Mahanagar Telephone Nigam
BSE: 500108 | NSE: MTNL | ISIN: INE153A01019 | Telecommunications - Service
- Directors Report
- Chairman's Speech
- Auditors Report
- Notes To Accounts
- Accounting Policy
- Finished Products
- Raw Materials
| Directors Report | Year End : Mar '08 |
The Directors have pleasure in presenting the 22nd Annual Report of
your Company together with the Statement of Accounts and Auditors
Report as well as comments of Comptroller and Auditor General on the
Accounts for the financial year ended on March 31, 2008.
HIGHLIGHTS
India has set on to join a handful elite of nations offering
third-generation (3G) mobile telephony services as the Govt, announced
the auction of slices of spectrum to offer the high-value services
which give the Telecom Industry a chance to earn higher revenue per
user and your company is ready to launch the 3G services soon.
The company is well equipped to keep pace with the competition in the
growing economy of the country. During the year there is a tremendous
increase in the cellular subscriber base. The company has continued to
provide a sustained push to mobile services through an expanding
network and a large range of services. The Company strives for
enhancement of the shareholders value.
We strengthened our leadership in GSM mobile services by improving on
market shares in both the metros. The net profit during this year has
gone down by Rs 948.45. million as compared to previous year which is
mainly due to revision of tariff.
The reduction in tariff is costing your company dearly. But inspite of
all the facts, due to the hard work of our officials, we have almost
maintained our profit in the last three years at the similar level.
There is a decline in income from services as compared to previous
year. This is partly attributed to the decline in tariffs due to heavy
competition. The downward trend of the Fixed line subscribers is still
an area of concern for the company.
FINANCIAL RESULTS
Sources and application of funds for the year under review are given
below:-
(Rs. in Million)
2007-08 2006-07
Income from Services 47225.17 49093.18
Expenditure (excluding- 46955.02 47881.54
Interest & prior period Adjustments)
Operating Profit 270.15 1211.64
Other Income 6074.16 6735.30
Interest 27.82 20.11
Profit before tax 6316.49 7926.83
Tax provision for the year 2248.31 3266.50
Prior Period Adjustments (1800.73) (2157.03)
Net Profit for the year 5868.91 6817.36
Profit available for 5868.91 6817.36
Appropriation
Interim/Proposed final dividend 2520.00 2520.00
Dividend Tax 428.27 372.14
Transfer to:
a) Contingency Reserve
b) Reserve for R&D
c) General Reserve 2920.64 3925.22
SOURCES AND USES OF FUNDS
Authorised Capital 8000.00 8000.00
Issued, Subscribed & paid-up Capital 6300.00 6300.00
Reserves & Surpl 112913.58 109992.96
Secured and unsecured loan
Deferred Tax Liability (Net) 4865.16 6204.79
REPRESENTED BY
Fixed Assets* (Net Block) 63197.96 64036.68
Investment 5573.92 4414.03
Net Current Assets 44065.31 44186.71
Deferred Revenue Expenditure 1591.70 2216.51
Capital Work-in-Progress 9649.85 7643.82
Note : Previous years figures have been re-grouped/re-cast wherever
considered necessary.
DIVIDEND
The Company has paid an interim dividend @ 30 % for the year 2007-08
and the Board is pleased to recommend payment of final dividend @ 10%
i.e. total 40% on the paid up equity capital of Rs. 6300 million. The
dividend will absorb a sum of Rs. 2520 million excluding dividend tax.
SUBSIDIARY COMPANIES
Your Company has two subsidiaries viz. Millennium Telecom Ltd. (MTL) at
Mumbai and Mahanagar Telephone Mauritius Ltd. (MTML) at Mauritius.The
reports and accounts of subsidiary companies pursuant to section 212 of
the Companies Act, 1956 are annexed.
(i) Millennium Telecom Ltd. (MTL)
MTL is handling the project for laying submarine cable from India to
south East Asia and Middle East with ultimate intent to extend
eventually to the USA and Europe. By investing in this project, MTNL &
BSNL (would be joint venture partner with 50% equity participation in
capital of MTL) can get International Bandwidth to support its own
network demand as well as to lease it to others at very competitive
rates. Thus, MTNL & BSNL would not be dependent on other operators for
international bandwidth.
