DIRECTOR'S REPORT To The Shareholders, of Mahanagar Telephone Nigam Limited Dear Shareholders, Your Directors present the 29th Annual Report of your Company together with the Financial 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 on March 31, 2015. PERFORMANCE REVIEW OF MTNL FOR THE FY 2014-15 MTNL is giving major thrust on the expansion of capacity for GSM 2G and 3G to cater the further demand. Actions are being taken to generate fresh demands by providing quality services, customer care & satisfaction, introduction of new services / schemes and innovative marketing strategies. Company has initiated the following up-gradation / capacity building projects- GSM / 3G services- (i) 3G Network Up-gradation: The existing HSDPA 3G network supporting D/L speed of 3.6 Mbps & U/L speed of 384 Kbps will be upgraded to support HSPA+ with D/L speed of 21.1 Mbps & U/L speed of 5.76 Mbps per sector in each Node-B. (ii) Expansion of GSM / 3G RF network: The network coverage will be improved by deploying additional BTSs / Node-Bs. Around 1080 Node-Bs & 800 BTSs in Delhi and 1080 Nods-Bs & 566 BTSs in Mumbai are proposed to be added. The number of BTSs & Node-Bs will be added as per requirement in phases. To reduce Capex & Opex, majority of the proposed expansion will be done on shared sites. For meeting the enhanced Data carrying requirement of 3G network, the packet core capacity (Data handling capacity of network) will be upgraded from existing capacity of 400 Mbps (Delhi) and \1.8 Gbps (Mumbai) to 10 Gbps in both cities. (iii) Expansion / Up-gradation of M/W Backhaul: Further, to handle the enhanced speed, the M/W backhaul will be augmented / expanded through deployment of 200 Mbps (upgradable to 400 Mbps) Hybrid M/W systems. Fixed Line - (i) Replacement of TDM switches with NGN/ IMS platform: MTNL has planned to replace its TDM Fixed line switches which are becoming obsolete as their induction started around 20 years back with NGN / IMS technology in phased manner during 12th Five year plan. Introduction of NGN / IMS based services will not only help MTNL in saving Opex, space but also enable us to offer all data / video centric services which are currently enjoyed by Mobile subscribers to our fixed line subscribers also and ultimately leading to convergence of fixed and mobile services. For this purpose, C-DOT was allowed to conduct a field trial of its IMS Complied NGN platform solution in MTNL's Network. An MOU in this regard was also signed with C-DOT. Successful field trial of C-DOT's IMS complied NGN switches has already been completed and voice to MTNL's FTTH subscribers, certain FIN and centrex services are being provided through this switch. Further C-DOT has been given go-ahead for trial commercial migration of one existing TDM switch of 10-20K capacity each in Delhi and Mumbai. This initiative with C-DOT will help MTNL in migration of its life expired switches without bearing any significant CAPEX burden. (ii) Extending reach of FTTH and taking fiber to the HUB / near to the subscriber : MTNL plans to increase 45 POP locations in Delhi and 56 in Mumbai on its' deployed state of art NGCN (IP/MPLS) Network to 400-500 PoP in next 2-3 years to reduce subscriber copper loop length to 1-2 Kms. Further to increase FTTH reach, certain societies & housing complexes in Delhi & Mumbai has already been identified for this purpose. (iii) Up-gradation of Access Networks- Continuous process and order for PIJF & OF cables for the current year as phase- I has been issued. DIVIDEND Since there has been no operating profit during the financial year 2014-15, the Board of Directors of your company expresses its inability to recommend any dividend for the year under report. SUBSIDIARY AND JOINT VENTURE COMPANIES Your company has two subsidiary and two Joint Ventures companies. The Financial Performance of Subsidiaries is given at Note 35 to account (point no. 29). The working of the same is as under:- (i) Mahanagar Telephone (Mauritius) Ltd. (MTML) MTML is a 100% subsidiary of MTNL. The company is having License for mobile services, international long distance services and internet services. The customer base of MTML has grown to 243,274 from 191,262 of last year. The market share has crossed 18% in voice and more than 35% in ILD sector. In the year 2015, it is planning to further upgrading its GSM network to add more BTSs and deploy HSPA (+) network in all areas. The LTE (4G) is also planned to be launched in select areas in 2015. MTML has achieved revenue of INR 880 Million during the fiscal year 2014-15 compare to the last financial year revenue of INR 761 Million. Despite the intense competition and market getting saturated, the company could increase its revenue. The Net profit (before