The Shareholders of Mahanagar Telephone Nigam Limited
Your Directors present the 32nd 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 31st 2018.
PERFORMANCE REVIEW OF MTNL FOR THE FY 2017-18
A. Mobile Network:
MTNL has undertaken the task of improving the Wireless Network in Delhi and Mumbai soas to improve the downlink speed of 21.1 Mbps & uplink speed of 5.76 Mbps which ispresently of 3.6 Mbps & 384 Kbps respectively with following major projects:
I. Expansion of GSM / 3G RF network by adding 1080 nos. of 3G sites & 800 nos. ofhybrid microwave to meet the backhaul capacity and Data handling capacity to 10 Gbps andUpgradation / replacement of existing 3G network (720 Node-Bs) and 754 nos. of existing8Mbps Microwave Hops to 400 Mbps capacity in MTNL Delhi:
Project implementation kicked off in 2017 with following current status:
While 730 new Node-Bs have been put on air 470 sites have been upgraded in the year2017-18.
451 new microwave hops were commissioned while 518 Hybrd Microwave have been upgraded/redeployed in Delhi in 2017-18.
160 Node-Bs have been shifted to Optical Fiber backhaul.
II. 3G Network Up-gradation of existing 3G network (720 Node-Bs) and 497 nos. ofexisting 8Mbps Microwave Hops to 400 Mbps in Mumbai:
Project implementation kicked off in 2017 with following current status:
695 Node B's have already been upgraded for 21Mbps speed.
B. Redeployment of DSLAMs of existing Broadband Network near to the subscriber premisesin Delhi and Mumbai thereby reducing copper length and enhancing the quality of broadbandservice. A total of 220 DSLAMs have been redeployed in Delhi and 174 in Mumbai. In theyear 2017-18 47 DSLAMs in Delhi and 23 in Mumbai have been redeployed thereby reducingcopper length and enhancing the quality of Broadband service. This has improved customerexperience and reduced the number of complaints.
C. This year MTNL finalized and made operational its new policy to engage partners onrevenue share basis to extend its FTTx services. 20 Partners in Mumbai and 14 partnersin Delhi have already started to provide BB over FTTH at speeds upto 100 Mbps.
D. Initiatives for Additional revenue:
Millennium Telecom Limited (MTL) - a subsidiary of MTNL has signed a joint venturewith New
Delhi Municipal Council Smart City Limited a public limited company wholly owned byNDMC
- to develop telecom access networks in NDMC areas to provide FTTH (Fibre to the Home)to the residents.
MTNL has signed an MoU with NDMCSCL on 18.08.2017 with the objective to providevarious services like FTTH Public Wi-Fi for making NDMC area as a SMART City. The projectinvolves around 2000 FTTH connections in CP area and approx.150 public Wi-Fi Networkcomprising Core Network and Access Points for Wi-Fi enabling of CP. The estimated cost ofthis project is around 8 Crore. All Investments are to be done by NDMCSCL and the assetswill belong to NDMCSCL. MTNL will ensure SLA and all licensing and Regulatory requirementsfor the services
E. Steps taken in Customer centric Strategies to make MTNL a profitable venture:
Tariff of Wireless services has been rationalized significantly in view of the cutthroat competition.
MTNL now offers three times more data in the same price.
To give boost to customer experience Download Speed of Broadband subscribers is beingupgraded to 8 Mbps progressively without any additional cost depending upon feasibilityand line parameters.
Tariff re-balancing of Broadband service has been done for giving more competitive andattractive tariff package to the customers.
Training is being given to line staff to improve maintenance and installationpractices.
Refurbishing of 20% Pillars and DPs every year is planned in phased manner. 1113Pillar and 4697 DP in Delhi & 1677 Pillar and 3563 DPs in Mumbai have beenrefurbished by MTNL this year.
To improve copper pair quality 81492 mtr existing Drop wires have been replaced withtwisted drop wires or thermo sleeves have been put at open joints at DPs by MTNL thisyear.
Proactive Monitoring of Broadband Faults through Radius attempt.
MTNL displayed an exemplary spirit of Collective efforts when its staff attended morethan 25000 Broadband subscribers affected by Malware recently and resolved the complaintswithin Four (4) Days including
Saturday and Sunday.