(ii) Mahanagar Telephone Mauritius Ltd. (MTML)
The company was incorporated as private domestic company at Mauritius
on 14.11.2003 with an authorized capital of MUR 600M and the paid up
capital as on 31.3.2008 stands as MUR 436.5 Million. The company is
having License from the telecom regulatory ICTA for Fixed Telephone
Services, Mobile Services, International Long Distance Services and
Internet Services.
It has.lnstalled 100K state of art technology CDMA IX & IX EVDO switch
with a radio network of 51 Base stations. The system is equipped to
provide value added services viz., SMS, DATA, Multi-media service
The following Telecom Services are being provided by MTML as of today:
Fixed Wireless Telephone
Mobile
International Long Distance Calls.
Internet through Fixed Wireless Phones and Data cards
The Company is second operator in Fixed Line and third operator in
Mobile and one among the seven ILD operators.The company is equipped
with call centre (10 positions) and 11 Customer Care centres all over
the island and started its operations in the year 2005-2006 partially.
The full operations of the company started from March 2007.
* The company is having the following customer base as of 31.3.2008.
Fixed Wireless Phones 26,710
Mobile 8,901
International Long Distance (through CAC) 5,708
Internet Customers 2,993
REVENUE
* The company earned a gross revenue of MUR 188.8M from services during
the year 2007-08 and just broke even during the year 2007-08.
The Fixed assets of the company as of 31.3.2008 MUR 445.27 M.
JOINT VENTURES
Your company has two joint ventures viz. UNITED TELECOMMUNICATIONS LTD.
(UTL) & MTNLSTPI IT SERVICES Ltd.
(i) UNITED TELECOMMUNICATIONS LTD. (UTL)
UTL is a Public Limited Company registered in Nepal and has been
promoted by three telecom majors viz. MTNL, TCIL & VSNL (TATA) and
Vishal Group of Nepal. Initially, UTL deployed state of art 3G CDMA
2000 1 xWLL equipments for providing Basic Telephone Service based on
WLL technology in Kathmandu valley consisting of five municipalities
namely Kathmandu city, Lalitpur, Bkaktapur, Thimi and Kitipur. For
serving customers in the valley, UTL has established a modern customer
service centre called Wave Gallery in Pitlisadak for providing
registration and other commercial services to its customers.
Subsequently five more Customer Service Centres in Hattisar, Chhabhil,
Balaju, Patan, Ghatagharand Kakhtapurwere established in valley.
UTL has set up first call centre for telecom in Nepal with IVRS system
for customers support services like FRS (Fault Repair Service), DQ
(Directory Enquiry), PRS (Payment Reminder System) etc. UTL installed
international Gateway Switch from M/s. Alcatel (France/India) and
Satellite Earth Station from M/s. GSI (USA) for provision of
international customers through its own international gateway
(consisting of satellite earth station and international gateway
switch) in April 2004. As on date, UTL has expanded its services in
Hetuda, Birganj, Butwal, Bhairawah, Pokhara, Banepa,
Bharatpur/Narayanagarh, Birat Nagarm Itahari and Dharan. In another
couple of months, UTL services will be available in Simra and Damak.
UTL was adjudged as one of the highest payer of taxes towards Customs
Duty, VAT, TSC, TDS etc and UTL by this way has remitted more than NRs
20 crore to the Government treasury. As on date, Customer base is about
115,000. The number of PCOs are about 1200.
UTL is planning to deploy Value Added Services (VAS) viz PDSN(high
speed internet of 144 KBPS), SMS, etc and also the expansion,
upgradation of existing network including IN platform. Also provision
of pre- paid services is on anvil. The network covers adjourning
villages to the cities wherever its services are in operation, 283
villages have been covered having customer base of 16,559.
(ii) MTNLSTPI IT SERVICES Ltd.
MTNL has joined hands with Software Technology Parks of India (STPI), a
society under the Ministry of Information Technology as 50:50 partners.
