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Mahanagar Telephone Nigam Ltd.

BSE: 500108 Sector: Telecom
NSE: MTNL ISIN Code: INE153A01019
BSE 00:00 | 10 Aug 9.79 0.16
(1.66%)
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9.96

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NSE 00:00 | 10 Aug 9.80 0.20
(2.08%)
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10.00

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OPEN 9.79
PREVIOUS CLOSE 9.63
VOLUME 354777
52-Week high 13.32
52-Week low 4.49
P/E
Mkt Cap.(Rs cr) 617
Buy Price 9.75
Buy Qty 2370.00
Sell Price 9.79
Sell Qty 11750.00
OPEN 9.79
CLOSE 9.63
VOLUME 354777
52-Week high 13.32
52-Week low 4.49
P/E
Mkt Cap.(Rs cr) 617
Buy Price 9.75
Buy Qty 2370.00
Sell Price 9.79
Sell Qty 11750.00

Mahanagar Telephone Nigam Ltd. (MTNL) - Director Report

Company director report

To

The Shareholders

of Mahanagar Telephone Nigam Limited

Dear Shareholders

Your Directors present the 33rd 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 (CAG) on the Financial Statements for the financial yearended on March 312019.

PERFORMANCE REVIEW OF MTNL FOR THE FY 2018-19

1. Mobile Network:

A. MTNL has undertaken the task of improving the Wireless Network in Delhi and Mumbaiso as to improve the coverage & downlink speed of 21.1 Mbps & uplink speed of 5.76Mbps which is presently of 3.6 Mbps & 384 Kbps respectively with following majorprojects:

I. 3G expansion & upgradation in Delhi:

Expansion of GSM / 3G RF network by adding 1080 nos. of 3G sites & 800 nos. ofCeragon hybrid microwave to meet the backhaul capacity and Data handling capacity to 10Gbps. 1708 Macro and 55 Micro Node Bs have been put on air in the 3G Expansion Project. Inaddition 720 existing Node-B of existing 3G-network were planned for upgradation/replacement and 914 existing 8 Mbps Microwave Hops were planned for upgradation to NECmake hybrid M/W of 400 Mbps capacity. Redeployment of Old Node B in Delhi --- To improvethe coverage in Faridabad & Ghaziabad a total of 143 old Node-Bs have been redeployedfrom Delhi as per details given below:

a. Old Node B redeployed in Faridabad: 65.

b. Old Node B redeployed in Ghaziabad: 78.

II. 3G upgradation in Mumbai:

720 Node-Bs of existing 3G-network were planned for upgradation and 497 nos. ofexisting 8Mbps Microwave Hops were planned to be upgraded to Ceragon make Hybrid M/w of400 Mbps capacity. 3G upgrade implementation of HSPA+ to enhance data speed from 3.6 Mbpsto 21 Mbps and 384Kbps to 5.76Mbps on downlink and uplink has been completed.

III. Convergence of Core Network of Delhi and Mumbai:

MTNL took initiative to have common core of 3G network for Delhi and Mumbai. Thisresulted into saving of opex of '96 Cr and will help in reducing Opex on annual basis interms of AMC cost and staff Cost Core network of Delhi and Mumbai is being converged bymigrating the core elements of Mumbai Network to Delhi. The convergence will lead tosignificant improvement in resource utilisation and reliability of network. With thisconvergence Mumbai network will also be able to utilise the benefits of upgraded corenetwork of Delhi. HLR SGSN GGSN Netact IN SMSC 2G BSS of Delhi 2G BSS of Mumbaiand 3G BSS of Mumbai has already been migrated. PCRF FMCC OTA & welcome server arebeing migrated. Further MTNL Mumbai has also closed 2 nos of MSCs in Mumbai.

IV. 4G Tender: The rollout of 4G services has been planned in Delhi and Mumbai. DoT hasbeen requested for allocation of spectrum for 4G services in February 2018. MTNL has alsosubmitted the proposal along with Detailed Project Report (DPR) for launching of 4Gservices in Delhi and Mumbai duly approved by the Board of Directors of MTNL in its 329thBoard meeting held on 13.02.2018. Action for rollout of 4G services shall be taken onallotment of 4G spectrum by GoI.

V. Trial for E-Band Spectrum: In order to meet growing data traffic demand MTNL isexploring the use of E Band spectrum to provide Backhaul connectivity upto 2Gb for 3G/4GNetwork and intend to carry out testing for the same. MTNL has tied up with Nokia for thesame and application for experimental license has been submitted with WPC.

2. Wireline Network:

A. Upgradation of the MPLS Network on OPEX model: MTNL is planning to upgrade theentire MPLS network on OPEX model and make it future ready to handle the growing trafficneeds of FTTH and 4G network.

B. FTTH Revenue share Policy: This unit had worked out finalized and made operationalthe new policy to engage partners on revenue share basis to extend its FTTx services.Various partners were roped in to offer the high speed broadband services on fiber. In theyear 2018-19 out of total 12105 FTTH subscribers added by MTNL 9520 subscribers (approx79%) were added by partners.

C. Redeployment of DSLAMs: Redeployment of DSLAMs of existing Broadband Network near tothe subscriber premises in Delhi and Mumbai thereby reducing copper length and enhancingthe quality of broadband service. A total of 242 DSLAMs have been redeployed in Delhi and188 in Mumbai till 31st March 2019. In the year 2018-19 22 DSLAMs in Delhi and 14 inMumbai have been redeployed thereby reducing copper length and enhancing the quality ofBroadband service. This has improved customer experience and reduced the number ofcomplaints.

Procurement of around 500 pizzabox type VDSL DSLAM are underway which are to bedeployed near customer premise to offer internet speed upto 50 Mbps over copper.

It is further planned to upgrade existing DSLAMs to offer high speed internet byproviding VDSL cards.

D. Refurbishing of Pillars and DPs: To improve the QoS parameters refurbishing ofPillars and DPs has been planned in phased manner. 1283 Pillars and 37844 DPs in Delhi& 2862 Pillars and 14702 DPs in Mumbai have been refurbished by MTNL in 2018-19.

E. Replacement of Drop Wire: To improve copper pair quality 118096 mtr existing Dropwires have been replaced with twisted drop wires or thermo sleeves have been put at openjoints at DPs by MTNL in 2018-19.