FINANCIAL RESULTS FOR THE F.Y. 2017-18
The Standalone and Consolidated Financial highlights of your company for the FinancialYear ended March
31st 2018 are summarized as follows:
Sources and Application of funds for the FY 2017-18 are given below:-
| || || |
(IN CRORES Rs)
| ||Standalone ||Consolidated (MTNL its Subsidiaries JV & Associates) |
| ||2017-18 ||2016-17 ||2017-18 ||2016-17 |
|Income from Operations ||2371.91 ||2869.68 ||2471.86 ||2969.37 |
|Expenditures (Excluding Finance Cost) ||4584.38 ||5049.44 ||4682.72 ||5146.47 |
|Operating Profit/(Loss) ||(2212.47) ||(2179.76) ||(2210.86) ||(2177.10) |
|Other Income ||744.51 ||682.78 ||745.34 ||685.32 |
|Finance Cost ||1505.49 ||1448.47 ||1505.49 ||1448.47 |
|Profit/(Loss) before Tax ||(2973.45) ||(2945.45) ||(2971.01) ||(2940.25) |
|Exceptional Items ||- ||- ||- ||- |
|Share of profit/(loss)in investments accounted for using equity methods ||- ||- ||0.57 ||0.69 |
|Tax Provision for the Year ||- ||(4.38) ||0.90 ||(3.51) |
|Profit/ (Loss) for the Year from || || || || |
| ||(2973.45) ||(2941.07) ||(2971.33) ||(2936.05) |
|Continuing Operations || || || || |
|Profit/ (Loss) for the Year from Discontinuing Operations ||0.42 ||- ||0.42 ||- |
|Profit/ (Loss) for the Year ||(2973.03) ||(2941.07) ||(2970.91) ||(2936.05) |
|Other Comprehensive Income ||2.38 ||(29.49) ||12.78 ||(32.83) |
|Total Comprehensive Income for the Year ||(2970.65) ||(2970.56) ||(2958.14) ||(2968.88) |
|Appropriation || || || || |
|Interim/ Proposed Final Dividend ||- ||- ||- ||- |
|Dividend Tax ||- ||- ||- ||- |
|Transfer to/ (from): || || || || |
|a) Contingency 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 |
|Other Equity ||(6967.35) ||(3996.70) ||(6962.01) ||(4003.85) |
|Non-Current and Current Borrowings ||17014.79 ||15196.55 ||17014.79 ||15196.55 |
|Deferred Tax Liability (Net) ||- ||- ||5.71 ||4.60 |
|REPRESENTED BY || || || || |
|Property Plant and Equipment (Net Block) ||4575.15 ||4808.32 ||4687.53 ||4928.12 |
|Capital Work in progress ||330.98 ||291.34 ||330.98 ||291.34 |
|Investment Property ||25.57 ||46.52 ||35.36 ||53.68 |
|Intangible Asset (Net Block) ||3439.27 ||3776.69 ||3440.71 ||3777.69 |
|Investment ||106.13 ||141.98 ||4.37 ||3.81 |
|Other Assets ||7772.56 ||8598.11 ||7792.25 ||8638.63 |
|Other Liabilities ||5572.23 ||5833.11 ||5602.70 ||5865.97 |
INFORMATION REGARDING ISSUE OF BONDS BY MTNL DURING FINANCIAL YEAR 2017-18.
The Company has not issued any debenture/ bonds during Financial Year 2017-18.
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.
SUBSIDIARY AND JOINT VENTURE COMPANIES
As on 31st March 2018 your company has two subsidiaries and one Joint Venture and oneAssociate company. There has been no material change in the nature of the business of theSubsidiaries. Pursuant to the provisions of
Section 129 (3) of the Act a statement containing salient features of the FinancialStatements of the Company's
Subsidiaries in Form AOC-1 is attached to the Financial Statements of the Company andpublished in this report. Further pursuant to the provisions of Section 136 of the Actthe Financial Statements of the Company Consolidated Financial Statements along withrelevant documents and separate Audited Accounts in respect of Subsidiaries have beenpublished with this report and the same are also available on the website of the Company.