The main objective of the company is to undertake all such activities
that are required to make domain India.in popular. The joint venture
was incorporated on 31 - 03-2006 under the Companies Act 1956, with
authorized capital of Rs. 50 Crores and at present the paid up capital
is Rs. 5 Lacs.
The project under this joint venture is under way. MTNL-STPI JV project
of data centre at Chennai will provide services like messaging,
web-hosting, application hosting, Web-farming application etc. The
company is in the process of recruiting its own staff and will be
recruiting the best professionals from software industry.
The Company has obtained Certificate of Commencement of Business from
ROC on 14-12-2007.
SYSTEM STATUS OF MTNL AS ON 31st MARCH 2008.
S.
NO. PARTICULARS DELHI MUMBAI TOTAL
1 Number of Exchanges 342 210 552
2 Equipped Capacity* 5135129 4734081 9869210
Digital Lines 5135129 4734081 9869210
DLC Capacity 160152 117734 277886
Digitalization % lines 100% 100% 100%
3 DELs (Including WLL Fixed and GSM) 3181463 4028385 7209848
4 DELs
a) Wired Lines. 1574417 2101452 3675869
b) WLL-Fixed 27640 103572 131212
c) Garuda (FWT)
d) WLL-Mobile 100966 59950 160916
e) Cellular Mobile (GSM) 1478440 1763411 3241851
5 DLC (Nos) 425 509 934
6 Leased Circuits 15273 35900 51173
7 PCOs
Local 57340 134794 192134
STD 25352 21849 47201
Total 82692 156643 239335
8 Tax capacity 150000 155200 305200
9 Tandem 370500 386060 756560
10 ISDN 8945 16748 25693
11 Internet connection
a) Pre paid 19892 7407 27299
b) Post paid 593825 735182 1329007
c) Broadband (including ADSL) 232169 338422 570591
12 Waiting List Nil Nil Nil
13 OFC (in Route Kms) 7172.383 5866.132 13038.515
14 OFC (in Fibre Kms) 201349.534 138992.902 340342.436
15 IPTV 3481 3499 6980
16 VOIP 1523 1302 2825
(including WLL fixed ,WLL mobile & GSM)
CUSTOMER CARE AND AFTER SALE SERVICES
MTNL pays utmost attention to customer care and after sales services.
The customer care help lines for all its services have been
strengthened and more trained staff has been posted on these help lines
as well as in Sanchar Haats to provide on the spot solutions to all the
requirements of the customers. With a view to provide world class
customer care services, the company has recently increased the seats in
all its call centers by deploying qualified professionals.
HUMAN RESOURCE DEVELOPMENT
The Telecom industry in India is undergoing through a volatile phase
and fate of the organizations is being written and re-written everyday.
In the recent past, we have identified Human Resources as one of the
strategic partners for rapid business strides leading to success in all
strata of our operations. During last fiscal also we continued our
endeavors towards world standards HR policies.
We have always considered our Manpower as one of our greatest assets
and this is what differentiates MTNL from its competitors. We have a
strong manpower base of 47422 Nos. with wide array of Technical and
Managerial aptitudes and also talented supporting staff having exposure
to state of the art technologies prevailing in Telecom Industry in the
world. As a step towards restructuring of our manpower we have adopted
dual pronged strategy, viz., at one end we have recruited young and
talented professionals in areas like Telecom, Finance, HR, Marketing,
Law and on the other hand we have taken steps towards rightsizing of
the organization by offering VRS.
Thus fine-tuning our existing manpower mix in terms of age,
qualification, and aptitude to meet the demands posed by the changing
Business Environment and to take advantage of the opportunities
presented to serve ever-increasing customer base.
TRAINING PERFORMANCE
Our Company has been conducting various Training & Development
activities, which apart from minimizing the skill gap and technical
obsolescence, are also focusing towards attaining the bigger
organizational purpose of building a competent workforce to take the
challenge in the currently existing
Telecom sector.
CENTRE FOR EXCELLENCE IN TELECOM TECHNOLOGY AND MANAGEMENT (CETTM)
Our dream for having a world-class in house Training Centre furthered
one step when CETTM (Centre for Excellence in Telecom Training &
Management) was awarded ISO 9001:2000 certification. CETTM is slowly
taking the lead role and becoming the nodal center for HRD. Induction
Training programme for newly recruited executive Trainees in the field
of Telecom, Finance, Marketing, HR, Legal have been conducted at CETTM.