F. Upgradation of Broadband Speed: To give boost to customer experience Download Speedof Broadband subscribers is being upgraded to 8 Mbps progressively without any additionalcost depending upon feasibility and line parameters. 45942 connections in Delhi and53235 in Mumbai were upgraded to higher speeds in the year 2018-19.

G. Trial for V-Band Spectrum: In order to meet growing data traffic demand MTNL isexploring the use of V Band spectrum for last mile access for high speed Internet in FTTHNetwork and intend to carry out testing for the same. MTNL has tied up with Qualcomm forthe same and application for experimental license has been submitted with WPC.

FINANCIAL RESULTS OF MTNL FOR THE FY 2018-19

The Standalone Financial Results of your company alongwith Consolidated FinancialResults for Financial Year 2018-19 is placed as an annexure to this report.

The Standalone and Consolidated Financial highlights of your company for the FinancialYear ended March 31st 2019 are summarized as follows:

(IN CRORES Rs.)

Standalone

Consolidated (MTNL its Subsidiaries JV & Associates)

2018-19 2017-18 2018-19 2017-18
Income from Operations 1987.80 2371.91 2085.41 2471.86
Expenditures (Excluding Finance Cost) 4293.73 4584.38 4404.87 4682.72
Operating Profit/(Loss) (2305.93) (2212.47) (2319.46) (2210.86)
Other Income 618.91 744.51 636.09 745.34
Finance Cost 1703.18 1505.49 1703.18 1505.49
Profit/(Loss) before Tax (3390.20) (2973.45) (3386.55) (2971.01)
Exceptional Items - - - -
Share of profit/(loss)in investments accounted for using equity methods - - (0.64) 0.57
Tax Provision for the Year - - 0.88 0.90
Profit/ (Loss) for the Year from Continuing Operations (3390.20) (2973.45) {3388.07) (2971.33)
Profit/ (Loss) for the Year from Discontinuing Operations - 0.42 - 0.42
Profit/ (Loss) for the Year {3390.20) (2973.03) {3388.07) (2970.91)
Other Comprehensive Income (7.39) 2.38 (7.75) 12.78
Total Comprehensive Income for the Year (3397.58) (2970.65) {3395.82) (2958.14)
Appropriation
Interim/ Proposed Final Dividend - - - -
Dividend Tax - - - -
Transfer to/ (from):
a) Contingency Reserve - - - -
b) Debenture Redemption Reserve - - - -

Sources and Application of Funds for the FY 2018-19 are given below:-

SOURCES AND USES OF FUNDS 2018-19 2017-18 2018-19 2017-18
Authorised Capital 10000.00 800.00 10000.00 800.00
Issued Subscribed & Paid Up Capital 630.00 630.00 630.00 630.00
Other Equity {10364.94) (6967.35) (10357.83) (6962.01)
Non-Current and Current Borrowings 19737.16 17014.79 19737.16 17014.79
Deferred Tax Liability (Net) - - 6.34 5.71
REPRESENTED BY
Property Plant and Equipment (Net Block) 4233.78 4575.15 4329.56 4687.53
Capital Work in progress 320.04 330.98 320.04 330.98
Investment Property 25.57 25.57 34.96 35.36
Intangible Asset (Net Block) 3101.90 3439.27 3101.90 3440.71
Investment 106.13 106.13 3.73 4.37
Other Assets 6890.03 7772.56 6914.33 7792.25
Other Liabilities 4675.22 5572.23 4688.85 5602.70

AMOUNT IF ANY WHICH THE BOARD PROPOSE TO CARRY TO ANY RESERVES

The Company has not transferred any amount to the Reserves in the absence of anyprofits during the financial year 2018-19.

DIVIDEND

Since there has been no operating profit the Board of Directors of your companyexpresses its inability to recommend any dividend for the year under report.

MATERIAL CHANGES AND COMMITMENT IF ANY AFFECTING THE FINANCIAL POSITION OF THE COMPANYOCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THESE 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 these financial statements relateand the date of the report. There has been no change in the nature of Business of theCompany.

CAPITAL AND DEBT STRUCTURE OF MTNL

During the Financial Year the Authorized Share Capital of your Company was increasedfrom '800 Crores comprising of 80 Crores shares of '10 each to '10000 Crores comprisingof 1000 Crores shares of '10 each. The paid up Equity Share Capital as at March 312019 ofyour company was '630 Crores comprising of 63 Crores Equity Shares of '10 each.

During the Financial Year 2018-19 your company has neither issued any shares withdifferential voting rights nor has granted any stock option or sweat equity or issued anyequity shares or preference shares or any securities which carry a right or option toconvert or issue any Share Warrents.

During the Financial Year 2018-19 your company has not issued any Debentures or Bonds.

DETAILS OF PRIVATELY PLACED DEBT SECURITIES/BONDS OF MTNL AS ON 31ST MARCH 2019.

S. No. ISIN Number Issuance Date Maturity Date Cou pon Rate Pay ment Fre quency Em bed ded Op tion if Any Embedded Option if Any Put option Detail Embedded Option if Any Call option Detail Amount Issued & outstanding (in Rs.) Name of the De- ben- ture Truste Company Remarks if any
1 INE153A08014 28-Mar-13 28-Mar-23 8.57% Half Yearly No 10050000000 SBI Cap Trust ee Com pany Ltd -
2 INE153A08022 5-Dec-13 5-Dec-23 9.38% No 19750000000 -
3 INE153A08030 26-Mar-14 26-Mar-24 9.39% No 7650000000 Semi annual interest and principal repayment liability rest with DoT (GOI)
4 INE153A08048 19-Nov-14 19-Nov-24 8.24% No 14000000000
5 INE153A08055 19-Nov-14 19-Nov-24 8.28% Yes Call option at the end of ninth year 1000000000
6 INE153A08063 19-Nov-14 19-Nov-24 8.24% No 700000
7 INE153A08071 28-Nov-14 28-Nov-24 8.29% No 22689000000
Grand Total 75139700000

CREDIT RATING OF DEBT/BOND ISSUED BY MTNL ALONG WITH ANY REVISIONS THERETO DURING THEFY 2018-19

CRISIL and CARE have reaffirmed their ‘CRISIL AAA(SO)/Stable' and CAREAAA(SO)/Stable rating respectively on the Rs. 7533.97 Crore non-convertible debentures ofMahanagar Telephone Nigam Limited (MTNL). There has been no change in the rating given byCRISIL and CARE in last three years i.e. 2016 2017 and 2018.

