Notes to Accounts of Coal India Ltd.
Mar 31, 2022
2. Dankuni Coal Complex / Indian Institute of Coal Management :
a. Fixed assets comprising plant & machinery and related building and other assets having written down value as on 31.03.2022 of 9.53 Crore (as on 31.03.2021 9.68 crore), continue to be let out to South Eastern Coalfields Ltd. for a lease rent of 1.80 Crore per annum under cancellable operating lease agreement.
b. Fixed assets comprising plant & machinery and related building and other assets having written down value as on 31.03.2022 of 11.49 Crore (as on 31.03.2021 11.80 crore) have been let out to Indian Institute of Coal Management, a registered society under Societies Registration Act, 1860 for an annual lease rent of 1.20 Lakh under cancellable operating lease agreement.
3. Land Reclamation/Site Restoration cost comprises of estimated cost to be incurred at the stage of mine closure duly escalated for inflation (5% p.a.) and then discounted at 8 % discount rate that reflects current market rate of fair value and the risk.
4. Land acquired during the year for Solar project has been capitalised to the extent of 75% invoice value. Balance 25% of invoice value is attributable to conversion of the categoy of the land.
1. Investment in Eastern Coalfields Limited (ECL) and Bharat Coking Coal Limited (BCCL).
The investment in Equity Shares of BCCL, a wholly owned subsidiary, is long term and strategic in nature. The Book Value of investment in BCCL as on 31.03.2022 is 4657.00 (as on 31.03.2021 is 4657.00) crore against which the accumulated loss as on 31.03.2022 is 1383.23 crore ( as on 31.03.2021 1568.19 crore). The accumulated loss as on 31.03.2022 has come down to 1383.23 crore from 4106.03 crore as on 31.03.2013 (i.e. the end of the year in which it came out of BIFR).
Similarly, the investment in Equity Shares of ECL, a wholly owned subsidiary, is also long term and strategic in nature. The Book Value of investment in ECL as on 31.03.2022 is 4269.42 crore (as on 31.03.2021 2218.45 crore) against which the accumulated loss as on 31.03.2022 is 2455.71 crore (as on 31.03.2021 2185.24 crore). The accumulated loss as on 31.03.2022 has come to 2455.71 crore from 2716.00 crore as on 31.03.2015 (i.e. the end of the year in which it came out of BIFR).In view of these companies turning around and the investments in these companies being long term and strategic in nature, book value of investment has been considered.
2. Investment in Coal India Africana Limitada (CIAL) (100% owned subsidiary -Overseas)
Coal India Ltd., has formed a 100% owned Subsidiary in Republic of Mozambique, named "Coal India Africana Limitada" to explore noncoking coal properties in Mozambique. The paid up capital (known as "Quota Capital") is 0.53 crore. The investment by CIL in CIAL is strategic and long term in nature. The advance given by CIL to CIAL shown under current account has been fully provided for because the expenses incurred till date are for the coal blocks which could not be turned into feasible projects. Pursuant to the directives of CIL Board, a request was made through Govt. of India for allocation of a new prospective coal block, the response for which from Mozambique government is awaited. In view of above, the investment does not have any indication for impairment and as such the same are valued at cost.
3. Investment in International Coal Ventures Pvt. Ltd.
CIL has entered into a Memorandum of Understanding (vide approval from its Board in 237th meeting held on 24th November, 2007) regarding formation of Special Purpose Vehicle (SPV) through joint venture involving CIL/SAIL/RINL/NTPC & NMDC for acquisition of coking coal properties abroad. The formation of the SPV had been approved by the Government of India, vide its approval dated 8th November, 2007.
The aforesaid SPV viz. International Coal Ventures Pvt. Ltd. was incorporated under Companies Act, 1956 on 20th May,2009 initially with an authorised capital of 1.00 crore and paid up capital of 0.70 crore. The authorised Capital and paid up Capital as on 31.03.2022 stood at 3500.00 Crore and 1460.29 Crore respectively. Out of above paid up capital, Coal India Ltd. is owning 0.19% share i.e. 2.80 crore face value of equity shares.
4. Investment in CIL NTPC Urja Private Ltd.
CIL NTPC Urja Pvt.Ltd., a 50:50 joint venture company was formed on 27th April''2010 between CIL & NTPC for setting up of joint integrated power plants along with mining of coal. Coal India Ltd. is presently holding 50% equity shares of face value of 0.08 crore in the joint venture Company.
5. Investment in Talcher Fertilizers Limited
A Joint venture company named ''Talcher Fertilizers Limited'' (formerly known as Rashtriya Coal Gas Fertilizers Limitedwas incorporated on 13th November,2015 under the Companies Act, 2013 under a joint venture agreement dated 27th October,2015, among Coal India Limited (CIL), Rashtriya Chemicals and Fertilizers Limited, GAIL (India) Limited and Fertilizer Corporation of India Limited with an authorised share capital of 4200.00 Crore. Presently Coal India Limited has invested 805.48 crore (i.e. 33.33%) in the joint venture company upto 31-03-2022.
6. Investment in Hindustan Urvarak and Rasayan Limited
By virtue of agreement dated 16th May, 2016 made between CIL and NTPC Ltd., a joint venture company named Hindustan Urvarak and Rasayan Limited (HURL) was formed. Subsequently, joint venture agreement has been revised on 31st October, 2016 to include IOCL, FCIL and HFCL as joint venture partners. The authorised share capital of the company is 5300.00 Crore. Presently Coal India Limited has invested 1629.42crore (i.e. 33.33%) in the joint venture company upto 31-03-2022.
7. Investment in Coal Lignite Urja Vikas Private LImited
A joint venture company named ''Coal Lignite Urja Vikas Private Limited'' was incorporated on 10th November, 2020 under the Companies Act, 2013 under a joint venture agreement dated 08th October, 2020 with NLCIL as joint venture partner. The authorised share capital of the company is 0.10 Crore. Presently Coal India LImited has invested 0.01 Crore (i.e. 50%) in the joint venture company upto 31-03-2022.
8. During FY 2021-22, the Investment in 20509700 Shares of 1000 each fully paid 5% Cumulative Preference shares of Eastern Coalfields Limited were converted into 20509700 fully paid-up equity shares of 1000 each of ECL. Accordingly, the equity portion of Investment in the above preference shares was adjusted to retained earnings.
2. Deposit in Bank under Shifting & Rehabilitation Fund scheme
Following the direction of the Ministry of Coal, the Company has setup a fund for implementation of action plan for shifting & rehabilitation, dealing with fire & stabilization of unstable areas of Eastern Coal Fields Ltd. & Bharat Coking Coal Ltd. The fund is utilized (by ECL and BCCL) based on implementation of approved projects in this respect.
The subsidiaries of CIL except CMPDIL and Coal India Africana Limitada are making a contribution of 6/- per tonne of their respective coal dispatch per annum to this fund, which remains in the custody of CIL as bank deposit for this purpose, till they are disbursed/utilized by subsidiaries/agencies implementing the relevant projects.
3. Coal India Ltd. entered into a Consortium Agreement with M/s BEML Ltd and M/s Damodar Valley Corporation (DVC) on 08.06.2010 for acquiring specified assets of M/s Mining and Allied Machinery Corporation (under liquidation). The agreement, inter alia, provided for formation of a joint venture company with a shareholding pattern of 48:26:26 among BEML,CIL and DVC respectively. CIL has paid its proportionate share towards bid consideration of Rs 100 Crores towards the said acquisition based on the order passed by Hon''ble High Court of Calcutta. As on 31-03-2022 an amount of 34.96 crores and as on 31-03-2021 34.96 Crores was paid towards bid consideration and other miscellaneous expenditure. Further a Company in the name of MAMC Industries Limited (MIL) has been formed and incorporated on 25th August 2010 as a wholly owned subsidiary of BEML for the intended purposed of JV formation. As per terms and condition of the Consortium Agreement, a shareholders'' agreement and joint venture agreement was to be executed. However shareholders'' agreement and joint venture agreement are not yet executed.
The management believes that the outcome of the above will not have any material adverse effect on the company.
The company has given guarantee on behalf of subsidiaries namely, Eastern Coalfields Limited and Mahanadi Coalfields Limited to the extent of their obligations under loans (principal and interest) made to Export Development Corporation, Canada and Natexis Banque (for purchase of Machinery from Liebherr France).The outstanding balance as on 31-03-2022 stood at'' 158.22 Crore (160.04 Crore) and '' 4.93 Crore (5.67 Crore) respectively.
III. Letter of Credit:
As on 31-03-2022 outstanding letters of credit is '' Nil (for the year ended 31-03-2021 Nil)
(b) Commitments
Estimated amount of contracts remaining to be executed on capital account and not provided for: as on 31-03-2022''10.39 Crore ( for the year ended 31-03-2021 '' 366.23 Crore).
Other Commitment: as on 31-03-2022''87.45 Crore (for the year ended 31-03-2021 '' 407.55 Crore)
(viii) No Trade or other receivables are due from directors or other officers of the company either severally or jointly with any other person. Nor any trade or other receivable are due from firms or private companies respectively in which any director is a partner, a director or member.
B. Related Party Transactions within Group
Coal India Limited has entered into transactions with its subsidiaries which include Apex charges, Rehabilitation charges, Lease rent, Interest on Funds parked by subsidiaries and other expenditure incurred by or on behalf of other subsidiaries through current account.
As per Ind AS 24, following are the disclosures regarding nature and amount of significant transactions
(a) Significant accounting policy
Significant accounting policy (Note-2) has been drafted to elucidate the accounting policies adopted by the Company in accordance with Indian Accounting Standards (Ind ASs) notified by Ministry of Corporate Affairs (MCA) under the Companies (Indian Accounting Standards) Rules, 2015.
(b) Change in accounting policy
For better understanding of the users of the financial statements, Significant Accounting Policy has been modified/rephrased in section 2.12 Intangible Assets and 2.18 Employee Benefits and 2.24.2 Estimates and Assumptions. However, there is no financial impact of the aforesaid change.
(c) Recent pronouncements
Ministry of Corporate Affairs (âMCA") notifies new standard or amendments to the existing standards under Companies (Indian Accounting Standards) Rules as issued from time to time. On March 23, 2022, MCA vide GSR 255(E) amended the Companies (Indian Accounting Standards) Amendment Rules, 2022, applicable from April 1st, 2022. The Company has evaluated the amendment and there is no impact on its financial statements.
(d) Others
i. Previous period/year figures have been restated, regrouped and rearranged wherever considered necessary.
ii. Note - 1 and 2 represents Corporate information and Significant Accounting Policies respectively, Note 3 to 23 form part of the Balance Sheet as at 31-03-2022 and 24 to 37 form part of Statement of Profit & Loss for the year ended on that date. Note - 38 represents Additional Notes to the Financial Statements.
A brief of each level is given below.
Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices. This includes Mutual fund which is valued using closing Net Asset Value (NAV) as at the reporting date.
Level 2: The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which maximize the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.
Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. This is the case for investments, security deposits and other liabilities included in level 3.
(c) Valuation technique used in determining fair value
Valuation techniques used to value financial instruments include the use of quoted market prices (NAV) of instruments in respect of investment in Mutual Funds.
(d) Fair value measurements using significant unobservable inputs
At present there are no fair value measurements using significant unobservable inputs.
(e) Fair values of financial assets and liabilities measured at amortised cost
The carrying amounts of trade receivables, short term deposits, cash and cash equivalents, trade payables are considered to be the same as their fair values, due to their short-term nature.
The Company considers that the Security Deposits does not include a significant financing component. The security deposits coincide with the company''s performance and the contract requires amounts to be retained for reasons other than the provision of finance. The withholding of a specified percentage of each milestone payment is intended to protect the interest of the company, from the contractor failing to adequately complete its obligations under the contract. Accordingly, transaction cost of Security deposit is considered as fair value at initial recognition and subsequently measured at amortised cost.
Significant estimates: The fair value of financial instruments that are not traded in an active market is determined using valuation techniques. The Company uses its judgment to select a method and makes suitable assumptions at the end of each reporting period.