CETTM has started generating revenues by leasing out infrastructure and
providing training to other organizations of repute.
INDUSTRIAL RELATIONS
Industrial peace and Industrial harmony based on healthy Employee
Relations, like the previous year prevailed throughout the year. The
Grievances/Issues raised by the employees/Union/Associations was given
due attention and regard. The cases/issues brought up by them were
settled through regular meetings ad interactions between Management and
Unions/Associations and action as mutually agreed was taken to settle
them.
A further step towards Workers Participation in critical issues
concerning business endeavors, a special Joint Negotiation Committee
meeting was convened to share the views of recognized Unions on the
various aspects of our business endeavors and to obtain opinion from
them in further improving the same.
EMPLOYEES WELFARE
Employees Welfare Schemes like subsidized Canteen, Creches, Housing,
Medical facilities, Scholarships for the 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 AND PH COMMUNITY
Your Company has endeavored to fulfill all the statutory requirements
with regard to implementation of reservation policy for candidates
belonging to SC/ST/OBC communities and as well as Physically Challenged
candidates.
WORKING CONDITIONS OF WOMAN EMPLOYEES
We are continuously striving towards gender sensitization amongst our
employees. Special care has been taken in case of woman employees
working in night shifts. Also to redress the issues of Sexual
Harassment at workplace Special Cells have been constituted.
The Parliamentary Committee on empowerment of Women had studied the
working conditions of women in MTNL during the year. Special grants
have been sanctioned to Women Welfare Committee at Delhi/ Mumbai.
CORPORATE SOCIAL RESPONSIBILITY
Fulfilling the Social Responsibility was always high on our agenda and
in last fiscal year also your company supported a lot of Organizations
fighting for the bigger social cause. In many instances we also took
the same responsibility on our shoulders.
MANPOWER STATUS
As on 31 st March 2008 your Company had a strength of employees as per
details given below:-
MTNL Employees working strength as on 31.3.2008
Group Working SC ST
A 1257 230 57
B 5342 807 115
C 28214 4892 533
D 12538 2912 922
Total 47351 8841 1627
DRMs 71 0 1
Grand Total 47422 8841 1628
VIGILANCE
Vigilance cell in MTNL is headed by Sh. Kabal Singh, IRSSE who has
joined as CVO in corporate office on 24.3.2005. CVO is responsible for
complete vigilance administration of MTNL. In 2007-08, emphasis has
been laid on incorporating practices to increase transparency and
making systemic improvements to prevent the possibility of
manipulation. Under the guidance and instructions of Central Vigilance
commission steps has been initiated for ensuring efficient vigilance
administration by leveraging of technology and through increasing
transparency by way of making effective use of information technology
in the functioning of company. In its commitment to ensure total
transparency MTNL achieved a milestone by way of signing a MOU with
Transparency International - India (Til) for implementation of
Integrity Pact in all its major procurements. Integrity Pact is a tool
developed by a NGO named Transparency International, which ensures that
all activities and transactions between a Company or Government
Departments and their Suppliers are handled in a Fair, Transparent and
Corruption Free manner.
Training programmes, seminars and workshops had been conducted from
time to time to enhance the knowledge and skills of executives and
staff so as to improve their efficacy and strengthen their role in
overall development of the organization. The Vigilance Awareness Week
was celebrated from 12.11.2007 to 17.11.2007 and various activities
were observed during this week. Customers feedback and suggestion via
a questioner was collected through various Sanchar Haats/CSCs for
improvement in the services and complaint handling policy of MTNL was
released. The telecom frauds and system failures causing revenue
leakage were detected with the help of Fraud Management and Control
Centre (FMCC). FMCC is proving a vital instrument in timely detection
of various revenue realization related issues such as delay in
disconnection of service due to non-payment bills or non-issue of bills
etc. The cases of high calling customers and bulk users were regularly
monitored and checked so as to prevent any potential financial loss to
company.
