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Mahanagar Telephone Nigam Ltd.

BSE: 500108 Sector: Telecom
NSE: MTNL ISIN Code: INE153A01019
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OPEN 23.80
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VOLUME 239313
52-Week high 40.85
52-Week low 16.70
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Mkt Cap.(Rs cr) 1,496
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Mahanagar Telephone Nigam Ltd. (MTNL) - Director Report

Company director report

<dhhead>DIRECTOR'S REPORT</dhhead>

To

THE SHAREHOLDERS

Mahanagar Telephone Nigam Limited

Dear Shareholders

Your Directors present the 36th Annual Report of yourCompany together with the Financial Statements and the Report of the Auditors as well ascomments of Comptroller & Auditor General of India (CAG) on the Financial Statementsfor the Financial Year ended on March 31 2022.

PERFORMANCE REVIEW OF MTNL FOR THE FY 2021-22

1. Mobile Network:

a. Handing over of O&M of MTNL Mobile Services to BSNL: TheOperation and Maintenance of MTNL Delhi Mobile service has been handed over to BSNL w.e.f.01.04.2021 as per instructions from DoT. MTNL Mumbai Mobile service has been handed overto BSNL w.e.f. 01.09.2021.

b. Launching of 4G Services in Delhi and Mumbai: DoT vide Officememorandum No.30- 40/2019-PSU affairs dated 29th Oct 2019 had informed that GoIin its cabinet meeting held on 23-10-2019 has approved the proposal of administrativeallotment of spectrum for 4G services to BSNL and MTNL among other things so as to enablethese PSUs to provide broadband and other data services. In a modification to thisdecision the Group of Ministers (GoM) constituted on the matter of "Revival of BSNLand MTNL" approved allocation of 4G spectrum to BSNL in Delhi and Mumbai in place ofMTNL in its meeting held on dated 21.12.2020. MTNL had shared its Schedule of requirements(SoR) with BSNL. The tender of 4G has been floated by BSNL.

c. SPAM Filtering solution: MTNL SMS SPAM filtering solution migratedto BSNL West Zone (Pune). Currently Spam filtering solution is being run through BSNL WestZone (Pune) SPAM Filter.

d. EIR Integration with BSNL Pune: MTNL EIR integrated with BSNL EIRinstalled at Pune.

2. Wireline Network:

 

a. Up-gradation of the MPLS Network: MTNL is planning to upgradethe entire MPLS network along with the security solution as per TEC GR to handle thegrowing traffic needs of FTTH and 4G networks. The MTNL MPLS expansion plan includes 6Core routers 78 Edge routers and 150 L-3 Switches. In a recent decision of managementthe requirement of MTNL's MPLS network is to be procured as a part of the BSNL tender. Thetender for the same has been floated by the BSNL.

 

b. FTTH Revenue share Policy: MTNL had worked out finalized andmade operational the policy to engage partners on a revenue share basis to extend its FTTxservices. The policy has been significantly liberalized by relaxing entry level barriersand removing clauses regarding turnover eligibility criteria rollout obligations andPerformance Bank Guarantee. Significant upward revision to the tune of 45% has also beencarried out for the revenue share of the partner. In the post-VRS scenario challengeswere observed in the O&M of the MTNL own FTTH connections due to lack of field staff.Accordingly policy was amended to allow partners for maintenance of MTNL owned FTTHconnections at 10% revenue share and one time provisioning charges of Rs 1500.

 

c. FTTH Rollout Plan: A tender dated 22.01.2021 was floated forProcurement of GPON based FTTH equipment in Delhi & Mumbai wherein there was provisionfor 494 No’s of GPON OLT & 21746 No’s of GPON ONT. An Advance Purchase Order(APO) in this regard has already been awarded. To cater the requirement of OLTs of MTNLand its partners there shall be a need to augment the OFC network by laying 1050 Km OFCable in each city which will be laid progressively as per deployment plan andavailability of funds with MTNL.

 

3. Synergy/Integration of Networks between MTNL & BSNL: Inorder to reduce the CAPEX and

OPEX several Synergy/Integration items have also been identified andshared with BSNL to

bring out the best possible technical solutions as given below:

i. Utilization of MNPGW of BSNL for MTNL Delhi & Mumbai:MTNL MNPGW Migration PO to BSNL MNPGW has been placed by WS Delhi unit on 12th Nov 2021.Migration to BSNL North Zone MNPGW Chandigarh has been successfully completed on 6th march2022. LRN dipping query for call and SMS have also been migrated to BSNL SSTP/DB.

ii. Mobile Service Billing: BSNL has placed a PO for WS billingwherein requirement of MTNL WS billing would also be catered.

iii. Sharing of NMS for MLLN: BSNL uses an upgraded NMS withlatest servers and application version for managing MLLN network. MLLN network in BSNL andMTNL are of same OEM i.e. M/s Infinera (earlier M/s Tellabs). Sharing of NMS will lead tosubstantial saving of up-gradation cost. BSNL has placed a PO for migration andintegration of MTNL MLLN network with BSNL.

iv. Migration of MTNL landline subscribers on BSNL IMS core throughdiversion of spare LMGs from BSNL: MTNL had successfully conducted the testing ofvoice and data with BSNL NGN (0.5K LMG) in Delhi network. About 11K voice ports LMGequipment for Mumbai and 8K for Delhi have been diverted to MTNL from BSNL. Theinstallation of LMG at Mumbai has been completed and configuration of the same with BSNLnetwork is under process.

v. Migration of FTTH VoIP subscribers on BSNL network: Due toNon-availability of support for C-DOT IMS Core installed at MTNL it was decided to shiftthe MTNL FTTH voice subscribers on BSNL hardware of MAX-NG being supported by C-DOT. Themigration has started in Delhi unit and about 5000 customers have already been migratedand total

6600 FTTH customers are created on New hardware MAX-NG. In MTNL Mumbaialso testing has been successfully completed and actual migration to start shortly.

vi. CRM & CDR based Billing System: Common Billing and CRMSolutions for fixed line network of MTNL has been included in BSNL CDR P-3 tender. PO hasbeen issued on M/s TCIL by BSNL for their requirement. The requirement of MTNL is beingreviewed for catering in the existing capacity of BSNL.

vii. ILD for Voice & Data services: Outgoing ILD traffic ofMTNL Delhi and MTNL Mumbai is being routed through BSNL Taxes. Recently it has beendecided that the incoming ILD traffic of MTNL Delhi and Mumbai PSTN should also be routedon existing ILD connectivity with BSNL.

 

FINANCIAL RESULTS OF MTNL FOR THE FY 2021-22

The Standalone Financial Results of your company alongwith ConsolidatedFinancial Results for

Financial Year 2021-22 is placed as an annexure to this Report.