Financial risk management objectives and policies
The Company''s principal financial liabilities comprise trade and other payables. The main purpose of these financial liabilities is to finance the Company''s operations and to provide guarantees to support its operations. The Company''s principal financial assets include loans, trade and other receivables, and cash and cash equivalents that is derived directly from its operations.
The Company is exposed to market risk, credit risk and liquidity risk. The Company''s senior management oversees the management of these risks. The Company''s senior management is supported by a risk committee that advises, inter alia, on financial risks and the appropriate financial risk governance framework for the Company. The risk committee provides assurance to the Board of Directors that the Company''s financial risk activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the Company''s policies and risk objectives. The Board of Directors reviews and agrees policies for managing each of these risks, which are summarized below.
A. Credit Risk:.
Credit risk management:
Receivables arise mainly out of sale of Coal. Sale of Coal is broadly categorized as sale through fuel supply agreements (FSAs) and e-auction. Macro - economic information (such as regulatory changes) is incorporated as part of the fuel supply agreements (FSAs) and e-auction terms Fuel Supply Agreements (FSAs)
As contemplated in and in accordance with the terms of the New Coal Distribution Policy (NCDP), the company enters into legally enforceable FSAs with customers or with State Nominated Agencies that in turn enters into appropriate distribution arrangements with end customers. Our FSAs can be broadly categorized into:
⢠FSAs with customers in the power utilities sector, including State power utilities, private power utilities ("PPUs") and independent power producers ("IPPs");
⢠FSAs with customers in non-power industries (including captive power plants ("CPPs")); and
⢠FSAs with State Nominated Agencies.
The E-Auction scheme of coal has been introduced to provide access to coal for customers who were not able to source their coal requirement through the available institutional mechanisms under the NCDP for various reasons, for example, due to a less than full allocation of their normative requirement under NCDP, seasonality of their coal requirement and limited requirement of coal that does not warrant a long-term linkage. The quantity of coal to be offered under E-Auction is reviewed from time to time by the Ministry of Coal.
Credit risk arises when a counterparty defaults on contractual obligations resulting in financial loss to the company.
Provision for expected credit loss: Company provides for expected credit risk loss for doubtful/ credit impaired assets, by lifetime expected credit losses (Simplified approach). Refer Note - 13, Trade Receivables
Significant estimates and judgments for Impairment of financial assets
The impairment provisions for financial assets disclosed above are based on assumptions about risk of default and expected loss rates. The Company uses judgment in making these assumptions and selecting the inputs to the impairment calculation, based on the Company''s past history, existing market conditions as well as forward looking estimates at the end of each reporting period.
B. Liquidity Risk
Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through an adequate amount of committed credit facilities to meet obligations when due. Due to the dynamic nature of the underlying businesses, Company treasury maintains flexibility in funding by maintaining availability under committed credit lines.
Management monitors forecasts of the Company''s liquidity position (comprising the undrawn borrowing facilities) and cash and cash equivalents on the basis of expected cash flows. This is generally carried out at local level in accordance with practice and limits set by the Company. The bank borrowings of Coal India Ltd. has been secured by creating charge against stock of coal , stores and spare parts and book debts of CIL and its Subsidiary Companies within consortium of banks. The total working capital credit limit available to CIL is ''430.00 Crore, of which fund based limit is ''140.00 Crore and non-fund based limit is ''290.00 crore. Further, ''5000.00 crore(''5000.00 Crore) was set up as non-fund based limit outside consortium in order to facilitate import of HEMM. Coal India Limited is conti ngently liable to the extent such facility is actually utilised by the Subsidiary Companies.The Company has been sanctioned a term loan of ''364.30 crores from HDFC bank Limited secured by creating exclusive charge on plant and equipment and movable assets of the 100 MW Solar Project of the Company in Gujarat.
C. Market risk
a) Foreign currency risk
Foreign currency risk arises from future commercial transactions and recognised assets or liabilities denominated in a currency that is not the Company''s functional currency(INR).The Company is exposed to foreign exchange risk arising from foreign currency transactions. Foreign exchange risk in respect of foreign operation is considered to be insignificant. The Company also imports and risk is managed by regular follow up. Company has a policy which is implemented when foreign currency risk becomes significant.
b) Cash flow and fair value interest rate risk
The Company''s main interest rate risk arises from bank deposits with change in interest rate, exposes the Company to cash flow interest rate risk. Company policy is to maintain most of its deposits at fixed rate.
Company manages the risk using guidelines issued by Department of Public Enterprises (DPE) on diversification of bank deposits credit limits and other securities.
Capital management
The company being a government entity manages its capital as per the guidelines of Department of Investment and Public Asset Management under Ministry of Finance.
6 Employee Benefits: Recognition and Measurement (Ind AS-19)Defined Benefit Plans
a) Gratuity
The Company provides for gratuity, a post-employment defined benefit plan ("the Gratuity Scheme") covering the eligible employees. The Gratuity Scheme is fully funded through trust maintained with Life Insurance Corporation of India, wherein employer contribution is 2.01% of basic salary and dearness allowances. Every employee who has rendered continuous service of more than 5 years or more is entitled to receive gratuity amount equal to 15 days salary for each completed years of service computed as (15 days/26 days in a month* last drawn salary and dearness allowance* completed years of service) subject to maximum of Rs 0.20 crores at the time of separation from the company considering the provisions of the Payment of Gratuity Act 1972 as amended. The liability or asset recognised in the balance sheet in respect of the Gratuity Scheme is the present value of the defined benefit obligation at the end of the reporting year less the fair value of plan assets. The defined benefit obligation is calculated at each reporting date by actuaries using the projected unit credit method. Re-measurement gains and losses arising from experience adjustments and changes in actuarial assumptions are recognised in the year in which they occur, directly in other comprehensive income (OCI).
b) Post-Retirement Medical Benefit - Executive (CPRMSE)
Company has post-retirement medical benefit scheme known as Contributory Post Retirement Medicare Scheme for Executive of CIL and its Subsidiaries (CPRMSE), to provide Medicare to the executives and their spouses in Company hospital/empaneled hospitals or outpatient/ Domiciliary only in India subject to ceiling limit, on account of retirement on attaining the age of superannuation or are separated by the Company on medical ground or retirement under Voluntary Retirement Scheme under common coal cadre or Voluntary Retirement Scheme formulated and made applicable from time to time. Membership is not extended to the executives who resigns from the services of the CIL and its subsidiaries. The maximum amount reimbursable during the entire life for the retired executives and spouse taken together jointly or severally is Rs 25 lakhs except for specified diseases with no upper limit. The Scheme is funded through trust maintained by the CIL at group level solely for this purpose.The liability for the scheme is recognised based on actuarial valuation done at each reporting date.
C) Post-Retirement Medical Benefit - Non Executive (CPRMS -NE)
As a part of social security scheme under wage agreement, Company is providing Contributory Post-Retirement Medicare Scheme for nonexecutives (CPRMSE-NE) to provide medical care to the non-executives and their spouses and Divyang Child(ren) in Company hospital/ empaneled hospitals or outpatient/Domiciliary only in India subject to ceiling limit, on account of retirement on attaining the age of superannuation or are separated by the Company on medical ground or retirement under Voluntary Retirement Scheme formulated and made applicable from time to time or resigns from the company at the age of 57 Years or above or on death to the spouse and Divyang Child(ren). The maximum amount reimbursable during the entire life for the retired non-executives, spouse and Divyang Child(ren) taken together jointly or severally is Rs 8 lakhs except for specified diseases with no upper limit. The Scheme is funded through trust maintained by the CIL at group level solely for this purpose. The liability for the scheme is recognised based on actuarial valuation done at each reporting date.
Defined Contribution Plansa) Provident Fund and Pension
Company pays fixed contribution towards Provident Fund and Pension Fund at pre-determined rates based on a fixed percentage of the eligible employee''s salary i.e. 12% and 7% of Basic salary and Dearness Allowance towards Provident Fund and Pension Fund respectively. These funds are governed by a separate statutory body under the control of Ministry of Coal, Government of India, named Coal Mines Provident Fund Organisation (CMPFO).The contribution towards the fund for the period is recognized in the Statement of Profit & Loss.
b) CIL Executive Defined Contribution Pension Scheme (NPS)
The company provides a post-employment contributory pension scheme to the executives of the Company known as "CIL Executive Defined Contribution Pension Scheme -2007" (NPS). NPS is being administered through separate trust at group level solely formed for the purpose. The obligation of the Company is to contribute to the trust to the extent of amount not exceeding 30% of basic pay and dearness allowance less employer''s contribution towards provident fund, gratuity, post-retirement medical benefits -Executive i.e. CPRMSE or any other retirement benefits. The current employer contribution of 6.99% of basic and Dearness Allowance is being charged to statement of profit and loss.
Other Long Term Employee Benefits
The company provides benefit of total Earned Leave (EL) of 30 days and Half Paid Leave (HPL) of 20 days to the executives of the company, accrued and credited proportionately on half yearly basis on the first day of January and July of every year. During the service, 75% EL credited balance is one time encashable in each calendar year subject to ceiling of maximum 60 days EL encashment. Accumulated HPL is not permitted for encashment during the period of service. On superannuation, EL and HPL together is considered for encashment subject to the overall limit of 300 days without commutation of HPL. In case of non-executives, Leave encashment is governed by the National Coal Wage Agreement
(NCWA) and at present the workmen are entitled to get encashment of earned leave at the rate of 15 days per year and on discontinuation of service due to death, retirement, superannuation and VRS, the balance leave or 150 days whichever is less, is allowed for encashment. Therefore, the liabilities for earned leave are expected to be settled during the service as well as after the retirement of employee. They are therefore measured as the present value of expected future payments to be made in respect of services provided by employees up to the end of the reporting period using the projected unit credit method. The benefits are discounted using the market yields at the end of the reporting period that have terms approximating to the terms of the related obligation. The liability under the scheme is borne by the Company as per actuarial valuation at each reporting date.
b) Life Cover Scheme (LCS)
As a part of social security scheme under wage agreement, the Company has Life Cover Scheme under Deposit Linked Insurance Scheme, 1976 notified by the Ministry of Labour, Government of India, known as "Life Cover Scheme of Coal India Limited" (LCS). An amount of Rs 1,25,000 is paid under the scheme w.e.f 01.10.2017. The expected cost of the benefits is recognised when an event occurs that causes the benefit payable under the scheme.
c) Settlement Allowances
As a part of wage agreement, a lump sum amount of Rs 12000/- is paid to all the non-executive cadre employees governed under NCWA on their superannuation on or after 31.10.2010 as settling-in allowance. The liability under the scheme is borne by the Company as per actuarial valuation at each reporting date.
d) Group Personal Accident Insurance (GPAIS)
Company has taken group insurance scheme from United India Insurance Company Limited to cover the executives of the company against personal accident known as "Coal India Executives Group Personal Accident Insurance Scheme" (GPAIS). GPAIS covers all types of accident on 24 hour basis worldwide. Premium for the scheme is borne by the Company.
e) Leave Travel Concession (LTC)
As a part of wage agreement, Non-executive employees are entitled to travel assistance for visiting their home town and for "Bharat Bhraman" once in a block of 4 years. A lump sum amount of Rs 8000/- and Rs 12000/- is paid for visiting Home town and "Bharat Bhraman", respectively. The liability for the scheme is recognised based on actuarial valuation at each reporting date.
f) Compensation to Dependent on Mine Accident Benefits
As a part of social security scheme under wage agreement, the company provide the benefits admissible under The Employee''s Compensation Act, 1923. An amount of Rs 15 lakhs is paid to the next of kin of an employee in case of a fatal mine accident w.e.f 07.11.2019. The expected cost of the benefits is recognised when an event occurs that causes the benefit payable under the scheme.
(d) (i) Lease - as a lessee
CIL has taken a Guest House at Hailey Road, New Delhi on a short term lease for monthly rent of 2.48 lacs for the period July''2021 to May''2022. The monthly lease payments associated with the lease for the period is recognised as an expense in the Statement of Profit & loss.
(ii) Lease - as a lessor
CIL AND IICM
CIL has leased out the assets viz. land, building, structures, furniture and fixtures and other assets to IICM. The existing lease agreement is valid from 01.04.2015 to 31.03.2020. Renewal of the lease is in process. The lease rent of IICM payable to CIL is 0.45 Crore per quarter.