tax) has increased to INR 41.92 Million from INR 37.42 Million (before tax). All the expenses of the company are paid by its own internal resources and CAPEX for procurement of equipments is also met. There is no debt liability on the company. The company is managed by CEO, CTO, CFO and 10 more officers all on deputation from the parent company. Other operations are managed through outsourcing. (ii) Millennium Telecom Ltd. (MTL) (Wholly owned subsidiary of MTNL) FINANCIAL PERFORMANCE: MTL was in losses for many years but now it is moving ahead towards the path of revival. In 2014-15, the company turned into profit by System Integration other ICT related works at Pan India level. In the financial year ended 31st March, 2015 MTL has registered a net profit of Rs. 12.73 lakhs/- as against a Net loss of Rs. 16.97 lakhs last year. With continuous pursuance with Income Tax department, MTL has received a refund of Rs 4.20 lakhs and got overall refund order issued for Rs. 96 lakhs approximately. The Company was basically formed for providing internet and other value added services in the year 2000. During the financial year 2014-15 the Board of Directors of MTL has proposed to take up the new business for increasing the revenue and making the Company profitable simultaneously. Some of the new work orders being undertaken by the company are as follows: 1. MTNL has given its recovery case of its CWG project from the Govt. to be pursued by MTL for which an amount equivalent to 5% of the amount recovered will be paid to MTL as its consultancy charges. 2. Non-Telecom component work in MTNL's contracts/projects to be awarded to MTL on nomination basis. 3. To start Bundled Services for MTNL products/services. 4. To undertake Infrastructure Leasing Business of MTNL Mumbai. 5. To undertake the Data centers Leasing /Hiring of MTNL and other PSU telecos like. M/s BSNL, ITI, MSITS. 6. To undertake remote monitoring of customer network. 7. To undertake capacity building and skill development programme. 8. To perform end-to-end ICT Solution provider along with operation & maintenance. 9. To launch, operate, provide and maintain Cloud and managed services. 10. Surveillance and perimeter security including emergency communication. 11. Campus wide Wi-Fi , surveillance projects. 12. Provision of RF links for Captive use. Some officers of MTNL have been nominated to take care of the work of MTL in addition to their existing duties & responsibilities without additional remuneration. This is done for gearing up of MTL since lot of businesses is available in the market. (iii) United Telecommunications Ltd. (UTL) United Telecom Limited (UTL) is a Joint Venture between MTNL, TCIL, VSNL(now TCL) and NVPL in which the three Indian Partners had jointly subscribed 80% of the shares (MTNL:26.68%, TCIL:26.66% & VSNL(TCL): 26.66%) and remaining 20% by NVPL, the local Partner at Nepal. MTNL has invested Rs.35.85 crs. in UTL. There are pending dues such as Royalty, IUC, License Fee, etc. For meeting the above liabilities and to add more BTSs to start GSM services, UTL had raised a demand to all the JV Partners to infuse more capital but in view of the financial constraints in MTNL, it was found difficult to make further investments in UTL. Even the DOT has advised that MTNL & TCIL may take a decision in their best commercial interest and without impairing the investment of the Government in the two PSUs. An Amendatory Agreement of UTL was signed in December, 2014 wherein NVPL has agreed to bring additional investment of NRs.360 crores as and when necessary and shareholding ratio will be changed as and when NVPL makes such investment and other partners do not invest. In order to protect the interest of the minority shareholders, a clause has been added in the Amendatory Agreement that JV Agreement cannot be altered without the consent of all the shareholders. An exit clause has also been added as per which the three Indian Partners can exit at par value after 2 years after serving 3 months notice. MTNL, TCIL & TCL have decided not to invest in the Rights issue of NRs.45 crore of UTL. After subscribing to the Right issue by NVPL, their shareholding has increased to 33.8461% from earlier 20% while the shareholding of TCIL and TCL reduced to 22.0458% each and that of MTNL reduced to 22.0623%. NVPL has further invested NRs.9 crs against the 10th equity tranche of NRs.40 crs. MTNL's share has reduced to 21.3242% while NVPL's share has increased to 36.0595%. The earthquake of 12th May 2015 has affected the services a lot. There is tremendous pressure from house owners and community to remove the towers from buildings. In 4 cases, even the local administration has issued letters to remove all towers. Presently, towers at