The Standalone and Consolidated Financial highlights of your companyfor the Financial Year ended March 31st 2022 are summarized as follows:

 

(Rs. In Crores)

Standalone Result

Consolidated Result (MTNL its Subsidiaries JV & Associates)

2021-22

2020-21

2021-22

2020-21

Income from Operations

1069.72

1303.64

1149.04

1387.71

Expenditures (Excluding Finance Cost)

2160.04

2143.13

2239.66

2225.63

Operating Profit/(Loss)

(1090.33)

(839.49)

(1090.62)

(837.92)

Other Income

627.18

484.77

628.89

485.16

Finance Cost

2139.45

2107.07

2139.62

2107.24

Profit/(Loss) before Tax

(2602.59)

(2461.79)

(2601.36)

(2460.00)

Exceptional Items

-

-

-

-

Share of profit/(loss)in investments accounted for using equity methods

-

-

1.15

0.81

Tax Provision for the Year

-

-

2.91

2.07

Profit/ (Loss) for the Year from Continuing Operations

(2602.59)

(2461.79)

(2603.12)

(2461.26)

Profit/ (Loss) for the Year from Discontinuing Operations

-

-

-

-

 

Standalone Result

Consolidated Result (MTNL its Subsidiaries JV & Associates)

2021-22

2020-21

2021-22

2020-21

Profit/ (Loss) for the Year

(2602.59)

(2461.79)

(2603.12)

(2461.26)

Other Comprehensive Income

(13.98)

7.55

(20.63)

(1.15)

Total Comprehensive Income for the Year

(2616.57)

(2454.24)

(2623.76)

(2462.41)

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 2021-22 are given below: -

Sources and Uses of Funds

2021-22

2020-21

2021-22

2020-21

Authorised Capital

10000.00

10000.00

10000.00

10000.00

Issued Subscribed & Paid Up Capital

630.00

630.00

630.00

630.00

Other Equity

(19286.45)

(16669.88)

(19298.26)

(16674.50)

Non-Current and Current Borrowings

26606.48

25348.55

26606.48

25348.55

Deferred Tax Liability (Net)

-

-

6.99

6.88

REPRESENTED BY
Property Plant and Equipment (Net Block)

2982.74

3252.16

3045.19

3329.45

Capital Work in progress

73.98

184.25

73.98

184.25

Investment Property

62.09

36.59

68.62

43.95

Intangible Asset (Net Block)

2097.96

2431.86

2097.96

2431.86

Investment

106.13

106.13

3.07

3.17

Other Assets

6980.73

7339.76

7027.92

7382.67

Other Liabilities

4353.62

4042.08

4371.54

4064.42

 

The Company has prepared these Consolidated and Standalone FinancialResults in accordance with the Companies (Indian Accounting Standards) Rules 2015 (Ind AS)prescribed under Section 133 of the Companies Act 2013.

 

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

The Company has not transferred any amount to the Reserves in theabsence of any profits during the Financial Year 2021-22.

 

DIVIDEND

Since there has been no operating profit the Board of Directors ofyour company expresses its inability to recommend any dividend during FY 2021-22.

 

MATERIAL CHANGES AND COMMITMENT IF ANY AFFECTING THE FINANCIAL POSITIONOF THE COMPANY OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THESE FINANCIALSTATEMENTS RELATE AND THE DATE OF THE REPORT.

No Material changes and commitment affecting the financial position ofthe company occurred between the end of the financial year to which these financialstatements relate and the date of the report. There has been no change in the nature ofBusiness of the Company.

 

CAPITAL AND DEBT STRUCTUREOF MTNL

During the Financial Year 2021-22 there was no increase in theAuthorized Share Capital of your Company. The Authorized Share Capital as at March 312022 of your company was Rs. 10000 Crores comprising of 65 Crores of Preference Shares ofRs. 100 each and 350 Crores of Equity Shares of Rs 10 each. The Paid-up Equity ShareCapital as at March 31 2022 of your company was Rs. 630 Crores comprising of 63 CroresEquity Shares of Rs. 10 each.

During the Financial Year 2021-22 your company has neither issued anyshares with differential voting rights nor has granted any stock option or sweats equityor issued any equity shares or preference shares or any securities which carry a right oroption to convert or issue any Share Warrants.

During the Financial Year 2021-22 your company has not issuedDebentures/Bonds: -

 

Details of Privately Placed Debt Securities/Bonds of MTNL as on 31stMarch 2022.

Name of the issuer

ISIN Number

Issuance Date

Maturiy Date

Coupon Rate

Payment Frequency

Embedded Option if Any

Embedded Option if Any Put option Detail

Embedded Option if Any Call option Detail

Amount Issued (in Rs)

Amount Outstanding (in Rs)

Name of the Debenture Trustee

Company Remarks if any

1

INE153A08014

28-Mar-13

28-Mar-23

8.57%

No

10050000000

10050000000

2

INE153A08022

5-Dec-13

5-Dec-23

9.38%

No

19750000000

19750000000

3

INE153A08030

26-Mar-14

26-Mar-24

9.39%

No

7650000000

7650000000

4

INE153A08048

19-Nov-14

19-Nov-24

8.24%

No

14000000000

14000000000

Semi annual

5

MTNL

INE153A08055

19-Nov-14

19-Nov-24

8.28%

Half Yearly

Yes

Call option at the end of ninth year

1000000000

1000000000

SBI Cap Trustee Company Ltd

interest and principal repayment liability rest with

6

INE153A08063

19-Nov-14

19-Nov-24

8.24%

No

700000

700000

DoT (GOI)

7

INE153A08071

28-Nov-14

28-Nov-24

8.29%

No

22689000000

22689000000

8

INE153A08089

12-Oct-20

11-Oct-30

7.05%

No

43614000000

43614000000

9

INE153A08097

21-Dec-20

20-Dec-30

6.85%

No

21386000000

21386000000

Grand Total

140139700000

140139700000

 

ASSET MONETIZATION IN MTNL DURING FY 2021-22

MTNL has been making continuous effort to maximize revenue from rentingof its Buildings/ quarters and monetization of various approved land parcels in Delhi andMumbai through Department of Investment and Public Asset Management (DIPAM). MTNL hasgenerated revenue of Rs 337.27 Cr. from rental of properties in the Financial Year2021-22.

On approval ofthe President for monetization ofvarious land parcels inDelhi and Mumbai International Property Consultant (IPC) for 5 land parcels and 398quarters of MTNL has been appointed. MTNL along with DIPAM have floated an e-Auction onMSTC platform for two properties of MTNL viz. 20 Flats at Raheja Classique OshiwaraMumbai and Vasari Hill Plot Mumbai. The reserved price for the e-auction for all the 20flats of Oshiwara flats is INR 20.35 Cr and Vasari Hill Plot is INR 270 Cr. The e-auctionprocess has been completed and bids are under process.

 

PROCUREMENT DONE BY MTNL DURING FY 2021-22 (Rs. In Crores)

Sl. No. PROCUREMENT DURING FY 2021-22

(Rs. in Crores)

1. Total Procurement during the year

103.4598

2. Annual Procurement from Micro and Small Enterprises (MSEs)

82.3998

3. Annual procurement from MSEs owned by SC/ST Entrepreneurs

0.0002

4. Annual procurement from MSEs owned by Women Entrepreneurs

1.6019

5. Annual Procurement from GeM

27.185

6. Annual Procurement from MSEs on GeM

27.183

 

REVIEW OF SUBSIDIARIES ASSOCIATES AND JOINT VENTURE COMPANIES

Pursuant to Section 129(3) of the Companies Act 2013("Act") the consolidated financial statements of the Company and itssubsidiaries associates and joint ventures prepared in accordance with the relevantAccounting Standard specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014 form part of this Annual Report. Pursuant to theprovisions of the said section a statement containing the salient features of thefinancial statements of the Company’s subsidiaries associates and joint ventures inForm AOC-1 is given in this Annual Report. At present there is no material subsidiarycompany of MTNL within the meaning of the Companies Act 2013 / SEBI (LODR) 2015.