(e) Joint Operations:
CIL and ONGC have entered agreement for CBM development and operation in Jharia and Raniganj North CBM Blocks as joint operation as per GoI CBM policy under the aegis of Directorate General of Hydrocarbons (DGH).
1. The Development Plan of Jharia CBM Block (Stage-I) is already approved by CIL as well as ONGC, however acceptable start date of Development Phase is subject to clarification from DGH. As on 31.03.2022 Participating Interest (PI) of CIL is 26%.
2. The CBM development and operation project in Raniganj North CBM Block is under consideration of CIL and ONGC management
3. Management certified provisional billing statement of CBM Jharia Block has been considered for FY 2020-21.
(f) Subsidiaries incorporated for Solar Business
Coal India has incorporated two wholly owned subsidiaries on 16th April, 2021 viz. CIL Solar PV Limited for manufacturing of solar value chain (Ingot-wafer-Cell Module) and CIL Navikarniya Urja Limited for renewable energy.
(g) Goods procured by Coal India Ltd. on behalf of Subsidiaries
As per existing practice, goods purchased by Coal India Ltd. on behalf of subsidiary companies are accounted for in the books of respective subsidiaries directly.
(h) Insurance and escalation claims
Insurance and escalation claims are accounted for on the basis of admission/final settlement.
(i) Provisions made in the Accounts
Provisions made in the accounts against slow moving/non-moving/obsolete stores, claims receivable, advances, doubtful debts etc. are considered adequate to cover possible losses.
(j) Current Assets, Loans and Advances etc.
In the opinion of the Management, assets other than fixed assets and non-current investments have a value on realisation in the ordinary course of business at least equal to the amount at which they are stated.
(k) Current Liabilities
Estimated liability has been provided where actual liability could not be measured.
(l) Disaggregated revenue information:
The table below presents disaggregated revenues from contract with customers information as per requirement of Ind AS 115, Revenue From Contract with Customer:
(n) During the financial year 2013-14, a case of misappropriation of Company''s fund for personal gain came to the notice of the management. The matter has been investigated by different agencies and appropriate action for recovery is underway. As per the estimate of the internal audit department of Coal India Limited, the amount involved is ''1.17 crores approximately.
(o) Suspension of mines
The committee of functional director of Coal India Limited vide its 229th meeting dated 05th June, 2020 has ratified the decision to temporarily suspend the mining operation at NEC (in Tikak, Tipong and Tirap Colliery) from 03rd June, 2020 till forestry and other statutory clearances are obtained and mines are madeoperational. "However Mining operations have been started in Tikak Extension OCP mines from 10th February, 2022."
(p) Seized Stock of Coal
"As per the direction given by Dy. Director of Forests, Regional Office, MoEF Shillong on 24th October, 2019, 4810.76 tonnes of coal lying in the Tikak colliery was seized and directed not to carry out any mining operation at Tikak Colliery. NEC Protested the seizure of coal at Tikak Colliery and filed a case in the SDJM''s Court, Margherita. The Hon''ble court has taken cognizance of the matter and case is pending till date. Based on, order of the Hon''ble court, Divisional Forest Officer, Digboi Division has directed to sale the coal and deposit the money under the custody of Margherita Treasury."Based on the above order, NEC sold 906.46 tonnes of coal amounting to '' 0.37 Crore in FY 2020-21 and 3904.30 tonnes of coal amounting to '' 1.93 Crore in FY 2019-20 and collected Royalty of '' 0.04 Crore in FY 2020-21 and '' 0.25 Crore in FY 2019-20 on this sale included in Sale of Coal (Note-23). The inventory of FY 2019-20 includes stock of seized coal 906.46 tonnes valued '' 0.32 Crore (Note-12).
"Further, on the direction of Divisional Forest Officer, Digboi Division NEC has deposited amounting '' 2.26 Crores under the custody of Margherita Treasury. The management has also recognised the provision against such deposit in the Financial Statement (Refer Note 20)".
Mar 31, 2021
1. Deposit with bank under Mine Closure Plan
Following the guidelines from Ministry of Coal, Government of Indiafor preparation of Mine Closure Plan, an Escrow Account has been opened. The interest earned/accrued during the period on such Escrow Account for ''2.64 Crore (''3.64 crore) is included in interest income from deposit with banks disclosed in Note-24. Up to 50% of the total deposited amount including interest accrued in the ESCROW account may be releasedafter every five years in line with the periodic examination of the closure plan as per the Guidelines.(Refer Note 20 for Provision for Site Restoration/Mine Closure).
2. Coal India Ltd. entered into a Consortium Agreement with M/s BEML Ltd and M/s Damodar Valley Corporation (DVC) on 08.06.2010 for acquiring specified assets of M/s Mining and Allied Machinery Corporation (under liquidation). The agreement, inter alia, provided for formation of a joint venture company with a shareholding pattern of 48:26:26 among BEML, CIL and DVC respectively. CIL has paid its proportionate share towards bid consideration of Rs 100 Crores towards the said acquisition based on the order passed by Hon''ble High Court of Calcutta. As on 31st March, 2021 an amount of '' 34.96 (''34.96 Crores) was paid towards bid consideration and other miscellaneous expenditure. Further a Company in the name of MAMC Industries Limited (MIL) has been formed and incorporated on 25th August 2010 as a wholly owned subsidiary of BEML for the intended purposed of JV formation. As per terms and condition of the Consortium Agreement, a shareholders'' agreement and joint venture agreement was to be executed. However shareholders'' agreement and joint venture agreement are not yet executed.
3. Deposit in Bank under Shifting & Rehabilitation Fund scheme
Following the direction of the Ministry of Coal, the Company has setup a fund for implementation of action plan for shifting & rehabilitation, dealing with fire & stabilization of unstable areas of Eastern Coal Fields Ltd. & Bharat Coking Coal Ltd. The fund is utilized (by ECL and BCCL) based on implementation of approved projects in this respect.
The subsidiaries of CIL except CMPDIL and Coal India Africana Limitada are making a contribution of ''6/- per tonne of their respective coal dispatch per annum to this fund, which remains in the custody of CIL as bank deposit for this purpose, till they are disbursed/utilized by subsidiaries/agencies implementing the relevant projects.
A brief of each level is given below.
Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices. This includes Mutual fund which is valued using closing Net Asset Value (NAV) as at the reporting date.
Level 2: The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which maximize the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.
Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. This is the case for investments, security deposits and other liabilities included in level 3.
Valuation technique used in determining fair value
Valuation techniques used to value financial instruments include the use of quoted market prices (NAV) of instruments in respect of investment in Mutual Funds.
Fair value measurements using significant unobservable inputs
At present there are no fair value measurements using significant unobservable inputs.
Fair values of financial assets and liabilities measured at amortised cost
The carrying amounts of trade receivables, short term deposits, cash and cash equivalents, trade payables are considered to be the same as their fair values, due to their short-term nature.
The Company considers that the Security Deposits does not include a significant financing component. The security deposits coincide with the company''s performance and the contract requires amounts to be retained for reasons other than the provision of finance. The withholding of a specified percentage of each milestone payment is intended to protect the interest of the company, from the contractor failing to adequately complete its obligations under the contract. Accordingly, transaction cost of Security deposit is considered as fair value at initial recognition and subsequently measured at amortised cost.
Significant estimates: The fair value of financial instruments that are not traded in an active market is determined using valuation techniques. The Company uses its judgment to select a method and makes suitable assumptions at the end of each reporting period.
The Company''s principal financial liabilities comprise trade and other payables. The main purpose of these financial liabilities is to finance the Company''s operations and to provide guarantees to support its operations. The Company''s principal financial assets include loans, trade and other receivables, and cash and cash equivalents that is derived directly from its operations.
The Company is exposed to market risk, credit risk and liquidity risk. The Company''s senior management oversees the management of these risks. The Company''s senior management is supported by a risk committee that advises, inter alia, on financial risks and the appropriate financial risk governance framework for the Company. The risk committee provides assurance to the Board of Directors that the Company''s financial risk activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the Company''s policies and risk objectives. The Board of Directors reviews and agrees policies for managing each of these risks, which are summarized below.
The Company risk management is carried out by the board of directors as per DPE guidelines issued by Government of India. The board provides written principles for overall risk management as well as policies covering investment of excess liquidity.
Credit Risk:.
Credit risk management:
Receivables arise mainly out of sale of Coal. Sale of Coal is broadly categorized as sale through fuel supply agreements (FSAs) and e-auction. Macro - economic information (such as regulatory changes) is incorporated as part of the fuel supply agreements (FSAs) and e-auction terms Fuel Supply Agreements (FSAs)
As contemplated in and in accordance with the terms of the New Coal Distribution Policy (NCDP), the company enters into legally enforceable FSAs with customers or with State Nominated Agencies that in turn enters into appropriate distribution arrangements with end customers. Our FSAs can be broadly categorized into:
⢠FSAs with customers in the power utilities sector, including State power utilities, private power utilities ("PPUs") and independent power producers ("IPPs");
⢠FSAs with customers in non-power industries (including captive power plants ("CPPs")); and
⢠FSAs with State Nominated Agencies.
E-Auction Scheme
The E-Auction scheme of coal has been introduced to provide access to coal for customers who were not able to source their coal requirement through the available institutional mechanisms under the NCDP for various reasons, for example, due to a less than full allocation of their normative requirement under NCDP, seasonality of their coal requirement and limited requirement of coal that does not warrant a long-term linkage. The quantity of coal to be offered under E-Auction is reviewed from time to time by the Ministry of Coal.
Credit risk arises when a counterparty defaults on contractual obligations resulting in financial loss to the company.
Significant estimates and judgments for Impairment of financial assets
The impairment provisions for financial assets disclosed above are based on assumptions about risk of default and expected loss rates. The Company uses judgment in making these assumptions and selecting the inputs to the impairment calculation, based on the Company''s past history, existing market conditions as well as forward looking estimates at the end of each reporting period.
Liquidity Risk
Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through an adequate amount of committed credit facilities to meet obligations when due. Due to the dynamic nature of the underlying businesses, Company treasury maintains flexibility in funding by maintaining availability under committed credit lines.
Management monitors forecasts of the Company''s liquidity position (comprising the undrawn borrowing facilities) and cash and cash equivalents on the basis of expected cash flows. This is generally carried out at local level in accordance with practice and limits set by the Company. The bank borrowings of Coal India Ltd. has been secured by creating charge against stock of coal , stores and spare parts and book debts of CIL and its Subsidiary Companies within consortium of banks. The total working capital credit limit available to CIL is ''535.00 Crore (''535.00 Crore), of which fund based limit is ''240.00 Crore (''240.00Crore) and non-fund based limit is ''295.00 crore (''295.00 Crore). Further, ''5000.00 crore (''5000.00 Crore) was set up as non-fund based limit outside consortium in order to facilitate import of HEMM. Coal India Limited is contingently liable to the extent such facility is actually utilised by the Subsidiary Companies.
Market risk
a) Foreign currency risk
Foreign currency risk arises from future commercial transactions and recognised assets or liabilities denominated in a currency that is not the Company''s functional currency (INR).The Company is exposed to foreign exchange risk arising from foreign currency transactions. Foreign exchange risk in respect of foreign operation is considered to be insignificant. The Company also imports and risk is managed by regular follow up. Company has a policy which is implemented when foreign currency risk becomes significant.
b) Cash flow and fair value interest rate risk
The Company''s main interest rate risk arises from bank deposits with change in interest rate, exposes the Company to cash flow interest rate risk. Company policy is to maintain most of its deposits at fixed rate.
Company manages the risk using guidelines issued by Department of Public Enterprises (DPE) on diversification of bank deposits credit limits and other securities.
Capital management
The company being a government entity manages its capital as per the guidelines of Department of Investment and Public Asset Management under Ministry of Finance.
Mar 31, 2019
Note: 1 CORPORATE INFORMATION
Coal India Limited (CIL) is a Maharatna Company having registered office at Kolkata, West Bengal and listed on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE).