The other details of Subsidiaries and Joint Venture Companies are briefly given asunder:-
(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.'18 has grown to 307819 resulting in a market share of around 20%. MTML isoffering 2G/3G services in all over island and 4G at selected areas. First phase of 4Gexpansion has been completed by June'17 as targeted by which now 80% of the island iscovered by our 4G network. MTML has earned a gross revenue of approx INR 965 Millionduring the financial year 2017-18 as against INR 971 Million in the corresponding periodof last fiscal year. In terms of MUR there is a slight fall in revenue due to change incustomer usage pattern with majority of customers using data for ILD calls as well aslocal calls and using chat applications instead of SMS etc. intense competition andsaturated market. However the company could post its net profit to INR 37.32 Million withprecise management of available resources.
During the Financial Year 2017-18 MTML had total Turnover amounting to MUR495951228/- as against MUR 521054488/- in FY 2016-17. During the Financial Year2017-18 MTML has earned Profit amounting to MUR 19860562/- as against MUR 21535007/-in FY 2016-17. During 2017-18 MTML has deployed UMTS-900 and augmented its 4G Network.MTML has built up a network over diversified technology with CDMA and GSM having 2G 3G(UMTS -900 & 2100) along with 4G on a transmission backbone over Digital Microwavewith dual ring topology. MTML made inroads in Enterprise Business solutions as well andcould get a few dozen Enterprise customers in the year. MTML has also started retailmarketing of popular Mobile phone brands such as Apple Samsung Huawei Nokia etc. afterentering into agreements with main distributers of these brands at Mauritius. In thisfinancial year the Company could generate revenue of approx. INR 10 million from thissegment.
MTML is well established in Mauritius due to its innovative tariff structure and on themerit of its state of art technical offerings. The Company is always exploring newbusiness possibilities and is looking to consolidate its position in the market on thebasis of a strong 4G network. MTML has been conferred with Mauritius Best Employer BrandAward 2017 in the 12th Employer Branding Awards function of World HRD Congress held inMauritius on 5th December 2017.
All the expenses of the company are paid from its own internal resources. The CAPEX forprocurement of equipment's is totally met from its own internal resources. There is nodebt 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 got "Excellent" MoU rating for the outstanding performance in 2016-17.
Services being offered by MTL include Telecom consultancy & engineering ProjectManagement Wi-Fi solution project on e-governance Managed services Turnkey ICTsolution GIS based services capacity building and skill development etc.
Millennium Telecom Ltd (MTL) is also moving ahead with a very high growth rate. In2014-15 the company turned into profit making company by System Integration and other ICTrelated business at pan India level. Since 2014-15 the company has been making profitcontinuously. During the year under report i.e. 2017-18 the company has earned a revenueof Rs67577399/- as against Rs 48213943/- last year. MTL earned a net profit of Rs52.58 lacs for the period ending 31st March 2018. MTL is in the process of winning overmore orders in the upcoming 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 etc. MTL is also expanding its portfolio of services forproviding generalized as well customized solutions to suit Government and Semi Governmentinstitutions.
MTL has empanelled various Business Development Associates (BDAs) for 10 years throughOpen Tender.
These BDAs are very competent and have good experience in various components of Govt ofIndia schemes like Smart City Digital India and Skill India. MTL has reopened the windowfor Empanelment of Business Development Associates in MTL through open ended EOI.
Many new projects are in pipeline like GIS survey of Electric poles in UttarakhandDigitalization of Birth / Death certificate North Delhi Municipal Corporation NetworkingProject in UJVNL video surveillance of temples in Gujarat. MTL is also in the process ofstarting various services for which the card rates are being developed. Such services aresmart solutions for smart city implementation security as a services video surveillanceas a services etc.
(III) 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 50Crores.
In order to implement one of its objectives MSITSL has established the physicalinfrastructure of Tier III Data Center at Chennai on space taken on lease basis from STPI.The Data Center has server farm area of around 3500 sq. ft. and the total investment madein this regard is of Rs477 lakhs. This Tier III Data Center is maintaining 99.98% uptimeon 24X7. The commercial operation of the Data Center commenced in 2009. The Ministry ofExternal Affairs (MEA) has hosted Passport Seva Project at MSITSL Data Center through M/sTCS. The Directorate General of
Employment & Training (DGE&T) in Ministry of Labour& Employment has hostedNational Career Project through STPI at MSITSL Data Centre. IT/TES companies have alsoco-located servers and networking equipments. The revenue of the company has beenincreasing year after year from the date of its commercialisation in 2009. In the currentyear the revenue over the last year has registered an increase of 1.63% from Rs49367592/- to Rs50174822/-.