The Policy on Material Subsidiary has been approved by the Board andthe same may be accessed on the Company’s Website at the link: http://mtnl.in/policymaterialsubsidy.pdf

Performance highlights of Subsidiaries Associates and Joint VentureCompanies during FY 2021-22 are briefly given as under: -

 

SUBSIDIARIES

(I) MAHANAGAR TELEPHONE (MAURITIUS) LTD. (MTML) (A WHOLLY OWNEDOVERSEAS SUBSIDIARY

MTML is a 100% owned subsidiary of MTNL in Mauritius. The company ishaving license for Mobile Services International Long Distance (ILD) Services andInternet Services. In a small Island country having a population of around 12.5 Lacs onlyand having Mobile Tele-density of more than 160% MTML has been able to successfullyposition itself with Customer Centric Services. With patronage of more than 405000customers MTML is able to compete well in a saturated telecom market. The companycontinues to be in profit for 13th Consecutive Year. MTML is offering MobileServices on latest state of the art technology having 4G (LTE) Services covering more than90% of the total population and 2G/3G Network all over the Island. With increased coverageof high speed data services on 4G and migrating more and more subscribers to its 4Gnetwork MTML customers are now generating more than 1500 TB of data every month. MTMLbecame the first operator in Mauritius to launch e-SIM Service which has helped it inacquiring higher ARPU customers. MTML has also acquired license for 5G Services inMauritius recently. Action on procurement of equipment has been started and it is expectedto launch 5G Services in commercially important areas during 2022-23. MTML has earnedRevenue of approximately MUR 463.20 Million in financial year 2021-22 as against MUR462.40 Million during last fiscal year.The company has improved its revenue marginallydespite severe challenges faced during this period. Due to Covid-19 Mauritius sufferedfrom lengthy curfew/ lockdowns leading to reduced business activity. Being an Island 1/3rdeconomy of Mauritius used to run on Tourism Sector and Roaming used to be a big source ofrevenue for the company in past years. However due to Covid-19 Tourism Sector was almostclosed due to which Roaming Revenue declined by almost 85%. Other International Serviceslike ILD A2P SMS also suffered severely due to lack of economic activity. Despite severedepression in national economy due to Covid-19 and absence of Tourism Business GrossRevenue of MUR 463.20 Million is achieved during the Current Financial year.MTML hasestablished its own brand CHILI in the Republic of Mauritius as trusted total telecomservice provider. With more than 265 BTSs operating across the island the quality ofservice is to the satisfaction of customers. Co-location with other telecom providers formobile network has also started opening a new source of revenue for the company. MTML hasbeen introducing innovative tariff packages to match current market dynamics with thestate of art technology and is quite popular especially among youth. MTML has alsodiversified into retailing of Smartphones including Apple products and the business haspicked up well during past two years. During 2021-22 total Smartphone Sales reached MUR39.49 Million.All the expenses of the company are paid from its own internal resources.The CAPEX for procurement of equipment is also met from its own internal resources. MTMLis operating from its own building situated in Cyber City Mauritius which is consideredto be the heart of IT hub in Mauritius. There is no debt liability on the Company. Thecompany is managed by CEO CFO and 11 more officers all on deputation from the parentcompany. Other operations are managed through local outsourcing.

(II) MILLENNIUM TELECOM LTD. (MTL) (A WHOLLY OWNED INDIANSUBSIDIARY)

Millennium Telecom Ltd. (MTL): a wholly owned subsidiary ofMahanagar Telephone Nigam Limited a Government of India CPSE registered office in NewDelhi. MTL was incorporated in February 2000. ICT related Services being offered by MTLinclude Cloud services Wi-Fi solution; project on egovernance Managed services TurnkeyICT solution GIS based services capacity building and skill development etc. MTL earneda net profit of Rs. 19.79 lakhs for the period ending 31st March 2022. MTL's customer listincludes Air India J & K Government Central University-(Mahendragarh) Haryana UPBuilding and Other Constructions Workers Welfare Board (UP BOCWWB) Lucknow ThaneMunicipal Corporation CIDCO Film Division of India Insurance Institute of India etc. MTLis also expanding its portfolio of service for providing generalized as well customizedsolutions to suit government and semi government institutions. MTL has empanelled BusinessDevelopment Associates (BDAs) for 10 years through EOI in the year 2016-17. Further MTLhas reopened the window for Empanelment of Business Development Associates in MTL throughopen ended EOI. MTL has around 23 empanelled Business Development Associates (BDAs) forinnovative projects in ICT related fields. MTL along with its Empanelled BusinessDevelopment Associates (BDAs) has introduced the cloud services for the Governmentcustomers on back to back basis.

During the financial year under report MTL has registered a profitbefore tax of Rs 26.74225/- as against a profit before tax of Rs 1914455/- last yearand has a reserve and surplus of Rs 28149806/- as against Rs 26276390/- last year

 

JOINT VENTURE

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

MTNL STPI IT Services Ltd. (MSITSL) is a 50:50 Joint Venture company ofMahanagar Telephone Nigam Limited (MTNL) and Software Technology Parks of India (STPI).MSITSL was incorporated on 31/03/2006 under the Companies Act 1956 with authorizedCapital of Rs. 50 Crores. MSITSL has established the physical infrastructure of state ofthe art Tier III compliant Data Centre 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 madefor setting it up was Rs.477 lakhs. This Tier III Data Center is maintaining 99.98% uptimeon 24X7x365. The commercial operation of the Data Centre commenced in 2009. At presentthe following customers have colocated server racks for their projects and operation inthe MSITSL Data Centre.

• The Ministry of External Affairs (MEA) has hosted Passport SevaProject at MSITSL Data Centre through M/s TCS.

• The Directorate General of Employment & Training (DGE&T)in Ministry of Labour & Employment has hosted National Career Project through STPI atMSITSL Data Centre.

• Repco Bank Ltd M/s Repco Home finance Limited and M/s RepcoMicro Finance Limited have co-located server racks for banking operation

• In addition to that MSITS has been offering 39 Nos workstationfacilities to Repco Home finance Ltd through STPI centre.

During the year under Report MSITS has registered a turnover of Rs.648.45 lacs as against Rs. 588.12 lacs last year and registered an increase of Rs. 60.33lacs over last year Other income during the year is Rs. 39.85 lacs which was Rs. 30.75lacs last registering an increase of Rs. 9.10 lacs. MSITS has earned a profit amounting toRs. 230.58 lacs after providing for depreciation as compared to the last year's figure ofRs. 189.92 lacs. Earning per share for the year ended on 31.03.2022 is Rs. 5.05 ascompared to Rs. 4.16 last year ended on 31.03.2021.

Ministry Of External Affairs has issued the Letter of intent (LoI) toM/s TCS as implementing Agency for Passport Seva Project 2.0(PSP2.0) subsequently MEAofficials confirmed our Data centre premises as Disaster Recovery Centre for executing thesaid project .In this regard MSITSL has selected DC consultant for expanding the DataCentre server farm area by around 1200 sqft as per Tier-III standard through tenderingprocess at the estimate cost of 6 Crs.

 

(II) UNITED TELECOMMUNICATIONS LTD. (UTL) NEPAL

UTL i s 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 isholding 26.68% of Equity in UTL. The company has not been performing well for the last fewyears. It has huge losses. The Customer base has also reduced. It is not able to pay thestatutory dues like Royalty Fees BTS site charges and other dues to the Govt. of Nepal.The company does not have resources to clear outstanding. They have sought Equity/ Loanparticipation 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 at par value. Notice of exit (Sale of our share in JV Company) was givenon 30.01.2018 and was required to be accepted within 3 months i.e. on or before30.04.2018 but so far the same has not been given effect by the UTL/NVPL.