The Company is mainly engaged in mining and production of Coal and also operates Coal washeries. The major consumers of the company are power and steel sectors. Consumers from other sectors include cement, fertilisers, brick kilns etc.
CIL is an apex body with 8 wholly-owned subsidiaries in India out of which 7 subsidiaries are coal producing and 1 subsidiary is engaged in mine planning, designing and related consultancy services. The operations of the Company are spread across 8 states in India. CIL also has a fully owned mining company in Mozambique known as âCoal India Africana Limitadaâ which is yet to commence operations. Further some of the subsidiaries of CIL, are also having another layer of subsidiaries. There are also Joint Ventures/Associates of CIL.
Note:
1. Land:
a. 5487.825 hectares of total land is in the possession of NEC, out of which 998.005 hectares constitutes of free hold land and remaining 4489.82 hectares as leasehold land. Out of above, 946.34 hectares of free hold land and the entire 4489.82 hectares of leasehold land were acquired by the company in the process of Nationalisation for which nil value was recorded in the books.
b. Land amounting to Rs. 0.08 crore related to Western Coalfields LImited has been transferred.
c. Land acquired in pursuance to Coal Mines (Nationalisation) Act 1973, does not require title deeds separately for corresponding land. All other title deeds for land acquired are in possession and are mutated in favour of company except in few cases of freehold lands, where same is under progress pending legal formalities.
d. Land- Others also includes Land acquired under Coal Bearing Areas (Acquisition and Development) Act, 1957 and Land Acquisition Act, 1894.
2. Dankuni Coal Complex / Indian Institute of Coal Management :
a. Fixed assets comprising plant & machinery and related building and other assets having written down value as on 31.03.2019 of Rs.10.21 Crore, continue to be let out to South Eastern Coalfields Ltd. for a lease rent of Rs. 1.80 Crore per annum under cancellable operating lease agreement. The above written down value of Rs. 10.21 Crore includes land of Rs. 3.73 Crore (at cost) and building of Rs. 4.41 Crore (at WDV).
b. Fixed assets comprising plant & machinery and related building and other assets having written down value as on 31.03.2019 of Rs. 12.51 Crore have been let out to Indian Institute of Coal Management, a registered society under Societies Registration Act, 1860 for an annual lease rent of Rs. 1.80 Crore under cancellable operating lease agreement.
3. Land Reclamation/Site Restoration cost comprises of estimated cost to be incurred at the stage of mine closure duly escalated for inflation (5% p.a.) and then discounted at 8 % discount rate that reflects current market rate of fair value and the risk.
4. Depreciation has been provided based on useful life as mentioned in Note 2.7. However, pending completion of technical assessment to segregate the value of certain assets embedded within a different class of asset, depreciation has been provided on these assets on the basis of useful life of the un-segregated class of assets.
NOTE - 2 NON - CURRENT INVESTMENTS - Unquoted at Cost
1 Investment in Eastern Coalfields Limited (ECL) and Bharat Coking Coal Limited (BCCL)
a) The investment in Equity Shares of BCCL, a wholly owned subsidiary, is long term and strategic in nature. The Book Value of investment in BCCL as on 31.03.2019 is Rs. 2118.00 (Rs.2118.00) crore against which the accumulated loss as on 31.03.2019 is Rs. 1751.76 crore (Rs.2546.82 crore). The accumulated losses as on 31.03.2019 has come down to Rs. 1751.76 crore from Rs. 4106.03 crore as on 31.03.2013 (i.e. the end of the year in which it came out of BIFR).
Similarly, the investment in Equity Shares of ECL, a wholly owned subsidiary, is also long term and strategic in nature. The Book Value of investment in ECL as on 31.03.2019 is Rs. 2218.45 (Rs. 2218.45) crore against which the accumulated loss as on 31.03.2019 is Rs. 1439.29 crore (Rs. 2731.93 crore). The accumulated losses as on 31.03.2019 has come to Rs. 1439.29 crore from Rs. 2716.00 crore as on 31.03.2015 (i.e. the end of the year in which it came out of BIFR).
In view of these companies turning around and the investments in these companies being long term and strategic in nature, book value of investment has been considered.
b) Investments also includes preference share which have been classified as compound financial instrument by such companies as the dividend on them is payable at the discretion of ECL and BCCL.
2 Investment in Coal India Africana Limitada (CIAL) (100% owned subsidiary -Overseas )
Coal India Ltd., has formed a 100% owned Subsidiary in Republic of Mozambique, named âCoal India Africana Limitadaâ to explore noncoking coal properties in Mozambique. The initial paid up capital on such formation (known as âQuota Capitalâ) is Rs. 0.01 crore. The investment by CIL in CIAL is strategic and long term in nature. The advance given by CIL to CIAL shown under current account has been fully provided for because the expenses incurred till date are for the coal blocks which could not be turned into feasible projects. Pursuant to the directives of CIL Board, a request was made through Govt. of India for allocation of a new prospective coal block, the response for which from Mozambique government is awaited. In view of above, the investment does not have any indication for impairment and as such the same are valued at cost.
3 Investment in International Coal Ventures Pvt. Ltd.
CIL has entered into a Memorandum of Understanding (vide approval from its Board in 237th meeting held on 24th November, 2007) regarding formation of Special Purpose Vehicle (SPV) through joint venture involving CIL/SAIL/RINL/NTPC & NMDC for acquisition of coking coal properties abroad. The formation of the SPV had been approved by the Government of India, vide its approval dated 8th November, 2007.The aforesaid SPV viz. International Coal Ventures Pvt. Ltd. was incorporated under Companies Act, 1956 on 20th May,2009 initially with an authorised capital of Rs.1.00 crore and paid up capital of Rs. 0.70 crore. The authorised Capital and paid up Capital as on 31.03.2019 stood at Rs. 3500.00 Crore and Rs. 1450.67 Crore respectively. Out of above paid up capital, Coal India Ltd. is owning 0.19% share i.e. Rs. 2.80 crore face value of equity shares.
4 Investment in CIL NTPC Uria Private Ltd.
CIL NTPC Urja Pvt.Ltd., a 50:50 joint venture company was formed on 27th AprilRs.2010 between CIL & NTPC for setting up of joint integrated power plants along with mining of coal. Coal India Ltd. is presently holding 50% equity shares of face value of Rs. 0.08 crore in the joint venture Company.
5 Investment in Talcher Fertilizers Limited
A Joint venture company named âTalcher Fertilizers Limitedâ (formerly known as Rashtriya Coal Gas Fertilizers Limitedâ) was incorporated on 13th November,2015 under the Companies Act, 2013 under a joint venture agreement dated 27th October,2015, among Coal India Limited (CIL), Rashtriya Chemicals and Fertilizers Limited, GAIL (India) Limited and Fertilizer Corporation of India Limited with an authorised share capital of Rs. 50 Crore. Presently Coal India Limited has invested Rs. 16.34 crore (i.e. 33.33%) in the joint venture company upto 31.03.2019.
6 Investment in Hindustan Urvarak and Rasayan Limited
By virtue of agreement dated 16th May, 2016 made between CIL and NTPC Ltd., a joint venture company named Hindustan Urvarak and Rasayan Limited (HURL) was formed. Subsequently, joint venture agreement has been revised on 31st October, 2016 to include IOCL, FCIL and HFCL as joint venture partners. The authorised share capital of the company is Rs. 5300.00 Crore. Presently Coal India Limited has invested Rs. 440.33 crore (i.e. 33.33%) in the joint venture company upto 31.03.2019.
7 During the year 2018-19 Northern Coalfields Limited (NCL), South Eastern Coalfields Limited (SECL) and Mahanadi Coalfields Limited (MCL) sanctioned Buy-back of shares upto 7.59%, 6.834% and 6.27% respectively. Number of shares bought back by NCL, SECL and MCL are 5,18,560 equity shares of Rs. 1000 each, 4,90,039 equity shares of Rs. 1000 each and 4,42,967 equity shares of Rs. 1000 each respectively.
1. Deposit with bank under Mine Closure Plan Following the guidelines from Ministry of Coal, Government of India for preparation of Mine Closure Plan, an Escrow Account has been opened. The interest earned/accrued during the year on such Escrow Account for Rs. 2.68 crore (Rs.2.41 crore) is included in interest income from deposit with banks disclosed in Note-24. Up to 80% of the total deposited amount including interest accrued in the ESCROW account may be released after every five years in line with the periodic examination of the closure plan as per the Guidelines. (Refer Note 20 for Provision for Site Restoration/Mine Closure).
2. Coal India Ltd. entered into a Consortium Agreement with M/s BEML Ltd and M/s Damodar Valley Corporation (DVC) on 08.06.2010 for acquiring specified assets of M/s Mining and Allied Machinery Corporation (under liquidation). The agreement, inter alia, provided for formation of a joint venture company with a shareholding pattern of 48:26:26 among BEML, CIL and DVC respectively. CIL has paid its proportionate share towards bid consideration of Rs 100 Crores towards the said acquisition based on the order passed by Honâble High Court of Calcutta. As on 31st March 2019 an amount of Rs 33.56 Crores (Rs. 31.31 Crores) was paid towards bid consideration and other miscellaneous expenditure. Further a Company in the name of MAMC Industries Limited (MIL) has been formed and incorporated on 25 August 2010 as a wholly owned subsidiary of BEML for the intended purposed of JV formation. As per terms and condition of the Consortium Agreement, a shareholdersâ agreement and joint venture agreement was to be executed. However shareholdersâ agreement and joint venture agreement are not yet executed.
3. Deposit in Bank under Shifting & Rehabilitation Fund scheme Following the direction of the Ministry of Coal, the Company has setup a fund for implementation of action plan for shifting & rehabilitation, dealing with fire & stabilization of unstable areas of Eastern Coal Fields Ltd. & Bharat Coking Coal Ltd. The fund is utilized (by ECL and BCCL) based on implementation of approved projects in this respect. The subsidiaries of CIL except CMPDIL and Coal India Africana Limitada are making a contribution of 6/- per tonne of their respective coal dispatch per annum to this fund, which remains in the custody of CIL as bank deposit for this purpose, till they are disbursed/utilized by subsidiaries/agencies implementing the relevant projects.
Shifting and Rehabilitation Fund
1- Following the direction of the Ministry of Coal, the Company has setup a fund for implementation of action plan for shifting & rehabilitation, dealing with fire & stabilization of unstable areas of Eastern Coal Fields Ltd. & Bharat Coking Coal Ltd. The fund is utilized (by ECL and BCCL) based on implementation of approved projects in this respect.
The subsidiaries of CIL except CMPDIL and Coal India Africana Limitada are making a contribution of Rs.6/- per tonne of their respective coal dispatch per annum to this fund, which remains in the custody of CIL, till they are disbursed/utilised by subsidiaries/agencies implementing the relevant projects. (Refer Note 9 for deposits with bank under Shifting & Rehabilitation Fund scheme)
2- Interest earned (Net of TDS) on bank deposits earmarked for this fund is credited to this fund.
1. Sale of Coal is net of Provision for Coal Quality Variance amounting is Rs. 2.91 Crore (Rs. 4.88 Crore)
2. Government of India introduced Goods and Services Tax (GST) w.e.f 1st July, 2017. Consequently revenue from operations for the period from 01.07.2017 to 31.03.2019 is presented net of GST.
3. Revenue from operations for the period prior to 01.07.2017 is inclusive of Excise duty. Sale of coal includes excise duty of Rs.5.87 Crore for the period 01.04.2017 to 30.06.2017. Loading and additional transportation charges includes excise duty of Rs. 0.07 Crore.
A brief of each level is given below.
Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices. This includes Mutual fund which is valued using closing Net Asset Value (NAV) as at the reporting date.
Level 2: The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which maximize the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.
Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. This is the case for investments, security deposits and other liabilities taken included in level 3.
(c) Valuation technique used in determining fair value
Valuation techniques used to value financial instruments include the use of quoted market prices(NAV) of instruments in respect of investment in Mutual Funds.
(d) Fair value measurements using significant unobservable inputs
At present there are no fair value measurements using significant unobservable inputs.