(iv)United Telecommunications Ltd. (UTL)
UTL is an associate of MTNL which consists of TCL TCIL NVPL (Nepal) & MTNL andwas set up in October 2001. The company provides Mobile/ILD/data services in Nepal. Atpresent MTNL is holding 26.68% of Equity in UTL. The company has not been performing wellfor the last few years. It has huge losses. The Customer base has also reduced. It is notpaying the statutory dues like Royalty BTS site charges and other dues to the Govt. ofNepal. The company does not have resources to clear outstandings. They have sought Equityparticipation by its JV partners but MTNL TCIL & TCL all the Indian JV partners havedecided not to contribute any amount towards its Share Capital or Loan. All the Indian JVPartners have decided to exit from the JV and have exercised their Right to exit onJanuary 30 2018. Notice of exit (Sale of our share in JV company) has been given and itis required to be accepted within 3 months i.e on or before 30.04.2018. The UTL has notmade any payment for its value of shares so far. UTL has already applied to the NepalGovt. the requisite Govt. approvals for accepting the Exit option and remitting the valueof shares to Indian JV Partners.
Latest Status on United Telecom Limited.
UTL has not yet received the requisite Government approvals as per Nepalese Laws. MTNLhas not received any payment against the sale of shares so far and MTNL's holding stillcontinues at the existing shareholding pattern.
UTL had submitted an application to Department of Industries (DOI) Government of Nepal(GoN) for approval of increase of authorized share capital upto NRs. 600 Crores
After completion of all due process DOI recommended case of UTL to Industry andInvestment Promotion Board (IIPB) GoN for approval.
However approval for increase of share capital of UTL was not granted citing variousissues such as pending royalty dues pending interconnection dues with Nepal Telecom notallowing UTL to enter into any sale purchase agreement for 3 years etc.
DETAILS OF SYSTEM STATUS FOR THE FINANCIAL YEAR 2017-18 (AS ON 31st MARCH 2018)
Your Company has the following equipped and used capacity of Landline GSM Broadbandetc. as on 31st
|S. No ||Parameters ||MTNL Delhi ||MTNL Mumbai ||Total |
|1 ||Number of Switches ||355 ||264 ||619 |
|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) ||4345019 ||3541900 ||7886919 |
|3a ||Fixed Line ||1538377 ||1808191 ||3346568 |
|3b ||GSM ||2279634 ||1277426 ||3557060 |
|3c ||Broadband Subscribers ||527008 ||456283 ||983291 |
|4 ||FTTH Subscribers ||6685 ||5279 ||11964 |
|5 ||ISDN ||7608 ||11731 ||19339 |
|6 ||DLC (No.) ||425 ||116 ||541 |
|7 ||Tax Capacity ||150000 ||115200 ||265200 |
|8 ||Tandem Capacity ||402500 ||331240 ||733740 |
|9 ||Optical Fibre Cable ||- ||- ||- |
|9a ||OFC in Route Kms ||8655.998 ||8426.145 ||17082.143 |
|9b ||OFC in Fibre Kms ||280585.378 ||272108.028 ||552693.406 |
|10 ||Leased Circuits ||12590 ||19534 ||32124 |
HUMAN RESOURCE DEVELOPMENT
Your Company attaches the highest priority to the quality of intellectual capital atits disposal and believes that knowledge and skills 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 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.
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 centersat Delhi and 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 and inservice training to the executives and non executives of MTNL Delhi in the field ofTelecom IT Computer system and Management. With impressive growth of Telecom sector inIndia the requirement of telecom trained personnel is growing day by day. Realizing thisever growing demand for telecom personnel ITTM started industrial training forengineering students during summer and winter sessions since 2011. ITTM also conductscorporate training as per requirement of the organization in the field of telecom andmanagement. During the year 2017-18 some of the achievements of ITTM in the field oftraining are as given below.