Latest status of exit option - With regard to the exercising of ExitRight by all the Indian JV Partners- MTNL TCIL and TCL from United Telecom Limited (UTL)dated January 30 2018 by invoking the provisions of the JV Agreement and AmendatoryAgreement NVPL is willing to acquire all the 17.2 million equity shares held by allIndian JV Partners in UTL at par value upon satisfactory negotiation on the terms andpayment modality between all parties. NVPL further requested all the Indian JV Partners toinitiate necessary steps towards completing related acquiring procedures includingentering into a Share Purchase Agreement (SPA) at the earliest. Accordingly as providedby NVPL UTL forwarded a "SPA draft" to all Indian JV Partners for their perusaland comments in line with initiating necessary steps to complete the sale purchase. TheSPA draft envisages to complete all necessary processes with all the Indian JV Partnersand at necessary regulatory authorities as per the provisions of the prevailing laws ofNepal within 3 months from the completion date of share transfer deed. SPA draft agreementhas not been finalized till date.

 

During the FY 2021-22 there has been no change in SubsidiariesAssociates or Joint Ventures

of the Company.

 

DETAILS OF SYSTEM STATUS FOR THE FINANCIAL YEAR 2021-22 (AS ON 31stMARCH 2022)

Your Company has the following equipped and used capacity of LandlineGSM Broadband etc. as on 31st March 2022: -

S. No. Parameters

MTNL Delhi

MTNL Mumbai

MTNL Total

1 Number of Switches

287

342*

629

2 Details of Capacity
2a Fixed Phones

2416505

2464710

4881215

2b GSM

2800000

2800000

5600000

2c Broadband Capacity (in Ports)

788736

845020

1633756

3 DELs (including Fixed-Line GSM and Broadband)

3797341

2744003

6541344

3a Fixed Line

1284568

1393877

2678445

3b GSM

2152246

1096405

3248651

3c Broadband Subscribers

360527

253721

614248

4 FTTH Subscribers

27402

15193

42595

5 ISDN

7721

8998

16719

6 DLC (No.)

30

32

62

7 Tax Capacity

80000

115200

195200

8 Tandem Capacity

215500

331240

546740

9 Optical Fibre Cable
9a OFC in Route Kms

9416.66

10089.982

19506.642

9b OFC in Fibre Kms

309896.586

326624.465

636521.051

10 Leased Circuits

8691

13907

22598

 

including CNE

 

HUMAN RESOURCE DEVELOPMENT

The Company attaches the highest priority to the quality ofintellectual capital at its disposal and believes that knowledge and skills of itsemployees are the key to achievements of its corporate mission. It has sound recruitmentpolicy and comprehensive training system. During the past one year our company has laidgreater emphasis on Human Resources Development. We have been devoting substantialresources on building a skilled workforce that has a capability to counter threats posedby ever changing customer base. The Company has been conducting various training anddevelopment activities which apart from reorienting the employees towards the greaterorganizational purpose are also focusing on eliminating any skill gap and technicalobsolescence. The management's view on training is one of development of employee'soverall personality and enabling them in becoming a vital productive resource.

 

TRAINING ACHIEVEMENTS

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

(I) The Institute of Telecom Technology & Management (ITTM)NEW DELHI

The Institute of Telecom Technology and Management ITTM Shadipur NewDelhi is a state of the art training centre of MTNL Delhi engaged in imparting inductiontraining and short duration training to its officers and employees in the field ofTelecom IT Computer System and Management. ITTM has the necessary infrastructuretechnical and academic competence and excellence for providing training in specializedcourses in the field of GSM Broadband Technology Switching Transmission ExternalPlant IT Computer System Management and various wellness and Life Style Managementsubjects comprising of Motivation Positive Thinking Stress Management and Spiritualityat workplace and other health care programs. In addition to this ITTM also conductsIndustrial Training and Visits for students from Engineering Colleges and Various Schoolsof India. ITTM conducts regular executives upgradation training for financially upgradedexecutives from E2 to E7 cadre (E2-E3 E3-E4 E4-E5 E5-E6 E6-E7) in core competency(Telecom Civil Finance Electrical HR/Marketing/CS/Legal) and management module of oneweek duration each. From April 2021 to March 2022 total 633 executives have undergoneupgradation training.

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

The Centre for Excellence in Telecom Technology & Management(CETTM) an ISO 9001:2015 certified institute is situated at Technology StreetHiranandani Gardens Powai Mumbai. CETTM’s achievements during financial year2021-22 are as follows: CETTM responded to the pandemic situation by gearing up andconducting trainings in online/ e-mode. CETTM successfully conducted in all 32 trainingprograms (online via e-mode) and trained 321 in-house personnel achieving a figure of 331trainee days in the FY 2021-22. 16 batches consisting of 268 students on industrial visitalso conducted in March 2022. CETTM is suiting up to propose conducting classroom modetrainings w.e.f. June 2022 and ITEC batches from Aug 2022 subject to all the GovernmentSOPs and guidelines from time to time. Despite difficult times and economic slowdownCETTM has managed to generate a revenue of Rs. 19.82 Cr during FY 2021-22 as compared to atotal revenue of Rs. 21.09 Cr during last year. Proposals of leasing out additional spaceof around 6868 sq.ft. in 3rd floor to MNLU and leasing of around 50 hostelrooms to other clients like MISB Bocconi IIIMI are in pipeline. CETTM initiated leasingof its infrastructure on short duration basis for the shooting of films web series byprominent production houses and generated business of Rs. 50 lakh for the FY 2021-22. Newavenues of generating revenue through other production houses are also being initiated andare in pipeline.

 

INDUSTRIAL RELATIONS

Industrial peace and Industrial harmony is based on healthy employeerelations and like the previous year employee’s relations remained cordialthroughout the year. The grievances/issues raised by the

employees/Union/Associations were given due attention and regard. Thecases/ issues brought up by them were settled through regular meetings and interactionsbetween Management and Unions/ Associations and action as mutually agreed was taken tosettle them.

 

EMPLOYEES' WELFARE

1. Employees Welfare Schemes like subsidized Canteen Housing Medicalfacilities Group Insurance dormitories for females working in night shift etc. continuedand maintained by the Company for its employees. Sports and Cultural activities were alsogiven priority during the year.

2. Married/unmarried female employees with less than two survivingchildren are entitled to maternity leave for a period of 180 days on the production ofmedical certificate from an authorized medical officer. During the period of such leavethe female employees are paid leave salary equal to the pay drawn immediately beforeproceeding on leave.

3. Working spouse of MTNL employee has been covered in MTNL OPD Schemew.e.f 01.04.2021.

4. In view of ongoing pandemic situation due to COVID-19 and forproviding relief to the employees and their families the ceiling for outdoor medicalclaim in a financial year has been increased to 10 days salary (Basic +IDA) as on01.04.2020.

5. Changeover of Contributory Group Health Insurance Scheme forretirees to CGHS- After pursuance of MTNL with DoT Ministry of Health issued instructionsto CGHS for enrolment of MTNL retirees (drawing Govt. Pension) in the CGHS. To facilitatethe same an incentive is being provided to the retirees concerned. As on dateapproximately ‘18648’ retirees in MTNL have benefited from this scheme.

 

IMPLEMENTATION OF OFFICIAL LANGUAGE POLICY

The Company continued its efforts tocomply with statutory requirementsin promoting the use of Hindi and has been able to achieve most of the annual targets setby the Government for implementation and promotion of Hindi as Official Language in theCompany.