(e) Fair values of financial assets and liabilities measured at amortised cost
- The carrying amounts of trade receivables, short term deposits, cash and cash equivalents, trade payables are considered to be the same as their fair values, due to their short-term nature.
- The Company considers that the Security Deposits does not include a significant financing component. The security deposits coincide with the companyâs performance and the contract requires amounts to be retained for reasons other than the provision of finance. The withholding of a specified percentage of each milestone payment is intended to protect the interest of the company, from the contractor failing to adequately complete its obligations under the contract. Accordingly, transaction cost of Security deposit is considered as fair value at initial recognition and subsequently measured at amortised cost.
Significant estimates: The fair value of financial instruments that are not traded in an active market is determined using valuation techniques. The Company uses its judgment to select a method and makes suitable assumptions at the end of each reporting period.
2. Financial Risk Management
Financial risk management objectives and policies
The Companyâs principal financial liabilities comprise trade and other payables. The main purpose of these financial liabilities is to finance the Companyâs operations and to provide guarantees to support its operations. The Companyâs principal financial assets include loans, trade and other receivables, and cash and cash equivalents that is derived directly from its operations.
The Company is exposed to market risk, credit risk and liquidity risk. The Companyâs senior management oversees the management of these risks. The Companyâs senior management is supported by a risk committee that advises, inter alia, on financial risks and the appropriate financial risk governance framework for the Company. The risk committee provides assurance to the Board of Directors that the Companyâs financial risk activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the Companyâs policies and risk objectives. The Board of Directors reviews and agrees policies for managing each of these risks, which are summarized below.
This note explains the sources of risk which the entity is exposed to and how the entity manages the risk and the impact of hedge accounting in the financial statements.
The Company risk management is carried out by the board of directors as per DPE guidelines issued by Government of India. The board provides written principles for overall risk management as well as policies covering investment of excess liquidity.
A. Credit Risk:.
Credit risk management:
Receivables arise mainly out of sale of Coal. Sale of Coal is broadly categorized as sale through fuel supply agreements (FSAs) and e-auction. Macro - economic information (such as regulatory changes) is incorporated as part of the fuel supply agreements (FSAs) and e-auction terms Fuel Supply Agreements (FSAs)
As contemplated in and in accordance with the terms of the New Coal Distribution Policy (NCDP), the company enters into legally enforceable FSAs with customers or with State Nominated Agencies that in turn enters into appropriate distribution arrangements with end customers. Our FSAs can be broadly categorized into:
- FSAs with customers in the power utilities sector, including State power utilities, private power utilities (âPPUsâ) and independent power producers (âIPPsâ);
- FSAs with customers in non-power industries (including captive power plants (âCPPsâ)); and
- FSAs with State Nominated Agencies.
E-Auction Scheme
The E-Auction scheme of coal has been introduced to provide access to coal for customers who were not able to source their coal requirement through the available institutional mechanisms under the NCDP for various reasons, for example, due to a less than full allocation of their normative requirement under NCDP, seasonality of their coal requirement and limited requirement of coal that does not warrant a long-term linkage. The quantity of coal to be offered under E-Auction is reviewed from time to time by the Ministry of Coal.
Credit risk arises when a counterparty defaults on contractual obligations resulting in financial loss to the company.
Expected credit loss: The Company provides for expected credit risk loss for doubtful/ credit impaired assets, by lifetime expected credit losses (Simplified approach).
Expected Credit losses for trade receivables under simplified approach
Significant estimates and judgments for Impairment of financial assets
The impairment provisions for financial assets disclosed above are based on assumptions about risk of default and expected loss rates. The Company uses judgment in making these assumptions and selecting the inputs to the impairment calculation, based on the Companyâs past history, existing market conditions as well as forward looking estimates at the end of each reporting period.
B. Liquidity Risk
Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through an adequate amount of committed credit facilities to meet obligations when due. Due to the dynamic nature of the underlying businesses, Company treasury maintains flexibility in funding by maintaining availability under committed credit lines.
Management monitors forecasts of the Companyâs liquidity position (comprising the undrawn borrowing facilities) and cash and cash equivalents on the basis of expected cash flows. This is generally carried out at local level in accordance with practice and limits set by the Company. The bank borrowings of Coal India Ltd. has been secured by creating charge against stock of coal, stores and spare parts and book debts of CIL and its Subsidiary Companies within consortium of banks.The total working capital credit limit available to CIL is Rs.535.00 Crore (Rs.550.00 Crore), of which fund based limit is Rs.240.00 Crore (Rs.250.00 Crore)and non-fund based limit is Rs.295.00 crore (Rs.300.00 Crore). Further, Rs.5000.00 crore (Rs.5000.00 Crore) was set up as non-fund based limit outside consortium in order to facilitate import of HEMM. Coal India Limited is contingently liable to the extent such facility is actually utilised by the Subsidiary Companies.
C. Market risk
a) Foreign currency risk
Foreign currency risk arises from future commercial transactions and recognised assets or liabilities denominated in a currency that is not the Companyâs functional currency(INR).The Company is exposed to foreign exchange risk arising from foreign currency transactions. Foreign exchange risk in respect of foreign operation is considered to be insignificant. The Company also imports and risk is managed by regular follow up. Company has a policy which is implemented when foreign currency risk becomes significant.
b) Cash flow and fair value interest rate risk
The Companyâs main interest rate risk arises from bank deposits with change in interest rate exposes the Company to cash flow interest rate risk. Company policy is to maintain most of its deposits at fixed rate.
Company manages the risk using guidelines from Department of public enterprises (DPE), diversification of bank deposits credit limits and other securities.
Capital management
The company being a government entity manages its capital as per the guidelines of Department of investment and public asset management under ministry of finance.
3. Employee Benefits: Recognition and Measurement (Ind AS-19)
a) Gratuity
Gratuity is maintained as a defined benefit retirement plan and contribution is made to the Life Insurance Corporation of India. The liability or asset recognised in the balance sheet in respect of defined benefit gratuity plans is the present value of the defined benefit obligation at the end of the reporting period less the fair value of plan assets. The defined benefit obligation is calculated annually by actuaries using the projected unit credit method.Remeasurement gains and losses arising from experience adjustments and changes in actuarial assumptions are recognised in the period in which they occur, directly in other comprehensive income.
b) Leave encashment
The liabilities for earned leave are expected to be settled after the retirement of employee. They are therefore measured as the present value of expected future payments to be made in respect of services provided by employees up to the end of the reporting period using the projected unit credit method. The benefits are discounted using the market yields at the end of the reporting period that have terms approximating to the terms of the related obligation. Re-measurements as a result of experience adjustments and changes in actuarial assumptions are recognised in other comprehensive income.
c) Provident Fund:
Company pays fixed contribution towards Provident Fund and Pension Fund at pre-determined rates to a separate trust named Coal Mines Provident Fund (CMPF). The contribution towards the fund during the year is Rs.53.63Crore (Rs.28.61Crore)has been recognized in the Statement of Profit & Loss (Note 27).
d) The Company operates some defined benefit plans as follows which are valued on actuarial basis:
(i) Funded
o Gratuity o Leave Encashment o Medical Benefits o Pension Scheme
(ii) Unfunded
o Life Cover Scheme o Settlement Allowance o Group Personal Accident Insurance o Leave Travel Concession
o Compensation to dependent on Mine Accident Benefits Total liability as on 31.03.2019 based on valuation made by the Actuary, details of which are mentioned below is Rs.456.49 Crore.
Medical Benefits for retired Employees
The Company provides Post-Retirement Medical Facility to the retired employees and their spouse. The facilityis covered by separate PostRetirement Medical scheme for executive and non-executive. Scheme for the medical benefit for executive retired prior to 01.01.2007 is administered through separate âContributory Post-Retirement Medical Scheme for Executive Trustâ. Liability for the medical benefits are recognized based on actuarial valuation.
For executive retired prior to 01.01.2007 - funded status as on 31.03.2019 Rs.5.47crore (Nil) and liability for the same as on 31.03.2019 is Rs.33.52 crore (Rs.39.43crore).
Pension
The company has a defined contribution pension scheme for its employees, which is administered through CIL Executive Defined Contribution Pension Scheme - 2007 trust. Funded status as on 31.03.2019 Rs.58.54 crore (Nil) and liability for the same as on 31.03.2019 is Rs.53.70 crore (Rs.51.53crore).
4. Unrecognized items
a) Contingent Liabilities
I. Claims against the companynot acknowledged as debt
The management believes that the outcome of the above will not have any material adverse effect on the company.
II. Guarantee
The company has given guarantee on behalf of subsidiaries namely, Eastern Coalfields Limited and Mahanadi Coalfields Limited to the extent of their obligations under loans (principal and interest) made to Export Development Corporation, Canada and Natexis Banque (for purchase of Machinery from Liebherr France). The outstanding balance as on 31.03.2019 stood at Rs.165.55 Crore (Rs.161.20 Crore) and Rs.6.29 Crore (Rs.7.09 Crore) respectively. Other bank guarantee issued is Rs.0.84 Crore (Rs.0.84 Crore).
III. Letter of Credit:
As on 31.03.2019 outstanding letters of credit is Nil(Nil).
b) Commitments
Estimated amount of contracts remaining to be executed on capital account and not provided for: as on 31.03.2019 is Rs.322.61 Crore (Rs.19.38 Crore).
Other Commitment: as on 31.03.2019 Rs.306.85 Crore (Rs.391.02 Crore)
5. Other Information
a) Provisions
The position and movement of various provisions as per Ind AS-37 except those relating to employee benefits which are valued actuarially, as on 31.03.2019 are given below :
b) Authorised Preference Share capital
c) Earnings per share
d)Related Party Disclosures A. List of Related Parties
i) Subsidiary Companies
1) Eastern Coalfields Limited (ECL)
2) Bharat Coking Coal Limited (BCCL)
3) Central Coalfields Limited (CCL)
4) Western Coalfields Limited (WCL)
5) South Eastern Coalfields Limited (SECL)
6) Northern Coalfields Limited (NCL)
7) Mahanadi Coalfields Limited (MCL)
8) Central Mine Planning and Design Institute Limited (CMPDIL)
9) Coal India Africana Limitada, Mozambique (CIAL)
ii) Joint Venture Companies
1) International Coal Venture Private Limited (ICVL)
2) CIL NTPC Urja Private Limited
3) Talcher Fertilizers Limited (TFL)
4) Hindustan Urvarak and Rasayan Limited (HURL)
iii) Post Employment Benefit Fund:
1) Group Gratuity Cash Accumulation Plan with LICI.
2) New Group Gratuity Cash Accumulation Plan with LICI (for employees joining after 01.04.2014).
3) New Group Leave Encashment Scheme with LICI.
4) Coal Mines Provident Fund (CMPF).
5) Contributory Post-Retirement Medical Scheme for Executive Trust
6) CIL Executive Defined Contribution Pension Scheme-2007
DANKUNI COAL COMPLEX
Coal India Ltd. (Holding Company) has given on lease land, building and structures, plant and machinery of Dankuni Coal Complex at Kolkata from 01.04.1995, with absolute right to manufacture, sell its products including gas and by-products. The lease rent payable from 01.04.2016 onward to Coal India Ltd. is Rs.1.80 Crore per annum.
C. Entities under the control of the same government:
The Company is a Central Public Sector Undertaking (CPSU) controlled by Central Government by holding majority of shares (Refer Note-16). The Company being a Government entity is exempt from the general disclosure requirements in relation to related party transactions and outstanding balances with the controlling Government and another entity under same Government. The following transactions have been entered at armâs length price with entities under the control of the same Government.
e) Recent AccountingPronouncements
i) Ind AS, 116- Leases
Ministry Of Corporate Affairs vide notification dated 30th March 2019 has notified Indian Accounting Standard (Ind AS) 116, Leases which shall come into force on the 1st day of April 2019.
This Standard sets out the principles for the recognition, measurement, presentation, and disclosure of leases. The objective is to ensure that lessees and lessors provide relevant information in a manner that faithfully represents those transactions.
The standard permits two possible methods of transition:
Retrospectively to each prior reporting period presented applying IND AS 8 i.e. 1 April 2018.
Retrospectively with the cumulative effect of initially applying the standard on application date i.e. 1 April 2019.
