories include old and non-moving items and has not carried out any ageing, usefulness and serviceability assessment to ascertain obsolete inventories, if any. List of inventories was not furnished to confirm its bifurcation into raw materials, components, stores, work in process, manufactured components, finished goods, material in transit and goods pending inspection along with requisite quantitative stock reconciliation statements. We could not independently validate the stock records with valuation made by the Company with supporting documents. We have not been able to independently verify and ensure compliance with IndAS 2- Inventories.
16. In the absence of complete details/nature and ageing of each amounts payable, reasons for their pendency, reasons for non-claim by parties where applicable, confirmations/statements of account/reconciliations prepared of certain liabilities (both current/non-current) and advances received from customers of Rs. 1,71,363.65 lakhs, we have not obtained sufficient appropriate audit evidence and are unable to comment on its completeness/ accuracy. The data regarding ageing of trade payables and other liabilities is as furnished by the management and in absence of bill-wise breakup, we are unable to independently validate the same.
17. Disclosure of information pertaining to dues to micro and small enterprises in terms of the Micro, Small and Medium Enterprises Development Act, 2006 and pending identification of such vendors and its account balances, seeking confirmation of balances/reconciliation of transactions entered along with and consequential non-provision for interest, if any, in terms of section 23 of the said act, we have not obtained sufficient appropriate audit evidence and are unable to comment on its completeness/ accuracy.
18. The Company has not carried-out any fair valuation assessment in terms of the IndAS 109 ‘Financial Instruments in respect of its financial assets and liabilities which are receivable/payable beyond a period of 12 months from the date of initial recognition (examples: certain employee receivables, retention money payable, security deposits accepted/paid, etc.) for the purposes of determination of amortized costs and amortization/recognition of expenses/ income of the differential between amortized cost and contractual amounts payable/receivable.
19. The Companys contribution to ITI Employees Provident Fund Trust (‘PF Trust) as detailed in its Material Accounting Policies has been considered as a defined contribution plan and not as a defined benefit plan, both for the current and prior years. Accordingly, the liability to the trust ought to have been evaluated actuarily and recognized rather than at 12% of the eligible salaries to be made over during the year. The Company is in the process of reconciling with the PF Trust books including the contributions made by it, shortfall between the income received by the PF Trust and interest expense recognized based on the rate of interest declared by the Provident Fund Commissioner, Government of India for the year or prior years and closing balances as at the year end. Consequent disclosures required in terms of IndAS 19 – Employee Benefits have not been furnished.
20. The Company has not reconciled its books of accounts with its GST returns (GSTR-1/3B/2A/2B/6/7/7A/9&9C) and various forms as applicable filed/to be filed across all its registrations (includes turnover, exempt turnover, taxes payable, input tax credit available/availed and tax deducted at source). Several cross charges between the units of the Company with different registrations taken by the Company also could not be validated in terms of the GST law. The Company has not segregated the goods and service portions of the advances received based on respective contracts and remitted GST liability on the service portion of the same. Pending such bifurcation, we are unable to ascertain the quantum of GST liability on advances payable and required provision along for interest payable. The company has not ascertained comprehensively the reversal of GST input and interest thereon on account of non-payment of vendors before 180 days and on adjustments made for obsolescence of inventories. Reconciliation for the current year between its books of account and returns for each registration has also not been furnished to us. Company has also not assessed any interest / penalty payable, if any, for all the non-compliances identified by it or by the GST authorities during the year as well as prior years.
21. The Company has not reconciled the entries in forms 26AS, TIS and AIS in the Income Tax portal website with its books of account for the current and prior years. The Company has not disclosed the TDS/ TCS receivables appropriately in terms of Schedule III of the Act.
22. The Company has reported to the extent ascertained its contingent liabilities/legal/arbitration/other cases against the Company and capital commitments. In the absence of full and comprehensive list across all divisions/units/ROs/Corporate office of the Company with testing of the probability of the liability devolving supported with appropriate legal advice wherever required, we are unable to ascertain the completeness/accuracy of the values reported in the said note and any provisions that may be required to be recognized in this respect.
23. The Company has not identified warranty obligations as a distinct performance obligation within the meaning of IndAS 115 – ‘Revenue from contracts with customers but recognizes the same as and when obligations arise on the plea that it generally has a back-to-back claims against its vendors. The Company has not provided us with the requisite documentation indicating such rights in each contract entered into by it.
24. The Company has reported various bank balances as at the reporting date; however, direct balance confirmations from the banks were not received in respect of certain banks. We have relied on bank statements and books of accounts furnished to us.
25. a. The Company entered into multiple composite contracts with certain customers for planning, engineering, construction, upgradation, supply, installation, commissioning, testing and annual maintenance, involving substantial amounts. In these cases, the Company has recognized revenue (including unbilled portions) for the supply of goods to customers based on dispatches and for services rendered, wherever completed by it, as at the year end and unbilled portions of revenue recognised based on assessment of work completed and corresponding costs incurred. The Company has not furnished us with the requisite documentation substantiating compliance with the preconditions for recognizing revenue including unbilled portion in terms of Ind AS 115-Revenue from Contracts with Customers and passing of controls to the latter over the goods and services. The Company has also not assessed probable losses which it might incur on account of cost overruns, liquidated damages, warranty expenses and additional cost to be incurred in the completion of services, requiring recognition.
b. The Company is in the process of assessing certain changes in various terms of certain select contracts involving procurement of goods and services. Pending such exercise, and finalization of the said matters/ entering into revised contracts/ issuing amendments of purchase orders, effects on costs, incurred or to be incurred in respect of each such contracts/ amendments/ revised purchase orders are not assessed at this stage. Further, the Company has not furnished clear details/ breakups of unbilled payables recorded in the books of accounts. Due to such matters, effect on the SFS, if any, could not be ascertained. c. Attention is invited to foot note of Note 22 of the SFS where in the Company has enumerated the status of a contract with Ministry of Defense, Government of India, for supply and establishment of Army Static Switched Communication Network (ASCON) at an agreed consideration. In terms of the said contract, the Company was to mandatorily demonstrate its complete solution to bring out its capabilities vis-?-vis the requirements of the customer, which would be evaluated by the latter and form an essential part of the test bed evaluation process. We were informed for the reasons stated in the said note that the test bed approval was awaited as at December 2026, which is expected upon completion of certain activities as detailed therein. The Company has proceeded with part execution of the contract pending test bed final approval and in the opinion of the management of the Company is not impacting the revenue already recognized up to March 31, 2026, to an aggregate extent of Rs. 1,92,094.93 lakhs.
26. The Company is in the process of updating its books of accounts upto the date of issue of this report. Accordingly, we could not perform subsequent events review and relied on certain management representations.
27. The Company follows the process of recording interunit transactions which are identified manually, and we have relied on the entries passed in the books of accounts. There are inherent limitations in identifying and tracing such entries in the books of accounts with actual transactions happened during the year. Further the Company is also in process of reconciling the inter unit transactions pending reconciliation, an amount of Rs. 1,748.64 lakhs has been adjusted in SFS under the head ‘Cost of material consumed of the SFS. Accordingly, we are unable to independently assess the correctness and completeness of such transactions.