ITTM imparted training to 694 executives (2888 Man days) and 1170 non executives(7409 Man days) in different courses.
ITTM imparted industrial training of various durations for 309 engineeringstudents earned a revenue of Rs 2811806/-
Industrial visit of 278 students from different engineering colleges was conducted atITTM.
ITTM imparted corporate training to TCIL employees and earned a revenue of Rs53475/-
ITTM imparted pre exam training for 296 candidates for TTA LDCE (LimitedDepartmental Competitive Exam) and 33 for JAO (screening) LDCE. Also conducted pre examtraining for JAO (Mains).
ITTM conducted LDCE exam for the post of TTAs JAO Mains and JAO Screeningsuccessfully.
Total 169 trainees (both executives and non executives) were imparted door steptraining on FTTH in all the seven areas of MTNL Delhi.
ITTM conducted visit of 670 students from different schools to their nearestMTNL exchanges under NSQF scheme.
Special batch of industrial training exclusively for Diploma students started at ITTMwith reduced charges.
One day Workshop on GST was conducted at ITTM.
ITTM has necessary infrastructure technical and academic competence for providingtraining in the field of GSM Broadband Technology Switching Transmission ExternalPlant IT Computer System Management and wellness programs. To upgrade the traininginfrastructure one eight port FTTH OLT has been installed in Transmission and FTTH Lab atITTM.
(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 of training isincreasing tremendously with each passing day. CETTM's achievements during financial year2017-18 are as follows.
CETTM successfully trained 3200 in-house personnel and 2833 external personnel with anachievement of 28085 Trainee days. Total of 245 Programs were conducted.
105 Students were trained through various certificate courses under Corporate SocialResponsibility (CSR) while 34 students took part in one/two/six months Project Trainingworks. Total 2151 number of Engineering College Students from 27 different Colleges tookpart in "Industrial Visit Programme" during 2017-18.
43 senior officers from 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 successfullycompleted 16 programs. Total 310 delegates from 61 different countries participated thisFY.
CETTM conducted 10 weeks Induction Training Programme for 14 newly recruited JTOs inMTNL.
CETTM conducted Induction training of 148 candidates for TTA promotion of 8 weeksduration as well as Telecom Mechanic Induction Course for 10 candidates of 8 weeksduration.
CETTM has conducted various short duration Technical as well as Management relatedcourses for
MTNL employees on need basis to improve MTNL services
New short duration courses introduced on FTTH Broadband OF Splicing etc.
61 Students of Symbiosis Institute of Telecom Management (SITM) were trained under 4days Industrial
44 Polytechnic faculties from Maharashtra State Board of Technical Education (MSBTE)were trained for 3 days training Course on Information Security & Next generationtransport Technology.
Workshops & Events organized in FY 2017-18:
CETTM organized workshop on Energy Conservation and Saving techniques' by ShriJitendra Kumar Rathour expert in Energy Conservation & Mgmt on 29 April 2017.
CETTM celebrated World Telecommunications & Information Society Day' byconducting one day workshop on Big Data Technology' by Dr Vinay Kulkarni from IITMumbai on 17th May 2017.
CETTM organized tree plantation drive to celebrate World Environment Day' on 5thJune 2017.
Yoga sessions & talk by Yoga Prabha Bharti seva Trust were conducted for MTNLemployees to celebrate International Yoga Day' at CETTM on 21st June 2017.
MTNL in association with Mumbai Police Nutan Savera and Jalota Welfare organizedSeminar on self defense' for women employees of on 4th July 2017.
A special Interactive session was addressed by Shri P K Purwar CMD MTNL for newlyinducted Assistant Managers on 9th August 2017.
Hindi Diwas was celebrated at CETTM in association with Business Standard (Hindi) byrunning quiz contests for CETTM employees.
One day Seminar of "Latest Trends in Telecom Sector' was organized on 15thNovember 2017. Shri
P K Purwar CMD MTNL was chief guest at the event which was attended by all the seniorofficers of MTNL.
One day workshop on Redesigning Life and Power of Vision Commitment & Gratitudeby Mrs Anjala
Verma and Mr Lokesh Nathany on 24th March 2018.
