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Mahanagar Telephone Nigam Ltd.

BSE: 500108 Sector: Telecom
NSE: MTNL ISIN Code: INE153A01019
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VOLUME 166692
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OPEN 17.75
CLOSE 17.75
VOLUME 166692
52-Week high 27.50
52-Week low 15.00
P/E
Mkt Cap.(Rs cr) 1,087
Buy Price 17.25
Buy Qty 5125.00
Sell Price 0.00
Sell Qty 0.00

Mahanagar Telephone Nigam Ltd. (MTNL) - Director Report

Company director report

To

The Shareholders of Mahanagar Telephone Nigam Limited

Dear Shareholders

Your Directors present the 30th Annual Report of your Company together with theFinancial Statements and the Report of the Auditors as well as comments of Comptroller& Auditor General of India on the Financial Statements for the financial year ended onMarch 31 2016.

PERFORMANCE REVIEW OF MTNL FOR THE FY 2015-16

The achievements / initiatives taken by MTnL during the year 2015-16 are as follows:

Redeployment of Smaller Capacity Broadband Exchanges: 108 numbers of DigitalSubscriber Line Access Multiplexer (DSLAMs) have been redeployed near subscriber premisesin Delhi and 100 in Mumbai each thereby reducing copper length and enhancing the qualityof broadband service. This has improved customer experience and reduced the number ofcomplaints.

Provision of High Speed Broadband and Wi-Fi at the Hon’ble M.Ps residences: MTnLis executing

High Speed Broadband on FTTH (Fiber to the Home) and Wi-Fi project at the residences ofHon’ble MPs in Delhi for total number of 790 Hon’ble MPs residences. Out ofthese 731 FTTH connections have already been provided and Physical installation has beencompleted for Wi-Fi Services in 587 residences.

Mumbai City Surveillance (MCS) Project: MTNL Mumbai as a consortium partner withM/s L&T have been executing the Mumbai surveillance project for about Rs. 281 Crinvolving installation of 6000 cameras at 1500 locations. First phase has already beencompleted with installation of 1235 cameras.

State-of-the-Art Data Centre: MTNL has established two state-of-the-art Tier-IIIcertified Datacenters at Worli and Belapur for collocation of equipments of Mumbai CitySurveillance Project. Services are being managed by a dedicated team of MTnL on 24x7basis.

Higher data rates to mobile customers: To improve network capabilities andprovide better speed/ quality of service to its customers MTnL has planned to upgrade theexisting 3G network of Mumbai with enhanced Downlink speed of 21.1 Mbps as against 3.6Mbps speeds in the existing network.

An On line testing tool (IPTESTER) has been introduced for monitoring the status onreal time basis of the BTS/node-B equipments and Broadband Equipments.

The free night calling facility has been introduced for all landline customers formaking local calls to any network in Delhi and Mumbai between 10 PM to 7 AM.

From 1st May 2015 local call pulse rate has been introduced for STD calls (at 180seconds duration) for all landline customers of MTNL to any network anywhere in Indiabetween 10 PM to 7 AM.

Free Incoming National Roaming Facility for all MTNL Mobile customers introduced w.e.f.01.01.2016.

Free Up-gradation of the broadband bandwidth plans to minimum 2 Mbps speed has beenimplemented as per plan.

Jodi Plan has been introduced in which MTNL mobile customer can make local calls to oneMTNL landline number and one MTnL mobile number at a reduced rate of 20 paise / minute.

Launched attractive plan for FTTH broadband with speed at 10 Mbps (Fair usage datadownload limit of 25GB at the monthly service charge of Rs.790/). Other plans provide 20Mbps- 50 Mbps with fair usage download ranging from 45 GB to 200 GB at a monthly servicecharge ranging of Rs.1200/- to Rs.2990/-.

Free Trial 2 Mbps Broadband Plan with free usage for one month from the date ofinstallation for existingLandline subscribers was introduced on promotional offer forthree months.

FINANCIAL RESULTS FOR THE F.Y. 2015-16

Sources and Application of Funds for the FY 2015-16 are given below:-

(IN CRORES Rs.)

Standalone Consolidated
2015-16 2014-15 2015-16 2014-15
Income from Operations 3196.62 3397.53 3303.55 3493.99
Expenditures (excluding Interest & prior period adjustments) 5054.48 5225.15 5167.77 5327.16
Operating Profit/(Loss) (1857.86) (1827.62) (1864.22) (1833.18)
Other Income 316.09 410.07 317.80 411.16
Interest 1296.71 1439.62 1297.10 1440.10
Profit/(Loss) before Tax (2838.48) (2857.18) (2843.52) (2862.12)
Exceptional Items - - - -
Tax Provision for the Year (492.26) - (490.81) 2.84
Prior Period Adjustments (24.49) (9.62) (24.48) (9.62)
Profit/ (Loss) for the Year from Continuing Operations (2321.73) (2847.56) (2328.23) (2855.34)
Profit/ (Loss) for the Year from Discontinuing Operations 315.99 (45.83) 315.99 (45.83)
Profit/ (Loss) for the Year (2005.74) (2893.39) (2012.24) (2901.17)
Appropriation
Interim/ Proposed Final Dividend - - - -
Dividend Tax - - - -
Transfer to/(from):
a) Contigency Reserve - - - -
b) Debenture Redemption Reserve - - - -
SOURCES AND USES OF FUNDS
Authorised Capital 800.00 800.00 800.00 800.00
Issued Subscribed & paid up capital 630.00 630.00 630.00 630.00
Reserves & Surplus (617.40) 1437.42 (610.85) 1428.57
Secured and Unsecured Loan 17932.71 16604.40 17932.83 16608.05
Deferred Tax Liability (net) - - 4.51 3.34
REPRESENTED BY
Fixed Assets (Net Block) 9563.60 10432.32 9712.69 10569.71
Investment (net) 141.98 181.98 - 40.00
Other Assets 16284.23 16101.70 16336.01 16146.38
Other Liabilities 8146.52 8178.02 8194.25 8220.21
Capital Work in Progress 102.02 133.84 102.05 134.07

Note: Previous year’s figures have been re-grouped/re-cast wherever considerednecessary.

Standalone MTNL
FY 2015-16 FY 2014-15
Particulars Continued Operations Discontinued Operations Total Continued Operations Discontinued Operations Total
Total Income 3512.71 466.52 3979.23 3807.60 13.46 3821.06
Total Expenses 5834.44 150.53 5984.97 6655.16 59.28 6714.45
Net Profit/Loss (2321.73) 315.99 (2005.74) (2847.56) (45.82) (2893.39)

 

Consolidated MTNL
Particulars FY 2015-16 FY 2014-15
Continued Operations Discontinued Operations Total Continued Operations Discontinued Operations Total
Total Income 3621.35 466.52 4087.87 3905.15 13.46 3918.61
Total Expenses 5949.58 150.53 6100.11 6760.50 59.28 6819.78
Net Profit/Loss (2328.23) 315.99 (2012.24) (2855.35) (45.82) (2901.17)

INFORMATION REGARDING ISSUE OF BONDS BY MTNL DURING FINANCIAL YEAR 2015-16.

No Bonds have been issued by MTNL during Financial Year 2015-16.

DIVIDEND

Since there has been no operating profit during the FY 2015-16 the Board of Directorsof your company expresses its inability to recommend any dividend for the year underreport.

SUBSIDIARY AND JOINT VENTURE COMPANIES

As on 31st March 2016 your company has two subsidiaries and two Joint Venturescompanies. There has been no material change in the nature of the business of theSubsidiaries. Pursuant to provisions of Section 129 (3) of the Act a statement containingsalient features of the Financial Statements of the Company’s Subsidiaries in FormAOC-1 is attached to the Financial Statements of the Company. Further pursuant to theprovisions of Section 136 of the Act the Financial Statements of the CompanyConsolidated Financial Statements along with relevant documents and separate AuditedAccounts in respect of Subsidiaries are available on the website of the Company.

(i) Mahanagar Telephone (Mauritius) Ltd. (MTML)

MTML is a 100% subsidiary of MTnL. The company is having license for mobile servicesinternational long distance services and internet services. The customer base of MTML ason 31st Mar 2016 has grown to 271888 resulting in a market share of around 19%. MTML isoffering 2G/3G in all over island and 4G at selected areas.