28. The Company has reported certain non-compliances with various provisions of the SEBI Listing Regulations/the Act interalia in respect of quorum for board meetings, non-compliance with the constitution of audit and risk management committees, specified proportion/ number of independent directors. Consequential non compliance of such provisions and its effect on SFS is not known including non-provision for penalty and interest liability there on. 29. Reference is drawn to observation in paragraph ‘29 of our audit report issued on June 13, 2025 in respect of Financial Statements as of March 31, 2025, regarding certain old balances carried forward in various assets and liabilities, where in management has not furnished us the composition of such balances and requisite records in support thereof.
30. Reference is drawn to Note 31(50) SFS where in the Company has classified certain items as Exceptional Items which are not in accordance with the IndAS 1 Presentation of Financial Statements. In the absence of adequate information and documentation we are unable to comment on the correctness of the amounts reported therein.
31. Company has not furnished adequate details/reconciliation regarding the classification of current and non current portions of employee benefits which includes gratuity, LTC and earned leave liabilities across all units, regional offices and corporate office as per actuary and the books of accounts. Accordingly, we are unable to comment on the correctness of the provisions reported there under including the charge to the Statement of Profit and loss for the year ended March 31, 2026 (including those reported under ‘Other Comprehensive Income).
32. The Company has in the past years availed certain Grants which in our opinion has not followed principles of recognition, measurement and disclosures as required under IndAS 20-Accounting for Government Grants and Disclosure of Government Assistance.
33. Attention of the members is also invited to our comments in paragraph 2(i)(vi) of the section on ‘Report on legal and regulatory matters regarding audit trails and in Annexure C, pursuant to the directions of the Comptroller and Auditor General of India. We are unable to assess the impact of these observations on the SFS.
34. The Company has not complied with the recognition, measurement and disclosure requirements of IndAS 21 – The Effects of Changes in Foreign Exchange Rates in respect of the outstanding forward exchange contracts outstanding as at March 31, 2026 as detailed in note 31(17) to SFS. We are unable to trace the corresponding liabilities against which such contracts were entered in the books of accounts. Consequently, the effect of the above non-compliances on the SFS could not be ascertained.
35. The Company has not furnished certain disclosures as required under Schedule III of the Act and disclosure in accordance with IndAS as detailed below:
a) The details of quarterly returns / statements of Current assets filed by the Company with banks. Accordingly, we are unable to comment if those returns were in agreement with the books of accounts or reconciliations/reasons of material discrepancies, if any, if there were differences.
b) Bifurcation of sale of products and sale of services in Note 22 to SFS and purchase of Stock-in-Trade and installation & Maintenance Charges in Note 25(a) and 25(b) to SFS in respect of certain projects executed by the Company are not properly made in the said note.
c) Considering our observations in paragraph 15 above, we are unable to comment on the correctness of cost of materials consumed, Changes in inventories of finished goods work-in-progress and Stock-in-Trade and relied on the data furnished by the company in Note 24 and Note 26 respectively.
d) Details regarding classification of vendors as Micro and Small Enterprises (MSME) and non MSME parties are not furnished accurately considering our observation in paragraph 17 above.
e) Reference drawn to note 31(52) to SFS where reasons for reclassification has not been furnished by the Company in line with the requirement of IndAS 1- Presentation of Financial Statements
f) The various current and non - current assets and liabilities respectively classified and presented in the SFS are as determined by the Company and could not be independently validated by us.
g) In the light of our observations under the ‘Basis for Disclaimer of Opinion paragraph Company has not furnished several disclosures as required under all applicable IndAS.
35. Further, as explained to us, certain units (Mankapur, Raebareli, Naini, Palakkad and Srinagar) of the Company, which have been audited by respective unit auditors. In accordance with SA 600 (Revised), "Using the Work of Another Auditor", we had issued group audit instructions to seek relevant information from such unit auditors. However, we have not received the requisite responses/information, and we were unable to perform alternative audit procedures to obtain sufficient appropriate audit evidence in respect of such units. Reference is drawn to our ‘Other Matters paragraph below regarding our opinion in so far as it relates to the amounts and disclosures included in respect of these units is solely on the reports of such units auditors. Accordingly, we are unable to determine the possible impact, if any, in respect of this matter on the SFS.
36. As per the Audit report issued by Balaram and Nandakumar, Chartered Accountants dated May 26, 2026 for Palakkad Unit of the Company.
The Company has included an amount of _2.54 lakhs as unreconciled Bank Reconciliation Statement receipts under current liabilities. In the absence of adequate reconciliation and supporting documentation, we were unable to determine the correctness and consequential impact of the same on the SFS.
Common to all matters dealt with above:
We are unable to obtain sufficient appropriate audit evidence to form an opinion on the SFS due to the potential interaction of the multiple/undetected misstatements, if any, contained therein and assessment of their possible individual and cumulative effect thereof, which may be material and pervasive, and accordingly forms the basis for the disclaimer of opinion.
Material Uncertainty for continuing as a Going Concern.
The Company reported net profit after tax of Rs. 29,279.55 lakhs during the year ended March 31, 2026 and its current liabilities as at year end being more than its current assets as reflected in the SFS and such gap likely to increase in the wake of our qualifications outlined in the foregoing paragraphs under the heading ‘Basis for Disclaimer of Opinion may cast a doubt on the ability of the Company to continue as a going concern. Reference is drawn to note 31(4) of the SFS where in the management is of the opinion that going concern basis of accounting is appropriate in view of the factors outlined in the said note. The appropriateness of the going concern is subject to successful attainment of the plans of the Company as detailed in the said note. Our opinion is not modified in respect of this matter.
Other Matters
We did not audit the financial statements of the Mankapur, Raebareli, Srinagar, Naini & Palakkad Units included in the standalone financial results of the Company, whose financial statements reflect total assets of Rs. 2,56,946.33 lakhs, total income of Rs. 33,792.97 lakhs and total loss of Rs. 50,567.08 lakhs for the year ended March 31, 2026, (excluding inter-unit balances and transactions). The financial statements of these units have been audited by units auditors whose reports have been furnished to us and our opinion in so far as it relates to the amounts and disclosures included in respect of these units is solely on the reports of such units auditors. Our opinion is not modified in respect of these matters.
Other Information
The Companys Board of Directors is responsible for the other information. The other information comprises the Company information, ten-year digest, figures at a glance, directors report and report on corporate governance (‘Other Information). The directors report is expected to be made available to us after the date of this auditors report.
Our opinion on the SFS does not cover the other information and we will not express any form of assurance conclusion thereon.
In connection with our audit of the SFS, our responsibility is to read the other information identified above when it becomes available and, in doing so, consider whether the other information is materially inconsistent with the SFS or our knowledge obtained in the audit, or otherwise appears to be materially misstated.
When we read the Other Information, if we conclude that there is a material misstatement therein, we are required to communicate the matter to those charged with governance and describe actions applicable in the applicable laws and regulations. Other Information for the financial year March 31, 2026, have not been finalised and accordingly, the same was not furnished to us.