Business Development at CETTM in FY 2017-18:
Total revenue achieved for the FY 2017-18 was Rs25.2 cr with an increase of 28.3%compared to Rs19.64 cr revenue in FY 2016-17.
CETTM continues to be the first choice for conducting training courses workshopsseminar etc. by our esteemed clients. Top clients include LIC BPCL NPCIL Department ofSales Tax KEC IIT Mumbai Grey Atom Wipro National School of Drama etc.
CETTM has leased 100 hostel rooms to Maharashtra National Law University this financialyear.
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.
(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 Delhi (ITTM). Both of the training centers are engaged to meet the requirementof skill development and giving summer trainings to students of BE/ B.Tech. Short Term
(One Day/ Two days) training programs for outsiders including students housewives& others are also being conducted. To achieve the aim of skill development programmeMTNL has signed MoU with Telecom Sector Skill Council & Global Institute of SkillDevelopment. MTNL has also signed MoU with Gramin Vikas
Trust (GVT) to run a training cum skilling center for promotion of entrepreneurship forthe period of Five years. Under skill development programme MTNL has trained 3945 traineesin FY 2017-18. MTNL is also in process of conducting Recognition of Prior Learningcertification for all eligible MTNL employees.
Industrial peace and Industrial harmony is based on healthy Employee-Employer Relationsand like the previous years Employees Relations remained Cordial throughout the yearunder report. The Grievances/ Issues raised by the employees/Union/Associations were givendue attention and regard. The cases/ issues brought up by them were settled throughregular meetings and interactions between Management and Unions/Associations and action asmutually agreed was taken to settle them.
JNC meeting was held on 28.03.2018 for addressing various demands of MTNL employees andofficers wherein neutralization of IDA and implementation of 3rd PRC with 15% fitment hasbeen decided. The matter was submitted to the DOT after the approval of MTNL Board forconsideration. Thereafter the DOT has vide letter dated 22.06.2018 has accorded itsapproval for benefit of merger of IDA @73.8% for the purpose of fitment in respect ofBoard level below Board level Executives Non- Executives Non- Unionized supervisors
(all employees) of MTNL w.e.f. 01.01.2007 on notional basis and actual payment from01.01.2018.
Employees Welfare Schemes like subsidized Canteen Housing Medical facilities GroupInsurance dormitories for females working in night shift etc. continued and maintainedby the Company for its employees. Sports and Cultural activities were also given priorityduring the year.
Changeover of Contributory Group Health Insurance Scheme for retirees to CGHS- Afterpursuance of MTNL with DoT Ministry of Health issued instructions to CGHS for enrolmentof MTNL retirees (drawing
Govt. Pension) in the CGHS. To facilitate the same an incentive is being provided tothe concerned retirees.
As on date approximately 6030 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 & PH COMMUNITY
Your Company has endeavoured to fulfill all the statutory requirements with regard toimplementation of reservation policy for candidates to SC/ ST/ OBC communities as well asPhysically Challenged candidates
IMPLEMENTATION OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITITION& 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) Act 2013.
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.
As on 31st March 2018 your company had a working strength of employees as per detailsgiven below:-
|Group ||Total Working ||SC ||ST |
|A ||850 ||152 ||53 |
|B ||2711 ||400 ||71 |
|C ||14839 ||2336 ||256 |
|D ||6783 ||1676 ||518 |
|Total ||25183 ||4564 ||898 |
|TSM ||8 ||- ||- |
|Grand Total ||25191 ||4564 ||898 |
The Board of Directors of MTNL has approved to induct 100 officers at E-2 level in thestream of Telecom Finance Electrical Civil
HR and Sales & Mktg.
39 officers in the stream of JTO (Electrical/Civil/Telecom) at
E-2 level have joined MTNL.
The recruitment of non-technical posts viz AM (Finance/Mktg/HR) as detailed below isunder process.
(i) Finance- 22 (ii) HR- 06
(iii) Sales & Marketing 15
CORPORATE SOCIAL RESPONSIBILITY (CSR)
The Company has been suffering losses for the last few years and hence no CSR funds hasbeen allocated/ spent for CSR activities during the Financial Year. The provisions ofSection 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 .