Monthly Vigilance meetings were regularly conducted to monitor the
progress of pending vigilance complaints and disciplinary cases. In
these meetings, remedial measures and actions were suggested and
initiated to redress the problems and remove the hurdles in timely
settlement of such cases. Vigilance branch received 321 complaints
during the year. These complaints were expeditiously examined and
necessary actions were taken! Total 107 disciplinary cases were
finalized during the year. Regular inspections were also carried out by
vigilance officials at sensitive areas and corrective action were
initiated and suggested wherever required. Major/minor penalty,
disciplinary proceedings have been initiated against 105 employees of
the company for the irregularities and misconducts detected during
vigilance investigations.
CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION
Being a service providing organization, the relevant rules in this
regard are not applicable to your Company.
FOREIGN EXCHANGE EARNINGS
a) Activities relating to Export and total Foreign Exchange earned and
used:-
Earned: Rs. (Million) 66.70
Expenditure in Foreign Currency Rs. (Million) 34.09
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.
A Report on Corporate Governance has been appended under separate
section titled Corporate Governance Report and forms a part of the
Annual Report.
COMPLIANCE CERTIFICATE
A certificate from the Practicing Company Secretary regarding
compliance of conditions of Corporate Governance is stipulated under
revised Clause 49 of the Listing Agreement is attached to this report.
DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to the provisions of Sec 217(2AA) of the Companies Act, 1956,
the Directors to the best of their knowledge and belief confirm that:
(i) in the preparation of the annual accounts, the applicable
accounting standards have been followed along with proper explanation
relating to material departures;
(ii) they have 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 as at the end of the financial year and of the profit or
loss of the company for that period;
(iii) they have taken proper and sufficient care for the maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act 1956 and for safeguarding the assets of the company and
for preventing and detecting fraud and other irregularities;
(iv) they have prepared the annual accounts on a going concern basis.
PARTICULARS OF EMPLOYEES
During the year under report, there was no employee who was in receipt
of remuneration in excess of limits prescribed under the provisions of
Section 217(2A) of the Companies Act, 1956 read with the Companies
(Particulars of Employees), Rules, 1975.
COMMENTS OF C & AG ON THE ACCOUNTS
Comments of C&AG and management replies thereto are given as an
Annexure to the Directors Report.
DIRECTORS
During the year under report, the Board of Directors of your Company
met frequently. 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 and Cellular Mobile Telephony and other value added
services.
Sh.R.S.P.Sinha continued to be the Chairman and Managing Director of
your company and Sh. Kuldip Singh, and Smt. Anita Soni continued to be
the Director(Technical) and Director(Finance) respectively of your
Company.
During the period under report, the following changes took place in
the Directorship of the Company:-
1 . Sh. Satya Prakash Pachauri was appointed as Director (HR) w.e.f.
06.12.2007 in place of Sh. V. Shivakumar who had retired from the
services of the company after completion of his tenure on 03.04.07.
2. Sh. J. S. Deepak Joint Secretary (T), Department of
Telecommunication was appointed as director in place of Sh. M. Sahu
w.e.f. 30.04.2008
3. Smt. Usha Sahajpal was appointed as non-official Part-Time Director
(Independent Director) w.e.f. 30.04.2008.
4. Smt. Anuradha Joshi Durgapal, DDG (FEB.), DOT was appointed as
Govt, director w.e.f 31.7.2008 in place of Sh. A.S. Bhola.
The Board places on record its deep appreciation for the excellent
services rendered by Sh M. Sahu and Sh. A.S. Bhola during their tenure
as Directors on the Board of MTNL.
AUDITORS
M/s. Bansal Sinha & Co. Chartered Accountants, were appointed as
Statutory Auditors of your Company by the Comptroller and Auditor
General of India. In addition, M/s. Gandhi Minocha & Co. and M/s C.V.K.
& Associates, Chartered Accountants were appointed as Branch Auditors
for Delhi and Mumbai units respectively for the year 2008-09.
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.
For and on behalf of the Board of Directors
(R.S.P. SINHA)
CHAIRMAN AND MANAGING DIRECTOR
PLACE: NEW DELHI
DATE : 29th August 2008
|
|
![]() | |
| Source : Religare Technova | |
![]() | |




Online