Managements and Board of Directors Responsibilities for the Standalone Financial Statements
The Companys Management and the Board of Directors are responsible for the matters stated in section 134(5) of the Act with respect to the preparation and presentation of these SFS that give a true and fair view of the net profit/ loss and other financial information, the Statement of Assets and Liabilities and the Statement of Cash Flow in accordance with the recognition and measurement principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2021, issued there under. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities, selection and application of appropriate accounting policies, making judgments and estimates that are reasonable and prudent and the design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring accuracy and completeness of the accounting records, relevant to the preparation and presentation of the SFS that give a true and fair view and are free from material misstatement, whether due to fraud or error.
In preparing the SFS, management and the Board of Directors are responsible for assessing the Companys ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Board of Directors either intend to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
The Board of Directors is responsible for overseeing the Companys financial reporting process. Auditors Responsibilities for the Audit of the Standalone Financial Statements
Our responsibility is to conduct an audit of the SFS in accordance with Standards on Auditing and to issue an auditors report. However, because of the matters described in the Basis of Disclaimer of the opinion section of our report, we were not able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion of SFS.
We are independent of the Company in accordance with the Code of Ethics and provisions of the Companies Act, 2013 that are relevant to our audit of the SFS under the Companies Act, 2013, and we have fulfilled our other ethical responsibilities in accordance with the Code of Ethics and the requirements under the Companies act, 2013.
REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS
As required by the Companies (Auditors Report) Order, 2020 ("the Order") issued by the Central Government in terms of section 143 (11) of the Act, we give in the "Annexure A" a statement on the matters specified in paragraphs 3 and 4 of the Order, which is subject to the possible effects of the matters described in the ‘Basis for Disclaimer Opinion section of our Independent auditors report and in our report on the Internal Financial Controls over Financial Reporting.
As required by section 143(3) of the Act, we report that: a. As described in the ‘Basis for Disclaimer of Opinion section above, we have sought but were not able to obtain all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.
b. In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books, except in respect of matters described in the ‘Basis for Disclaimer of Opinion section above.
c. The reports on the accounts of branch/ unit offices of the Company audited by branch/ unit auditors have been forwarded to us and have been duly dealt with while preparing this report.
d. The Balance Sheet, the Statement of Profit and Loss including Other Comprehensive Income, Statement of Changes in Equity, and the Cash Flow Statement dealt with by this Report are in agreement with the books of account, except for gross block and accumulated depreciation of PPE and IP as per books are not in agreement with the corresponding figures in the relevant notes to the SFS.
e. Due to the possible effects of the matters described in the ‘Basis for Disclaimer of Opinion section above, we are unable to state whether the aforesaid SFS comply with the Indian Accounting Standards prescribed under section 133 of the Act read with Companies (Indian Accounting Standards) Rules, 2021, as amended.
f. As per GSR- 463 (E) dated June 5, 2015, issued by the Ministry of Corporate Affairs, the provisions of Section 164(2) of the Companies Act, 2013 regarding disqualification of director(s) is not applicable to the Company, since it is a Government Company.
g. The reservation/modification relating to the maintenance of accounts and other matters connected therewith are as stated in the ‘Basis for Disclaimer of Opinion section.
h. With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure B" and paragraph 2 of the section ‘Basis for Disclaimer of Opinion. Our report expresses a disclaimer of opinion on the Companys internal financial controls over financial reporting for the reasons stated therein.
i. Except for the possible effects of the matters described in the ‘Basis for Disclaimer of Opinion section above, with respect to the other matters to be included in the Independent Auditors Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended, in our opinion and to the best of our information and according to the explanations given to us:
i) The Company has disclosed the estimated impact of pending litigations on its financial position as detailed in Note 31(10) to FS, to the extent ascertained. Refer paragraph 22 of the section ‘Basis for Disclaimer of Opinion of our report.
ii) The Company has made provisions, as required under applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts, subject to our comments in paragraph 24(a) of the section ‘Basis for Disclaimer of Opinion of our report. The Company did not enter into any derivative contracts.
iii) There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.
iv) a. i. Management has represented that, to the best of its knowledge and belief, 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(s) or entity(ies), including foreign entities ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
b. ii. Management has represented, that, to the best of its knowledge and belief, no funds have been received by the Company from any person(s) or entity(ies), including foreign entities ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
c. iii. Based on such audit procedures that we considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under sub-clause (i) and (ii) above contain any material misstatement.
v) The Company did not declare or pay any dividends during the year. Accordingly, no reporting under the said sub clause is applicable.
vi) In respect of the current year under audit, Bangalore Plant (BGP), Network Systems Unit (NSU), Corporate office (Corporate), Research & Development Units(R&D), Regional office (ROs) Lucknow, RO Chennai, RO Mumbai, RO Delhi, RO Kolkata, RO Bhubaneswar, RO Hyderabad and RO Bangalore, used accounting software (Tally Prime Edit Log version software) for maintaining its books of account which has a feature of recording audit trail (edit log) facility and to the best of our knowledge, the same has been operated throughout the year for all transactions recorded in the said software for the said above units , based on test check carried out by us. As far as we could ascertain, based on test checks, the audit trail feature has not been tampered with. The said software does not have a ready report for archival of audit trial for all the transactions entered by such units. Accordingly, the management has confirmed that audit trail has been preserved as per the statutory requirements for record retention, however in the absence of ready report as mentioned above we are unable to comment on the same.
The unit auditors of Raebareli (RBL), Srinagar (SNR)and Mankapur (MKP) units of the Company have not commented on availability of audit trails/ edit log facilities. In the absence of the required reporting by the unit auditors, we are unable to comment on the compliance of rule 11(g) of the Companies (Audit and Auditors) Rules, 2014, under the Act.
Further the comments made by the unit auditors of Naini (NNI) and Palakkad (PKD)unit of the Company are as furnished below and no independent verification performed by us in the absence of ready data:
a) Naini unit - Proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 for maintaining books of account using accounting software which has a feature of recording audit trail (edit log) facility is applicable to the Company. Based on our examination the Naini Unit of ITI Limited has used software for maintaining its books of accounts which has a feature of recording audit trail (edit log) facility. Further the audit trail facility has been operating throughout the year for all relevant transactions recorded in the software except for the records maintained manually like inventory records and property, plant and equipment records maintained in excel. Further, during the course of our audit we did not came across any instance of audit trail feature being tampered with.
b) Palakkad unit - The reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules,2014 is applicable from April 01, 2023. Based on our examination which included test checks, the company has used accounting software for maintain its books of account, which have a feature of recording audit trail (edit log) facility. However, data for verification of audit logs have not been provided to us by the management. Accordingly, we are not in a position to independently verify and report on the appropriateness of the accounting software used by the Company to maintain its books of account, with respect to Audit Trail (edit log) facility.
j. As required by section 143(5) of the Act, we report on matters covered in the directions issued by the Comptroller and Auditor-General of India, the action taken thereon and its impact on the SFS of the Company in "Annexure C".