 

IMPLEMENTATION OF RESERVATION POLICY FOR SC/ST/OBC/PHYSICAL HANDICAPEDAND ECONOMICALLY WEAKER SECTION

The Company has endeavoured to fulfill all the statutory requirementswith regard to implementation of reservation policy for candidates to SC/ ST/ OBCcommunities as well as Physically Challenged and Economically Weaker Section candidates.

 

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

The Company has constituted an internal Committee to look into thecomplaints on Prevention Prohibition & Redressal of Sexual Harassment of Women atworkplace and matters connected therewith or incidental thereto covering all aspects ascontained in the Sexual Harassment of Women at workplace (Prevention Prohibition &Redressal) Act 2013.

 

WORKING CONDITIONS OF WOMEN EMPLOYEES

We are continuously striving towards gender sensitization amongst ouremployees. Special care has been taken in case of woman employees in night shifts. Also toredress the issues of Sexual Harassment at workplace special cells have been constituted.

 

MANPOWER STATUS

As on 31st March 2022 the total strength of employees andSC/ST Category working in the company as per details is given below: -

Group

Working

SC

ST

A

204

54

23

B

1025

190

43

C

1587

351

32

D

930

286

19

TSM

3

2

-

Grand Total

3749

883

117

 

TOTAL NO. OF EMPLOYEES (MALE & FEMALE) AS ON 31.03.2022:

Total (A)

Male

Female

No. (B)

% (B/A)

No. (C)

% (C/A)

3749

3004

80.12

745

19.87

 

TOTAL NO. OF DIFFERENTLY ABLED EMPLOYEES AS ON 31.03.2022:

Total (A)

Male

Female

No. (B)

% (B/A)

No. (C)

% (C/A)

22

19

86.36

3

13.63

 

TURNOVER RATE FOR PERMANENT EMPLOYEES DURING FY 2021-22:

Turnover rate in FY 2021-22

Male

Female

Total

Permanent Employees

130

25

155

 

MECHANISM AVAILABLE TO RECEIVE AND REDRESS GRIEVANCES FOR THEEMPLOYEES:

MTNL has its own Grievance Redressal Procedure for employees.Management of the Company believes in the philosophy of an Open Door Policy in the matterof redressal of employee grievances.

An aggrieved employee can approach his/her Departmental Head or theconcerned officer of the Personnel Department (including the Head of the PersonnelDepartment) and discuss his/her grievance. Best efforts are made to enable prompt actionson the issues raised by the employee.

The objective of the Grievance Redressal Procedure is to provide aneasily accessible machinery for settlement of grievances and to adopt measures as wouldensure expeditious settlement of grievances leading to increased satisfaction on the joband resulting in improved productivity and efficiency of the organization.

 

MECHANISMS TO PREVENT ADVERSE CONSEQUENCES TO THE COMPLAINANT INDISCRIMINATION AND HARASSMENT CASES:

To prevent adverse consequences to the complainant in discriminationand harassment cases MTNL has appointed concerned Liaison Officers and constitutedCommittees.

 

COMPLIANCE OF MTNL WITH RIGHTS OF PERSONS WITH DISABILITIES ACT 2016:

MTNL complies with provisions of Rights of Persons with DisabilitiesAct 2016 to protect the interests of persons with disabilities. Reservation is providedas per GoI instructions in direct recruitment for Persons with Benchmark Disabilities.Separate 100 point vacancy based reservation roster register is maintained fordetermining/effecting reservation for the Persons with Benchmark Disabilities. Relaxationin age limit and standards of suitability (as applicable) is given to persons withdisabilities. Liaison Officers for PwD have been appointed to look after reservationmatters and to ensure compliance of instructions of the Act.

 

MEASURES TAKEN BY MTNL TO ENSURE A SAFE AND HEALTHY WORK PLACE:

1. In order to ensure a safe and healthy workplace requisite securitymeasures installation and maintenance of fire extinguishers and housekeeping measureshave been taken in MTNL.

2. MTNL being an essential service provider of telecom services MTNLhas been scrupulously following COVID prevention and management guidelines for all itsstakeholders like social distancing wearing of masks and frequent hand sanitization.

3. Thermal scanning at the entrance gate has been ensured. Employeeswho have been found sick or having COVID like symptoms are advised to stay at home.

4. Proper cleaning and frequent sanitization of workplace particularlyof frequent touched surfaces at regular intervals has been ensured.

5. Downloading and updating of Aarogya Setu app has been mademandatory.

6. Quarantine Leave has been provided for employees whose familymembers have been infected with COVID.

7. For employees and their family members requiring hospitalization dueto COVID Group Health insurance coverage upto Rs.6 Lakhs is being provided under GroupHealth Insurance Scheme.

 

CORPORATE SOCIAL RESPONSIBILITY (CSR)

The Company has been suffering losses for the last few years and hence.The provisions of Section 135 of the Companies Act 2013 are not applicable. However thecompany has constituted a CSR Committee and also formed a CSR Policy in compliance withthe provisions of The Companies Act 2013 and DPE Guidelines on the subject. MTNL isundertaking non funding CSR activities like sending SMS to the public for spreadingawareness on spread of COVID 19 awareness on Swachh Bharat Pulse Polio other moves ofthe Government etc. For details regarding the CSR Committee please refer to theCorporate Governance Report which forms part of this Report. The CSR Policy is availableon the website of the company http://mtnl.in/csr 2014.pdf .

 

VIGILANCE

The Vigilance wing of MTNL is headed by Chief Vigilance Officer. Atpresent Sh Surender Mehra (IFS) CVO BSNL is in additional charge of CVO MTNL. CVO isresponsible for complete vigilance administration in MTNL. During the year 2021-22emphasis was laid on preventive vigilance and to enhance the awareness of transparency andaccountability in working by carrying out various types of field inspections. CTE typeinspections were also carried out as per CVC guidelines. Further training program /seminars on vigilance matters/complaints handling and disciplinary proceedings have beenconducted during the year for the employees to make the participants understand theconduct rules of MTNL procedure for handling departmental proceedings and improve theirworking efficiency. As per CVC instructions the Vigilance Awareness Week was observedfrom October 26 2021 to November 1 2021 with the theme "Independent India @ 75:Self Reliance with Integrity: @ 75 i l VTcefUHfjTT". During this weekvarious activities like administering of

integrity pledge release of information booklet on the Vigilance &Disciplinary matters Preventive Vigilance and other general conduct (Do's & Dont's)among the employees of MTNL was distributed. Also various programmes such as seminarsworkshops Essay Poster as well as Quiz competitions were organized during VigilanceAwareness Week. Filing of a complaint under PIDPI (Public Interest Disclosure &Protection of Informer Resolution) was explained with the help of Posters and video.

 

WHISTLE BLOWER POLICY/VIGIL MECHANISM

Your Company has in place a robust vigil Mechanism for reportinggenuine concerns through the company’s Whistle Blower Policy. The Policy on WhistleBlower may be accessed on the Company’s Website at the link:http://mtnl.in/whistleBlowerPolicy.pdf . The Company promotes ethical behavior in all itsbusiness activities and has put in place a mechanism for reporting illegal or unethicalbehavior as defined under Regulation 22 of SEBI (LODR) Regulation 2015. Under the WhistleBlower Policy the employees are free to report violations of applicable laws andregulations and the Code of Conduct to the Chairman of the Audit Committee. During theyear under report no employee was denied access to the Audit Committee.