about 5 places are being removed from top of such buildings in Kathmandu that have suffered extensive damage and it is no more safe. It will have negative impact on coverage. All employees are safe. Operations are normal except about 8 BTS in different parts of network have been switched off by house owners to pressurize us to remove the sites. Performance Highlights During the period from 17.7.2014 to 16.7.2015 UTL has earned total revenue from Telecom, Data Services, Internet Services, IUC, Value Added Services, etc amounting to NRs.20,19,06,469/- as against NRs. 48,82,79,058/- on 16.7.2014. The No. of Subscribers of UTL as on 31st March, 2015 were 5,99,067 and this include both voice and data subscribers. The no. of Exchanges of UTL is MSC-1, BSC-1, and BTS-199. UTL has applied for Unified License and accordingly deposited license fee with Nepal Telecommunications Authority (NTA). NTA is in the process of issuing the Unified License to UTL. This is a Pan-Nepal License. UTL plans to roll out GSM network in three phases starting from end of 2016. (iv) MTNL STPI IT Services Ltd. (MSITS) MTNL STPI IT SERVICES LTD (MSITSL) is a 50:50 Joint Venture company of Mahanagar Telephone Nigam Limited (MTNL) and Software Technology Parks of India (STPI). MSITSL was incorporated on 31/03/2006 under the Companies Act, 1956, with authorized Capital of Rs.50 Crores. In order to implement one of its objectives MSITSL has established the physical infrastructure of Tier III Data Center at 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 made in this regard is of Rs.477 lakhs. This Tier III Data Center is maintaining 99.98% uptime on 24X7. The commercial operation of the Data Center commenced in 2009. The Ministry of External Affairs (MEA) has hosted Passport Seva Project at MSITSL Data Center through M/s TCS. The Directorate General of Employment & Training (DGE&T) in Ministry of Labour & Employment has hosted National Career Project through STPI at MSITSL Data Centre, Chennai. MSITSL has earned the revenue for the period of 2009-10: Rs. 196 lakhs, for the year 2010-11:Rs. 275 lakhs, for the year 2011-12: Rs. 297 lakhs, for the year 2012-13: Rs. 360 lakhs, for the year 2013-14: Rs. 388 Lakhs and for the year 2014-15: Rs. 422 Lakhs. HUMAN RESOURCE DEVELOPMENT Your Company attaches the highest priority to the quality of intellectual capital at its disposal and believes that knowledge and skill of its employees are the key to achievements of its corporate mission. It has sound recruitment policy and comprehensive training system. During the past one year, your Company has laid greater emphasis on Human Resources Development. We have been devoting substantial resources on building a skilled workforce that has a capability to counter threats posed by ever changing business environment and to take advantages of opportunities presented to serve ever increasing customer base. The Company has been conducting various training and development activities which apart from reorienting the employees towards the greater organizational purpose, are also focusing on eliminating any skill gap and technical obsolescence. The managements' view on training is one of development of employee's overall personality and enabling them in becoming a vital productive resource. TRAINING TARGETS AND ACHIEVEMENTS At present MTNL has its in house two state of the art training centres one located in New Delhi and other at Mumbai. (I) The Institute of Telecom, Technology & Management (ITTM), New Delhi The Institute of Telecom, Technology & Management, ITTM Shadipur, New Delhi is a state of the art training centre of MTNL, Delhi engaged in imparting induction training and short duration training to its officers and employees in the field of Telecom, IT, Computer system and Management. With impressive growth of Telecom sector in India, the requirement of telecom trained personnel is growing day by day. Realizing this ever growing demand for telecom personnel, ITTM started training engineering students also as part of their summer training. During the year 2014-15, ITTM has successfully trained 950 Executives with an achievement of 4450 Man days and 1050 Non Executives with an achievement of 2779 Man days. One day and two days training workshops on Broadband and Customer Service as Life Style with positive attitude & behavior were also conducted by ITTM in all MTNL Delhi area units and a total of 1236 field staff was trained. Three Days Life Management Workshop by AWGP Shantikunj for motivation, positive thinking, stress management & spirituality at workplace and other healthcare program were organized by ITTM at CGO Complex in which 326 officers and officials of MTNL Delhi participated. Industrial Training/ Industrial visits