ANNEXURE-A REFERRED TO IN PARAGRAPH 1 UNDER THE HEADING "REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS" OF OUR REPORT TO THE MEMBERS OF ITI LIMITED
As referred to in paragraph 2 of the section on ‘Report on Other Legal and Regulatory Requirements of our report of even date to the members of the ITI Limited on the SFS for the year ended March 31, 2025, subject to the possible effects of the matters described in the section on ‘Basis for Disclaimer of Opinion and "Annexure B" on the internal controls over financial reporting, we report, based on the information and explanations provided to us, that: 1.
a) (A) The Company has not maintained adequate records showing full particulars, including quantitative details, location, asset transfers between units and asset coding system of PPE. The amounts reported under gross block and accumulated depreciation in the note 1 and 3 to SFS were pending reconciliation with general ledger and asset records including depreciation calculations/salvage value. Land records at various divisions/units need to be reconciled with respective documents held at corporate office/respective divisions/units and with respective asset registers, pending which we are unable to report on matters contained in paragraph 3(i)(a)(A) of the Order. Refer details listed in footnote to note 1 and 3 to SFS and our observation under paragraph 6 of the section ‘Basis for Disclaimer of Opinion.
(B) The Company did not have any intangible asset with positive written-down value as at March 31, 2026, subject to our comments in paragraph 10 of the section ‘Basis for Disclaimer of Opinion. Accordingly, reporting on matters contained in paragraph 3(i)(a)(B) of the Order cannot be made.
b) As reported in paragraph 6 of the section ‘Basis for Disclaimer of Opinion, we have not been furnished records in support of physical verification of PPE wherever carried out during the year and the immediate previous year. Further, the company has not carried out substantially physical verification of PPE at its major units, and accordingly, we are unable to comment on matters contained in paragraph 3(i)(b) of the Order.
c) Reference is invited to footnotes to notes 1 and 3, note 31(10)(b) and 31(15) to SFS which includes certain observations of the management regarding incomplete land records which are under reconciliation with relevant documents/records (as explained in our observation in paragraph 5 of the section ‘Basis for Disclaimer of Opinion) and certain lease agreements executed by/ in favour of the Company are pending documentation/renewal as explained in observation in paragraph 11 of the section ‘Basis for Disclaimer of Opinion. Further, the title deeds relating to certain portions of land are yet to be transferred in the Company name for various reasons. Accordingly, we are unable to comment on matters required in paragraph 3(i)(c) of the Order. Based on available information, title deeds of certain immovable properties detailed below were not held in the name of the Company to the extent details available are furnished below:
| Description of the Property | Gross carrying value (Rs. In lakhs) | Held in the name of | Whether promoter director of their relative or their employee | Period held – Indicate range, where appropriate | Reason for not being held in name of company (also indicate if in dispute) | Unit |
| Land | 6,090.31 | Title resumed by the Government of Kerala | No | Over 10 years | Company has disputed the resumption | Palakkad |
| Land | 9,282 | Title deed not executed | No | Over 10 years | Possession handed over by District Industrial Officer in the year 1969 to the Company on the basis of possession letter. The absolute sale deed or any other title documents has not yet been executed. | Naini |
| Land | 11,620 | 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(as furnished by the company) | Raebareli |
| Land | Not ascertainable | Absolute Sale Deed not yet executed | No | Over 10 years | Out of 191.03 acres of land purchased from private owners, title deed for 41.77 acres land are not available with the management. (as reported by the Company) | Mankapur |
The Company operates its business across various Units/ Regional Offices(‘RO)/Marketing, Services and Projects centers(‘MSP). Comprehensive data regarding the land and building for those offices were not furnished to us specifying own/lease land/premises, in the absence of which we are unable to comment on the compliance of the said clause in respect of those offices. d) The Company has not revalued any of its PPE (including Right of Use assets) or intangible assets or both during the year. Accordingly, reporting on matters contained in paragraph 3(i)(d) of the Order is not applicable.
e) There are no proceedings that have been initiated or are pending against the Company for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and rules made thereunder. Accordingly, reporting on matters contained in paragraph 3(i)(e) of the Order is not applicable.
2. a) The Company did not carry out comprehensive physical verification of inventories covering all categories (as explained in our observation in paragraph 15 of the section ‘Basis for Disclaimer of Opinion). We are unable to comment on matters contained in paragraph 3(ii)(a) of the Order. b) In the absence of data of inventories, sales, debtors, production and other details as of quarter ends being furnished to us by the Company, the same could not be compared with the corresponding data furnished by it to its banks where working capital facilities have been availed(as explained in our observation in paragraph 35(a) of the section ‘Basis for Disclaimer of Opinion and refer note 31(22) to SFS). Accordingly, we are unable to comment on matters contained in paragraph 3(ii) (b) of the Order.
3. During the year, the Company has not made investments in, provided any guarantee or security or granted any loans or advances in the nature of loans, secured or unsecured, to companies, firms, limited liability partnerships or any other parties. Accordingly, reporting on matters contained in paragraph 3(iii)(a) to (f) are not applicable.
4. The Company has not granted any loans or provided any guarantees covered by the provisions of sections 185 and Company has invested in India Satcom limited in accordance with section 186 of the Act. Accordingly, reporting on matters contained in paragraph 3(iv) are not applicable.
5. The Company has not accepted any deposits as applicable under the directives issued by the Reserve Bank of India and the provisions of sections 73 to 76 or any other provisions of the Act and rules framed under. The Company based on its internal assessment that amounts due on account of advances/ retention money/other deposits on its various projects are covered under exempted deposits and accordingly, comply with section 73 to 76 of the Act. Reference is drawn to our observation in paragraph 16 of the section ‘Basis for Disclaimer of Opinion, wherein we were unable to obtain sufficient appropriate audit evidence for the matters described there in including advances from customer and accordingly, reporting under paragraph 3(v) of the Order could not be commented upon.
6. Maintenance of cost records have been prescribed by the Central Government under section 148 (1) of the Act. In the absence of the necessary information, we are unable to comment whether such accounts and records have been made and maintained for the year.