Management is in the process of selecting the appropriate method of transition and estimating the impact in the Financial Statement.
ii) Amendment to Ind AS 19 - plan amendment, curtailment or settlement-
Ministry of Corporate Affairs vide notification dated 30th March 2019 has notified amendments to Ind AS 19, âEmployee Benefitsâ, in connection with accounting for plan amendments, curtailments and settlements. The amendments require an entity:
- to use updated assumptions to determine current service cost and net interest for the remainder of the period after a plan amendment, curtailment or settlement; and
- to recognise in profit or loss as part of past service cost, or a gain or loss on settlement, any reduction in a surplus, even if that surplus was not previously recognised because of the impact of the asset ceiling.
Effective date for application of this amendment is annual period beginning on or after 1 April 2019. Management is in the process of estimating the impact of the above in the Financial Statement.
f) CIL AND IICM
CIL has leased out the assets viz. land, building, structures, furniture and fixtures and other assets to IICM. The existing lease agreement is valid from 01.04.2015 to 31.03.2020. The lease rent of IICM payable to CIL is Rs.1.80 Crore per annum.
Excess amount collected on behalf of IICM from subsidiaries Rs. 180.94 Crores during earlier years has been recognised as liability write back in current year as the same is no longer payable to IICM.
g) Goods procured by Coal India Ltd. on behalf of Subsidiaries
As per existing practice, goods purchased by Coal India Ltd. on behalf of subsidiary companies are accounted for in the books of respective subsidiaries directly.
h) Insurance and escalation claims
Insurance and escalation claims are accounted for on the basis of admission/final settlement.
i) Provisions made in the Accounts
Provisions made in the accounts against slow moving/non-moving/obsolete stores, claims receivable, advances, doubtful debts etc. are considered adequate to cover possible losses.
j) Current Assets, Loans and Advances etc.
In the opinion of the Management, assets other than fixed assets and non-current investments have a value on realisation in the ordinary course of business at least equal to the amount at which they are stated.
k) Current Liabilities
Estimated liability has been provided where actual liability could not be measured.
l) Disaggregated revenue information:
The table below presents disaggregated revenues from contract with customers information as per requirement of Ind AS 115,Revenue From Contract with Customer:
m) During the financial year 2013-14, a case of misappropriation of Companyâs fund for personal gain came to the notice of the management. The matter has been investigated by different agencies and appropriate action for recovery is underway. As per the estimate of the internal audit department of Coal India Limited, the amount involved is Rs. 1.17 Crore approximately. n) Significant accounting policy
Significant accounting policy (Note-2) has been drafted to elucidate the accounting policies adopted by the Company in accordance with Indian Accounting Standards (Ind ASs) notified by Ministry of Corporate Affairs (MCA) under the Companies (Indian Accounting Standards) Rules, 2015.
o) Others
i. Previous year figures have been restated, regrouped and rearranged wherever considered necessary.
ii. Previous Year figures in Note No. 3 to 37 are in brackets.
iii. Note - 1 and 2 represents Corporate information and Significant Accounting Policies respectively, Note 3 to 22 form part of the Balance Sheet as at 31st March, 2018 and 23 to 36 form part of Statement of Profit & Loss for the year ended on that date. Note -37 represents Additional Notes to the Financial Statements.
Signature to Note 1 to 37.
Mar 31, 2018
NOTES TO THE FINANCIAL STATEMENTS-STANDALONE
NOTE - 7 (contd.) NON - CURRENT INVESTMENTS - Unquoted at Cost
1. Investment in Eastern Coalfields Limited (ECL) and Bharat Coking Coal Limited (BCCL)
The investment in Equity Shares of BCCL, a wholly owned subsidiary, is long term and strategic in nature. The Book Value of investment in BCCL as on 31.03.2018 is Rs, 2118.00 crore against which the accumulated loss as on 31.03.2018 is Rs,2546.82 crore (Rs,1249.40 crore). The accumulated losses as on 31.03.2018 has come down to Rs,2546.82 crore from Rs,4106.03 crore as on 31.03.2013 (i.e. the end of the year in which it came out of BIFR).
Similarly, the investment in Equity Shares of ECL, a wholly owned subsidiary, is also long term and strategic in nature. The Book Value of investment in ECL as on 31.03.2018 is Rs, 2218.45 crore against which the accumulated loss as on 31.03.2018 is Rs,2731.93 crore (Rs,1907.76 crore). The accumulated losses as on 31.03.2018 has come to Rs,2731.93 crore from Rs,2716.00 crore as on 31.03.2015 (i.e. the end of the year in which it came out of BIFR).
In view of these companies turning around and the investments in these companies being long term and strategic in nature, book value of investment has been considered.
2. Investment in Coal India Africana Limitada (CIAL) (100% owned subsidiary -Overseas)
Coal India Ltd., has formed a 100% owned Subsidiary in Republic of Mozambique, named "Coal India Africana Limitada" to explore noncoking coal properties in Mozambique. The initial paid up capital on such formation (known as "Quota Capital") is Rs, 0.01 crore. The investment by CIL in CIAL is strategic and long term in nature. The advance given by CIL to CIAL has been fully provided for because the expenses incurred till date are for the coal blocks which could not be turned into feasible projects.Pursuant to the directives of CIL Board, a request was made through Govt. of India for allocation of a new prospective coal block, the response for which from Mozambique government is awaited. In view of above, the investment does not have any indication for impairment and as such the same are valued at cost.
3. Investment in International Coal Ventures Pvt. Ltd.
CIL has entered into a Memorandum of Understanding (vide approval from its Board in 237th meeting held on 24th November, 2007) regarding formation of Special Purpose Vehicle (SPV) through joint venture involving CIL/SAIL/RINL/NTPC & NMDC for acquisition of coking coal properties abroad. The formation of the SPV had been approved by the Government of India, vide its approval dated 8th November, 2007.
The aforesaid SPV viz. International Coal Ventures Pvt. Ltd. was incorporated under Companies Act, 1956 on 20th May, 2009 initially with an authorised capital of Rs,1.00 crore and paid up capital of Rs,0.70 crore. The authorised Capital and paid up Capital as on 31.03.2018 stood at Rs,3500.00 Crore and Rs,1450.67 Crore respectively. Out of above paid up capital, Coal India Ltd. is owning 0.19% share i.e. Rs,2.80 crore face value of equity shares.
4. Investment in CIL NTPC Urja Private Ltd.
CIL NTPC Urja Pvt.Ltd., a 50:50 joint venture company was formed on 27th AprilRs, 2010 between CIL & NTPC for setting up of joint integrated power plants along with mining of coal. Coal India Ltd. is presently holding 50% equity shares of face value of Rs, 0.08 crore in the joint venture Company.
5. Investment in Talcher Fertilizers Limited
A Joint venture company named "Talcher Fertilizers Limited" (formerly known as Rashtriya Coal Gas Fertilizers Limited) was incorporated on 13th November, 2015 under the Companies Act, 2013 under a joint venture agreement dated 27th 0ctober,2015, among Coal India Limited (CIL), Rashtriya Chemicals and Fertilizers Limited, GAIL (India) Limited and Fertilizer Corporation of India Limited with an authorised share capital of Rs,50 Crore, out of which CIL shall hold 29.67% share capital. However, presently Coal India Limited has invested Rs, 5.02 crore (i.e. 33.32%) in the joint venture company up to 31.03.2018.
6. Investment in Hindustan Urvarak and Rasayan Limited
By virtue of agreement dated 16th May, 2016 made between CIL and NTPC Ltd., a joint venture company named Hindustan Urvarak and Rasayan Limited (HURL) was formed. Subsequently, joint venture agreement has been revised on 31st October, 2016 to include IOCL, FCIL and HFCL as joint venture partners. The authorised share capital of the company is Rs,1000.00 Crore, out of which CIL shall hold 29.67% share capital. However, presently Coal India Limited has invested Rs,333.25 crore (i.e. 33.33%) in the joint venture company up to
31.03.2018.
7. During the year Northern Coalfields Limited (NCL), Mahanadi Coalfields Limited (MCL), South Eastern Coalfields Limited (SECL) and Coal Mine Planning and Designing Institute Limited (CMPDIL) issued Bonus shares in the ratio of 4:1, 4:1, 7:5 and 1:1 respectively. No. of shares issued as Bonus Shares by NCL, MCL, SECL and CMPDIL are 5462372 equity shares of Rs,1000 each, 5649064 equity shares of Rs,1000 each, 41,82,850 equity shares of Rs,1000 and 1,90,400 equity shares of Rs,1000 each respectively.
CIL invests in liquid schemes (daily dividend) of the above mutual funds. In the daily dividend schemes, dividends are received on daily basis in the form of units of mutual fund scheme and the value of the NAV of the scheme remain constant.
Refer note 38 (1) for classification
1. Deposit with bank under Mine Closure Plan
Following the guidelines from Ministry of Coal, Government of India for preparation of Mine Closure Plan, an Escrow Account has been opened. The interest earned/accrued during the year on such Escrow Account for Rs, 2.41 crore (Rs, 0.71 crore) is included in interest income from deposit with banks disclosed in Note-25. (Refer Note 21 for Provision for Site Restoration/Mine Closure)
2. Receivable for Exploratory Drilling Work
In view of critically weak financial position of ECL, which was under BIFR till 31st Dec 2014, expenditure incurred by CMPDIL on exploratory drilling works, falling under the command area of ECL was paid by CIL and shown as advance. Amount of advance, lying unadjusted for more than five years is being written off. Therefore, as an abundant precaution, advance made on this account up to 31s1 Dec 2014 was fully provided for.
1. Current accounts with Subsidiaries: The balances of the current account with the Subsidiaries are reconciled at regular intervals, and the same as on 31.03.2018 has also been reconciled. Adjustments arising out of reconcilation are carried out continuously.
2. Other receivables of Rs, 50.32 crore includes Rs, 29.72 crore (Rs, 24.47 crore) for interest receivable on deposits made on account of Shifting & rehabilitation fund.
Refer note 38 (1) for classification
2 During the period, there is no change in the number of shares.
3 Listing of shares of Coal India Ltd. in Stock Exchange :
The shares of Coal India Ltd. is listed in two major stock exchanges of India, viz. Bombay Stock Exchange and National Stock Exchange on and from 4th November,2010.
Hence, the number of shares held by Govt of India stood at 4,87,56,71,716 i.e. 78.546% of the total 6,20,74,09,1 77 number of shares outstanding as on 31.03.2018.
4 The Company has only one class of equity shares having a face value Rs,10/- per share. The holders of the equity shares are entitled to receive dividends as declared from time to time and are entitled to voting rights proportionate to their share holding at the meeting of shareholders.
5 Refer Note 38 (5) (c) also for Authorised Share capital of the company.
1. Interim Dividend- During the year the company has paid interim dividend of Rs,16.50 (Rs,19.90) per equity share of face value of Rs,10/- each for the year 201 7-18 amounting to Rs,10,242.24 crore (Rs,12,352.76 crore) .
The Board of Directors of the company decided to recommend such interim dividend already paid as final dividend and no additional dividend has been recommended for the year 2017-18.
2. Corporate Dividend Tax - The above represents the Dividend Distribution Tax pertaining to the Dividend paid over and above the utilization of Dividend received from Subsidiaries, as per provisions of Income Tax Act,1961.
Cash Credit
The bank borrowings of Coal India Ltd. has been secured by creating charge against stock of coal, stores and spare parts and book debts of CIL and its Subsidiary Companies within consortium of banks.
The total working capital credit limit available to CIL is Rs,550.00 Crore, of which fund based limit is Rs,250.00 Crore and non-fund based limit is Rs,300.00 crore. Further, Rs,2000.00 crore was set up as non-fund based limit outside consortium in order to facilitate import of HEMM. Coal India Limited is contingently liable to the extent such facility is actually utilised by the Subsidiary Companies.
1. Current Accounts of Subsidiaries
The current account balances of the Subsidiary Companies are reconciled on regular intervals, and the same as on 31.03.2018 has been reconciled. Adjustment arising out of reconcilation are carried out continuously.