 

SIGNIFICANT & MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS ORTRIBUNALS

There are no significant and material orders passed by theRegulators/Courts/Tribunals that would impact the going concern status of the Company andits future operations.

 

INTEGRITY PACT PROGRAME WITH TRANSPARENCY INTERNATIONAL INDIA

MTNL has signed a Memorandum of Understanding (MOU) with TransparencyInternational India (TII) for implementing an Integrity Pact Programme (IPP) focused onenhancing transparency in its business transactions contracts and procurement process.Under this MOU MTNL is committed to implementing the Integrity Pact in all its majorprocurement and work contract activities. The Integrity Pact has strengthened theestablished system and procedures by creating trust in various stakeholders. ThreeIndependent External Monitors (IEMs) being persons of eminence nominated by the CentralVigilance Commission (CVC) to monitor the activities. As on 31-03-2022 Smt. Rashmi GoelIRAS (Retd) and Shri Bibhuti Bhushana Mishra IPS (Retd.) are acting as IEMs of MTNL.

 

CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGEEARNINGS & OUTGO

The provision of Section 134(m) of the Companies Act 2013 do not applyto the Company as your Company is a service provider. The total foreign exchange earningwas Rs. 2.63 Crore and the total foreign exchange expenditure was Rs. 4.40 Crore.

ENTERPRISE RISK MANAGEMENT

The Board of Directors of the Company has formed a Risk ManagementCommittee to frame implement and monitor the risk management plan for the Company. TheCommittee is responsible for reviewing the risk management plan and ensuring itseffectiveness. The Audit Committee also has additional oversight in the area of financialrisks and controls. Major risks identified by the businesses and functions aresystematically addressed through mitigating actions on a continuing basis. The developmentand implementation of Risk Management Policy has been covered in the Management Discussionand Analysis Report which forms part of this Report.

 

MEETINGS OF THE BOARD OF DIRECTORS

During the year under report the Board of Directors of your Companymet Five times during the Financial Year 2021-22. The intervening gap between any twomeetings was within the period prescribed by the Companies Act 2013 & the ListingRegulations. Details of Board Meetings are given in Corporate Governance Report whichforms part of this Report. At these meetings the Board held intensive discussions on thebudget important financial transactions and various steps to face the impendingcompetition from private operators both in Basic Telephone Service Cellular MobileTelephone and other value-added services.

 

SELECTION AND PROCEDURE FOR NOMINATION AND APPOINTMENT OF DIRECTORS ANDTHEIR REMUNERATION

MTNL being a Government Company the appointment and the terms andconditions of appointment (including remuneration) of the Whole-Time Directors are decidedby the Government of India. However the Board has constituted a Nomination &Remuneration Committee. The Government Nominee Directors do not get any remuneration fromthe Company. The Independent Directors are being paid sitting fee of Rs. 10000/- forattending each meeting of the Board or Committee thereof.

They are reimbursed travel expenses & hotel expenses on thisaccount if any in addition to the sitting fees. Details of remuneration paid to the Wholetime Directors and KMP as well as sitting fees paid to Independent Directors for the yearunder review are given in the Corporate Governance Report which is attached as annexure tothis report.

 

PERFORMANCE EVALUATION OF DIRECTORS

Ministry of Corporate Affairs (MCA) through General Circular dated 5thJune 2015 has exempted Government Companies from the provisions of Section 178 (2) ofthe Companies Act 2013 which provides about manner of performance evaluation of Board ofDirectors Committee of Board of Directors and Director by the Nomination and RemunerationCommittee. The aforesaid circular of MCA further exempted listed Govt. Companies fromprovisions of Section 134 (3) (p) of the Companies Act 2013 which requires mentioning themanner of formal evaluation of its own performance by the Board and that of its Committeesand Individual Director in Board’s Report if directors are evaluated by the Ministryor Department of the Central Government which is administratively in charge of thecompany or as the case may be the State Government as per its own evaluationmethodology. Now MCA through Notification dated 05.07.2017 has amended Schedule IV ofthe Companies Act 2013 with respect to performance evaluation of directors of theGovernment Companies that in case of matters of performance evaluation are specified bythe concerned Ministries or Departments of the Central Government or as the case may bethe State Governments and such requirements are complied with by the Government companiessuch provisions of Schedule IV are exempt for the Government Companies.

Similar exemption has been requested by PSUs wing of CII from SEBIunder the SEBI LODR for all PSUs. In this regard Department of Public Enterprises (DPE)has already laid down a mechanism for performanceappraisalof all functionaldirectors.DPEvide its Office Memorandum No.9(14)/2009-GM- Part-3-FTs-9036 dtd. 30.05.2022 hasintimated MTNL that assessment of performance of Non-official Directors/Independentdirectors is to be done on annual basis from now onwards.

Your Company enters into a Memorandum of Understanding (MOU) withGovernment of India each year demarcating key performance parameters for the Company. Theperformance of the Company and Board of Directors are evaluated by the Department ofPublic Enterprises vis-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 henceprovision of transfer of unclaimed dividend and shares as per IEPF Rules is not applicableto your Company.

 

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

During the year under report the Company has not entered into anyMaterial Transaction with any of its related parties. The Company’s major RelatedParty Transactions are generally with its subsidiaries and associates. All Related PartyTransactions if any were in ordinary course of Business and were negotiated at anArm’s Length basis and they were intended to further the company’s interest.Accordingly the disclosure of Related Party Transactions as required under Section134(3)(h) of

Companies Act 2013 in Form AOC-2 is not applicable. Web link forPolicy on Materiality of Related Party Transactions and also on dealing with Related PartyTransactions has been provided in the Report on Corporate Governance which forms part ofAnnual Report. Details of Related Parties and transaction with your Company are given inNotes to the financial statement which is a part thereof.

 

PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186OF THE COMPANIES ACT 2013.

During the Year under report there was no Loan or Guarantee given orinvestments made by the MTNL under Section 186 of the Companies Act 2013.

 

CORPORATE GOVERNANCE

Your company has complied with the Corporate Governance requirementunder the Act Listing Regulations and the relevant guidelines issued by Department ofPublic Enterprises (DPE). Your company is also complying with the applicable SecretarialStandards issued by the Institute of Company Secretaries of India (ICSI). A Certificatefrom M/s Mritunjay Shekhar & Associates Practising Company Secretaries regardingcompliance of conditions of Corporate Governance as stipulated under Schedule V (E) ofSEBI (LODR) 2015 for the FY 2021-22 and Annual Secretarial Compliance Report for the FY2021-22 pursuant to SEBI Circular No. CIR/CFD/CMD1/27/2019 dated 8th February 2019 hasalso been obtained from M/s Mritunjay Shekhar & Associates Practising CompanySecretaries are also placed at annexure to this report. Further a separate section onCorporate Governance is also placed as annexure to this report.

 

EXTRACT OF ANNUAL RETURN

As provided under Section 92 of the Act and rules framed thereunder theextract of Annual Return in Form MGT-9 is given as Annexure which forms part of thisreport. Extract of Annual Return is also uploaded on MTNL Website and can be accessed atwww.mtnl.net.in.

 

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

Ministry of Corporate Affairs (MCA) Government of India vide itsGeneral Circular No 14/2020 dtd.