The revenue of the company also is growing consistently. MTML has already earned grossrevenue of approx INR 1028 million during the financial year as against INR 880 Millionin the corresponding period of last fiscal year thereby registering a growth of around16.8%. Despite the intense competition and saturated market the company could increaseits revenue due to customer centric efforts in designing specific packages and services.In the year 2015 the company has upgraded its entire network for high speed data services(HSPA) and introducedLTE (4G) in some select areas. All the expenses of the company arepaid from its own internal resources. The CAPEX for procurement of equipments is alsobeing met from its own internal resources. MTML is operating from its own building alsoconstructed from internal resources situated at 63 Cyber City Ebene Mauritius which isconsidered to be heart of IT hub in Mauritius. There is no debt liability on the company.The company is managed by CEO CTO CFO and 9 more officers all on deputation from theparent company. Other operations are managed through outsourcing.

(ii) Millennium Telecom Ltd. (MTL)

Millennium Telecom Ltd (MTL) is a wholly owned subsidiary of MTNL incorporated inFebruary 2000 under the Companies Act 1956. MTL was in loss for many years. But now it ismoving ahead towards the path of revival. In 2014-15 the company turned into profit bySystem Integration other ICT related works at Pan India level. MTL had a profit of Rs 41lakhs approximately for the period ending 31st March 2016. MTL is in the process ofwinning over more orders in the upcoming years. Services being offered by MTL are Telecom& IT Consultancy Project Management End-to-end ICT Solutions IT for Education andHealth Sector Skill Development & Capacity Building Security & SurveillanceCloud Computing Managed Services etc. MTL is developing core capabilities by partnershipmodel for execution of Digital India Smart City Skill India etc the Government of Indiaprojects.

Major Achievements of MTL: Web Hosting Services to NHAI connectivity of 7 Toll Plazasfor NHAI Data Centre RF link to Air India Campus wide Wi-Fi LAN network and RF linksfor Central University of Haryana and Training to 1400 students in ICT at variouslocations in J&K funded by J&K Govt.

Many new projects in pipeline: 1) Uttarakhand Government had listed MTL as executiveagency for execution of IT related projects of Uttarakhand Government. Accordinglyenquiries for work relating to IT projects are being received from different department ofUttarakhand Government. In this regard for work of High Court Uttarakhand MTL hadsubmitted a techno commercial proposal (Approx. five Crores) to Registrar High CourtUttarakhand Nainital for providing end to end solution to subordinate courts under eCourtProject. Uttarakhand Forest Development Corporation has also invited Expression ofInterest (EOI) from MTL for services to design and operationalise software for e-Auctionof timber. 2) MTL team is aggressively working towards generating leads for executing

Wi-Fi Network projects for Hospitals and Colleges of Delhi and NCR. In this contextCMD MTL has sent Wi-Fi Proposal to various Hospitals and educational institutes. In thisregard response has been received from various hospitals and colleges. Accordingly EOI isbeing floatedfor Rate Contract on OPEX model for managed services of Campus wide Wi-Fi. 3)Laying of underground telephone cables at INS Tanaji Mumbai Project of Commander INSTanaji Sion-Trombay Road Mankhurd Mumbai. 4)Introductory letter by COO-MTL Delhi sentto states like Bihar Rajasthan Uttar Pradesh Arunachal Pradesh Chandigarh Punjab etcregarding provision of solar solutions in their offices / buildings. 5) For more businessopportunity efforts are being made by MTL/MTNL Management to have synergies with BSnLalso. 6) MTL is exploring option for empanelling Business Development Associates forBusiness generation and capacity building in Digital India Small City Skill IndiaStandup India etc. now the matter is being pursued by MTnL Delhi Unit.

(iii) United Telecommunications Ltd. (UTL)

United Telecom Ltd.(UTL) is a Joint Venture company of MTNL TCIL TCL (erstwhile VSNL)and NVPL where MTNL holds 26.68% shares and the shareholding of all Indian Partners i.e.MTNL TCIL & TCL was 80% while the local partner was holding 20%. During the lastthree years the company is not doing well and the Indian Partners have not contributedany amount into share capital while the local partner has contributed into its convertibleloans.

On conversion of loan into capital the holding of Local Partner i.e. NVPL willincrease beyond 51%. The company has earned an income of Rs.7crs. during the financialyear 2015-16. The gross loss isRs.42.51crs.

(iv) MTNL STPI IT Services Ltd. (MSITS)

MTNL STPI IT SERVICES LTD (MSITSL) is a 50:50 Joint Venture company of MahanagarTelephone Nigam Limited (MTNL) and Software Technology Parks of India (STPI). MSITSL wasincorporated on 31/03/2006 under the Companies Act 1956 with authorized Capital of Rs.50 Crores. In order to implement one of its objectives

MSITSL has established the physical infrastructure of Tier III Data Center at Chennaion space taken on lease basis from STPI. The Data Center has server farm area of around3500 sq. ft. and the total investment made in this regard is of Rs.477 lakhs. This TierIII Data Center is maintaining 99.98% uptime on 24X7 basis. The commercial operation ofthe Data Center commenced in 2009. The Ministry of External Affairs (MEA) has hosted thePassport Seva Project at MSITSL Data Center through M/s TCS. The Directorate General ofEmployment & Training (DGE&T) in Ministry of Labour & Employment has hostedNational Career Project through STPI atMSITSL Data Centre. Many IT/TES companies have alsoco-located servers and networking equipments in the MSITSL Data Centre. MSITSL has earnedthe revenue for the period of 2009-10: Rs.196 lakhs for the year 2010-11: Rs.275 lakhsfor the year 2011-12: Rs.297 lakhs for the year 2012-13: Rs.360 lakhs for the year2013-14: Rs.388 Lakhs and for the year 2014-15: Rs.422 Lakhs. For the period 2015-16 :Rs.534 Lakhs.

DETAILS OF SYSTEM STATUS FOR THE FINANCIAL YEAR 2015-16 (AS ON 31ST MARCH 2016)

Your Company has the following equipped and used capacity of Landline GSM WLL etc. ason 31st March 2016:-

Details of System Status of MTNL As on 31st March 2016(31.03.2016)

S. No Parameters Delhi Mumbai Total
1 number of switches 337 253 590
2 Details of Capacity
(a) Fixed Phones 2416505 2586392 5002897
(b) GSM 2800000 2800000 5600000
(c) Broadband Capacity (in ports) 788736 845908 1634644
3 DELs (including Fixed-Line GSM and Broadband) 4527994 3718502 8246496
(a) Fixed Line 1615433 1888655 3504088
(b) GSM 2318460 1242396 3560856
(c) Broadband Subscribers 594101 587451 1181552
4 FTTH Subscribers 3407 4088 7495
5 ISDn 8049 13645 21694
6 DLC (no) 425 523 948
7 Tax Capacity 150000 115200 265200
8 Tandem Capacity 402500 363240 765740
9 Optical fiber cable
(a) In Route KMs 8871.08 8116.43 16987.51
(b) In Fiber KMs 277749.92 259680.09 537430.01
10 Leased Circuits 12613 18150 30763

HUMAN RESOURCE DEVELOPMENT

Your Company attaches the highest priority to the quality of intellectual capital atits disposal and believes that knowledge and skill of its employees are the key toachievements of its corporate mission. It has sound recruitment policy and comprehensivetraining system. During the past one year your Company has laid greater emphasis on HumanResources Development. We have been devoting substantial resources on building a skilledworkforce that has a capability to counter threats posed by ever changing businessenvironment and to take advantages of opportunities presented to serve ever increasingcustomer base.The Company has been conducting various training and development activitieswhich apart from reorienting the employees towards the greater organizational purpose arealso focusing on eliminating any skill gap and technical obsolescence. Themanagements’ view on training is one of development of employee’s overallpersonality and enabling them in becoming a vital productive resource. The Company hasbeen conducting various training and development activities which apart from reorientingthe employees towards the greater organizational purpose are also focusing on eliminatingany skill gap and technical obsolescence. The managements’ view on training is one ofdevelopment of employee’s overall personality and enabling them in becoming a vitalproductive resource.