The Vigilance organization of MTNL is headed by Chief Vigilance Officer. At presentShri Deepak Kashyap CVO BSNL is in additional charge of CVO MTNL. The CVO isresponsible for complete vigilance administration in MTNL.
During the FY 2017-18 emphasis was laid on preventive vigilance and to enhance theawareness of transparency and accountability in working by carrying out various fieldinspections. Advices for systemic improvement were issued by Vigilance Unit forreconciliation of Sanchaar Haat products store verification proper maintenance ofbroadband faults BTS sites etc. CTE type inspections were also carried out as per CVCguidelines.
Further training programme/ 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 from 30/10/2017 to 04/11/2017. During this week variousactivities like integrity pledge taking release of information booklet on the Vigilance& Disciplinary matters with a focus on "My Vision Corruption Free India"Preventive Vigilance and other general conduct (Do's & Dont's) among the employees ofMTNL was distributed. Also various programmes such as seminars workshops debates as wellas Quiz competitions were also organized during Vigilance Awareness Week. MTNL Board wasregularly apprised of the progress of Disciplinary cases for review through quarterlyreports. Review of vigilance work/matters by CMD with CVO was also submitted quarterly.CVO reviews the status of investigations / Disciplinary cases in meetings held with GM(Vigilance) Mumbai/Delhi. Central Vigilance Commission (CVC) had decided to create anintegrity index through IIM Ahmedabad for public sector organizations which would bebased on bench marking of governance processes by internal and external stakeholders .MTNL was one of 25 PSUs chosen to carry out the exercise of computing the Integrity index.Timely inputs to questionnaire for the exercise were furnished to IIM Ahmedabad and CVC incoordination with units concerned in MTNL. The exercise has since been completed by MTNLvigilance deptt.
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 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.
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 inflow was Rs2.80 Crore andoutflow was Rs 3.35 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 whichforms part of this Report.
MEETINGS OF THE BOARD OF DIRECTORS
During the year under report the Board of Directors of your Company met Six times i.e.during the Financial
Year 2017-18 6 (Six) Board Meetings were held. The intervening gap between any twomeetings was within the period prescribed by the Companies Act 2013. Details of BoardMeetings are given in Corporate Governance Report which forms part of this Report. Atthese 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 Telephony and other value added services.
DECLARATION OF INDEPENDENCE BY INDEPENDENT DIRECTORS FOR THE FINANCIAL YEAR 2017-18
Pursuant to the provisions Section 149(7) of The Companies Act 2013 the Company hasreceived necessary declaration from all the Independent Directors i.e. Shri Rakesh NangiaShri Ashok Mittal Shri Chinmay Basu Shri K.B. Gokulchandran Smt. G. Padmaja Reddy andSmt. Suneeta Trivedi that they meet the criteria of Independence laid down in the Section149(6) of the Companies Act 2013 and Regulation 25 of SEBI (LODR) 2015.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
During the period under review the Company has 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 PartyTransactions were in ordinary course of Business and were negotiated at an Arm's Lengthbasis and they were intended to further the company's interest. Accordingly thedisclosure of Related Party Transactions as required under Section 134(3)(h) of CompaniesAct 2013 in Form AOC-2 is not applicable. Web link for Policy on Materiality of RelatedParty Transactions and also on dealing with Related Party Transactions has been providedin the Report 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.
Your Company follows the principles of effective Corporate Governance Practices. TheCompany has taken steps to comply with the requirements of SEBI (LODR) Regulation 2015which came into effect from 01.12.2015. Your Company has also complied with the CorporateGovernance Guidelines enunciated by Department of Public Enterprises (DPE) Government ofIndia for Central Public Sector Enterprises (CPSEs). MTNL is filing its reportsstatements documents in this regard with the NSE BSE & OTCIQ on quarterly basis. AReport on Corporate Governance has been appended under the separate section titledCorporate Governance Report.
COMPLIANCE OF CONDITIONS OF CORPORATE GOVERNANCE - CERTIFICATE FROM THE PRACTISINGCOMPANY SECRETARY REGARDING
A certificate from M/s V.K. Sharma & Co. Practicing Company Secretary regardingcompliance of conditions of Corporate Governance as stipulated under Schedule V (E) ofSEBI (LODR) 2015 and DPE Guidelines is attached 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.