7. a) The Company is not regular in depositing undisputed statutory dues including goods and services tax, provident fund, employees state insurance, income-tax, sales-tax, service tax, duty of customs, duty of excise, value added tax, cess and any other statutory dues to the respective appropriate authorities during the year have not been regularly deposited by the company with the appropriate authorities and there have been serious delays in a large number of cases. Arrears of such outstanding statutory dues as on the last day of the financial year for a period of more than six months from the date they became payable (to the extent ascertained from the Companys records pending reconciliation) are furnished below.
| Unit | Name of the Statute | Nature of the Dues | Amount (Rs.) | Period to which the amount relates | Due Date | Date of Payment |
| RO - Delhi | Employees Provident Fund Act, 1952 | PF | 7.80 | 2025-26 & Prior | Unascertainable | Unascertainable |
| RO - Delhi | Employees Provident Fund Act, 1952 | PF | 120.32 | 2025-26 & Prior | Unascertainable | Unascertainable |
| RO - Lucknow | Employees Pension Scheme, 1995 | Pension Payable | 0.11 | 2025-26 & Prior | Unascertainable | Unascertainable |
| RO - Lucknow | Employees Provident Fund Act, 1952 | PF | 3.97 | 2025-26 & Prior | Unascertainable | Unascertainable |
| RO - Lucknow | Employees Provident Fund Act, 1952 | PF | 21.09 | 2025-26 & Prior | Unascertainable | Unascertainable |
| RO - Bhubaneshwar | Employees Pension Scheme, 1995 | Pension Payable | 0.06 | 2025-26 & Prior | Unascertainable | Unascertainable |
| RO - Bhubaneshwar | Employees Provident Fund Act, 1952 | PF | 0.13 | 2025-26 & Prior | Unascertainable | Unascertainable |
| RO - Bhubaneshwar | Employees Provident Fund Act, 1952 | PF | 20.01 | 2025-26 & Prior | Unascertainable | Unascertainable |
| RO - Chennai | Employees Pension Scheme, 1995 | Pension Payable | 0.07 | 2025-26 & Prior | Unascertainable | Unascertainable |
| RO - Chennai | Employees Provident Fund Act, 1952 | PF | 6.71 | 2025-26 & Prior | Unascertainable | Unascertainable |
| RO - Chennai | PT Acts and rules made thereunder | PT | 0.03 | 2025-26 | Unascertainable | Unascertainable |
| RO - Hyderabad | Employees Pension Scheme, 1995 | Pension Payable | 0.02 | 2025-26 & Prior | Unascertainable | Unascertainable |
| RO - Hyderabad | Employees Provident Fund Act, 1952 | PF | 2.45 | 2025-26 & Prior | Unascertainable | Unascertainable |
| RO - Hyderabad | Employees Provident Fund Act, 1952 | PF | 14.24 | 2025-26 & Prior | Unascertainable | Unascertainable |
| RO - Hyderabad | PT Acts and rules made thereunder | PT | 0.00 | 2025-26 | Unascertainable | Unascertainable |
| RO - Kolkata | Employees Pension Scheme, 1995 | Pension Payable | 0.26 | 2025-26 & Prior | Unascertainable | Unascertainable |
| RO - Kolkata | Employees Provident Fund Act, 1952 | PF | 0.59 | 2025-26 & Prior | Unascertainable | Unascertainable |
| RO - Kolkata | Employees Provident Fund Act, 1952 | PF | 0.59 | 2025-26 & Prior | Unascertainable | Unascertainable |
| RO - Kolkata | PT Acts and rules made thereunder | PT | 0.01 | 2025-26 | Unascertainable | Unascertainable |
| NSU | GST Acts and rules made thereunder | TDS on GST | 1,864.73 | 2025-26 & Prior | Unascertainable | Unascertainable |
| NSU | Income Tax Act, 1961 | TDS - 194 C | 257.71 | 2025-26 & Prior | Unascertainable | Unascertainable |
| NSU | Income Tax Act, 1961 | TDS - 194 J | 16.61 | 2025-26 & Prior | Unascertainable | Unascertainable |
| NSU | Income Tax Act, 1961 | TDS - 194 I | 0.13 | 2025-26 & Prior | Unascertainable | Unascertainable |
| NSU | Income Tax Act, 1961 | TDS - 194 B | 36.97 | 2025-26 & Prior | Unascertainable | Unascertainable |
| NSU | Income Tax Act, 1961 | TDS - 194 Q | 7.26 | 2025-26 & Prior | Unascertainable | Unascertainable |
| NSU | Employees Provident Fund Act, 1952 | PF | 10.19 | 2025-26 & Prior | Unascertainable | Unascertainable |
| NSU | Employees Provident Fund Act, 1952 | PF | 741.13 | 2025-26 & Prior | Unascertainable | Unascertainable |
| NSU | PT Acts and rules made thereunder | PT | 0.10 | 2025-26 & Prior | Unascertainable | Unascertainable |
| NSU | Employees State Insurance Act, 1948 | ESI | 5.56 | 2025-26 & Prior | Unascertainable | Unascertainable |
| NSU | Employees State Insurance Act, 1948 | Interest payable on ESI | 5.56 | 2025-26 & Prior | Unascertainable | Unascertainable |
| NSU | GST Acts and rules made thereunder | Interest payable on GST | 165.39 | 2025-26 & Prior | Unascertainable | Unascertainable |
| NSU | Income Tax Act, 1961 | Interest payable on TDS | 42.43 | 2025-26 & Prior | Unascertainable | Unascertainable |
| BGP | Employees Provident Fund Act, 1952 | PF | 399.41 | 2025-26 & Prior | Unascertainable | Unascertainable |
| BGP | PT Acts and rules made thereunder | PT | 1.28 | 2025-26 & Prior | Unascertainable | Unascertainable |
| RBL | Employees Provident Fund Act, 1952 | PF | 4893.25 | 2025-26 & Prior | Unascertainable | Unascertainable |
| MKP | Employees Provident Fund Act, 1952 | PF | 2553.78 | 2025-26 & Prior | Unascertainable | Unascertainable |
| PKD | Employees Provident Fund Act, 1952 | PF | 123.75 | 2025-26 & Prior | Unascertainable | Unascertainable |
| NNI | Employees Provident Fund Act, 1952 | PF | 2754.22 | 2025-26 & Prior | Unascertainable | Unascertainable |
i. The above data is subject to our comments in paragraph 20 of the section on ‘Basis for Disclaimer of opinion, wherein we have reported that the Company had not reconciled its books of account with its GST returns filed across all its registrations. The above table does not include GST liability (including withholding tax under GST regulations) as per books of account since we are unable identify undisputed dues more than 6 months as at March 31, 2026. Accordingly, we are unable to ascertain registration wise closing general ledger balances. Further, GST payable on advances received by the Company on account of services, for the reasons stated could not be ascertained.
ii. The above table does not include certain withholding taxes as per books of account since we are unable identify undisputed dues more than 6 months as at March 31, 2026 apart from those reported above. Accordingly, we are unable to ascertain registration wise closing general ledger balances.
iii. Reference is drawn to note 31(10)(iv) to SFS in respect of delayed remittance of provident fund including interest thereon for the reasons stated thereon. Accordingly we are unable to comment on the completeness of the reporting under the said clause.
iv. All the above undisputed statutory dues are furnished to the extent identified/ ascertained and pending reconciliation of documents/ orders/ demand notices across all units/ RO/ Corporate office and pending reconciliation with the contingent liability disclosure vide note 31(10) to SFS and accordingly we could not independently validate the above said data regarding correctness/completeness.