REVIEW OF SUBSIDIARIES ASSOCIATES AND JOINT VENTURE COMPANIES

Pursuant to Section 129(3) of the Companies Act 2013 (“Act”)theconsolidated financial statements of the Company and its subsidiaries associates andjoint ventures prepared in accordance with the relevant Accounting Standard specifiedunder Section 133 of the Act read with Rule 7 of the Companies (Accounts) Rules 2014form part of this Annual Report. Pursuant to the provisions of the said section astatement containing the salient features of the financial statements of the Company'ssubsidiaries associates and joint ventures in Form AOC-1 is given in this Annual Report.At present there is no material subsidiary company of MTNL within the meaning of theCompanies Act 2013 / SEBI (LODR) 2015.

The Policy on Material Subsidiary has been approved by the Board and the same may beaccessed on the Company's Website at the link: http://mtnl.in/policy_materialsubsidy.pdfPerformance highlights of Subsidiaries Associates and Joint Venture Companies are brieflygiven as under:-

SUBSIDIARIES

(i) MAHANAGAR TELEPHONE (MAURITIUS) LTD. (MTML) (A WHOLLY OWNED OVERSEAS SUBSIDIARY)

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 March 2019 has grown to 318875 resulting in a market share of around 20%. MTMLis offering 2G/3G services all over the island and after completion of LTE Phase-2 inJanuary 2019 almost 80% of the island population is covered by our 4G network.

During the Financial Year 2018-19 MTML had total Turnover amounting to INR 108.43 cr asagainst INR 93.19 cr in last year. During the Financial Year 2018-19 MTML has earnedProfit amounting to INR 3.41 cr as against INR 3.73 cr in last year. The year 2018-19 hasbeen 10th straight year for MTML to be in profit. In 2018-19 MTML continued to add morecustomers by introducing very attractive voice and data plans for existing as well asprospective customers. LTE (4G) expansion has resulted in exponential data growth. MTML isalso making inroads in Enterprise Business solutions and could get a few more Enterprisecustomers during the year. MTML has also started selling Smartphone of all popular brandssuch as Apple Samsung Huawei Nokia etc. after entering into agreements with maindistributers of these brands at Mauritius. In this financial year the Company generatedrevenue of INR 22.22 million from this segment. MTML is well established in Mauritius dueto its innovative tariff structure and on the merit of its state of art technicalofferings. The Company is always exploring new business possibilities and is looking toconsolidate its position in the market on the basis of a strong 4G network. During theyear 2018-19 MTML was successful in getting substantially bigger orders to providesatellite bandwidth and mobile services in Agalega Island of Mauritius for the developmentproject being carried out by AFCONS. Agalega Island is more than 1000Kms north ofMauritius Island.

All the expenses of the company are met from its own internal resources. The CAPEX forprocurement of equipments is totally met from its own internal resources. There is no debtliability on the company. The company is managed by CEO CTO CFO and 10 more officersall on deputation from the parent company. Other operations are managed throughoutsourcing the locals.

(ii) MILLENNIUM TELECOM LTD. (MTL) (A WHOLLY OWNED INDIAN SUBSIDIARY)

Millennium Telecom Ltd (MTL) is a wholly owned subsidiary of MTNL. Services beingoffered by MTL include Telecom consultancy & engineering Project Management Wi-Fisolution project on e-governance Managed services Turnkey ICT solution GIS basedservices capacity building and skill development etc.

Millennium Telecom Ltd (MTL) is also moving ahead with a very high growth rate. Duringthe year under report i.e. 2018-19 the company has earned revenue of '73439502/- asagainst '67577399/- last year. MTL earned a net profit of '64.07 Lakhs during the yearunder report. MTL is in the process of winning over more orders in the coming years.

A large number of Govt. Institutions have awarded works on nomination basis which havebeen successfully executed by MTL. Customer list include Air India J & K GovernmentCentral University-(Mahendragarh) Haryana UP Building and Other Constructions WorkersWelfare Board (BOCWWB) Lucknow Thane Municipal Corporation CIDCO Film Division ofIndia Insurance Institute of India etc. MTL is also expanding its portfolio of servicefor providing generalized as well customized solutions to suit government and semigovernment institutions. MTL has reopened the window for Empanelment of BusinessDevelopment Associates in MTL through open ended EOI. MTL has around 24 empanelled BDAs.In 2018-19 MTL has worked on various projects including P2PRF connectivity (50 mbps) forAir India FMS for campus wide wireless and wired LAN for Central University Haryana GISbased Survey of District Meerut and Ghaziabad of UP for generating social welfare fund forlabor's CESS LAN-WAN Project along with email hosting solution of Thane MunicipalCorporation(TMC) Communication server project (state of art voice solution ) of CIDCOLAN networking of Films Division of India enhancing EPABX Solution for InsuranceInstitute of India. Further many new projects are in the pipeline including:-To providebandwidth connectivity on MPLS-VPN Network (more than 36 locations including DC and DR)and Internet Leased Line for UJVN Limited Dehradun Establishment of Video Conferencingsystem between head office and there field offices of UJVNL Ltd Dehradun Uttarakhand andGIS survey of various districts in Chhattisgarh with the help of modern GIS technologies.

JOINT VENTURE

(i) MTNL STPI IT SERVICES LTD. (MSITSL)

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 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 '477 lakhs. This Tier IIIData Center is maintaining 99.98% uptime on 24X7. At present the following are our primecustomers who have co-located server/storage/network racks of their functions andoperations in the MSITSL Data Centre.

• The Ministry of External Affairs (MEA) has hosted Passport Seva Project atMSITSL Data Center through M/s TCS.

• The Directorate General of Employment & Training (DGE&T) in Ministry ofLabour & Employment has hosted National Career Project through STPI at MSITSL DataCentre.

• M/s Repco Bank Ltd and its associates such as Repco Microfinance Ltd. etc. haveco-located server racks for banking/finance operation.

The revenue of the company has been increasing year after year from the date of itscommercialization in 2009. In the current year the revenue over the last year hasregistered an increase of 6.53% from '50174822/- to '53449037/-.