2. Current Account of Indian Institute of Coal Management (IICM)
Current account balance of IICM represents the fund accumulated by receiving Rs, 0.50 per tonne (up to June 2017) of productions of NEC and the Subsidiaries, net of expenditure made / fund remitted on behalf of IICM.
During this period total contribution received from NEC and the Subsidiaries on this account amounted to Rs,5.94 Crore. Further Rs,13.67 Crore (net) were remitted to IICM during the period; and hire charges/ lease rent recovered from IICM amounted to Rs,1.80 Crore (excluding service tax/ GST applicable thereon).
3. Unpaid dividend includes interim dividend of Rs,11.12 crore (Rs,68.77 crore) declared but 30 days have not been lapsed so as to transfer in Unpaid Dividend account.
During the year, an amount of Rs,0.48 crore in respect of interim dividend of FY 2010-11 has been transferred to Investor Education & Protection Fund (IEPF) as the same remained unpaid and unclaimed for a period of seven years from the date of transfer of such dividend to unpaid dividend account.
There is no other amount due to be transferred to IEPF within 31.03.2018.
Refer note 38 (1) for classification
1. Provision for Site Restoration/Mine Closure
The companyRs,s obligation for land reclamation and decommissioning of structures consists of spending at both surface and underground mines in accordance with the guidelines from Ministry of Coal, Government of India. The estimate of obligation for Mine Closure, Site Restoration and Decommissioning based upon detailed calculation and technical assessment of the amount and timing of the future cash spending to perform the required work. Mine Closure expenditure is provided as per approved Mine Closure Plan. The estimates of expenses are escalated for inflation, and then discounted at a discount rate (@8%) that reflects current market assessment of the time value of money and the risks, such that the amount of provision reflects the present value of the expenditures expected to be required to settle the obligation. The value of the provision is progressively increased over time as the effect of discounting unwinds; creating an expense recognised as financial expenses. In reference to the above guidelines for preparation of mine closure plan, an escrow account has been opened. (Refer Note 9 for deposit with banks under Mine Closure Plan)
2. Provision- Other Employee Benefits-Current includes Rs,51.53 crore (Rs,45.09 crore) provided for Superannuation benefits @9.84%.
3. National Coal Wage Agreement (NCWA)-X for non-executive employees effective from 01.07.2016 was finalized on 10th October 201 7 and payment of salary as per the agreement has been started from the month of October, 2017. Provision against arrear salary for NCWA-X amounting to Rs,21.26 crore has been made for the period from 01.04.201 7 to 30.09.201 7 resulting total provision of Rs,36.45 crore for the period from 01.07.2016 to 30.09.201 7. An adhoc amount of Rs,9.55 crore has been paid in October, 201 7 against above arrear which is net off with the provision as shown in Note-21. (Refer footnote 1 of Note 28)
4. Department of Public Enterprises (DPE) vide Office Memorandum (OM) NO. W-02/0028/2017-DPE(WC)-GL-XIII/1 7 dated 3rd August, 2017 has circulated the approval of the Government of India regarding the guidelines of the revision of pay and allowances of Board level and below Board level Executives and non-unionized supervisors of Central Public Sector Enterprises (CPSEs) w.e.f 01.01.2017.
Pending final implementation of these guidelines, the provision for executive pay revision of Rs,32.84 crore, considering estimated impact of increase in all elements of executive salary (including the employer''s PF contribution), other employee benefits and all superannuation benefits as per DPE guidelines, covering the period 01.01.2017 to 31.03.2018, has been made/kept in the financial statements.
5. A provision as Coal Quality Variance of Rs,4.88 Crore (Nil) is recognised For sampling results awaited from refree samplers.
Shifting and Rehabilitation Fund
1- Following the direction of the Ministry of Coal, the Company has setup a fund for implementation of action plan for shifting & rehabilitation, dealing with fire & stabilization of unstable areas of Eastern Coal Fields Ltd. & Bharat Coking Coal Ltd. The fund is utilized (by ECL and BCCL) based on implementation of approved projects in this respect.
The subsidiaries of CIL except CMPDIL and Coal India Africana Limitada are making a contribution of Rs,6/- per tonne of their respective coal dispatch per annum to this fund, which remains in the custody of CIL, till they are disbursed/utilised by subsidiaries/agencies implementing the relevant projects. (Refer Note 9 for deposits with bank under Shifting & Rehabilitation Fund scheme)
2- Interest earned (Net of TDS) on bank deposits earmarked for this fund is credited to this fund.
Other liabilities include Rs,1 77.00 crore (Rs,154.82 crore) towards TDS on interest earned on deposits made against Shifting & Rehabilitation fund as refered in Note-22.
1. Government of India introduced Goods and Services Tax (GST) w.e.f 1st July,2017. Consequently revenue from operations for the period from 01.07.201 7 to 31.03.2018 is presented net of GST.
2. Revenue from operations for the period prior to 01.07.2017 is inclusive of Excise duty. Sale of coal includes excise duty of Rs,5.80 Crore (Rs,21.03 crore). Sales of coal (Net) exclusive of excise duty is Rs,357.13 crore (Rs,285.37 crore).
Loading and additional transportation charges includes excise duty of Rs,0.07 Crore (Rs,0.27 crore). Loading and additional transportation charges net of excise duty is Rs,5.10 crore (Rs,4.43 crore).
3. Subsidy for Sand Stowing & Protective Works includes Rs,0.07 received from Ministry of Coal, Government of India in terms of Coal Mines (Conservation & Development) Act, 1974 towards reimbursement of expenditure incurred for the Sand Stowing & Protective Works by NEC.
4. Clean energy Cess has been repealed w.e.f 01.07.2017, and GST compensation cess has been introduced w.e.f. 01.07.2017.
1. Interim Dividend of 2017-18 received from CCL Rs,531.10 crore (Rs,3634.04 crore), NCL Rs,1 750.00 crore (Rs,1680.00 crore), SECL Rs,2202.58 crore (Rs,2133.47 crore), MCL Rs,4350.00 crore (Rs,2982.00 crore) and CMPDIL Rs,19.50 crore (Nil) has been accounted for during the year.
2. Interest income from deposits with Banks and dividend income from investment in mutual fund includes interest/dividend income on investments of amount lying in Current Account of IICM. (Refer Note 20)
3. Miscellaneous income includes incomes like receipt on account of holiday home bookings, RTI fees, application money for recruitments, misc. receipts from banks etc.
1. National Coal Wage Agreement (NCWA)-X for non-executive employees effective from 01.07.2016 was finalized on 10th October 201 7 and
payment of salary as per the agreement has been started from the month of October, 201 7. The provision for such wage revision was made in Accounts up to 30.09.2017.
The NCWA -X for the year ended 31.03.2018 above includes Rs,6.68 Crore relating to the Period 01.07.2016 to 31.03.2017. (Refer footnote
3 of Note 21)
2. As per the Payment of Gratuity (Amendment) Act, 2018 and the notification issued thereafter, the ceiling for maximum gratuity has been
increased from Rs,10 lakh to Rs,20 lakh w.e.f. 29.03.2018. Gratuity for the year ended 31.03.2018 above includes Rs,97.55 Crore for impact of above change in gratuity ceiling.
In pursuance of section 135 of Companies Act 2013, an amount of Rs,7.88 crore (being 2% of the average net profit of the company made during the three immediately preceding financial years - considered from the audited financial statements of the respective years prepared as per previous GAAP/Ind-AS) was required to be spent during 2017-18 towards CSR activities. The company has spent Rs,24.31 crore during the year.
A brief of each level is given below.
Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices. This includes Mutual fund which is valued using closing NAV.
Level 2: The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which maximize the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.
Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. This is the case for unlisted equity securities, preference shares borrowings, security deposits and other liabilities taken included in level 3.
(c) Valuation technique used in determining fair value
Valuation techniques used to value financial instruments include the use of quoted market prices of instruments.
(d) Fair value measurements using significant unobservable inputs
At present there are no fair value measurements using significant unobservable inputs.
(e) Fair values of financial assets and liabilities measured at amortised cost
^ The carrying amounts of trade receivables, short term deposits, cash and cash equivalents, trade payables are considered to be the same as their fair values, due to their short-term nature.
^ The Company considers that the Security Deposits does not include a significant financing component. The milestone payments (security deposits) coincide with the company''s performance and the contract requires amounts to be retained for reasons other than the provision of finance. The withholding of a specified percentage of each milestone payment is intended to protect the interest of the company, from the contractor failing to adequately complete its obligations under the contract. Accordingly, transaction cost of Security deposit is considered as fair value at initial recognition and subsequently measured at amortised cost.
Significant estimates: The fair value of financial instruments that are not traded in an active market is determined using valuation techniques. The Company uses its judgment to select a method and makes suitable assumptions at the end of each reporting period.
Financial risk management objectives and policies
The Company''s principal financial liabilities comprise trade and other payables. The main purpose of these financial liabilities is to finance the Company''s operations and to provide guarantees to support its operations. The Company''s principal financial assets include loans, trade and other receivables, and cash and cash equivalents that is derived directly from its operations.
The Company is exposed to market risk, credit risk and liquidity risk. The Company''s senior management oversees the management of these risks. The Company''s senior management is supported by a risk committee that advises, inter alia, on financial risks and the appropriate financial risk governance framework for the Company. The risk committee provides assurance to the Board of Directors that the Company''s financial risk activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the Company''s policies and risk objectives. The Board of Directors reviews and agrees policies for managing each of these risks, which are summarized below.
The Company is exposed to market risk, credit risk and liquidity risk.This note explains the sources of risk which the entity is exposed to and how the entity manages the risk and the impact of hedge accounting in the financial statements.
The Company risk management is carried out by the board of directors as per DPE guidelines issued by Government of India. The board provides written principles for overall risk management as well as policies covering investment of excess liquidity.
A. Credit Risk: Credit risk arises from cash and cash equivalents, investments carried at amortised cost and deposits with banks and financial institutions, as well as including outstanding receivables.
Credit risk management:
Receivables arise mainly out of sale of Coal. Sale of Coal is broadly categorized as sale through fuel supply agreements (FSAs) and e-auction. Macro - economic information (such as regulatory changes) is incorporated as part of the fuel supply agreements (FSAs) and e-auction terms Fuel Supply Agreements (FSAs)
As contemplated in and in accordance with the terms of the New Coal Distribution Policy (NCDP), the company enters into legally enforceable FSAs with customers or with State Nominated Agencies that in turn enters into appropriate distribution arrangements with end customers. Our FSAs can be broadly categorized into:
- FSAs with customers in the power utilities sector, including State power utilities, private power utilities ("PPUs") and independent power producers ("IPPs");
- FSAs with customers in non-power industries (including captive power plants ("CPPs")); and
- FSAs with State Nominated Agencies.
E-Auction Scheme
The E-Auction scheme of coal has been introduced to provide access to coal for customers who were not able to source their coal requirement through the available institutional mechanisms under the NCDP for various reasons, for example, due to a less than full allocation of their normative requirement under NCDP, seasonality of their coal requirement and limited requirement of coal that does not warrant a long-term linkage. The quantity of coal to be offered under E-Auction is reviewed from time to time by the Ministry of Coal.
Expected credit loss: The Company provides for expected credit risk loss for doubtful/ credit impaired assets, by lifetime expected credit losses (Simplified approach).
Expected Credit losses for trade receivables under simplified approach.
Provision of '' 4.88 Crores (Nil) has been recognized as Coal Quality Variance for sampling results awaited from referee samplers and disclosed separately in Note 21 Provisions.
Significant estimates and judgments for Impairment of financial assets
The impairment provisions for financial assets disclosed above are based on assumptions about risk of default and expected loss rates. The Company uses judgment in making these assumptions and selecting the inputs to the impairment calculation, based on the Company''s past history, existing market conditions as well as forward looking estimates at the end of each reporting period.
B. Liquidity Risk
Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through an adequate amount of committed credit facilities to meet obligations when due. Due to the dynamic nature of the underlying businesses, Company treasury maintains flexibility in funding by maintaining availability under committed credit lines.