b) According to the records of the Company, statutory dues outstanding on account of disputes of those referred to in sub-clause (a) are furnished below:
| Unit | Name of the statute | Nature of dues | Amount in Rs. Lakhs (As on March 31, 2026) | Period to which the dispute relates | Forum where the dispute is pending |
| BGP | Central Excise Act 1944 | CENVAT Credit | 376 | 2007-2008 | Custom Excise & Service Tax Appellate Tribunal |
| MKP | UP VAT | Sales Tax | 264.89 | 1986-1989 | UP Government |
| MKP | UP VAT | Sales Tax | 15.32 | 1989-1996 | UP Government |
| MKP | Finance Act, 1994 | Service Tax | 2,453.33 | 2009-10 to 2013-14 | CESS Tax, Allahabad |
| MKP | Goods and Service Tax Act, 2017 | GST | 565.3 | 2017-18 & 2022-23 | Odhisha, Jharkand & Kolkata |
| MKP | Sales Tax Act | Sales Tax | 442.89 | Data not available | Data not available |
| NNI | Central Sales Tax (CST) | Demand of other dues and Additional Tax against FORM C | 1,013.98 | 2005-2006 | Joint Commissioner (Appeals), Commercial Tax, Allahabad |
| NNI | Central Sales Tax | Demand of Additional Tax against FORM C | 2.64 | 2007-08 | Additional Commissioner (Appeals), Commercial Tax, Allahabad |
| NNI | CST/ UPVAT/Entry Tax | Demand of other dues | 9.23 | 2008-09 | Addl Commissioner, (Appeals), Commercial Tax, Allahabad |
| NNI | Central Sales Tax | Demand of other dues and Additional Tax against FORM C | 2.12 | 2009-10 | Deputy Commissioner, Commercial Tax, Allahabad |
| NNI | CST/ UPVAT | Demand of other dues and Additional Tax against FORM C | 60.57 | 2010-11 | Additional Commissioner (Appeals), Commercial Tax, Allahabad |
| NNI | CST | Demand of other dues and Additional Tax against FORM C | 10.96 | 2011-12 | Tribunal, Commercial Tax, Allahabad |
| NNI | CST/ UPVAT | Demand of other dues and FORM C | 146.75 | 2012-13 | Deputy Commissioner Sector 14, Commercial Tax, Allahabad |
| NNI | CST/ UPVAT | Demand of Tax | 86.75 | 2013-14 | Deputy Commissioner Sector 14, Commercial Tax, Allahabad |
| PKD | Service Tax | Service Tax | 109.44 | 2010-2011 | CESTAT, Bangalore |
| PKD | Service Tax | Service Tax | 140.34 | 2011-2012 | CESTAT, Bangalore |
| PKD | Service Tax | Service Tax | 161.27 | 2011-2012 | CESTAT, Bangalore |
| PKD | Service Tax | Service Tax | 2.76 | 2012-2013 | CESTAT, Bangalore |
| PKD | Service Tax | Service Tax | 2.69 | 2012-2013 | CESTAT, Bangalore |
| PKD | CST | Sales Tax | 28.04 | 2001-02 | High Court, Ernakulam |
| PKD | CST | Sales Tax | 504.13 | 2003-04 | KVAT Tribunal, Palakkad |
| PKD | Customs, Central Excise & Service Tax | Service Tax | 143.42 | 2016-17 & 2017-18 | Commissioner Appeals, Kochi |
| PKD | Customs, Central Excise & Service Tax | Service Tax | 3.93 | Apr 2015 to Jun 2 2017 | Commissioner Appeals, Kochi |
| PKD | Goods & Service Tax | Goods & Service Tax | 924.77 | 2019-2020 | Commissioner Central Tax & Central Excise, Calicut |
| PKD | Goods & Service Tax | Goods & Service Tax | 6,163.40 | 2017-2018 &2018- 2019 | Commissioner Appeals, Kochi |
| RBL | Sales Tax Act | Sales Tax | 122.53 | 2010-11 | Trade Tax Tribunal, Lucknow |
| RBL | Sales Tax Act | Sales Tax | 87.39 | 2014-15 | Trade Tax Tribunal, Lucknow |
| RO - Bangalore | Kerala VAT Act, 2003 | Turnover Suppression | 26.47 | 2014-15 | Commercial Tax Officer, Thirpunithura |
| RO - Bangalore | Kerala VAT Act, 2003 | Turnover Suppression | 48.92 | 2013-14 | Appellate Assistant Commissioner, Commercial Taxes, Ernakulam |
| RO - Bangalore | Service Tax | Non-payment of Service Tax on Royalty payments received | 44.78 | 2014-15 | Commissioner of Central Excise |
| RO - Bangalore | Kerala VAT Act, 2003 | Turnover suppression | 65.87 | 2012-13 to 2014-15 | Dy Commr (Appeals) - Commercial Tax, Ernakulam |
| SNR | Sales Tax Act | Sales Tax | 733.36 | 1987-88 to 1989- 90,1996-97,1999-00, 2002-03 | High Court, J & K |
| RO - Bhubanesh- war | Sales Tax | Sales Tax | 226.05 | 2013-14 | Commissioner of Sales Tax Bhubaneshwar |
| RO – Lucknow | Sales Tax Act | Non receipt of C/D forms | 24 | Not available. | Not available. |
| NNI | Sales Tax Act | Non receipt of C/D forms | 1537.98 | Not available. | Not available. |
| RBL | Sales Tax Act | Non receipt of C/D forms | 2838.92 | Not available. | Not available. |
| RBL | Sales Tax Act | Sales Tax | 85.17 | 2017-18 | Not available. |
| BGP | Goods & Service Tax | Ineligible ITC and Blocked Credit | 8 | 2022-23 | Not available. |
| BGP | Goods & Service Tax | Ineligible ITC and Blocked Credit | 11 | 2023-24 | Not available. |
| RBL | Goods & Service Tax | ISSUANCE OF CREDIT NOTE BEYOND THE TIME LIMIT | 46 | 2019-20 | Commissioner Appeal, Guwahati |
| RO Hyderabad | Goods & Service Tax | Short payment of tax | 496.88 | 2017-18 to 2021-22 | GSTTAT, Hyderabad |
| RO Kolkata | Goods & Service Tax | Tax Short paid on outward supply | 42 | 2019-20 | GSTTAT, Kolkata |
| RO Lucknow | Goods & Service Tax | Discrepancies in return filing | 508 | 2017-18 | Commissioner Appeal, Lucknow |
| RO Lucknow | Goods & Service Tax | Short Payment of GST | 162 | 2018-19 | Commissioner Appeal, Lucknow |
| RO Lucknow | Goods & Service Tax | Order for FY 2019-20 to 2021-22 | 420 | 2019-20 to 2021-22 | Commissioner Appeal, Lucknow |
| RO Delhi | Goods & Service Tax | GST Audit happen and demand issued as per audit para | 341 | 2019-20 to 2023-24 | Commissioner Appeal, Delhi |
| NSU | Goods & Service Tax | GST Audit happen and demand issued as per audit para | 343 | 2019-20 to 2023-24 | Not available. |
| Corporate | Goods & Service Tax | Payment not made to vendors within 180 days from the date of issuance of Invoice or payment made to vendors after 180 days from the date of issuance of Invoice | 6114 | 2017-18 to 2023-24 | Commissioner Appeal, Bangalore |
| RO - Bangalore | Goods & Service Tax | Ineligible ITC for the FY 2021-22 | 142.64 | 2021-22 | Commissioner Appeal, Bangalore |
All the above disputed statutory dues are furnished to the extent identified/ ascertained and pending reconciliation of documents/ orders/ demand notices across all units/ RO/ Corporate office and pending reconciliation with the contingent liability disclosure vide note 31(10) to SFS and reference is drawn to our observation in paragraph 20 and 22 of the section ‘Basis for Disclaimer of Opinion. Accordingly we could not independently validate the above said data regarding correctness/completeness.