The service Agreement between TCS and MSITS ltd. for co-locating passport seva project(PSP) in MSITS datacenter at Chennai is expiring on 11th June 2020 for which MEA hasfloated the Expression of Interest(EoI) for onboarding an Implementing Agency for afurther period of 10 years beginning July 2020 for operating and maintaining Passport sevaproject . The TCS may either exit or continue if it is the winning bidder in the MEA bidprocess. If another bidder is successful then they may take over the Passport sevaProject within six months after winning the bid. Presently MSITS is generating revenue of4.4 crores per annum from TCS for Passport seva project. Keeping this in view The Boardhas desired that MSITS should keep close watch as outcome of MEA's EoI as the PSP is amajor source of revenue for our Company.

(II) UNITED TELECOMMUNICATIONS LTD. (UTL) NEPAL

UTL is another J.V Company of MTNL which consists of TCL TCIL NVPL (Nepal) &MTNL. The company provides Mobile/ILD/data services in Nepal. At present MTNL is holding26.68% of Equity in UTL. The company has not been performing well for the last few years.It has huge losses. The Customer base has also reduced. It is not paying the statutorydues like Royalty BTS site charges and other dues to the Govt. of Nepal. The companydoes not have resources to clear outstandings. They have sought Equity participation byits JV partners but MTNL TCIL & TCL all the Indian JV partners have decided not tocontribute any amount towards

its Share Capital or Loan. All the Indian JV Partners have decided to exit from the JVand have exercised their Right to exit on January 30 2018. Notice of exit (Sale of ourshare in JV Company) was given and was required to be accepted within 3 months i.e on orbefore 30.04.2018. The local partner had sought time extension of another 3 months i.e.till 30th July 2018 for giving effect to the exit request by parent.

Accordingly such investment has been classified as “held for sale” in thefinancial statement for year ended 31st March 2019. The repatriation of Indian FDI inNepal is under the process of approval with Nepal Government Department and is yet to beapproved by Nepal government. MTNL has taken up the matter with Ambassador of India inNepal through the secretary DoT to get the process expedited so that facilitation of theremittance of amount invested in UTL is done.

During the year under report 2018-19 there has been no change in subsidiariesassociates or joint ventures of the company.

DETAILS OF SYSTEM STATUS FOR THE FINANCIAL YEAR 2018-19 (AS ON 31st MARCH 2019)

Your Company has the following equipped and used capacity of Landline GSM Broadbandetc. as on 31st March 2019:-

S. No Parameters MTNL Delhi MTNL Mumbai MTNL Total
1 Number of Switches 361 278 639
2 Details of Capacity - - -
2a Fixed Phones 2416505 2586392 5002897
2b GSM 2800000 2800000 5600000
2c Broadband Capacity (in Ports) 788736 845908 1634644
3 DELs (including Fixed-Line GSM and Broadband) 4129751 3402993 7532744
3a Fixed Line 1441900 1761740 3203640
3b GSM 2213046 1240177 3453223
3c Broadband Subscribers 474805 401076 875881
4 FTTH Subscribers 12548 10227 22775
5 ISDN 7340 11056 18396
6 DLC (No.) 425 46 471
7 Tax Capacity 150000 115200 265200
8 Tandem Capacity 402500 331240 733740
9 Optical Fibre Cable - - -
9a OFC in Route Kms 9039.468 8936 17975.47
9b OFC in Fibre Kms 298470.364 289792.346 588262.7
10 Leased Circuits 11861 18037 29898

HUMAN RESOURCE DEVELOPMENT

The Company attaches the highest priority to the quality of intellectual capital at itsdisposal and believes that knowledge and skills of its employees are the key toachievement 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 have a capability to counter threats posed by ever changing customer base.The Company has been conducting various training and development activities which apartfrom reorienting the employees towards the greater organizational purpose are alsofocusing on eliminating any skill gap and technical obsolescence. The management's view ontraining is one of development of employee's overall personality and enabling them inbecoming a vital productive resource.

TRAINING ACHIEVEMENTS

At present MTNL has its two in house state of the art training centers one located inNew Delhi and another at Mumbai. The details of the achievement of training centers atDelhi and Mumbai are given below:

(I) THE INSTITUTE OF TELECOM TECHNOLOGY & MANAGEMENT (ITTM) NEW DELHI

The Institute of Telecom Technology & Management (ITTM) at Shadipur New Delhi hasbeen imparting induction training in-service training and short term courses to itsofficers and employees in the field of Telecom IT Management and HR. With impressivegrowth of Telecom sector in India the requirement of telecom trained personnel is growingday by day. Realizing this ever growing demand for telecom personnel ITTM introducedindustrial training to engineering students in the field of ECE/CS/IT as part of theirsummer/ winter training. During the year 2018-19 ITTM has successfully trained 854Executives and 1034 NonExecutives of MTNL. Coaching classes for candidates appearing inLimited Departmental Competitive Exam for TMs was conducted and subsequently the exam wasconducted at Andhra Education Society New Delhi centre. Industrial training andindustrial visits for engineering/school students were also organized. Total 278BE/B.Tech/Diploma students have undergone Industrial training on paid basis. In additionto this ITTM also conducted the industrial visits for 634 students from schools/technicalinstitutions. Six employees of TCIL were also imparted training in Computer and Managementskills on chargeable basis.

Revenue earned at ITTM for financial year 2018-19:-Industrial Training to EngineeringStudents = Rs. 2201666/- and Corporate Training to TCIL employees = Rs. 65844/-

(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 Mumbai. The competition in the field oftraining is increasing tremendously with each passing day.

CETTM's achievements during financial year 2018-19 are as follows:- CETTM successfullytrained 3938 in-house personnel and 3264 external personnel with an achievement of 24414Trainee days. Total of 318 Programs were conducted. 35 Students were trained throughvarious certificate courses under Corporate Social Responsibility (CSR) while 23 studentstook part in one/two/six months Project Training works. Total 2731 number of EngineeringCollege Students from 30 different Colleges took part in “Industrial VisitProgramme” during 2018-19. 7 senior officers from the Security Wing from CabinetSecretariat have been trained in Next Generation Networks. Under ITEC program sponsoredby MEA Govt. of India CETTM successfully completed 13 programs. Total 306 delegates from54 different countries participated this financial year. CETTM also conducted 10 weeksInduction Training Programme for 2 newly recruited JTO (Electrical) in MTNL and 2departmental JTOs as 16 weeks Induction training program for 8 departmental JAOs.Induction training of 50 candidates for TTA promotion of 8 weeks duration was alsoconducted. CETTM has conducted various short duration technical as well as Managementrelated courses for MTNL employees on need basis to improve MTNL services. Behavioural andAttitudinal training for Line staff and CSC staff completed in all areas and CC operators.Onsite and in-house programs conducted in Landline BB FTTH OFC splicing PON wiring& its troubleshooting for all areas. 60 students of Symbiosis Institute of TelecomManagement (SITM) were trained under 4 days Industrial Visit Program. 35 Polytechnicfaculties from Maharashtra State Board of Technical Education (MSBTE) were trained for 3days training Course on Information Security. Workshops & Events organized by CETTM inFY 2018-19 are given below:-

• SMART (Stress Management & Right Thinking) workshop organized byBrahmakumaris on 17th Apr 2018.