TRAINING TARGETS AND ACHIEVEMENTS

The training achievements for the financial year 2015-16 are as per table given below:-

UNIT Achievement
Delhi 3474
Mumbai 3023
Total 6497

At present MTnL has its in house two state of the art training centres one located innew Delhi and other at Mumbai. The details of the achievement of training centers at Delhiand Mumbai respectively are given below:

(I) The Institute of Telecom Technology & Management (ITTM) New Delhi

The Institute of Telecom Technology & Management ITTM Shadipur New Delhi is astate of the art training centre of MTNL Delhi engaged in imparting induction trainingand short duration training to its officers and employees in the field of Telecom ITComputer system and Management. With impressive growth of Telecom sector in India therequirement of telecom trained personnel is growing day by day. Realizing this evergrowing demand for telecom personnel ITTM started training engineering students also aspart of their summer training. During the year 2015-16 ITTM has successfully trained 1010Executives with an achievement of 4346 Man days and 1348

Non Executives with an achievement of 3790 Man days. Besides these 1116 others* werealso trained with 16548 Man days. Others* include Industrial trainings/Industrial visitsof Engineering students/One day lectures outsideITTM on Digital India and LeadershipQualities and short term courses for outsiders/students housewives etc.

Revenue earned at ITTM by providing Industrial training to Engg Students / IndustrialVisits and Short Term Courses for Outsiders for Financial Year 2015-16 is as below:

Industrial Training (Students) Rs. 5232279/-
Short Term Courses Rs. 11454/-
One day Industrial Visits Rs. 3550/-
Total (Rs. Inc all Taxes) Rs. 5247283/-

Short Term ( One Day / Two days ) training programs for outsiders including students housewives & others were started on following courses in 2015-16 i) E-SocialNetworking ii) Personality Development iii.) Computer familiarization iv) Broadband& Wi-Fi and v) FTTH. Setting up of Wi-Fi Lab at ITTM is in progress in advance stage.ITTM has the necessary infrastructure technical and academic competence and excellencefor providing training in specialized courses in the field of GSM Broadband TechnologySwitching Transmission External Plant IT Computer System Management and variouswellness programs.

(II) Centre for Excellence in Telecom Technology & Management (CETTM) Mumbai

The Centre for Excellence in Telecom Technology & Management (CETTM) is situated atTechnology Street Hiranandhani Garden Powai and Mumbai. The competition in the field oftraining is increasing tremendously with each passing day. Despite of the fiercecompetition CETTM has achieved following during Financial year 2015-16.

200 Students were trained in various courses under Corporate Social Responsibility(CSR) while 82 students took part in one/two/six months Project Training works. Total2028 number of Engineering College Students from 17 different Collages took part in"Industrial Visit Programme" during 2015-16.

31 senior officersfrom the Security Wing from Cabinet Secretariat have been trained invarious Technologies of Telecommunications and IT related courses.

Under ITEC/SCAPP program sponsored by MEA Govt. of India CETTM has successfullycompleted 13 programs 4 programs are in continuation. Total 220 officials from 53different countries participated.

CETTM had MOU with Maharashtra State Board of Technical Education (MSBTE) for trainingtheir faculties from various Polytechnics. Under this MOU first two batches of trainingprogram on "3G Technologies" & "Next Generation TransportTechnology" had been conducted.

CETTM also tied up with Welingkar Institute for providing Post Graduate Program onTelecom Management. 9 students passed out in 3rd batch.

Apart from this CETTM has conducted two 4weeks Vender training on "OCB -283O&M course" for M/s. Alcatel and ITI for completing the condition under AMC.

MOU done with D-Link academy for providing 5 days handsome training & GlobalCertification program D-Link certified Specialist DCS Switching. Courses contents: on"Switching and routing technology" at CETTM. First batch planned on 11thApril2016.

CETTM has conducted various short duration Technical as well as Management relatedcourses for MTNL employees on need basis to improve MTnL services.

Apart from the above CETTM has successfully trained 3023 in-house personnel and 2887external personnel with an achievement of 29503 Trainee days. Moreover there were a totalof 378 Programs conducted altogether.

New short duration courses introduced on FTTH Broadband OF Splicing etc.

Conducted Workshops on following topics by guest lecturers: 1) "G-Fast"standerds by M/s.Alcatel 2) "Creative Living" by Dr Maya KripalaniConsultant Psychologist 3) "Implementation of Reservation Policy for SC/ ST/OBC/PWDEmployees" was conducted for SC/ST/OBC/PWD Executives of MTNL Mumbai by special guestlecturer Shri Jaiprakash Ingale from HPCL 4)"SMPS Modules & its repairing"was conducted by Engineers from ITI Raibareli

Business Development at CETTM

1. Three years agreement for Leasing of 18 Rooms in the CETTM Hostel to MazgaonDockyard on monthly rental basis is in signing stage.

2. Leasing of 18 unfurnished Hostel rooms to Bacconi is in signing stage.

3. Proposal for renting out 50 furnished Hostel rooms to HPCL is in process.

4. MoU done with D-Link Academy to offer courses for Engineering/IT students/professionals on Switching & Routing Technology training & Global Certificationprogram.

5. Ties up with Sync-route is in process for offering TMT (Telecom Media &Technology) Courses to students.

6. Maharashtra State Board of Technical Education & MTNL CETTM join hands forconducting courses under Faculty development programs to train the faculty of thePolytechnic colleges in various areas of Telecomm Technology.

7. MOU with TSSC for Skill Development courses is in signing stage.

8. Major Clients in 2015-16 include like Central Bank of India NPCIL WIPRO BPCLCRISIL IIT Bombay Dept of Sales Tax Directorate of Economics & Statistics. IRBInfrastructure Aegis British Council Quintiles etc.

9. Total revenue achieved for year 2015-16 is 16.1Cr. an increase of 15% compared tolast financial year 2014-15.

The efforts and the results reiterate our commitment to the growth in terms ofbusiness quality and customer satisfaction; and the customers have always rewarded ourgood work by giving us the repeated business.

INDUSTRIAL RELATIONS

Industrial peace and Industrial harmony is based on healthy Employee Relations and likethe previous year Employees Relations remained Cordial throughout the year. TheGrievances/Issues raised by the employees/ Union/Associations were given due attention andregard. The cases/issues brought up by them were settled through regular meetings andinteractions between Management and Unions/Associations and action as mutually agreed wastaken to settle them.

Further MTNL was paying Pension to the absorbed employees for the service rendered inGovt. For the past few years MTNL was pursuing with Govt. for settlement of the pensionissue. The Pension issue was considered by the Govt and it has been decided that Paymentof pensionary benefits to all categories of the erstwhile employees of the Government (Gr.A B C & D) absorbed in MTNL who have opted for pension on combined service will bemade by Govt. in the same manner as in BSnL w.e.f 01/10/2000.

EMPLOYEES’ WELFARE

Employees Welfare Schemes like subsidized Canteen Creches Housing Medicalfacilities Scholarship towards of employees Group Insurance dormitories for femalesworking in night shift etc. continued and maintained by the Company for its employees.Sports and Cultural activities were also given priority during the year.

IMPLEMENTATION OF OFFICIAL LANGUAGE POLICY

The Company continued its efforts to comply with statutory requirements in promotingthe use of Hindi and has been able to achieve most of the annual targets set by theGovernment for implementation and promotion of Hindi as Official Language in the Company.

IMPLEMENTATION OF RESERVATION POLICY FOR SC/ST/OBC & PH COMMUNITY

Your Company has endeavoured to fulfill all the statutory requirements with regard toimplementation of reservation policy for candidates belonging to SC/ST/OBC communities aswell as Physically Challenged candidates.

IMPLEMENTATION OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITITION& REDRESSAL) ACT 2013

The Company has constituted an Internal Complaint Committee on Prevention Prohibition& Redressal of Sexual Harassment of women at workplace and matters connected therewithor incidental thereto covering all aspects as contained in the Sexual Harassment of Womenat workplace (Prevention Prohibition & Redressal) Act2013.

WORKING CONDITIONS OF WOMEN EMPLOYEES

We are continuously striving towards gender sensitization amongst our employees.Special care has been taken in case of woman employees in night shifts. Also to redressthe issues of Sexual Harassment at workplace special cells have been constituted.Specialgrants have been sanctioned to Women Welfare Committees at Delhi/ Mumbai. Child Care Leavehas also been approved by MTnL Board on 30/05/2014.