were also successfully provided to 1318 trainees of various engineering institutions with an achievement of 17827 Man days. Revenue earned at ITTM by providing Industrial training to students for the financial year 2014-15 is Rs. 50,31,759 and revenue earned by ITTM from TCIL Trainees for the Financial year 2014-15 is Rs. 1,74,012. ITTM has the necessary infrastructure, technical and academic competence and excellence for providing training in specialized courses in the field of GSM, Broadband Technology, Switching, Transmission, External Plant, IT, Computer System, Management and various wellness programs. (II) Centre for Excellence in Telecom Technology & Management (CETTM), Mumbai The competition in the field of training is increasing tremendously with each passing day. Despite of fierce competition, CETTM has successfully shown 7.72% increase in the revenue during financial year 2014-15 compare to the last year 2013-14 revenue. Clients from various sectors like BPO, Banking, Finance, Oil, pharmacy, IT etc. have availed the infrastructure of CETTM on leasing basis, keeping to its tradition, CETTM has also added more than 32 new clients to its already existing long clientele. As Corporate Social Responsibility 26 vacation courses for Engineering college students were launched during 2014-15 in which 474 students were trained during summer and winter vacations. Under ITEC-SCAAP program, sponsored by MEA, Govt. of India, CETTM has successfully completed 16 courses in Telecom, IT & Management streams. A total of 250 foreign particulars from over 49 countries were trained. Apart from the above, CETTM has successfully trained 2707 in-house personnel with an achievement of 27686 Trainee Days. 21 senior officers from Cabinet secretariat have been trained in various Technologies of Telecommunication. CETTM has tied up with Welingkar Institute of Management Development & Research for providing Post Graduate Program on Telecom Management, 17 students completed the course & 9 are undergoing training. CETTM is 'ISO 9001: 2008' certified institute and recently successfully completed renewal audit. The efforts and the results, reiterate our commitment to the growth in terms of Business, quality and customer satisfaction. The Customers have always rewarded our good work by giving us the repeated business. INDUSTRIAL RELATIONS Industrial peace and Industrial harmony is based on healthy Employee Relations and like the previous year, Employees Relations remained Cordial throughout the year. The Grievances/Issues raised by the employees/ Union/Associations were given due attention and regard. The cases/issues brought up by them were settled through regular meetings and interactions between Management and Unions/Associations and action as mutually agreed was taken to settle them. Further, MTNL was paying Pension to the absorbed employees for the service rendered in Govt. For the past few years MTNL was pursuing with Govt. for settlement of the pension issue. The Pension issue was considered by the Govt. and it has been decided that Payment of pensionary benefits to all categories of the erstwhile employees of the Government (Gr. A, B, C & D) absorbed in MTNL, who have opted for pension on combined service, will be made by Govt. in the same manner as in BSNL w.e.f 01/10/2000. EMPLOYEES' WELFARE Employees Welfare Schemes like subsidized Canteen, Creches, Housing, Medical facilities, Scholarship to Wards of Employees, Group Insurance, dormitories for females working in night shift etc. continued and maintained by the Company for its employees. Sports and Cultural activities were also given priority during the year. IMPLEMENTATION OF OFFICIAL LANGUAGE POLICY The Company continued its efforts to comply with statutory requirements in promoting the use of Hindi and has been able to achieve most of the annual targets set by the Government 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 to implementation of reservation policy for candidates belonging to SC/ST/OBC communities as well as Physically Challenged candidates. IMPLEMENTATION OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITITION & REDRESSAL) ACT, 2013 The Company has constituted an Internal Complaint Committee on Prevention, Prohibition & Redressal of Sexual Harassment of women at workplace and matters connected therewith or incidental thereto covering all aspects as contained in the Sexual Harassment of Women at workplace (Prevention, Prohibition & Redressal) Act, 2013. During the Financial Year 2014-15 one case has been referred/ reported to the Committee on Sexual Harassment and is under process to resolve it. 