• CETTM celebrated ‘World Telecommunications & Information Society Day'by conducting one day workshop on “Artificial Intelligence” by Dr. SasikumarDirector CDAC Mumbai and “Legal implication of A.I.” by Mr. Chirag Balyan prof.from MNLU on 17th May 2018.

• Yoga session & talk by Dr.Sachin Parab were conducted for MTNL employees tocelebrate International Yoga Day at CETTM on 21st June 2018.

• One day program on Awareness Program on Blockchain & IoT by SOFOCLETechnologies on 2nd Aug 2018 & 20th Oct 2018.

• Ceragon M/W training for Executives (AM/DM/SM) on 22nd and 25th Oct 2018.

• Organised two days advanced LPWA for IoT by M/s Award Solutions on 29th Oct2018.

• TCIL E-Tendering procedure training (6 batches) arranged for executives onrequest from IT Unit in the month of Jan 2019.

• Workshop on Session Initiation Protocol for FTTH on 19th Feb 2019.

• One day course on “GPS based access network planning” on 22nd Feb2019.

Business Development at CETTM in FY 2018-19 are given below:- Total revenue achieved inFY 2018-19 was '26.51Cr with an increase of 5.19% compared to 25.2Cr revenue in 2017-18.CETTM continues to be the first choice for conducting training courses workshop seminaretc. by our esteemed clients. Top clients include LIC BPCL NPCIL Department of SalesTax KEC IIT Mumbai Grey Atom Wipro National School of Drama etc. CETTM has leasedadditional 50 hostel rooms & 4th floor of academic building (13000 sq.ft.) toMaharashtra National Law University. For Skill Development courses perused with NSDC& TSSC. The efforts and the results reiterate our commitment to growth in terms ofbusiness quality & customer satisfaction and the customers have always rewarded ourgood work by giving us the repeated business.

(III) SKILL DEVELOPMENT

With a vision of a Skilled India Ministry of Skill Development & Entrepreneurship(MSDE) aims to skill India on a large scale with speed and high standards. Pradhan MantriKaushal Vikas Yojana (PMKVY) is the flagship scheme that is driving towards greaterrealisation of this vision. MTNL have two training centre one at Mumbai (CETTM) andanother at New Delhi (ITTM). Both of the training centers are engaged to meet therequirement of skill development and giving summer trainings to students of BE/ B.Tech.Short Term (One Day/ Two days) training programs for outsiders including studentshousewives & others are also being conducted. To achieve the aim of skill developmentprogramme MTNL has signed MoU with Telecom Sector Skill Council & Global Institute ofSkill Development. MTNL has also signed MoU with Gramin Vikas Trust (GVT) to run atraining cum skilling center for promotion of entrepreneurship for the period of Fiveyears. Under skill development programme MTNL has trained 3843 trainees in FY 2018-19.MTNL is also in process of conducting Recognition of Prior Learning certification for alleligible MTNL employees.

INDUSTRIAL RELATIONS

Industrial peace and Industrial harmony is based on healthy Employee Relations and likethe previous years Employees Relations remained Cordial throughout the year. TheGrievances/Issues raised by the Employees/Unions/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. MTNL vide letter No. MTNL/CO/IRW/22(8)/2018- 19 dtd 22.06.18 hasconveyed the approval of the Board for benefit of merger of IDA @ 73.8% for the purpose offitment in respect of Board and below Board level Executives Non-ExecutivesNon-unionized supervisors (all employees) of MTNL w.e.f. 01.01.2007 on the notional basisand actual payment from 01.01.2018.

EMPLOYEES' WELFARE

Employees' Welfare Schemes like subsidized Canteen Housing Medical facilities GroupInsurance dormitories for females working in night shift etc. continued and maintained bythe Company for its employees. Sports and Cultural activities were also given priorityduring the year. Changeover of Contributory Group Health Insurance Scheme for retirees toCGHS after pursuance of MTNL with DoT the Ministry of Health issued instructions to CGHSfor enrolment of MTNL retirees (drawing Govt. Pension) in the CGHS. To facilitate the samean incentive is being provided to the concerned retirees. As on date approximately‘8285' retirees in MTNL have benefited from this scheme.

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/PHYSICAL HANDICAPED AND ECONOMICALLYWEAKER SECTION

The Company has endeavored to fulfill all the statutory requirements with regard toimplementation of reservation policy for candidates belonging to SC/ ST/ OBC communitiesas well as Physically Challenged and Economically Weaker Section candidates.

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

The Company has constituted an internal Committee to look into the complaints onPrevention Prohibition & Redressal of Sexual Harassment of Women at workplace andmatters connected therewith or incidental thereto covering all aspects as contained in theSexual Harassment of Women at 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.

MANPOWER STATUS

As on 31st March 2019 the total strength of employees and SC/ST Category working inthe company as per details is given below:-

Group Total Working SC ST
A 810 137 55
B 2317 347 56
C 12758 1946 205
D 5819 1494 300
TSM 4 - -
Grand Total 21708 3924 616

New Recruitment

The Board of Directors during the last financial year had approved to induct 100officers at E-2 level in the stream of Telecom Finance Electrical Civil HR and Sales& Mktg. Total 39 officers in the stream of JTO (Telecom/Civil/Electrical) at E-2 leveljoined MTNL during the last financial year. The recruitment of nontechnical posts viz AM(Finance/Mktg/HR) as detailed below is under process:- Finance- 17 HR- 06 and Sales &Marketing - 15. During the financial year 2018-19 no further recruitment was made.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

The Company has been suffering losses for the last few years and hence. The provisionsof Section 135 of the Companies Act 2013 are not applicable. However the company hasconstituted a CSR Committee and also formed a CSR Policy in compliance with the provisionsof The Companies Act 2013 and DPE Guidelines on the subject. MTNL is undertaking nonfunding CSR activities like sending SMS to the public for spreading awareness on SwachhBharat Pulse Polio other moves of the Government etc. For details regarding the CSRCommittee please refer to the Corporate Governance Report which forms part of thisReport. The CSR Policy is available on the website of the company www.mtnl.net.in .