8. There are no transactions which are not recorded in the books of account, which were surrendered or disclosed as income during the year in the tax assessments in the Income Tax Act, 1961 (43 of 1961).
9. a) The Company has not defaulted in the repayment of borrowings or payment of interest thereon to banks. However, the Company has defaulted in repayment of instalments as detailed below:
| Nature of borrowing | Name of lender | Amount not paid on due date | Whether principal or interest | No. of days delay or unpaid | Remarks, if any |
| Term Loan | GOI, Ministry of Communications & IT Dept. of Telecommunications | Rs. 30,000 Lakhs (Principal) and Rs. 3,730.76 Lakhs (Interest – to the extent determined) | Both Principal and Interest | Above 1000 days (as informed by management) | NA |
b) The Company has not been declared a willful defaulter by any bank or financial institution or other lender.
c) The Company has not taken any term loans from banks during the year. Accordingly, reporting on matters contained in paragraph 3(ix)(c) of the Order is not applicable.
d) On an overall examination of the SFS as at March 31, 2026 of the Company, Company has utilized Rs. 53,386.23 lakhs funds raised on short term basis to finance long-term assets of the company. We further draw attention to Note 31(31) to FS where in the current ratio of the Company is less than 1 (being 0.93), which is also an indication that short-term funds have been utilized to finance long-term assets of the company.
e) The Company has not taken any funds from any entity or person on account of or to meet the obligations of its associate. The Company had no subsidiaries or joint ventures. Accordingly, reporting on matters contained in paragraph 3(ix)(e) of the Order is not applicable.
f) The Company has not raised loans during the year on the pledge of securities held in its associate company. The Company had no subsidiaries or joint ventures. Accordingly, reporting on matters contained in paragraph 3(ix)(f) of the Order is not applicable.
10. a) The Company has not raised any monies during the year by way of initial or further public offer (including debt instruments). Accordingly, reporting on matters contained in paragraph 3(x)(a) of the Order is not applicable.
b) The Company had received share application money aggregating to Rs. 5,900 lakhs from the Government of India on a private placement basis, as detailed in Note 31(15) of SFS as at March 31, 2025. During the year, the Company has allotted 19,65,029 equity shares to the President of India on 30 July 2025 at a price of Rs.300.25 per share (face value of Rs.10 per share and securities premium of Rs.290.25 per share) (refer note 11 to SFS). However, the provisions of Sections 42 and 62 of the Companies Act, 2013 have not been complied with, as reported in paragraph 27 under the section "Basis for Disclaimer of Opinion" vide our audit report dated June 13, 2025. The share application money was pending deployment for the intended purpose as at the year end. The application for listing of the aforesaid shares with the stock exchanges is also under process as on the date of this report. Consequently, reporting under paragraph 3(x)(b) of the Order regarding compliance with Sections 42 and 62 of the Act is subject to the matter described above.
11. a) As represented to us, no material fraud by or on the Company has been noticed or reported during the year Accordingly, reporting on matters contained in paragraph 3(xi)(a) of the Order is not applicable.
b) No report under sub-section (12) of section 143 of the Act has been filed in Form ADT-4 as prescribed under rule 13 of Companies (Audit and Auditors) Rules, 2014 with the Central Government, during the year and up to the date of this report.
c) Management has represented that there were no whistleblower complaints received by the Company during the year. However, this was not supported by any records to the said effect from the relevant whistle blower redressal authorities, both at head office and at units. Accordingly, we are unable to comment on matters contained in paragraph 3(xi)(c) of the said Order.
12. In our opinion the Company is not a Nidhi Company. Accordingly, reporting on matters contained in paragraph 3(xii) (a) to (c) of the said Order are not applicable.
13. The Company, being a Government Company, is exempted from the provisions of sections 177 and 188 of the Act, relating to transactions with other government companies in terms of MCA Notification No. GSR 463 (E) dated 05th June 2015. There were no transactions during the year with India Satcom Private Limited. Refer to note 31(6) of SFS Accordingly, reporting on matters contained in paragraph 3(xiii) of the Order is not applicable.
14. a) In our opinion, the Companys internal audit system is not commensurate with the size and nature of its business and needs strengthening.
b) We have considered the internal audit reports of the Company issued till date, for the period under audit.
15. The Company has not entered into any non-cash transactions with directors or persons connected with him based on the representations to us. Accordingly, reporting on matters contained in paragraph 3(xv) of the said Order is not applicable.
16. a) In our opinion, the Company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934. Accordingly, reporting on matters contained in paragraph 3(xvi)(a) to (c) of the Order is not applicable.
b) In our opinion, there is no core investment company within the Group, as defined in the Core Investment Companies (Reserve Bank) Directions, 2016 and accordingly, reporting on matters contained in paragraph 3(xvi)(d) of the Order is not applicable.
17. The Company has incurred cash losses in the immediately preceding financial year amounting to Rs. 16,394.54 lakhs and no cash losses incurred during the current financial year.
18. There is no resignation of statutory auditors during the year. Accordingly, reporting on matters contained in paragraph 3(xviii) of the Order is not applicable.
19. Attention is invited to note 31(4) to SFS regarding the same prepared on a going concern basis and our comments as detailed under the heading "Material Uncertainty on Going Concern". Company has significant liabilities to be discharged and its current ratio also being less than one. Accordingly we are unable to comment on the reporting on matters contained in paragraph 3(xix) of the Order.
20. According to the information and explanations given to us and based on our examination of the records of the Company, the Company did not have adequate profits requiring expenditure towards Corporate Social Responsibility under the provisions of Section 135 of the Act during the year. Accordingly, the provisions of paragraph 3(xx)(a) and 3(xx)(b) of the Order are not applicable to the Company.
21. In our opinion and according to the information and explanations given to us, there are no qualifications or adverse remarks in the Companies (Auditors Report) Order, 2020 reports of the associate company included in the consolidated financial statements. Accordingly, reporting under paragraph 3(xxi) of the Order does not give rise to any matter for reporting.
Annexure B referred to in Paragraph 2 (f) under the heading "Report on other legal and regulatory requirements" of our report to the members of ITI Limited
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 ("the Act")
We were engaged to audit the internal financial controls over financial reporting of ITI Limited ("the Company") as of March 31, 2026, in conjunction with our audit of the SFS of the Company for the year ended on that date.
Managements Responsibility for Internal Financial Controls
The Companys management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the "Guidance Note") issued by the Institute of Chartered Accountants of India (‘ICAI). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to companys policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Act.
