MTNL has been following the principles of Corporate Governance. As it is understood, the principles and Corporate Governance deals with laws, procedures, practices and implicit rules that determine a company's ability to take informed managerial decisions vis-୶is its stake holders, in particular its shareholders, creditors, customers, the state and employees.

The major constituents/components of Corporate Governance include :

1) Constitution of the Board of Directors.

2) Key information that are being reported to and are placed before the Board of Directors.

3) Proper functioning of Audit Committee.

4) Transparency and desirable disclosures by the company.

At present, MTNL Board comprises of four non-executive Directors, apart from three full time Directors viz. Director (Tech), Director (Fin) & Director (HR) and two ex-officio Directors on Board. There are two Govt. nominees on the Board. The meetings of the Board are held regularly, as per the agenda and their importance. Besides regular Board Meeting, emergency Board meetings are held as and when required. The information, which are reported to and placed before the Board includes: -

1) Annual Plans, revenue, capital budgets, manpower and over-head budgets and manpower requirements.

2) Quarterly results of the company as a whole and its operating divisions.

3) Internal audit reports.

There is a separate Internal Audit group formed & functioning in the company under whose jurisdiction member of independent Chartered Accountants Firms are appointed by the company to carry out audit of various departments of the company both in Delhi & Mumbai as well as Corporate Office.

Apart from the internal audit, the company is also subjected to Govt. Audits and other audits/examination by Parliamentary Committees. Company has to report its monthly, quarterly and yearly achievements in terms of financial and physical parameters to DoT and Department of Public Enterprises (DPE).

Hence, it can be seen that the company functions in a most transparent manner. Two most important claimants to any company are creditors and shareholders and the Corporate Governance and good corporate practice must satisfy both these claimants. In this regard, MTNL, a debt free company, has a unique distinction of servicing its shareholders. The company has evolved its own Insider Trading Code as per SEBI Rules & Regulations.

CORPORATE GOVERNANCE PRACTICES/STANDARDS