VIGILANCE

The Vigilance organization of MTNL is headed by Chief Vigilance Officer. Shri DeepakKashyap CVO BSNL was holding is in additional charge of CVO MTNL. CVO is responsiblefor complete vigilance administration in MTNL. During the year 2018-19 emphasis was laidon preventive vigilance and to enhance the awareness of transparency and accountability inworking by carrying out various field inspections. Advices for system improvement wereissued by Vigilance Unit. CTE type inspections were also carried out as per CVCguidelines. Further training programme/ seminars on vigilance matters/complaints handlingand disciplinary proceedings have been conducted during the year 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 from 29/10/2018 to 03/11/2018. During this week variousactivities like administering of integrity pledge release of information booklet on theVigilance & Disciplinary matters with a focus on “Eradicate Corruption- Build aNew India” Preventive Vigilance and other general conduct (Do's & Don'ts) amongthe employees of MTNL was distributed. Also various programmes such as seminarsworkshops debates as well as Quiz competitions were organized during Vigilance AwarenessWeek. MTNL Board was regularly apprised of the progress of Disciplinary cases for reviewthrough quarterly reports. Review of vigilance work/matters by CMD with approval of CVOwas also submitted quarterly.

WHISTLE BLOWER POLICY/VIGIL MECHANISM

Your Company has in place a robust vigil Mechanism for reporting genuine concernsthrough the company's Whistle Blower Policy. The Policy on Whistle Blower may be accessedon the Company's Website at the link: http://mtnl.in/whistleBlowerPolicy.pdf . The Companypromotes ethical behavior in all its business activities and has put in place a mechanismfor reporting illegal or unethical behavior as defined under Regulation 22 of SEBI (LODR)Regulation 2015. Under the Whistle Blower Policy the employees are free to reportviolations of applicable laws and regulations and the Code of Conduct to the Chairman ofthe Audit Committee. During the year under report no employee was denied access to theAudit Committee.

SIGNIFICANT & MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS

There are no significant and material orders passed by the Regulators/Courts/Tribunalsthat would impact the going concern status of the Company and its future operations.

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. The Integrity Pact has strengthened the established system andprocedures by creating trust in various stakeholders. Three Independent External Monitors(IEMs) being persons of eminence nominated by the Central Vigilance Commission (CVC) tomonitor the activities. As on 31-03-2019 Shri Dhruv Kr. Agarwal [Ex-Advisor (T) DOT]Shri V. K. Gupta [Ex-Addl. DG CPWD] and Ms. Alka Sirohi [IAS (Retd)] are acting as IEMsof MTNL. There have been regular Vender and Management Meeting of IEM during FY 2018-19.

CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS & OUTGO

The provision of Section 134(m) of the Companies Act 2013 do not apply to the Companyas your Company is a service provider. The total foreign exchange earning was '1.53 Croreand the total foreign exchange expenditure was '4.17 Crore.

ENTERPRISE RISK MANAGEMENT

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 also has additional oversight in the area of financial risks and controls.Major risks identified by the businesses and functions are systematically addressedthrough mitigating actions on a continuing basis. The development and implementation ofRisk Management Policy has been covered in the Management Discussion and Analysis Reportwhich forms part of this Report.

MEETINGS OF THE BOARD OF DIRECTORS

During the year under report the Board of Directors of your Company met Seven timesduring the Financial Year 2018-19. The intervening gap between any two meetings was withinthe period prescribed by the Companies Act 2013 & the Listing Regulations. Details ofBoard Meetings are given in Corporate Governance Report which forms part of this Report.At these meetings the Board held intensive discussions on the budget important financialtransactions and various steps to face the impending competition from private operatorsboth in Basic Telephone Service Cellular Mobile Telephone and other value added services.

SELECTION AND PROCEDURE FOR NOMINATION AND APPOINTMENT OF DIRECTORS AND THEIRREMUNERATION

MTNL being a Government Company the appointment and the terms and conditions ofappointment (including remuneration) of the Whole-Time Directors are decided by theGovernment of India. However the Board has constituted a Nomination & RemunerationCommittee. The Government Nominee Directors do not get any remuneration from the Company.The Independent Directors are being paid sitting fee of '10000/- for attending eachmeeting of the Board or Committee thereof. They are reimbursed travel expenses & hotelexpenses on this account if any in addition to the sitting fees. Details of remunerationpaid to the Whole time Directors and KMP as well as sitting fees paid to IndependentDirectors for the year under review are given in the Corporate Governance Report which isattached as annexure to this report.

PERFORMANCE EVALUATION OF DIRECTORS

Ministry of Corporate Affairs (MCA) through General Circular dated 5th June 2015 hasexempted Government Companies from the provisions of Section 178 (2) of the Companies Act2013 which provides about manner of performance evaluation of Board of DirectorsCommittee of Board of Directors and Director by the Nomination and Remuneration Committee.The aforesaid circular of MCA further exempted listed Govt. Companies from provisions ofSection 134 (3) (p) of the Companies Act 2013 which requires mentioning the manner offormal evaluation of its own performance by the Board and that of its Committees andIndividual Director in Board's Report if directors are evaluated by the Ministry orDepartment of the Central Government which is administratively in charge of the companyor as the case may be the State Government as per its own evaluation methodology. NowMCA through Notification dated 05.07.2017 has amended Schedule IV of the Companies Act2013 with respect to performance evaluation of directors of the Government Companies thatin case of matters of performance evaluation are specified by the concerned Ministries orDepartments of the Central Government or as the case may be the State Governments andsuch requirements are complied with by the Government companies such provisions ofSchedule IV are exempt for the Government Companies.

Similar exemption has been requested by PSUs wing of CII from SEBI under the SEBI LODRfor all PSUs. In this regard Deptt. of Public Enterprises (DPE) has already laid down amechanism for performance appraisal of all functional directors. DPE has also initiatedevaluation of Independent Directors.