MANPOWER STATUS

As on 31st March 2016 your company had a working strength of employees as per detailsgiven below:-

Group Total Working SC ST
A 881 148 57
B 3473 484 81
C 18287 3405 312
D 8415 2095 624
Total 31056 6132 1074
TSM 14
Grand Total 31070 6132 1074

CORPORATE SOCIAL RESPONSIBILITY (CSR)

No CSR funds has been allocated/spend for CSR activities during the Financial Year asthe requirement for allocation of funds for CSR activities under section 135 of theCompanies Act 2013 does not arise due to average loss during the three immediatelypreceding years. For other details regarding the CSR Committee please refer to theCorporate Governance Report which forms part of this Report. The Policy is available onthe website of the company (www.mtnl.net.in)

VIGILANCE

The Vigilance organization of MTNL is headed by Chief Vigilance Officer. Presently ShriAnand Prakash GM(Vigilance) Delhi is looking after charge of CVO MTNL. The CVO isresponsible for complete vigilance administration in MTnL.During the year 2015-16emphasis was laid on preventive vigilance and to enhance the awareness of transparency andaccountability in working by carrying out various field inspections. System improvementadvice were issued by Vigilance Unit for reconciliation of Sanchaar Haats products storeverification optimum electrical load in various buildings proper maintenance ofbroadband faults BTS sites etc. CTE type inspections were also carried out as per CVCguidelines.Further training programmes/seminars on vigilance/ complaints handling anddisciplinary proceedings have been conducted during the period for the employees to makethe participants understand the conduct rules of MTnL procedure for handling departmentalproceedings and improve their working efficiency. As per CVC instructions the VigilanceAwareness Week was observed from26.10.2015 to 31.10.2015. During this week variousactivities like pledge taking release of two booklets on (i) "Preventive Vigilanceas a Tool for Good Governance " and (ii) book on vigilance and discipline with afocus on the subject Preventive Vigilance a tool for Good Governance and containing thechapters on main function of vigilance MTNL Conduct Disciplinary and Appeal Rules-1998(Exective) Certified Standing orders for MTNL C & D Employees (Non Executies)Do’s and Don’ts are distributed. Also quotations and lectures seminar andworkshop organized. Further a lecture on "Preventive Vigilance as a Tool for GoodGovernance" was delivered at MTNL Delhi by Sh. B.P.Bagchi SP CBI.

Monthly vigilance/disciplinary meetings were held regularly at Delhi & Mumbai withconcerned GM (Vigilance) team to review the status of the cases and expedite the same.Meeting with ED & CGM ( Delhi / Mumbai / Wireless Services) were also held to apprisethem of the observations made during field inspections and different types of operationalcomplaints received by Vigilance Unit. During these meetings CVO emphasized for furtherimprovement in customer services offered by MTnL by taking prompt action oncustomer’s complaint and having customer-centric approach at all levels to enhancethe credibility and brand image of the company in the minds of the customers.

INTEGRITY PACT PROGRAME WITH TRANSPARENCY INTERNATIONAL INDIA

MTNL has signed a Memorandum of Understanding (MOU) with Transparency InternationalIndia (TII) for implementing an Integrity Pact Programme (IPP) focused on enhancingtransparency in its business transactions contracts and procurement process. Under thisMOU MTNL is committed to implementing the Integrity Pact in all its major procurement andwork contract activities. Three Independent External Monitors being persons of eminencenominated by MTNL in consultation with Central Vigilance Commission (CVC) monitor theactivities. The Integrity Pact has strengthened the established system and procedures bycreating trust in various Stakeholders.

MATERIAL CHANGES AND COMMITMENT IF ANY AFFECTING THE FINANCIAL POSITION OF THE COMPANYOCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THIS FINANCIAL STATEMENTS RELATEAND THE DATE OF THE REPORT.

No material changes and commitment affecting the financial position of the companyoccurred between the end of the financial year to which this financial statements relateand the date of the report.

CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS & OUTGO

The provisions of Section 134(m) of the Companies Act 2013 do not apply to the Companyas your Company is a service provider.Thetotalforeigninflowwas Rs. 4.29 Crores and outflowwasRs. 5.55 Crores during the year under review.

ENTERPRISE RISK MANAGEMENT POLICY FOR THE F.Y. 2016-17

The Board of Directors of the Company has formed a Risk Management Committee to frameimplement and monitor the risk management plan for the Company. The Committee isresponsible for reviewing the risk management plan and ensuring its effectiveness. TheAudit Committee has additional oversight in the area of financial risks and controls.Major risks identifiedby the businesses and functions are systematically addressed throughmitigating actions on a continuing basis.The development and implementation of riskmanagement policy has been covered in the management discussion and analysis which formsof this report.

MEETINGS OF THE BOARD OF DIRECTORS

During the year under report the Board of Directors of your Company met frequently. Inthe Financial Year 2015-16 7 (Seven) Board Meetings were held. The intervening gapbetween any two meetings was within the period prescribed by the Companies Act 2013.Details of Board Meetings are given in Corporate Governance Report which forms part ofthis Report. At these meetings the Board held intensive discussions on the budgetimportant financial transactions and various steps to face the impending competition fromprivate operators both in Basic

Telephone Service Cellular Mobile Telephony and other value added services.

DECLARATION BY INDEPENDENT DIRECTOR

The Company has received necessary declaration from the Independent Directors i.e. fromShri Rakesh nangia and Shri Ashok Mittal under Section 149(7) of the Companies Act 2013that they meets the criteria of Independence laid down in the Section 149(6) of theCompanies Act 2013 and Regulation 25 of SEBI (LODR) 2015.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

During the period under review the Company had not entered with any MaterialTransaction with any of its related parties. The Company’s major Related PartyTransactions are generally with its subsidiaries and associates. All Related PartiesTransactions were in ordinary course of Business and were negotiated on an Arm’sLength basis they were intended to further the company’s interest. Accordingly thedisclosure of Related Party Transactions as required under 134(3)(h) of Companies Act2013 in form AOC-2 is not applicable. Web link for Policy on Materiality of Related PartyTransactions and also on dealing with Related Party Transactions has been provided in theReport on corporate Governance which forms part of Annual Report.

PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THE COMPANIESACT 2013

During the year there were no loans given guarantees provided or investments made bythe MTnL under Section 186 of the Companies Act 2013.

CORPORATE GOVERNANCE

Your Company follows the principles of effective Corporate Governance Practices. TheCompany has taken steps to comply with the requirements of SEBI(LODR) 2015 which cameinto effect from 01.12.2015. MTNL also comply with the Corporate Governance Guidelinesenunciated by Department of Public Enterprises (DPE) Government of IndiaforCentralPublicSectorEnterprises(CPSEs).MTNLisfilingits reports statements documentsetc. with NSE & BSE on the electronic platform. A Report on Corporate Governance hasbeen appended under the separate section titled Corporate Governance Report.

CERTIFICATE FROM THE PRACTISING COMPANY SECRETARY REGARDING THE COMPLIANCE OF CORPORATEGOVERNANCE

Company Secretary regarding compliance of conditions Acertificate of CorporateGovernance as stipulated under Schedule V (E) of SEBI (LODR) 2015 and DPE Guidelines isattached as an Annexure.

COMPLIANCE OF DPE GUIDELINES & POLICIES

The Guidelines & Policies issued by the Department of Public Enterprises (DPE) fromtime to time are being complied with and implemented with the approval of the Board ofDirectors/Competent Authority.

IMPLEMENTATION ON CIRCULAR ISSUED BY MINISTRY OF CORPORATE AFFAIRS ON "GREENINITIATIVES IN CORPORATE GOVERNANCE"

In compliance of MCA circular regarding green initiatives the Annual Report for theFinancial Year 2014-15 was sent by e-mail to the shareholders whose e-mail addresses areavailable with the company. It is proposed that your company will send 30th Annual Report(for the F.Y. 2015-16) also by email to all the shareholders who have provided valid emailIDs. Further your company request all shareholders holding shares in electronic mode tokeep their email addresses updated or provide their email addresses if not earlierprovided to their respective DPs. Members holding shares in physical mode are alsorequested to update their email addresses by writing to the Registrar and Transfer Agentof the Company or directly to the Company by quoting their folio number(s).

DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant to the provisions of Section 134(5) of the Companies Act 2013 the Directorsto the best of their knowledge and belief confirm that:

(a) In the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures; (b) thedirectors had selected such accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the company at the end of the financial year and of the profitor loss of the company for that period; (c) the directors had taken proper and sufficientcare for the maintenance of adequate accounting records in accordance with the provisionsof the Companies Act 2013 for safeguarding the assets of the company and for preventingand detecting fraud and other irregularities; (d) the directors had prepared the annualaccounts on a going concern basis and

(e) the directors in the case of a listed Company had laid down internal financialcontrols to be followed by the company and that such internal financial controls areadequate and were operating efficiently.

(f) the directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.

INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY

MTNL had appointed Internal Financial Control Consultants M/s HDSG & Associates forreviewing evaluating and identifying MRCM and establishment of effective Internal ControlSystem of MTNL for the FY 2015-16. The Company has maintained in all material respectsadequate internal financial controls over financial reporting and such internal financialcontrols over financial reporting were operating effectively as of March 31 2016 basedon the internal control over financial reporting criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Note onAudit of Internal Financial Controls over Financial

Reporting issued by the Institute of Chartered Accountants of India.

FIXED DEPOSITS

We have not accepted any fixed deposits and as such no amount of principal orinterest was outstanding as on the Balance Sheet date on this account.

PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURE

As per the provisions of Section 197(12) of Companies Act 2013 read with Rule 5 ofCompanies (Appointment & Remuneration of Managerial Personnel) Rules 2014 everylisted company is required to disclose the ratio of the remuneration of each director tothe median employee’s remuneration and details of employees receiving remunerationexceeding limits as prescribed from time to time in the Director’s Report.However asper Notification dtd. 5th June 2015 issued by Ministry of Corporate Affairs Governmentcompanies are exempted from complying with provisions of Section 197 of the Companies Act2013. Therefore such particulars have not been included as part of Director’sReport.

SECRETARIAL AUDIT REPORT FOR THE FINANCIAL YEAR 2015-16

M/s Grover Ahuja & Associates Company Secretaries have conducted the SecretarialAudit of your company for the financial year 2015-16 under section 204 of the CompaniesAct 2013. The said Secretarial Audit Report is attached. The replies to the points raisedin the Secretarial Auditors Report for the Financial Year 2015-16 are given in asannexure.

EXTRACT OF ANNUAL RETURN FOR THE YEAR 2015-16 PURSUANT TO SECTION 92(3) OF COMPANIESACT 2013 (MGT-9)

Pursuant to Section 92(3) of Companies Act 2013 Extract of Annual Return (inForm-MGT-9) of the Company is annexed.

AUDITORS QUALIFICATIONS AND MANAGEMENT REPLY THERETO

The replies to the points raised in the Statutory Auditors’ Report for theFinancial Year 2015-16 are given as annexure. The Comments of the Comptroller and AuditorGeneral of India on the Financial Statement for the Financial Year 2015-16 and the repliesthereon of the Management are given in the annexure to the Directors’ Report.

DIRECTORS & KEY MANAGERIAL PERSONNEL

The Board of Directors of your company has seven (7) members three FunctionalDirectors (including CMD) two Government Nominee Directors and two independent directors.Shri P.K Purwar continued to be the Director (Fin) of the Company and was given additionalcharge of CMD on 08.06.2016 Shri Sunil Kumar continued to be the Director (HR&EB) andShri Sanjeev Kumar has been appointed as Director (Tech) of the Company w.e.f. 02.07.2016 Shri Amit Yadav & Ms. Tiakala Lynda Yaden has been appointed as the GovernmentDirector and Shri Ashok Mittal & Shri Rakesh Nangia has been appointed as IndependentDirector respectively.

During the period under report the following changes took place in theDirectorship/Key Managerial Personnel of Your Company:-

1. N. K. Yadav has been appointed as CMD of the Company vide DoT letter dated08/06/2015 and ceased to be CMD on 08.06.2016.

2. Shri P.K.Purwar has ceased to hold additional charge of CMD w.e.f. 08/06/2015 andwas again entrusted with additional charge of CMD w.e.f. 08.06.2016.

3. Shri Sushil Kumar Shingal Independent Director has ceased to be the IndependentDirector of the company w.e.f. 10.05.2015.

4. Shri Srikanta Panda has ceased to be Government Nominee Director w.e.f. 13/05/2015.

5. Shri Shashi Ranjan Kumar has ceased to be Government Nominee Director w.e.f05/03/2015.

6. Shri Amit Yadav has been appointed as Government Director in place of Shri ShashiRanjan Kumar w.e.f 05.03.2016.

7. Smt Simmi R. Nakra has been appointed as Government Nominee Director in place ofShri Srikanta Panda w.e.f. 13.05.2015 and ceased to be Director w.e.f. 12.04.2016.

8. Shri Ashok Mittal & Shri Rakesh Nangia has been appointed as IndependentDirector w.e.f. 23/12/2015

9. Ms. Tiakala Lynda Yaden has been appointed as Government Nominee Director in placeof Smt Simmi R. Nakra w.e.f 19.05.2016.

10. Shri Sanjeev Kumar has been appointed as Director (Tech) w.e.f. 02.07.2016.

Pursuant to the provisions of Section 203 of the Act the Key Managerial Personnel ofyour Company are:- i) Shri P.K. Purwar CMD & Dir(Fin) ii) Shri Sunil KumarDir(HR&EB) iii) Shri Sanjeev Kumar Dir(Tech) iv) Shri S.R. Sayal Company Secretary

AUDIT COMMITTEE

The details pertaining to composition of Audit Committee are included in the CorporateGovernance Report which forms part of this Report.

AUDITORS

(1) M/s. V. K. Dhingra & Co. Chartered Accountants and M/s Mehra Goel & CoChartered Accountants have been appointed as Joint Statutory Auditors of your Company bythe Comptroller and Auditor General of India for the year 2015-16 and the Board hasalready ratified their appointment.

(2) M/s R. M. Bansal & Co. Cost Accountants have been appointed as Cost Auditorsof your company for carrying out audit under Section 148 of the Companies Act 2013 forthe records maintained under section 209(1)(d) of Companies Act1956andasnotifiedunder:(i) Cost Accounting Records (Telecommuncations)Rules2002 & (ii) Cost AuditRules2001. The Cost Audit Report alongwith the annexures for the year 2014-15 have beensubmitted to the Central Government in the Form I-XBRL format on MCA portal on03/10/2015.

(3) M/s Grover Ahuja & Associates Company Secretaries have been appointed asSecretarial Auditors of your company for carrying out Secretarial Audit under section 204of the Companies Act 2013 for the Financial Year 2015-16.

ACKNOWLEDGEMENT

Your Directors take this opportunity to gratefully acknowledge the help guidance andsupport received from Deptt. of Telecom (DoT) and various Ministries of the Government ofIndia. Your Directors are especially grateful to its Bankers all stakeholders andinvestors including ADR holders for their continued patronage and confidence reposed inthe company.

The Directors would like to express their thanks for the sincere hard work anddedication of every employee leading to impressive results of your company. The Board isconfident that with the employees’ continued enthusiasm initiative and dedicatedefforts your company could face the new challenges and opportunities arising out of theresultant competition from private operators in the Cellular Mobile Basic TelephoneInternet services and other

Value Added services. The Directors are hopeful that the hard work and sincere effortsand dedicated services of the employees at all levels MTnL shall maintain its position asone of the leading telecom service provider.

For and on behalf of the Board of Directors
sd/-
(Shri P.K. PURWAR)
CMD & DIRECTOR (FIN)
PLACE: NEW DELHI
DATE: 16th August 2016

ANNEXURE I TO DIRECTORS’ REPORT GROVER AHUJA & ASSOCIATES

Company Secretaries

D-176 Defence Colony new Delhi-110024

Phone : 011-4163301 011-46772201-07

FORM NO. MR-3

Secretarial Audit Report

For The Financial Year Ended 31st March 2016

[Pursuant to section 204(1) of the Companies Act 2013 and rule No.9 of the Companies(Appointment and Remuneration Personnel) Rules 2014]

To

The Members

Mahanagar Telephone Nigam Limited

Mahanagar Doorsanchar Sadan

5th Floor 9 CGO Complex

Lodhi Road new Delhi-110 003

We have conducted the secretarial audit of the compliance of applicable statutoryprovisions and the adherence to good corporate practices by Mahanagar Telephone NigamLimited (hereinafter called the Company). Secretarial Audit was conducted in a mannerthat provided us a reasonable basis for evaluating the corporate conducts/ statutorycompliances and expressing our opinion thereon.

Based on our verification of the books papers minute books forms and returns filedand other records maintained by the Company and also the information provided by theCompany its officers agents and authorized representatives during the conduct ofsecretarial audit we hereby report that in our opinion the Company has during the auditperiod covering the financial year ended on31st March 2016 complied with thestatutory provisions listed hereunder and also that the Company has proper Board-processesand compliance mechanism in place to the extent in the manner and subject to thereporting made hereinafter:

We have examined the books papers minute books forms and returns filed and by MahanagarTelephone Nigam Limited for thefinancialyear ended on 31st March 2016 accordingto the provisions of:

(i). The Companies Act 2013 and the rules made there under the Act to the extentapplicable (hereinafter called the Act).