08.04.2020 and General Circular No 17/2020 dtd. 13.04.2020 deals withthe conduct of EGM during Covid Pandemic. MCA vide its General Circular No 20/2020 dtd.05.05.2020 has allowed companies to conduct their AGM during calendar year 2020 throughVideo Conferencing (VC) or other Audio Video Means (OAVM) subject to fulfilling conditionsspecified in the abovementioned Circular. Further the abovementioned Circular specifiesthat due to the prevailing situation owing to the difficulties involved in dispatching ofphysical copies of the financial statements(including Board’s report Auditor’sreport or other documents required to be attached therewith)such statement will be sentonly by email to the members trustees for the debenture-holders of any debentures issuedby the company and to all other persons so entitled after fulfilling requirement mentionedin the Circular. Further Clarification General Circular No. 03/2021 dated13.04.2021 General Circular No. 19/2021 dated 08.12.2021 General Circular No. 21/2021dated 14.12.2021 and General Circular No.03/2022 dated 05.05.2022 issued by the MCA hasclarified that it has been decided

to allow companies whose AGMs were due to be held in the year 2022 orbecome due in the year 2022 to conduct AGMs on or before 31.12.2022 in accordance withthe requirement of paragraph 3 and 4 of the General Circular No 20/2020 dated 05.05.2020.

Therefore MCA vide its General Circular No 20/2020 dtd. 05.05.2020and General Circular No 03/2022 dtd. 05.05.2022 has dispensed with the requirement ofprinting and dispatch of annual reports to shareholders and debentureholders if the AGM isheld during calendar year 2020 2021 and 2022.

Now SEBI vide its Circular No. SEBI/HO/CFD/CMD1/CIR/P/2020/79 dtd12/05/2020 has stated that "The requirement of Regulations 36(1)(b) and (c) andRegulations 58(1)(b) & (c) of the LODR are dispensed with for listed entities whoconduct their AGMs during the Calendar Year 2020 (i.e. till December 312020)."Further SEBI vide its Circular No. SEBI/HO/CFD/CMD2/CIR/P/2021/11 dtd. 15/01/2021Circular No. SEBI/HO/DDHS/P/CIR/2022/613 dtd 15/01/2021 Circular No.SEBI/HO/CFD/CMD2/CIR/P/2022/62 dtd 13/05/2022 and SEBI/HO/DDHS/P/CIR/2022/0063 dtd13/05/2022 has further extended the relaxations in para 3 to 6 of the aforementioned SEBICircular dated 12/05/2020 in respect of sending physical copies of annual report toshareholders and debentureholders and requirement of proxy for general meetings heldthrough electronic mode are extended for listed entities till December 31 2022.

In accordance with the aforesaid MCA and SEBI Circulars and to ensurecompliance of Green Initiative your Company has sent various documents including Noticeof the 36th AGM Audited Financial Statements Directors' ReportAuditors’ Report for the F.Y. 2021-22 etc. to its Shareholders and Debenture holdersonly in electronic form at the e-mail addresses provided / registered by members and madeavailable to us by the Depositories (NSDL/CDSL). The members are advised to update byregistering changes if any in their e-mail address with the concerned DepositoryParticipant.

Your Company shall also display full text of Notice of 36thAGM & Annual Report 2021-22 at its website http://mtnl.in/annual.html. Your Companylooks forward towards active participation of Shareholders in this "GreenInitiative" and request all Shareholders who have not so far supplied their e-mailaddresses to give the same at the earliest. There will be no dispatch by Post of Noticeof 36th AGM and Annual Report 2021-22 to Shareholders and Debenture holdershaving no email ids in compliance with Circulars of MCA and SEBI.

 

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the provisions of Section 134(5) of the Companies Act2013 the Directors to the best of their knowledge and belief confirm that:

(a) In the preparation of the annual accounts the applicableaccounting standards had been followed along with proper explanation relating to materialdepartures;

(b) the directors had selected such accounting policies and appliedthem consistently and made judgments and estimates that are reasonable and prudent so asto give a true and fair view of the state of affairs of the company at the end of thefinancial year and of the profit or loss of the company for that period;

(c) the directors had taken proper and sufficient care for themaintenance of adequate accounting records in accordance with the provisions of theCompanies Act 2013 for safeguarding the assets of the company and for preventing anddetecting fraud and other irregularities;

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

(e) the directors had laid down internal financial controls to befollowed by the company and that such internal financial controls are adequate and wereoperating efficiently.

(f) the directors had devised proper systems to ensure compliance withthe provisions of all applicable laws and that such systems were adequate and operatingeffectively.

 

INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company had maintained in all respects adequate internalfinancial controls over financial reporting and such internal control over financialreporting were operating effectively during the Financial Year 2021-22 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components on internal control stated in the Guidance Note on Audit ofInternal Financial Controls over Financial Reporting issued by the Institute of CharteredAccountants of India (ICAI). Report on the Internal Financial Control under Section143(3)(1) of the Companies Act 2013 for the FY 2021-22 is attached as annexure to theIndependent Auditors Report which is part of the report.

 

FIXED DEPOSITS

Your Company has not invited/ accepted any fixed deposits under Section73 of the Companies Act 2013 read with the Companies (Acceptance of Deposit) Rules 2014during the year and as such no amount of principal or interest was outstanding as on theBalance Sheet date on this account.

 

PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURE

The provisions of Section 197(12) of Companies Act 2013 read with Rule5 of Companies (Appointment & Remuneration of Managerial Personnel) Rules 2014 arenot applicable to your Company as being a Govt. Company.

 

BUSINESS RESPONSIBILITY REPORT (BRR)

The Listing Regulations mandate the inclusion of the BusinessResponsibility Report as part of the Annual Report for top 1000 listed companies based onMarket Capitalization and your company comes under top 1000 list. MTNL is disclosingBusiness Responsibility Report (BRR) for the FY 202122 as part of Annexure to this report.The BRR maps the sustainability performance of your Company against the reportingframework suggested by SEBI.

 

STATUTORY AUDITORS

M/s Vinod Kumar & Associates Chartered Accountants and SPMG &Co. Chartered Accountants have been appointed as Joint Statutory Auditors of your Companyby the Comptroller and Auditor General (CAG) of India for the Financial Year 2021-22 andthe Board has already ratified their appointment on 07.10.2021.

 

COSTAUDITORS

M/s R. M. Bansal & Co. Cost Accountants have been appointed asCost Auditors of your company for carrying out audit under Section 148 of the CompaniesAct 2013 for the cost records as maintained under Section 209(1)(d) of CompaniesAct1956 and as notified under: (i) Cost Accounting Records (Telecommunications)Rules2002 & (ii) Cost Audit Rules2001 for the FY 2021-22. The Cost Audit Reportalongwith the Annexures for the Financial Year 2021-22 have been submitted to the CentralGovernment in the Form CRA 4 in XBRL format on MCA Portal on 27/10/2021.

 

SECRETARIAL AUDITORS

Your Company has appointed M/s R. P. Sehgal & AssociatesPractising Company Secretaries to conduct the Secretarial Audit of the Company for theFinancial Year 2021-22. The Secretarial Audit Report of M/s R. P. Sehgal & Associatesare given in as annexure to this report.

 

AUDITORS QUALIFICATIONS AND MANAGEMENT REPLY THERETO

The replies to the observation of the Statutory Auditors for theFinancial Year 2021-22 are given as Annexure. The Comments of the Comptroller and AuditorGeneral of India (CAG) on the Financial Statements and the replies of the Managementthereon are also given in the Annexure to the Directors’ Report.

 

FRAUD REPORTED BY AUDITORS

The Auditors of the Company have not reported any fraud during FY2021-22 as specified under second proviso of Section 143(12) of the Companies Act 2013(including any statutory modification(s) or re-enactment(s) thereof for the time beingenforce).