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 redress the issues of Sexual Harassment at workplace, special cells have been constituted. Special grants have been sanctioned to Women Welfare Committees at Delhi/ Mumbai. Child Care Leave has also been approved by MTNL Board on 30/05/2014 IMPLEMENTATION OF CSR AND SUSTAINABILTY ACTIVITIES/ PROJECTS IN MTNL. A Board level CSR Committee has been constituted as per DPE Guidelines and the Companies Act, 2013 to oversee and coordinate the implementation of CSR and sustainability activities/ projects in MTNL. CSR Policy has been approved by the Board of Directors of your Company and the same has also been posted on the website of the company. Since your company is not making any profit for last few years, it has not spent any amount on the CSR activity. VIGILANCE The Vigilance Department of MTNL is headed by Chief Vigilance Officer. He is an officer of the rank of Joint Secretary, Govt. of India. Presently Shri Khushi Ram, IRSEE, is the CVO of MTNL. The CVO is responsible for complete vigilance administration in MTNL. During the year 2014-15, emphasis was laid on preventive vigilance and to enhance the awareness of transparency and accountability in working by carrying out various field inspections. System improvement advice were issued by Vigilance Unit for reconciliation of Sanchaar Haats products, store verification, optimum electrical load in various buildings, proper maintenance of broadband faults, BTS sites etc. CTE type inspections were also carried out as per CVC guidelines. Further, training programmes/seminars on vigilance/complaints handling and disciplinary proceedings have been conducted during the period for the employees to make the participants understand the conduct rules of MTNL, procedure for handling departmental proceedings and improve their working efficiency. As per CVC instructions, the Vigilance Awareness Week was observed from 27.10.2014 to 01.11.2014. During this week, various activities like pledge taking, release of three booklets on (i) ""Combating Corruption-Technology as an enabler" containing similar matter (ii) Book containing "DO's and DON'T and service provided by MTNL, and (iii) book on Vigilance and discipline with a focus on subject Combating Corruption and containing the chapters on Leveraging Technology for Transpararency and Fairness, Principles of Natural Justice, Complaint handling and investigation, steps of disciplinary proceedings, preventive vigilance, etc were distributed. Also quotations on anti-corruption and lectures, seminar and workshop were organized in MTNL. Further a lecture on "Combating Corruption -Technology as an enabler" was organized in MTNL, Delhi by Sh. B.P.Bagchi, SP, CBI. Monthly vigilance/disciplinary meetings were held regularly at Delhi & Mumbai with concerned GM (Vigilance) team to review the status of the cases and expedite the same. Meeting with ED & CGM ( Delhi / Mumbai / Wireless Services) were also held to apprise them of the observations made during field inspections and different types of operational complaints received by Vigilance Unit. During these meetings, CVO emphasized for further improvement in customer services offered by MTNL by taking prompt action on customer's complaint and having customer-centric approach at all levels to enhance the credibility and brand image of the company in the minds of the customers. INTEGRITY PACT PROGRAME WITH TRANSPARENCY INTERNATIONAL INDIA MTNL has signed a Memorandum of Understanding (MOU) with Transparency International India (TII) for implementing an Integrity Pact Programme (IPP) focused on enhancing transparency in its business transactions, contracts and procurement process. Under this MOU, MTNL is committed to implementing the Integrity Pact in all its major procurement and work contract activities. Three Independent External Monitors being persons of eminence nominated by MTNL in consultation with Central Vigilance Commission (CVC), monitor the activities. The Integrity Pact has strengthened the established system and procedures by creating trust in various Stakeholders. MATERIAL CHANGES AND COMMITMENT IF ANY AFFECTING THE FINANCIAL POSITION OF THE COMPANY OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THIS FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT. No material changes and commitment affecting the financial position of the company occurred between the end of the financial year to which this financial statements relate and the date of the report. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS & OUTGO The provisions of Section 134(m) of the Companies Act, 2013 do not apply to the Company as your Company is a service provider. The total Foreign Exchange inflow was Rs. 5.45 crores and outflow was Rs. 5.09 crores during the year under review. ENTERPRISE RISK MANAGEMENT POLICY FOR THE F.Y. 2015-16 Risk Management Policy for the FY 2015-16 has been approved by the Board of Directors of your company. The policy of the company on Enterprise Risk Management is a continuous mechanism, monitored by the company's Board of directors through a designated committee and other personnel, for the purpose of strategy formulation for various risks and designed to identify potential events that may affect the entity and also placing internal controls that could mitigate or avert the probable risks in various process application and manage risks to be within its risk appetite and to provide reasonable assurance regarding the achievement of entity objectives throughout the process and operations of the company. MEETINGS OF THE BOARD OF DIRECTORS During the year under report, the Board of Directors of your Company met frequently. In the Financial Year 2014-15, 11 (eleven) Board Meetings were held. The intervening gap between any two meetings was within the period prescribed by the Companies Act, 2013. Details of Board Meetings are given in Corporate Governance Report. At these meetings, the Board held intensive discussions on the budget, important financial transactions and various steps to face the impending competition from private operators both in Basic Telephone Service, Cellular Mobile Telephony and other value added services. DECLARATION BY INDEPENDENT DIRECTOR The Company has received necessary declaration from the Independent Director under Section 149(7) of the Companies Act, 2013 that he meets the criteria of Independence laid down in the Section 149(6) of the Companies Act, 2013 and Clause 49 of Listing Agreement. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THE COMPANIES ACT, 2013 During the year, there was no loans given, guarantees provided or investments made by the MTNL under Section 186 of the Companies Act, 2013. CORPORATE GOVERNANCE Your Company follows the principles of effective Corporate Governance Practices. The Company has taken steps to comply with the requirements of Revised Clause 49 of the Listing Agreement with the Stock Exchanges. MTNL also comply with the Corporate Governance Guidelines enunciated by Department of Public Enterprises (DPE), Government of India for Central Public Sector Enterprises (CPSEs). Quarterly Compliance Reports are regularly sent to the Stock Exchanges and the DPE. A Report on Corporate Governance has been appended under the separate section titled 'Corporate Governance Report'. CERTIFICATE FROM THE PRACTISING COMPANY SECRETARY REGARDING THE COMPLIANCE OF CORPORATE GOVERNANCE A certificate from the M/s V.K. Sharma & Co. Practising Company Secretary, regarding compliance of conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement and DPE Guidelines is attached as an Annexure. COMPLIANCE OF DPE GUIDELINES & POLICIES The Guidelines & Policies issued by the Department of Public Enterprises (DPE) from time to time are being complied with and implemented with the approval of the Board of Directors/Competent Authority. IMPLEMENTATION ON CIRCULAR ISSUED BY MINISTRY OF CORPORATE AFFAIRS ON "GREEN INITIATIVES IN CORPORATE GOVERNANCE" In compliance of MCA circular regarding green initiatives the Annual Report for the Financial Year 2014-15 was sent by e-mail to the shareholders whose e-mail addresses are available with the company. It is proposed that your company will send 29th Annual Report (for the F.Y. 2014-15) also by email to all the shareholders who have provided valid email IDs. Further your company request all shareholders holding shares in electronic mode to keep their email addresses updated or provide their email addresses if not earlier provided to their respective DPs. Members holding shares in physical mode are also requested to update their email addresses by writing to the Registrar and Transfer Agent of the Company or directly to the Company by quoting their folio number(s). DIRECTORS' RESPONSIBILITY STATEMENT Pursuant to the provisions of Section 134(5) of the Companies Act, 2013, the Directors to the best of their knowledge and belief confirm that: (a) In the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures; (b) the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit or loss of the company for that period; (c) the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities; (d) the directors had prepared the annual accounts on a going concern basis and (e) the directors, in the case of a listed Company, had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating efficiently. (f) the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively. FIXED DEPOSITS We have not accepted any fixed deposits and, as such, no amount of principal or interest was outstanding as on the Balance Sheet date on this account. PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURE During the year under report, there was no employee who was in receipt of remuneration in excess of limits prescribed under the revised provisions of Section 197(12) of the Companies Act, 2013 read with Rules 5(2) & 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. SECRETARIAL AUDIT REPORT FOR THE FINANCIAL YEAR 2014-15 M/s Grover Ahuja & Associates, Company Secretaries, have conducted the Secretarial Audit of your company for the financial year 2014-15 under section 204 of the Companies Act, 2013. The said Secretarial Audit Report is attached. EXTRACT OF ANNUAL RETURN FOR THE YEAR 2014-15 PURSUANT TO SECTION 92(3) OF COMPANIES ACT, 2013 (MGT-9) Pursuant to Section 92(3) of Companies Act, 2013 Extract of Annual Return (in Form-MGT-9) of the Company is annexed. AUDITORS QUALIFICATIONS AND MANAGEMENT REPLY THERETO The replies to the points raised in the Statutory Auditors' Report for the Financial Year 2014-15 are given as annexure. The Comments of the Comptroller and Auditor General of India on the Financial Statement for the Financial Year 2014-15 and the replies thereon of the Management are given in the annexure to the Directors' Report. DIRECTORS & KEY MANAGERIAL PERSONNEL The Board of Directors of your company has five (5) members consisting of CMD, two Functional Directors and two Government Nominee Directors. Shri P.K Purwar continued to be the Director (Fin) of the Company, Shri Sunil Kumar continued to be the Director (HR&EB/Tech) of the Company and Shri V. Umashankar continued to be the Government Director respectively. During the period under report, the following changes took place in the Directorship/Key Managerial Personnel of Your Company:- 1. Shri N. K. Yadav has been appointed as CMD of the Company vide DoT letter dated 08/06/2015 2. Shri P.K.Purwar has ceased to hold additional charge of CMD w.e.f. 08/06/2015 3. Shri Sushil Kumar Shingal, Independent Director has ceased to be the Independent Director of the company w.e.f. 10.05.2015. 4. Shri Srikanta Panda has ceased to be Government Nominee Director w.e.f. 13/05/2015. 5. Smt Simmi R. Nakra has been appointed as Government Nominee Director in place of Shri Srikanta Panda w.e.f. 13.05.2015. The present Key Managerial Personnel of your Company pursuant to the Companies Act, 2013 are:- (I) Shri N.K.Yadav, Chairman & Managing Director (II) Shri P.K. Purwar, Dir(Fin) (iii) Shri Sunil Kumar, Dir(HR&EB/Tech) (iv) Shri S.R. Sayal, Company Secretary AUDITORS (1) M/s. V.K.Dhingra & Co., Chartered Accountants and M/s Arun K. Agarwal & Associate, Chartered Accountants have been appointed as Joint Statutory Auditors of your Company by the Comptroller and Auditor General of India for the year 2014-15 and the Board has already ratified their appointment. (2) M/s R.M.Bansal & Co., Cost Accountants have been appointed as Cost Auditors of your company for carrying out audit under Section 148 of the Companies Act, 2013, for the records maintained under section 209(1)(d) of Companies Act,1956 and as notified under: (i) Cost Accounting Records (Telecommuncations) Rules,2002 & (ii) Cost Audit Rules,2001. The Cost Audit Report alongwith the annexures for the year 2013-14 have been submitted to the Central Government in the Form I-XBRL format on MCA portal on 29/09/2014. (3) M/s Grover Ahuja & Associates, Company Secretaries have been appointed as Secretarial Auditors of your company for carrying out Secretarial Audit under section 204 of the Companies Act, 2013 for the Financial Year 2014-15. ACKNOWLEDGEMENT Your Directors take this opportunity to gratefully acknowledge the help, guidance and support received from Deptt. of Telecom (DoT) and various Ministries of the Government of India. Your Directors are especially grateful to its Bankers, all stakeholders and investors including, ADR holders, for their continued patronage and confidence reposed in the company. The Directors would like to express their thanks for the sincere hard work and dedication of every employee leading to impressive results of your company. The Board is confident that with the employees' continued enthusiasm, initiative and dedicated efforts, your company could face the new challenges and opportunities arising out of the resultant competition from private operators in the Cellular Mobile, Basic Telephone, Internet services and other Value Added services. The Directors are hopeful that the hard work and sincere efforts and dedicated services of the employees at all levels, MTNL shall maintain its position as one of the leading telecom service provider. For and on behalf of the Board of Directors sd/- (Shri N. K. Yadav) CHAIRMAN AND MANAGING DIRECTOR PLACE: NEW DELHI DATE: 14th August, 2015 |