(ii). The Securities Contracts (Regulation) Act 1956 (‘SCRA’) and the rulesmade there under.

(iii). The Depositories Act 1996 and the Regulations and Bye-laws framed there under.

(iv). The following Regulations and Guidelines prescribed under the Securities andExchange Board of India Act 1992 (‘SEBI Act’) to the extent applicable:- a. TheSecurities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers)Regulations 2011. b. The Securities and Exchange Board of India (Prohibition of InsiderTrading) Regulations 1992 and the Securities and Exchange Board of India (Prohibition ofInsider Trading) Regulations 2015(effective from May 15 2015);

c. The Securities and Exchange Board of India (Issue of Capital and DisclosureRequirements) Regulations 2009.

d. The Securities and Exchange Board of India (Registrars to an Issue and ShareTransfer Agents) Regulations 1993 regarding the Companies Act and dealing with client.

e. The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations2009 (Not Applicable to the Company during the Audit Period); and f. The Securities andExchange Board of India (Buyback of Securities) Regulations 1998 (Not Applicable to theCompany during the Audit Period); (v) Other laws applicable to the Company as perrepresentations made by the Company.

(vi) We have also examined compliance with the applicable clauses of the following: a.Secretarial Standards issued by The Institute of Company secretaries of India (effectivefrom July 01 2015 onwards).

b. Listing Agreements entered into by the Company with National Stock Exchange ofIndia Limited BSE Limited (Bombay Stock Exchange). The Company has applied for delistingfrom the Calcutta Stock Exchange Limited Madras Stock Exchange Limited and Delhi StockExchange Limited. The company is also registered at OTCQX.

During the period under review and as per the explanations and clarifications given tous and the representations made by the management the Company has complied with theprovisions of the Act Rules Regulations Guidelines Standards etc. mentioned above.

We further report that:

(i). The company did not have the required percentage of Independent Directors on itsBoard all through the year under review and for part the year on its Audit Committee andnomination and Remuneration Committee. Further the changes in the composition of theBoard of Directors that took place during the period under review were carried out incompliance with the provisions of the Act

(ii). The details of the familiarization programme for Independent Directors conductedby the Company were not posted on its website.

(iii). Separate meeting of the Independent Director required to be held under theListing Agreement/ Regulations was not held during the year.

(iv). It has been observed that some court cases are pending however none of the caserelates to non-compliance of Laws.

(v). Adequate notice is given to all directors to schedule the Board Meetings agendaand detailed notes on agenda were sent to Directors at least seven days in advance and asystem exists for seeking and obtaining further information and clarifications on theagenda items before the meeting and for meaningful participation at the meeting.

(vi). Majority decisions are carried out with the unanimous consent so thereforedissenting members’ views are not required to be captured and recorded as part of theminutes.

(vii). We further report that there are adequate systems and processes in the Companycommensurate with the size and operations of the Company to monitor and ensure compliancewith applicable laws rules regulations and guidelines.

We further report that based on the information received and records maintained by theCompany there are adequate systems and processes in the Company commensurate with thesize and operations of the Company to monitor and ensure compliance with applicable lawsrules and regulations.

For GROVER AHUJA & ASSOCIATES

Company Secretaries

Dr (CS) POONAM AHUJA

FCS No. 4705

C. P. No.: 6586

Date: 5th August 2016

Place: New Delhi

This Report is to be read with our letter of even date which is annexed as Annexure Aand forms an integral part of this report.

‘Annexure A’

To

The Members

Mahanagar Telephone Nigam Limited

Our report of even date is to be read along with this letter.

1. Maintenance of Secretarial record is the responsibility of the management of theCompany. Our responsibility is to express an opinion on these secretarial records based onour audit.

2. We have followed the audit practices and process as were appropriate to obtainreasonable assurance about the correctness of the contents of the secretarial records. Theverification was done on test basis to ensure that correct facts are reflected insecretarial records. We believe that the process and practices we followed provide areasonable basis for our opinion.

3. We have not verified the correctness and appropriateness of financial records andBooks of Accounts of the Company.

4. Wherever required we have obtained the Management representation about theCompliance of laws rules and regulations and happening of events etc.

5. The Compliance of the provisions of Corporate and other applicable laws rulesregulations standards is the responsibility of management. Our examination was limited tothe verification of procedure on test basis.

For GROVER AHUJA & ASSOCIATES

Company Secretaries

Dr (CS) POONAM AHUJA

FCS No. 4705

C. P. No.: 6586

Date: 5th August 2016

Place: New Delhi

ANNEXURE II TO DIRECTORS’ REPORT V.K. SHARMA & CO.

Company Secretaries

422 Ocean Plaza Sector-18 Noida Tel. : 0120-4221470 Mobile : 9811009592

E-mail : vks_cosecy@yahoo.com

CERTIFICATE OF COMPLIANCE WITH CORPORATE GOVERNANCE UNDER LISTING AGREEMENT/REGULATIONS

To

The Shareholders

1. We have examined the compliance of the conditions of corporate governance byMahanagar Telephone Nigam Limited (hereinafter referred as the ‘Company’) forthe year ended on 31st March 2016 as stipulated in clause 49 of the Listing Agreement ofthe said company with stock exchanges for the period1st April 2015 to 30th november 2015and as per the relevant provisions of Securities and Exchange Board of India (ListingObligations and Disclosure Requirements)Regulations 2015 (‘ListingRegulations’) as referred to in Regulation 15(2) of the Listing Regulations for theperiod 1st December 2015 to 31st March 2016.

2. The compliance of the conditions of corporate governance is the responsibility ofthe management. Our examination was limited to the procedures and implementation thereofadopted by the company for ensuring the compliance of the conditions of corporategovernance. It is neither an audit nor an expression of opinion on the financialstatements of the company.

3. In our opinion and to the best of our information and according to the explanationsgiven to us we certify that the company has complied with the conditions of corporategovernance as stipulated in the listing agreement/ listing regulations except that:-(i)The company did not have the required percentage of Independent directors on its Board allthrough the year under review and for part of the year on its Audit Committee andnomination and Remuneration committee

(ii) The details of the familiarization programme for independent directors conductedby the company were not posted on its website.

(iii) Separate meeting of the Independent director required to be held under theListing Agreement/Regulations was not held during the Year.

4. We further state that the compliance is neither an assurance as to the futureviability if the company nor the efficiency or effectiveness with which the managementconducted the affairs of the Company.

For V. K. SHARMA & CO.
Company Secretaries
sd/-
Date: 5th August 2016 (Vijay Sharma)
Place: New Delhi FCS: 3440
C. P. NO: 2019

ANNEXURE-III to Directors’s Report

REPLY OF MTNL TO QUALIFICATIONS IN SECRETARIAL AUDIT REPORT AND COMPLIANCE CERTIFICATEREGARDING COMPLIANCE OF CONDITIONS OF CORPORATE GOVERNANCE (2015-16).

i) The Company did not have the requisite percentage of independent directorsthroughout the year on its Board and for part of the year in Board Level Committees.

MTNLReply : All Directors are appointed by the Govt. of India (DOT) and we havebeen sending reminders to the DOT for approval of more independent directors. Afterappointment of 2 independent directors we have reconstituted the Board level committeesas per law.

ii) The details of familiarization program conducted for the independent directors hasnot been posted on the website.

MTNLReply : The familiarization meeting was held but the same was not minutedand hence was not posted on website. For next meeting the same will be posted on website.

iii) Separate meeting of independent directors has not been hold.

MTNLReply : Since the independent director were appointed only in november2015 no meeting could be held till 31.03.2016. However a separate meeting of independentdirectors shall be held in this year.

ANNEXURE VI TO DIRECTORS’ REPORT

BUSINESS RESPONSIBILITY REPORT (For F.Y. 2015-2016)

Section A: General Information about the Company

1. Corporate Identity Number (CIN) of the Company L32101DL1986GOI023501
2. name of the Company Mahanagar Telephone nigam Limited
3. Registered Address Mahanagar Doorsanchar Sadan
5th Floor 9 CGO Complex Lodhi Road
new Delhi-110003
4. Website www.mtnl.net.in
5. E-mail id mtnlcsco@gmail.com
6. Financial Year reported 2015-16
7. Sector(s) that the Company is engaged in (Industrial activity code-wise) Telecommunication Service
8. List three key products/services that the Company manufactures/provides as in balance sheet) 1. Basic Telephony
2. Broadband Services
3. Mobile Services
9. Total number of locations where business activity is udertaken by the Company:
i) Number of International Locations - NIL. However the Company has a
Wholly Owned Subsidiary in Mauritius i.e. MTML and Joint Venture in Nepal i.e. UTL - 2 (Delhi & Mumbai)
ii) Number of National Locations
10. Markets served by the Company- National (Delhi & Mumbai) and
Local/State/national/International International(Mauritius through
Its subsidiary and Nepal through its JV as per 9 (i) above.