Auditors Responsibility
Our responsibility is to express an opinion on the Companys internal financial controls over financial reporting based on our audit conducted in accordance with the Guidance Note and the Standards on Auditing, to the extent applicable to an audit of internal financial controls, both issued by the ICAI.
Because of the matter described in Disclaimer of Opinion paragraph below, we were not able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion on internal financial controls system over financial reporting of the Company.
Meaning of Internal Financial Controls over Financial Reporting
A companys internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of SFS for external purposes in accordance with generally accepted accounting principles. A companys internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of SFS in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the companys assets that could have a material effect on the SFS.
Disclaimer of Opinion
According to the information and explanation given to us, the Company has neither established nor tested its internal financial control over financial reporting on criteria based on or considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India. Because of this reason, we are unable to obtain sufficient appropriate audit evidence to provide a basis for our opinion whether the Company had adequate internal financial controls over financial reporting and whether such internal financial controls were operating effectively as at March 31, 2026.
ANNEXURE C TO INDEPENDENT AUDITORS REPORT
Observations sequel to directions issued by the Comptroller & Auditor General of India under Section 143(5) of the Companies Act, 2013 indicating the areas to be examined by the Statutory Auditors during the course of audit of annual accounts of ITI Limited (Standalone) for the year 2025-26 (‘Directions), which are to the best of our knowledge and relying on the information and explanations given to us:
| Areas Examined | Statutory Auditors Observations |
| Assess the fair valuation of all the investments, both quoted and unquoted, made directly by the Company or through Trusts, for Post retirement benefits of the employees. This includes verifying valuation methodologies, ensuring consistency with Ind AS and reviewing supporting documentation. The auditor shall provide a brief note on the valuation approach, its reasonability, and compliance with applicable regulations, reporting any material deviations or misstatements. | The Company has set up two trusts for administration of post-retirement benefits of its employees- Provident fund and Gratuity. The financial statements of the two trusts for the year have not been furnished to us. Management has represented to us that the investments of both the trusts have been recognized at cost and their fair valuation has not been evaluated as required in the directions issued by the Comptroller & Auditor General of India. |
| Whether the company has system in place to process all the accounting transitions through IT system? 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. | The Companys accounting transactions are maintained on Tally Prime (Edit Log) version 5.0 as informed to us. We are unable to comment on the integrity of the accounts due to the matters described in our audit report under paragraph ‘Basis of Disclaimer of opinion and based on our comments under rule 11(g) of Companies (Audit and Auditors) Rules 2014. |
| Transactions relating to maintenance of asset (PPE) records, inventory, payroll, materials management are maintained in excel sheets and are susceptible to unauthorized changes and alterations. We are unable to comment on the integrity of these records maintained in excel or in other software without requisite audit trails/ edit logs. Reference is invited to our observations in paragraph 2 of the section ‘Basis for disclaimer of opinion and in paragraph 2(l) of the section on ‘Report on legal and regulatory matters | |
| Whether funds (grants/subsidy etc) received/receivable for specific schemes from Central/State Government or its agencies were properly accounted for /utilized as per applicable accounting standards or norms and whether the received funds were utilized as per its term and conditions? | The Company had received grants aggregating to Rs. 4,496.42 lakhs from the Central Government in prior years, as disclosed in Note 13 to the SFS. However, we have not been provided with sufficient and appropriate information regarding the amount of grants remaining unutilized as at the year end, the related sanction/ grant orders, and the details of the bank accounts or other accounts in which such unutilized funds were held. Consequently, we are unable to comment on whether the accounting of interest, if any, relating to such grants has been carried out in accordance with the terms and conditions governing the grants. |
| Whether accounting of interest earned on grants received has been done as per terms and conditions of the Grant. List the cases of deviation. | Further, refer to our observations made in paragraph 32 of the section ‘Basis for disclaimer of opinion where in we are unable to comment on the compliance of the various grants received and its accounting treatment in terms of IndAS 20 – Accounting for Government Grants and Disclosure of Government Assistance. |
| Whether the Company has identified the key Risks areas? If yes, whether the Company has formulated any Risk Management Policy to mitigate these risks? If yes, (a) whether the Risk management Policy has been formulated considering global best practices? (b) whether the Company has identified its data assets and whether it has been valued appropriately? | Management has represented to us that it has implemented a comprehensive Risk Management Policy to identify, assess, and mitigate key risk areas across the organization and that the framework operates at four levels: |
| 1. URMC - Unit Level Risk Management Committee 2. ERMSC - ERM Steering Committee | |
| 3. ERMGC - Enterprise Risk Management Governing Committee or RMC -Risk Management Committee | |
| 4. ERM Board Level. The Company has furnished certain minutes and risk registers covering various units in excel sheets. On our review of such data we could not ascertain if all risk areas were identified by the Company and whether it has identified all its data assets since there were no ready list of data assets as per requirements of the said direction. Further Company has not furnished any Risk Management Policy and Accordingly we are unable to comment if the said policy mitigates all risks. | |
| Whether the Company is complying with the Securities and Exchange Board of India (SEBI) (Listing Obligation and Disclosure Requirements) Regulations, 2015, and other applicable rules and regulations of SEBI, Department of Investment and Public Asset Management, Ministry of Corporate Affairs, Department of Public | A. Reference is invited to paragraph 28 of the section on ‘Basis for Disclaimer of Opinion regarding non-compliance with SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015, and other applicable rules and regulations and certain provisions of the Act. |
| Enterprises, Reserve Bank of India, Telecom Regulatory Authority of India, CERT-IN, Ministry of Electronics and Information Technology and National Payments Corporation of India wherever applicable? If not, the cases of deviation may be highlighted. | B. Management has informed that in respect of Department of Investment and Public Asset Management, the Company has complied with the same in respect of asset monetization. Since no additional details are furnished for the same, we are unable to comment on the compliance. |
| C. Ministry of Corporate Affairs – Company has confirmed that the said compliance is done. Reference is drawn to our report on various matters regarding compliance of Companies Act 2013 and hence we are unable to comment on the said direction. | |
| D. Reserve Bank of India (RBI)– We are not aware of the compliance made if any with RBI | |
| E. Telecom Regulatory Authority of India – Company has represented to us that the said authority is not applicable to the Company. In the absence of sufficient appropriate audit evidence we are unable to comment on the same. | |
| F. CERT- IN & Ministry of Electronics and Information Technology – Company has represented to us that it has complied with all applicable directives and has represented that measures such as log retention, incident response readiness, security audit practices and adherence to cloud and data localization norms are implemented in accordance with CERT-IN guidelines. | |
| In the absence of any information or audit evidence furnished we are not able to comment on the said compliances. | |
| G. National Payments Corporation of India (NPCI) – Company has mentioned that NPCI is not applicable. We have relied on the said representation. |
| For B.K.RAMADHYANI & CO LLP | |
| Chartered Accountants | |
| Firm Registration No. 002878S/S200021 | |
| (CA Vasuki H S) | |
| Partner | |
| Membership No. 212013 | |
| UDIN: 26212013LWADYJ4131 | |
| Place: Bangalore | |
| Date: May 29, 2026 |
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