Your Company enters into a Memorandum of Understanding (MOU) with Government of Indiaeach year demarcating key performance parameters for the Company. The performance of theCompany and Board of Directors are evaluated by the Department of Public Enterprisesvis-a-vis MOU entered into with the Government of India.

TRANSFER OF FUNDS/SHARES TO THE INVESTOR EDUCATION AND PROTECTION FUND (IEPF)

Your Company has not declared dividend from FY 2009-10 onwards hence provision oftransfer of unclaimed dividend and shares as per IEPF Rules is not applicable to yourCompany.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

During the year under report the Company has not entered into any Material Transactionwith any of its related parties. The Company's major Related Party Transactions aregenerally with its subsidiaries and associates. All Related Party Transactions if anywere in ordinary course of Business and were negotiated at an Arm's Length basis and theywere intended to further the company's interest. Accordingly the disclosure of RelatedParty Transactions as required under Section 134(3)(h) of Companies Act 2013 in FormAOC-2

is not applicable. Web link for Policy on Materiality of Related Party Transactions andalso on dealing with Related Party Transactions has been provided in the Report onCorporate Governance which forms part of Annual Report. Details of Related Parties andtransaction with your Company are given in Notes to the financial statement which is apart therof.

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

During the year under report your Company has executed Deed of Corporate Guarantee on25/10/2018 for '25.96 crores in favour of Bharat Broadband Network Ltd.(BBNL) for thepurpose of participating in BBNL tender for various telecom services by MTNL alongwith itsconsortium partners. The Corporate Guarantee was valid till 22/04/2019. The validity ofthe said Corporate Guarantee was extended till 31/07/2019.

During the Year there was no loan given or investments made by the MTNL under Section186 of the Companies Act 2013.

CORPORATE GOVERNANCE

Your company has complied with the Corporate Governance requirement under the ActListing Regulations and the relevant guidelines issued by Department of Public Enterprises(DPE). Your company is also complying with the applicable Secretarial Standards issued bythe Institute of Company Secretaries of India (ICSI). A certificate from M/s V.K. Sharma& Co. Practising Company Secretaries regarding compliance of conditions of CorporateGovernance as stipulated under Schedule V (E) of SEBI (LODR) 2015 for the FY 2018-19 andAnnual Secretarial Compliance Report for the FY 2018-19 pursuant to SEBI Circular No. CIR/CFD/CMD1/27/2019 dated 8th February 2019 has been obtained from M/s Mritunjay Shekhar& Associates Practising Company Secretaries is also placed at annexure to thisreport. Further a separate section on Corporate Governance is placed as annexure to thisreport.

EXTRACT OF ANNUAL RETURN

As provided under Section 92 of the Act and rules framed thereunder the extract ofAnnual Return in Form MGT-9 is given as Annexure which forms part of this report. Incompliance with Section 134 (3) (a) of the Act an extract of Annual Return is alsouploaded on MTNL Website and can be accessed at www.mtnl.net.in.

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

The Ministry of Corporate Affairs vide its Circular no. 17/2011 dated 21st April 2011followed by Circular no.18/2011 dated 29th April 2011 has taken “Green Initiative inthe Corporate Governance” by allowing paperless compliances by the Companies throughelectronic mode and introduced e-mail address as one of the modes of sending communicationto the members. Also as per provision of Section 101 of the Companies Act 2013 and rulesmade there under notice of meeting may be sent by electronic mode.

In accordance with the above circulars and to ensure compliance of Green Initiativeyour Company has sent various documents including Notice of the 33rd AGM AuditedFinancial Statements Directors' Report Auditors' Report for the F.Y. 2018-19 etc. to itsshareholders in electronic form at the e-mail addresses provided / registered by membersand made available to us by the Depositories (NSDL/CDSL). The members are advised toupdate by registering changes if any in their e-mail address with the concernedDepository Participant.

Your Company shall also display full text of Notice of 33rd AGM & Annual Report2018-19 at its website www.mtnl.net.in and physical copies of such documents will be madeavailable at the registered office of the Company for inspection by the members duringoffice hours on all working days. Your Company looks forward towards active participationof Shareholders in this “Green Initiative” and request all Shareholders whohave not so far supplied their e-mail addresses to give the same at the earliest.

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) the directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the company at the end of the financial year and ofthe profit or loss of the company for that period;

(c) the directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the company and for preventing and detecting fraud and otherirregularities;

(d) the directors had prepared the annual accounts on a going concern basis and

(e) the directors had laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingefficiently.

(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

The Company had maintained in all respects adequate internal financial controls overfinancial reporting and such internal control over financial reporting were operatingeffectively during the financial year 201819 based on the internal control over financialreporting criteria established by the Company considering the essential components oninternal control stated in the Guidance Note on Audit of Internal Financial Controls overFinancial Reporting issued by the Institute of Chartered Accountants of India (ICAI).Report on the Internal Financial Control under Section 143(3)(1) of the Companies Act2013 for the FY 2018-19 is attached as annexure to the Independent Auditors Report whichis part of the report.

FIXED DEPOSITS

Your Company has not invited/ accepted any fixed deposits under Section 73 of theCompanies Act 2013 read with the Companies (Acceptance of Deposit) Rules 2014 during theyear and as such no amount of principal or interest was outstanding as on the BalanceSheet date on this account.

PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURE

The provisions of Section 197(12) of Companies Act 2013 read with Rule 5 of Companies(Appointment & Remuneration of Managerial Personnel) Rules 2014 are not applicable toyour Company as being a Govt. Company.

BUSINESS RESPONSIBILITY REPORT (BRR)

The Listing Regulations mandate the inclusion of the Business Responsibility Report aspart of the Annual Report for top 500 listed companies based on Market Capitalization.MTNL is voluentarly disclosing Business Responsibility Report (BRR) as part of Annexure tothis report. The BRR maps the sustainability performance of your Company against thereporting framework suggested by SEBI.

STATUTORY AUDITORS

M/s. Kumar Vijay Gupta & 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 (CAG) of India for the Financial Year 2018-19 and theBoard has already ratified their appointment.