Section B: Financial Details of the Company

1. Paid up Capital (INR) Rs. 630 Crores
2. Total Turnover (InR) Rs. 3979.23 Crores
3. Total profit after taxes (INR) Rs. 2005.74 Crores
4. Total Spending on Corporate Social Responsibility (CSR) as percent- age of profit after tax (%) nIL.
5. List of activities in which expenditure in 4 above been incurred: not Applicable
a.
b.
c.

Section C: Other Details

Subsidiaries: The Company has following two Subsidiary Companies as on 31.3.2016:-

1. Mahanagar Telephone (Mauritius) Ltd.(Wholly Owned Subsidiary)

2. Millenium Telecom Ltd.(Wholly owned subsidiary)

The Business Responsibility Initiatives of the parent company are applicable to thesubsidiary companies also.

However none of the entities that the company does business with participate in the BRinitiatives of the Company.

Section D: BR Information

1. Individual Directors responsible for implementation of the BR Policy/Policies

Principle No. Description Policy/Policies Director(s) Responsible
Principle 1(P1) Businesses should conduct and gov- ern themselves with Ethics Transpar- ency and Accountability 1. Code of Conduct for Directors & Senior Managerial Personnel and KMPs. All Directors & Chief Vigilance Officer
2.CDA Rules
3.Whistle Blower Policy
4.Insider Trading Policy
5.CVC Guidelines
Principle 2(P2) Businesses should provide goods and services that are safe and contribute to sustainability throughout their life cycle. 1.TRAI All Functional Directors
2.Regulation and Licensing conditions issued by the Department of Telecom- munications
3.Indian Telegraph Act
Principle 3(P3) Business should promote the well be- ing of all the employees 1.MTNL Conduct & Disciplinary Rules Director(HR & EB) and CMD
2.Human Resources Policies
3.DPE Guidelines on HR issues
4. Guidelines issued by DOPT
Principle 4(P4) Businesses should respect the inter- ests of and be responsive towards all the stakeholders especially those who are disadvantaged vulnerable and marginalized. 1.CSR Policy All Functional Directors
2.HR Policies
3. TRAI Guidelines
4. DoT’s Policies
5. Indian Telegraph Act
Principle 5(P5) Business should respect and promote human rights HR Policies for Employees DoT’s Policies TRAI Guidelines Director (HR & EB)
Principle 6(P6) Business should respect protect and make efforts to restore the environment TRAI/DoT Guidelines. All Functional Directors
Indian Telegraph Act.
Pollution Control Laws
Principle 7(P7) Business when engaged in influenc- ing public and regulatory policy should do so in a responsible manner. Code of Conduct(for Board Members & Senior Management Personnel) All Directors
All applicable laws
Corporate Governance Code
Principle 8(P8) Business should promote inclusive growth and equitable development Corporate Governance Code CSR Policy All Directors
Principle 9(P9) Business should engage with and pro- vide value to their customers and con- sumers in a responsible manner Indian Telegraph Act TRAI Guidelines All Directors
DoT’s Policies
All applicable Laws

2. Details of Director/Directors responsible for BR as a whole

(a) Details of the Director/Directors responsible for implementation of the BRpolicy/policies:

(a) 1. DIN Number 06619060
2. Name Pravin Kumar Purwar
3. Designation CMD & Director(Fin)
4. Telephone No. 011-2432-1095/ 24329020
Fax:011-2432-8361
5. E-mail ID dirfinco@bol.net.in cmd@bol.net.in
(b) 1. DIn number 06628803
2. Name Sunil Kumar
3. Designation Director( HR/ EB & Tech)
4. Telephone No. 011-2431-5931
Fax:011-2431-5646
5. E-mail ID dirhr@bol.net.in

(b) Details of the BR head

Same as above

3. Principle-wise (as per NVGs) PR Policy/policies

(A) Question P1 P2 P3 P4 P5 P6 P7 P8 P9
1. Do you have a policy/policies for the Principle? Y Y Y Y Y Y Y Y Y
2. Has the policy being formulated in consultation with the relevant stakeholders? Y Y Y Y Y Y Y n n
3. Does the policy conform to any national/ international standards? If yes specify? (50 words) Y Y Y Y n Y Y Y n
4.1 Has the policy being approved by the Board Y Y Y Y n n Y Y n
4.2 Is yes has it been signed by MD/owner/ CEO/appropriate Board Director? Y Y Y Y n n Y Y n
5 Does the company have a specified committee of the Board/Director/Official to oversee the implementation of the policy? Y Y Y Y n n Y Y Y
6. Indicate the link for the policy to be viewed online? mtnl. net. in mtnl. net. in mtnl. net. in mtnl. net. in mtnl. net. in mtnl. net. in mtnl. net. in mtnl. net. in mtnl. net. in
7. Has the policy been formally communicated to all relevant internal and external stakeholders? Y Y Y Y n n Y Y n
8. Does the Company have in-house structure to implement the policy/policies Y Y Y Y Y n Y Y Y
9. Does the Company have a grievance redressal mechanism related to the policy/policies to address stakeholders’ grievances related to the policy/policies? Y Y Y Y n n Y Y Y
10. Has the company carried out independent audit/evaluation of the working of this policy by an internal or external agency? Y n n n n n n n n

 

i) Web links for the Policies
Code of Conduct www.mtnl.net.in
Whistle Blower Policy www.mtnl.net.in
Citizen Charter www.mtnl.net.in
CVC Guidelines http://mtnl.net.in/vig.htm
CSR Policy http://mtnl.in/csr_2014.pdf
Insider Trading Policy http://mtnl.in/finres.htm
(B) If answer at S.No.1 against any principle is ‘No’ please explain why : 4. Governance related to BR

 

i. Indicate the frequency with which the Board of Directors Committee of the Board or CEO to assess the BR performance of the Company. Within 3 months 3-6 months Annually More than 1 year. Within 3 Months
ii. Does the Company publish a BR or a Sustainability Report? What is the hyperlink for viewing this report? How frequently it is published? no

Section E: Principle-wise performance

Principle 1: Businesses should conduct and govern themselves with EthicsTransparency and Accountability

1. Does the policy relating to ethics bribery and corruption cover only thecompany? Yes/ No.

Yes. The ethical conduct of the Company is reflected in the various policy initiatives.While the Employees Conduct Discipline & Appeal Rules (CDA Rules) cover the employeesat all levels in the organization. In addition to promote ethical business Policies likeCode of Conduct Integrity Pact Whistle Blower Policy Insider Trading Code and CitizenCharter have also been put into operation.

Additionally the Company has a Vigilance Department headed by Chief Vigilance Officernominee of the Central Vigilance Commission. The Vigilance Department submits its reportsto Competent Authority including the Board of Directors. The CVO also reports to theCentral Vigilance Commission as per their norms.

2. Does it extend to the Group/Joint Ventures/ Suppliers/Contractors/NGOs/Others?

Yes the Integrity Pact Citizen Charter covers/extends to suppliers; customers etc.while the Code of Conduct Insider Trading Code & Whistle Blower Policy covers onlydirectors and Senior Management of the company.

3. How many stakeholder complaints have been received in the past financial year andwhat percentage was satisfactorily resolved by the management? If so provide detailsthereof in about 50 words or so.

Ethics Complaints Bribery & Corruption Complaints
Total Complaints Received no. ofComplaintsResolved no. ofComplaintsPending % ofComplaintsResolved TotalComplaintsReceived no. ofComplaintsResolved no. ofComplaintsPending % ofComplaintsResolved
104 92 12 88.46 56 51 5 91.07

Principle 2: Businesses should provide goods and services that are safe andcontribute to sustainability throughout their life cycle.

1. List up to 3 of your products or services whose design has incorporatedsocial or environmental concerns risks and/or opportunities.

As MTnL provides Telecommunication Services our Wireless Services (WS) complies withrelevant guidelines regarding Electromagnetic radiation from BTS Towers issued by DoT GoIand TRAI:

a) Whether MTNL is complying with relevant guidelines regarding Electromagneticradiation from BTS Towers issued by DoT GoI and TRAI? Is there any Policy framed by MTNLin this regard.