IMPLEMENTATION ON 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 theabove circulars and to ensure compliance of Green Initiative your Company has sentvarious documents including Notice of the 32nd AGM Audited Financial StatementsDirectors' Report
Auditors' Report for the F.Y. 2017-18 etc. to its shareholders in electronic form atthe e-mail addresses provided / registered by members and made available to us by theDepositories (NSDL/CDSL). The members are advised to update by registering changes ifany in their e-mail address with the concerned Depository Participant.
Your Company shall also display full text of Notice of 32nd AGM & Annual Report2017-18 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 participation of Shareholders in this"Green Initiative" and request all Shareholders who have not so far suppliedtheir 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 2017- 18 based on the internal control overfinancial reporting criteria established by the Company considering the essentialcomponents on internal control stated in the Guidance Note on Audit of Internal FinancialControls over Financial Reporting issued by the Institute of Chartered Accountants ofIndia.
Your Company has not invited/ accepted any fixed deposits and as such no amount ofprincipal or interest was outstanding as on the Balance Sheet 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
SECRETARIAL AUDIT REPORT FOR THE FINANCIAL YEAR 2017-18
M/s Hemant Kumar Singh & Associates Company Secretaries have conducted theSecretarial Audit of your company for the Financial Year 2017-18 under Section 204 of theCompanies Act 2013. The said Secretarial
Audit Report and the replies to the observations of the Secretarial Auditors are givenin as annexure.
AUDITORS QUALIFICATIONS AND MANAGEMENT REPLY THERETO
The replies to the observation of the Statutory Auditors for the Financial Year 2017-18are 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 given in theannexure to the Directors' Report.
DIRECTORS & KEY MANAGERIAL PERSONNEL
The Board of Directors of your company has eleven (11) members three FunctionalDirectors (including CMD) two Government Nominee Directors and six Independent Directors.List of present Directors of MTNL as on 19.07.2018 is given in the Corporate GovernanceReport.
During the period under report the following changes took place in theDirectorship/Key Managerial Personnel of Your Company:-
1. Shri Chinmay Basu has been appointed as Independent Director w.e.f. 26.10.2017.
2. Shri K.B. Gokulachandran has been appointed as Independent Director w.e.f.26.10.2017.
3. Smt. G. Padmaja Reddy has been appointed as Independent Director w.e.f. 26.10.2017.
4. Smt. Suneeta Trivedi has been appointed as Independent Director w.e.f. 26.10.2017.
Pursuant to the provisions of Section 203 of the Act the Key Managerial Personnel ofyour Company are:-i) Shri P.K. Purwar CMD & Director (Fin) ii) Shri Sunil KumarDirector (HR&EB) iii) Shri Sanjeev Kumar Director (Tech) iv) Shri S.R. Sayal CompanySecretary
The details pertaining to composition of Audit Committee are included in the CorporateGovernance Report which forms part of this Report.
(1) M/s. Kumar Vijay Gupta & Co. Chartered Accountants and M/s Mehra Goel &Co Chartered
Accountants have been appointed as Joint Statutory Auditors of your Company by theComptroller and Auditor General of India for the Financial Year 2017-18 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 cost records 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 2016-17have been submitted to the Central Government in the Form I-XBRL format on MCA portal on24/10/2017.
(3) M/s Hemant Kumar Singh & Associates Company Secretaries have been appointed asSecretarial
Auditors of your company for carrying out Secretarial Audit under Section 204 of theCompanies Act 2013 for the Financial Year 2017-18.
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 anddedicated services rendered by every employee of the company. The Board is confident thatwith the employees' continued enthusiasm initiative and dedicated efforts your companycould face the new challenges and opportunities arising out of the resultant competitionfrom private operators in the Cellular Mobile Basic Telephone Internet services andother Value Added services.
| ||For and on behalf of the Board of Directors |
| ||Sd/- |
|PLACE: NEW DELHI ||(Shri P.K. PURWAR) |
|DATE: 14th August 2018 ||CMD & DIRECTOR (FINANCE) |