COST AUDITORS

M/s R. M. Bansal & Co. Cost Accountants have been appointed as Cost Auditors ofyour company for carrying out audit under Section 148 of the Companies Act 2013 for thecost records as maintained under Section 209(1)(d) of Companies Act1956 and as notifiedunder: (i) Cost Accounting Records (Telecommunications) Rules2002 & (ii) Cost AuditRules2001. The Cost Audit Report alongwith the annexures for the Financial Year 2017-18have been submitted to the Central Government in the Form I-XBRL format on MCA portal on16/10/2018.

SECRETARIAL AUDITORS

Your Company has appointed M/s R. P Sehgal & Associates Practising CompanySecretaries to conduct the Secretarial Audit of the company for the Financial Year2018-19. The Secretarial Audit Report of M/s R. P. Sehgal & Associates and the repliesto their observations are given in as annexure to this report.

AUDITORS QUALIFICATIONS AND MANAGEMENT REPLY THERETO

The replies to the observation of the Statutory Auditors for the Financial Year 2018-19are given as annexure. The Comments of the Comptroller and Auditor General of India (CAG)on the Financial Statements and the replies of the Management thereon are also given inthe annexure to the Directors' Report.

FRAUD REPORTED BY AUDITORS

The Auditors of the Company have not reported any fraud as specified under secondproviso of Section 143(12) of the Companies Act 2013 (including any statutorymodification(s) or re-enactment(s) thereof for the time being enforce).

CRITERIA FOR DETERMINATING QUALIFICATION POSITIVE ATTRIBUTES AND INDEPENDENCE OF ADIRECTOR

(i) Qualification:- The Board of Directors of your Company has formulated criteria forappointment of Whole time Directors in your Company. The selection of Whole time Directorsis done by Public Enterprise Selection Board (PESB) on the basis of such criteria.

(ii) Positive Attribute:- Apart from the duties of Directors as prescribed in theCompanies Act the Directors are expected to demonstrate high standards of ethicalbehavior communication skills and independent judgment. The Directors are also expectedto abide by the respective code of conduct as applicable to them

(iii) Independence:- A Director is considered as independent if he/she meets thecriteria laid down in Section 149(6) of the Act the Rules framed their under andRegulations 16(1)(b) of the Listing Regulations.

INDEPENDENT DIRECTOR DECLARATION

The Independent Directors have submitted a declaration/confirmation that they meet thecriteria of independence as lad down in section 149 (6) of Companies Act 2013 &Regulation 16 (1) (b) of the Listing Regulation and they are not aware of anycircumstances or situation which exist or may be reasonably anticipated that could impairor impact their ability to discharge their duties with an objective independent judgmentand without any external influence pursuant to Regulation 25 of the Listing Regulations.

The following Non-Executive Director are independent as on March 312019: -

1. Shri Ashok Mittal

2. Shri Rakesh Nangia

3. Smt. Suneeta Trivedi

4. Shri Chinmay Basu

5. Smt. G. Padmaja Reddy

6. Shri K. B. Gokulchandran

DIRECTORS & KEY MANAGERIAL PERSONNEL

The Company has a very balanced and diversified Board of Directors with an optimum mixof Executive [represented by CMD Director (HR & EB) Director (Finance) and Director(Technical)] Non-Executive [represented by Government Directors] and IndependentDirectors. List of Present Directors of MTNL as on 14-08-2019 is given in the CorporateGovernance Report. During the period under report the following changes took place in theDirectorship/Key Managerial Personnel (KMP) of Your Company: -

1. Shri Shri Amit Yadav ceased to be Government Nominee Director on 22.10.2018

2. Shri R. K Khandelwal was appointed as Government Nominee Director Vide DoT letterE-5-1/2018- PSA dtd 11.10.2018 and ceased to be Government Director of the company on30.05.2019.

3. Shri Milind Vijay Joshi was appointed as Director (Finance) and KMP on 05.11.2018.

4. Shri Navneet Gupta Jt. Secretary (Admin) Government of India was appointed asGovernment Nominee Director vide DoT letter no. E-5-4/2019-PSA dtd 27.05.2019.

5. Shri P. K. Purwar ceased to be CMD of MTNL w.e.f 15.07.2019.

6. Shri Sunil Kumar Director (HR & EB) has been entrusted with additional charge ofCMD vide DOT letter no. E-2-2/2019-PSA dtd.24.07.2019 w.e.f 24.07.2019.

Pursuant to the provisions of Section 203 of the Act the Key Managerial Personnel(KMP) of your Company as on 31.03.2019 are: -

i) Shri P.K. Purwar CMD (Ceased to be CMD of MTNL w.e.f. 15.07.2019)

ii) Shri Sunil Kumar Director (HR&EB}

iii) Shri Milind Vijay Joshi Director (Finance)

iv) Shri Sanjeev Kumar Director(Tech)

v) Shri S.R. Sayal Company Secretary

Apart from the above no other Director (including Independent Directors) or KMP wereappointed or had retired or resigned during the Financial Year 2018-19. Details of Boardof Directors are given in the Corporate Governance Report.

RETIREMENT OF DIRECTORS BY ROTATION

In accordance with the provisions of Section 152 of the Companies act 2013 read withArticle 66 F of the Articles of Association of the Company. Shri Milind Vijay JoshiDirector (Finance) and Shri Sanjeev Kumar Director (Tech) retire by rotation at theforthcoming Annual General Meeting and being eligible offer themselves for reappointment.Brief particulars of directors seeking re-appointment together with

their directorships in other companies and committee memberships have been given in theannexure to the Notice of Annual General Meeting in pursuance to Regulation 36(3) of SEBI(LODR) Regulations 2015 and Secretarial Standards 2 issued by ICSI.

COMMITTEES OF THE BOARD

The Company has five Board Committees as on 31.03.2019:1. Audit Committees.

2. Nomination & Remuneration Committees.

3. Stakeholder Relationship Committee.

4. Risk Management Committee

5. Corporate Social Responsibility Committee

Details of all the Committees along with their main terms composition and meeting heldduring the year under review are provided in the report on Corporate Governance a part ofthis annual report.

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 workand dedicated services rendered by every employee of the company. The Board is confidentthat with the employees' continued enthusiasm initiative and dedicated efforts yourcompany could face the new challenges and opportunities arising out of the resultantcompetition from private operators in the Cellular Mobile Basic Telephone Internetservices and other Value Added services.

For and on behalf of the Board of Directors
Sd/-
PLACE: NEW DELHI (Shri Sunil Kumar)
DATE: 14/08/2019 CMD & Director (HR & EB)