MTnL is complying with relevant Guidelines regarding Electromagnetic radiation from BTSTowers issued by DoT GoI and TRAI. Yes a Policy has been framed by MTNL in this regard. a)Steps taken for reduction of energy consumption and safeguarding environment. i)Identifying the faulty Power Plant and replacing the same systematically and using theEngine

Alternator to the barest minimum. ii) 1 MSC(CDMA) 2 BSCs of CDMA (Vashi &Mankhurd) and one BSC of GSM(Vashi) were closed by rearrangement process. Also the BSCsof GSM(Fountain & Prabhadevi) were deloaded by 60% through proper rearrangement. Theseactivities resulted in substantial reduction of energy consumption. iii) In RF networkfree cooling was done in 10 BTS Shelters and thus saved energy consumption. iv) Duringslack hours and areas where positions are vacant unused cabins and training centre roomsthe AC and lights are kept switched off. When temperature of Call centre comes down due tocontinuous cooling some of the AC units are kept switched off. v) Free cooling systems aredeployed at BTS sites to minimize the energy requirements on account of ACs.

Principle 3: Business should promote the well being of all the employees

1. Please indicate the Total number of employees: 31070 (as on 31.03.2016)

2. Please indicate the Total number of employees hired ontemporary/contractual/casual basis: 1931

3. Please indicate the Number of permanent women employees: 7267

4. Please indicate the Number of permanent employees with disabilities: 145

5. Do you have an employee association that is recognized by management: no

6. What percentage of your permanent employees is members of this recognizedemployee association? not Applicable

7. Please indicate the Number of complaints relating to child labour forced labourinvoluntary labour sexual harassment in the last financial year and pending as on theend of the financial year.

S.No Category filed during the financial year No. of complaints pending as on end of the financial year No. of complaints
1. Child labour/forced labour/ involuntary labour nIL nIL
2. Sexual harassment nIL 03
3. Discriminatory employment nIL nIL

8. What percentage of your under mentioned employees were given safety &skill upgradation training in the last year?

? ?Permanent Employees: 20.91%? Permanent women Employees: 4.4%

? Casual/Temporary/Contractual Employees: n.A.? Employees with Disabilities:n.A.

Principle 4: Businesses should respect the interests of and be responsivetowards all the stakeholders especially those who are disadvantaged vulnerable andmarginalized.

1. Has the Company mapped its internal and external stakeholders? Yes/No

Yes. Over the years of its existence the organization has identified & engagedwith a varied group of stakeholders- both internal like employees shareholders &external such as customers communities Business Partners (Suppliers & Venders)Industry Association etc.

2. Out of the above has the company identified the disadvantaged vulnerable& marginalized Stakeholders? no Corporate Social Responsibility (CSR) funds hasbeen allocated/spent for CSR activities during the

Financial Year as the requirement for allocation of funds for CSR activities undersection 135 of the Companies Act 2013 is not applicable as the average profit during thethree immediately preceding years is nIL (The Company is suffering losses).

3. Are there any special initiatives taken by the company to engage with thedisadvantages vulnerable and marginalized stakeholders. If so provide details thereforein about 50 words or so. not Applicable.

Principle 5: Business should respect and promote human rights

1. Does the policy of the company on human rights cover only the company orextend to the Group/ Joint Ventures/Suppliers/Contractors/NGOs/others?

MTNL owes allegiance to the Constitution of India which resolves to secure to all itscitizens justice liberty equality and fraternity and which also encompasses thefundamental human rights as envisaged in the

Universal Declaration of Human Rights. MTNL stands committed to support and respect theprotection of internationally proclaimed human rights at its work places and in dealingwith customers suppliers customers venders etc.

2. How many stakeholders’ complaints have been received in the pastfinancial year and what percent was satisfactorily resolved by the management?

Already given in Business Responsibility Report

Principle 6: Business should respect protect and make efforts to restore theenvironment

1. Does the policy related to Principle 6 cover only the company or extends tothe Group/ Joint Ventures/Suppliers/Contractors/NGOs/others.

The Company is following the Policy framed in this regard.

2. Does the company have strategies/initiatives to address global environmentalissues such as climate change global warming etc? Y/N. If yes please give hyperlink forwebpage etc.

MTnL is complying with relevant Environmental Laws and Guidelines regardingElectromagnetic radiation from BTS Towers issued by DoT GoI and TRAI. no initiative toaddress the global environmental issues.

3. Does the company identify and assess potential environmental risks? Y/N

Yes MTNL Wireless Services (WS) has taken initiatives to comply with relevantGuidelines regarding

Electromagnetic radiation from BTS Towers issued by DoT GoI and TRAI.

4. Does the company have any project related to Clean Development Mechanism? Ifso provide details thereof in about 50 words or so. Also if Yes whether anyenvironmental compliance report is filed? no the company does not have any projectrelated to Clean Development Mechanism.

5. Has the company undertaken any other initiatives on clean technology energyefficiency renewable energy etc. Y/N. If yes please give hyperlink for web page etc.

The Company has taken initiative on energy efficiency. The detail reply is given inPrinciple 2 (1) (b).

6. Are the Emissions/Wastes generated by the company within the permissible limitsgiven by CPCB/ reported? SPCBforthefinancial year being

MTnL is complying with relevant Guidelines regarding Electromagnetic radiation fromBTS Towers issued by DoT GoI and TRAI. The Emissions/ Wastes generated is within thepermissible limits given by the

Pollution Control Board during the Financial Year 2015-16.

7. Number of show cause/legal notices received from CPCB/SPCB which are pending(i.e. not resolved to satisfaction) as on the end of Financial Year. nIL public andregulatory policy should do so in Principle 7: Business whenengagedin influencinga responsible manner.

1. Is your company a member of any trade and chamber or association? If yes Nameonly those major ones that your business deals with: i) SCOPE ii) FICCI iii) DMAiv)GSM Association

2. Have you advocated/lobbied through above association for the advancement orimprovement of public good? Yes/No; if yes specify the broad areas(drop box: Governanceand Administration Economic Reforms Inclusive Development Policies Energy SecurityWater Food Security Sustainable Business Principles Others) no

Principle 8: Business should promote inclusive growth and equitable development

1. Does the Company have specified programmes/initiatives/projects in pursuit ofthe policy related to Principle 8? If yes details thereof. no Corporate SocialResponsibility (CSR) fund has been allocated/spent for CSR activities during the

Financial Year as the requirement for allocation of funds for CSR activities undersection 135 of the

Companies Act 2013 is not applicable because the Company is incurring losses duringthe three immediately preceding years. The CSR Policy is available on the website of thecompany www.mtnl.net.in. MTnL is contributing to CSR activities in non- mandatory ways.

2. Are the programmes/projects undertaken through in house team /ownfoundation/external NGO/ government structures/any other organization? not applicable.

3. Have you done any impact assessment of your initiative? not applicable sinceMTnL is not doing any CSR activity where funds are involved because of losses in thecompany.

4. What is your company’s direct contribution to community developmentprojects-Amount in INR and the details of the projects undertaken? not applicablesince MTnL is a loss making company and is not undertaking any CSR activity involvingfunds/ money.

5. Have you taken steps to ensure that this community development initiative issuccessfully adopted by the community? Please explain in 50 words or so. notapplicable.

Principle 9: Business should engage with and provide value to their customers andconsumers in a responsible manner

1. What percentage of customer complaints/consumer cases are pending as on theend of financial year.

All complaints are resolved within the time frame laid down by TRAI. Percentage ofpending complaints with total annual complaints received (GSM call centre) on 31.03.2016was 0.014017%.

2. Does the company display product information on the product label over andabove what is mandated as per local news? Yes/No/N.A./Remarks(additional information)

As far as MTnL is concerned customer is being well informed at the time of issue ofCustomer Application Form (CAF) about the various plans. This is also being done throughpamphlet/brochures/ website of the

Company. However there is a need to further strengthen customer interface/ FRS systemfor proper and prompt handing of customer complaint. network of MTnL is also required tobe strengthened to further improve the quality of service.

3. Is there any case filed by any stakeholder against the company regardingunfair trade practices irresponsible advertising and/or anti-competitive behavior duringthe last five years and pending as on the end of financial year? If so provide detailsthereof in about 50 words or so.

NO

4. Did your company carry out any consumer survey/consumer satisfaction trends? nosuch survey has been carried out during 2015-16.