 

CRITERIA FOR DETERMINATING QUALIFICATION POSITIVE ATTRIBUTES ANDINDEPENDENCE OF A DIRECTOR

(i) Qualification:- The Board of Directors of MTNL hasformulated the job description for the posts of CMD and other Functional Directors.Theselection of Whole time Directors is done by Public Enterprise Selection Board (PESB) onthe basis of such criteria.

(ii) Positive Attribute:- Apart from the duties of Directors asprescribed in the Companies Act the Directors are expected to demonstrate high standardsof ethical behavior communication skills and independent judgment. The Directors are alsoexpected to abide by the respective code of conduct as applicable to them

(iii) Independence:- A Director is considered as independent ifhe/she meets the criteria laid down in Section 149(6) of the Act the Rules framed theirunder and Regulations 16(1)(b) of the Listing Regulations.

 

INDEPENDENT DIRECTOR

MTNL is a Public Sector Undertaking. All appointments includingIndependent Directors on the Board are done by the Administrative Ministry Government ofIndia Ministry of Communications Department of Telecommunications.

As on 31.03.2022 MTNL has four Independent Directors on the Board ofMTNL.

1. Shri Yogesh Kumar Tamarkar

2. Shri Sarv Daman Bharat

3. Shri Vishwas Pathak and

4. Ms. Deepika Mahajan

Due to non-appointment of Independent Directors till 12.11.2021 MTNLwas unable to comply the provisions relating to Board Composition [Regulation 17 &17(2A)] Audit Committee (Regulation 18) Nomination and Remuneration Committee(Regulation 19) and Stakeholders Relationship Committee Composition (Regulation 20).

Shri Piyush Ranjan Nishad was appointed as an Independent Director onthe Board of MTNL for a period of three years or until further orders whichever isearlier pursuant to the Department of Telecommunications Ministry of CommunicationsGovt. of India vide its Letter No.E-5-3/2018-PSA dtd. 23.03.2022 w.e.f. date of obtainingDIN. Shri Piyush Ranjan Nishad joined MTNL Board as an Independent director on 21.04.2022.

The matter for appointment of one more Independent Director has alreadybeen taken up with the Government of India.

 

DIRECTORS & KEY MANAGERIAL PERSONNEL

The Company has a very balanced and diversified Board of Directors withan optimum mix of Executive [represented by CMD Director (HR & EB) Director(Finance) and Director (Technical)] Non-Executive [represented by Government NomineeDirectors] and Independent Directors.

List of Present Directors of MTNL as on 31.03.2022 is given in theCorporate Governance Report. During the period under report the following changes tookplace in the Directorship/Key Managerial Personnel (KMP) of Your Company: -

1. Shri Suresh Kumar Gupta Director (Finance) has ceased to beDirector (Finance) w.e.f.

05.05.2021 due to death.

2. Smt. Yojana Das was appointed as Director (Finance) vide DoT letterNo. E-2-2/2020-PSA dtd.

12.05.2021 w.e.f. 17.05.2021.

3. Shri Sunil Kumar Director (HR & EB) has ceased to be Director(HR & EB) on 31.08.2021 on account of superannuation.

4. Shri Arvind Vadnerkar was appointed as Director (HR & EB) videDoT letter No. E-2-3/2021- PSA dtd. 25.08.2021 w.e.f. 01.09.2021.

5. Shri Yogesh Kumar Tamarkar Shri Vishwas Pathak and Shri Sarv DamanBharat was appointed as Independent Director of the Company vide DoT LetterNo.E-5-3/2018-PSA dtd. 01.11.2021 w.e.f. 12.11.2021.

6. Smt. Deepika Mahajan was appointed as Independent Director of theCompany vide DoT Letter No. No.E-5-3/2018-PSA dtd. 01.11.2021 w.e.f. 23.11.2021.

7. Shri Sushil Kumar Mishra Director (Technical) has ceased to beDirector (Technical) w.e.f.

31.03.2022 due to superannuation.

8. Shri V. Ramesh was appointed as Director (Technical) vide DoT LetterNo.E-2-2/2021-PSA dtd.

22.03.2022 w.e.f. 01.04.2022.

9. Shri Piyush Ranjan Nishad was appointed as Independent Director ofthe Company vide DoT Letter No. E-5-3/2018-PSA dtd. 23.03.2022 w.e.f. 21.04.2022.

10. Shri Navneet Gupta Government Nominee Director has ceased to beGovernment Nominee Director w.e.f. 17.05.2022.

11. Shri Premjit Lal was appointed as Government Nominee Director videDoT letter No. E-5- 3/2021-PSA dtd. 17.05.2022 & 18.05.2022 w.e.f. 17.05.2022.

12. Shri Amitabh Ranjan Sinha Government Nominee Director has ceasedto be Government Nominee Director w.e.f. 30.05.2022.

13. Ms. Yashashri Shukla was appointed as Government Nominee Directorvide DoT Letter No.E-5- 3/2021-PSA -Part(1) dtd. 26.05.2022 w.e.f. 30.05.2022.

Pursuant to the provisions of Section 203 of the Act the KeyManagerial Personnel (KMP) of your Company as on 31.03.2022 are: -

i) Shri S. R. Sayal Company Secretary

Apart from the above no other Director (including IndependentDirectors) or KMP were appointed or had retired or resigned during the Financial Year2021-22 and till the date of approval of Directors Report by the Board of Directors.Details of Board of Directors are given separately in the Corporate Governance Report.

 

RETIREMENT OF DIRECTORS BY ROTATION

In accordance with the provisions of Section 152 of the Companies act2013 read with Article 66 F of the Articles of Association of the Company Ms. Yojana DasDirector (Finance) and Shri Arvind Vadnerkar Director (HR & EB) retire by rotation atthe forthcoming Annual General Meeting and being eligible offer themselves forreappointment. Brief particulars of director seeking re-appointment together with theirdirectorships in other companies and committee memberships have been given in the Annexureto the Notice of 36thAnnual General Meeting in pursuance to Regulation 36(3) ofSEBI (LODR) Regulations 2015 and Secretarial Standards 2 issued by ICSI.

 

COMMITTEES OF THE BOARD

The Company has Five Board Level Committees as on 31.03.2022:

1. Audit Committees.

2. Nomination & Remuneration Committees.

3. Stakeholders Relationship Committee.

4. Enterprise Risk Management Committee

5. Corporate Social Responsibility Committee

Details of all the Committees along with their main terms compositionand meeting held during the year under review are provided in the Report on CorporateGovernance a part of this Annual Report.

 

ACKNOWLEDGEMENT

Your Directors take this opportunity to gratefully acknowledge thehelp guidance and support received from Department of Telecom (DoT) and variousMinistries of the Government of India. Your Directors are especially grateful to itsBankers all stakeholders and investors including ADR holders for their continuedpatronage and confidence reposed in the company. The Directors would like to express theirthanks for the sincere hard work and dedicated services rendered by every employee of thecompany. The Board is confident that with the employees’ continued enthusiasminitiative and dedicated efforts your company could face the new challenges andopportunities arising out of the resultant competition from private operators in theCellular Mobile Basic Telephone Internet services and other Value Added services.

For and on behalf of the Board of Directors

Sd/-

(Shri P. K. Purwar)

Chairman & Managing Director

PLACE: NEW DELHI
DATE: 12.08.2022

 

Note: After the approval of Directors Report by the Board ofDirectors on 12.08.2022 the following changes have taken place till -

.