Management monitors forecasts of the Company''s liquidity position (comprising the undrawn borrowing facilities) and cash and cash equivalents on the basis of expected cash flows. This is generally carried out at local level in the operating companies of the Company in accordance with practice and limits set by the Company.
C. Market risk
a) Foreign currency risk
The Company is exposed to foreign exchange risk arising from foreign currency transactions. Foreign exchange risk in respect of foreign operation is considered to be insignificant. The Company also imports and risk is managed by regular follow up. Company has a policy which is implemented when foreign currency risk becomes significant.
b) Cash flow and fair value interest rate risk
The Company''s main interest rate risk arises from bank deposits with change in interest rate exposes the Company to cash flow interest rate risk. Company policy is to maintain most of its deposits at fixed rate.
Company manages the risk using guidelines from Department of public enterprises (DPE), diversification of bank deposits credit limits and other securities.
Capital management
The company being a government entity manages its capital as per the guidelines of Department of investment and public asset management under ministry of finance.
a) Provident Fund:
Company pays fixed contribution towards Provident Fund and Pension Fund at pre-determined rates to a separate trust named Coal Mines Provident Fund (CMPF). The contribution towards the fund during the year is '' 28.61.Crore ('' 27.71 Crore)has been recognized in the Statement of Profit & Loss (Note 28).
b) The Company operates some defined benefit plans as follows which are valued on actuarial basis:
(i) Funded
- Gratuity
- Leave Encashment
- Medical Benefits
(ii) Unfunded
- Life Cover Scheme
- Settlement Allowance
- Group Personal Accident Insurance
- Leave Travel Concession
- Compensation to dependent on Mine Accident Benefits
e) Related Party Disclosures A. Key Managerial Personnel
Mr. A. K. Jha, Chairman-Cum-Managing Director (w.e.f 18.05.2018)
Mr. Suresh Kumar,Chairman-Cum-Managing Director(Addl. Charge (w.e.f 23.04.2018 to 17.05.2018) Mr. Gopal Singh, Chairman-Cum-Managing Director (Addl. Charge)(w.e.f. 01.09.2017 to 20.04.2018) Mr. S. Bhattacharya, Chairman-Cum-Managing Director (w.e.f 05.01.2015 to 31.08.2017)
Mr. C.K. Dey, Director (Finance)
Mr. S.N. Prasad, Director (Marketing)
Mr. Binay Dayal, Director (Technical)
Mr. Shekhar Saran, Director (Technical) - Additional Charge (up to 10.10.2017)
Mr. R. P. Srivastava, Director (P&IR)
Mr. R. R. Mishra, Director (P&IR) - Additional Charge (up to 30.01.2018)
Mr. M Viswanathan, Company Secretary
Independent Directors (appointed on 17.11.2015)
Ms. Loretta M. Vas Mr. Vinod Jain Dr. D.C. Panigrahi Prof. Khanindra Pathak Dr. S.B. Agnihotri
Mr. Vinod Kumar Thakral (appointed on 06.09.2017)
Mr. Bharatbhai Laxmanbhai Gajipara (appointed on 22.09.2017)
f) Goods procured by Coal India Ltd. on behalf of Subsidiaries
As per existing practice, goods purchased by Coal India Ltd. on behalf of subsidiary companies are accounted for in the books of respective subsidiaries directly.
g) Insurance and escalation claims
Insurance and escalation claims are accounted for on the basis of admission/final settlement.
h) Provisions made in the Accounts
Provisions made in the accounts against slow moving/non-moving/obsolete stores, claims receivable, advances, doubtful debts etc. are considered adequate to cover possible losses.
i) Current Assets, Loans and Advances etc.
In the opinion of the Management, assets other than fixed assets and non-current investments have a value on realisation in the ordinary course of business at least equal to the amount at which they are stated. j) Current Liabilities
Estimated liability has been provided where actual liability could not be measured. k) Balance Confirmations
Balance confirmation/reconciliation is carried out for cash & bank balances, certain loans & advances, long term liabilities and current liabilities. Provision is taken against all doubtful unconfirmed balances. m) During the financial year 2013-14, a case of misappropriation of Company''s fund for personal gain came to the notice of the management. The matter has been investigated by different agencies and appropriate action for recovery is underway. As per the estimate of the internal audit department of Coal India Limited, the amount involved is '' 1.17 Crore approximately.
u) Significant accounting policy
Significant accounting policy (Note-2) has been drafted to elucidate the accounting policies adopted by the Company in accordance with Indian Accounting Standards (Ind ASs) notified by Ministry of Corporate Affairs (MCA) under the Companies (Indian Accounting Standards) Rules, 2015.
v) Others
i. Previous year''s figures have been restated, regrouped and rearranged wherever considered necessary.
ii. Previous Year''s figures in Note No. 3 to 38 are in brackets.
iii. Note - 1 and 2 represents Corporate information and Significant Accounting Policies respectively, Note 3 to 23 form part of the Balance Sheet as at 31st March, 2018 and 24 to 37 form part of Statement of Profit & Loss for the year ended on that date. Note - 38 represents Additional Notes to the Financial Statements.
Mar 31, 2017
Note: 1 CORPORATE INFORMATION
Coal India Limited (CIL) is a Maharatna Company with having registered office at Kolkata, West Bengal and listed on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE).
The Company is mainly engaged in mining and production of Coal and also operates Coal washeries. The major consumers of the company are power and steel sectors. Consumers from other sectors include cement, fertilisers, brick kilns etc.
CIL is an apex body with 8 wholly-owned subsidiaries in India out of which 7 subsidiaries are coal producing and 1 subsidiary is engaged in mine planning, designing and related consultancy services. The operations of the Company are spread across 8 states in India. CIL also has a fully owned mining company in Mozambique known as âCoal India Africana Limitadaâ which is yet to commence operations. Further some of the subsidiaries of CIL, are also having another layer of subsidiaries. There are also Joint Ventures/Associates of CIL and some of its subsidiaries.
NOTE - 2 : INVESTMENTS
1 Investment in Eastern Coalfields Limited (ECL) and Bharat Coking Coal Limited (BCCL)
The investment in Equity Shares of BCCL, a wholly owned subsidiary, is long term and strategic in nature. The Book Value of investment in BCCL as on 31.03.2017 is Rs.2118.00 crore against which the accumulated loss as on 31.03.2017 is Rs.1262.09 crore (Rs.1113.61 crore). The accumulated losses as on 31.03.2017 has come down to Rs.1262.09 crore from Rs.4106.03 crore as on 31.03.2013 (i.e. the end of the year in which it came out of BIFR).
Similarly, the investment in Equity Shares of ECL, a wholly owned subsidiary, is also long term and strategic in nature. The Book Value of investment in ECL as on 31.03.2017 is Rs.2218.45 crore against which the accumulated loss as on 31.03.2017 is Rs.1907.76 crore (Rs.1928.53 crore). The accumulated losses as on 31.03.2017 has come down to Rs.1907.76 crore from Rs.2716.00 crore as on 31.03.2015 (i.e. the end of the year in which it came out of BIFR).
In view of these companies turning around and the investments in these companies being long term and strategic in nature, book value of investment has been considered.
2 Investment in Coal India Africana Limitada (100% owned subsidiary -Overseas )
Coal India Ltd., has formed a 100% owned Subsidiary in Republic of Mozambique, named âCoal India Africana Limitadaâ to explore non-coking coal properties in Mozambique. The initial paid up capital on such formation (known as âQuota Capitalâ) is Rs.0.01 crore. The investment by CIL in CIAL is strategic and long term in nature. The advance given by CIL to CIAL has been fully provided for because the expenses incurred till date are for the coal blocks which could not be turned into feasible projects.Pursuant to the directives of CIL Board, a request was made through Govt. of India for allocation of a new prospective coal block, the response for which from Mozambique government is awaited. In view of above, the investment does not have any indication for impairment and as such the same are valued at cost.
3 Investment in International Coal Ventures Pvt. Ltd.
CIL has entered into a Memorandum of Understanding (vide approval from its Board in 237th meeting held on 24th November, 2007) regarding formation of Special Purpose Vehicle (SPV) through joint venture involving CIL/SAIL/RINL/NTPC & NMDC for acquisition of coking coal properties abroad. The formation of the SPV had been approved by the Government of India, vide its approval dated 8th November, 2007.
The aforesaid SPV viz. International Coal Ventures Pvt. Ltd. was incorporated under Companies Act, 1956 on 20th May,2009 initially with an authorised capital of Rs.1.00 crore and paid up capital of Rs.0.70 crore. The authorised Capital and paid up Capital as on 31.03.2017 stood at Rs.3500.00 Crore and Rs.1270.67 Crore respectively. Out of above paid up capital, Coal India Ltd. is owning 0.22% share i.e. Rs.2.80 crore face value of equity shares.
4 Investment in CIL NTPC Urja Private Ltd.
CIL NTPC Urja Pvt.Ltd., a 50:50 joint venture company was formed on 27th Aprilâ2010 between CIL & NTpC for setting up of joint integrated power plants along with mining of coal. Coal India Ltd. is presently holding 50% equity shares of face value of Rs.0.08 crore in the joint venture Company.
5 Investment in Talcher Fertilizers Limited
A Joint venture company named Talcher Fertilizers Limited (formerly known as Rashtriya Coal Gas Fertilizers Limited) was incorporated on 13th November, 2015 under the Companies Act, 2013 under a joint venture agreement dated 27th October,2015, among Coal India Limited (CIL), Rashtriya Chemicals and Fertilizers Limited, GAIL (India) Limited and Fertilizer Corporation of India Limited with an authorised share capital of Rs.50 Crore, out of which CIL shall hold 29.67% share capital. However, presently Coal India Limited has invested Rs.1.50 lakhs (i.e. 30%) in the joint venture company upto 31.03.2017.
6 Investment in Hindustan Urvarak and Rasayan Limited
By virtue of agreement dated 16th May, 2016 made between CIL and NTPC Ltd., a joint venture company named Hindustan Urvarak and Rasayan Limited (HURL) was formed. Subsequently, joint venture agreement has been revised on 31st October, 2016 to include IOCL, FCIL and HFCL as joint venture partners. The authorised share capital of the company is Rs.100.00 Crore, out of which CIL shall hold 29.67% share capital. However, presently Coal India Limited has invested Rs.5.03 crore (i.e. 33.28%) in the joint venture company upto 31.03.2017.
1. Deposit with bank under Mine Closure Plan
Following the guidelines from Ministry of Coal, Government of India for preparation of Mine Closure Plan, an Escrow Account has been opened. The interest earned/accrued during the year on such Escrow Account for Rs.2.38 crore (Rs.2.29 crore) is included in interest income from deposit with banks disclosed in Note-25. (Refer Note 21 for Provision for Site Restoration/Mine Closure)
2. Receivable for Exploratory Drilling Work
In view of critically weak financial position of ECL, which was under BIFR till 31st Dec 2014, expenditure incurred by CMPDIL on exploratory drilling works, falling under the command area of ECL was paid by CIL and shown as advance. Amount of advance, lying unadjusted for more than five years is being written off. Therefore, as an abundant precaution, advance made on this account upto 31st Dec 2014 was fully provided for.
* Refer Note 22 - Shifting & Rehabilitation Fund
1. Current account with Subsidiaries- The balances of the current account with the Subsidiaries are reconciled at regular intervals, and the same as on 31.03.2017 has also been reconciled. Adjustments arising out of reconcilation are carried out continuously.
2. Other receivables of Rs.30.50 crore includes Rs.24.47 crore (Rs.25.19 crore as on 31.03.2016 & Rs.21.92 crore as on 01.04.2015) for interest receivable on deposits made on account of Shifting & rehabilitation fund.
Refer note 38 (2) for classification
1 Shares in the company held by each shareholder holding more than 5% Shares
2 During the year, the company has not issued any shares. However, pursuant to Public Announcement (âPAâ) published on August 30, 2016 and letter of offer dated September 23, 2016, the Company has bought back its 10,89,55,223 number of Equity shares of face value of Rs.10 each fully paid up through tender offer route under Stock Exchange mechanism and extinguished these shares on October 28, 2016. Post such buy-back, the number of fully paid equity shares as on 31.03.2017 stands at 6,20,74,09,177.
3 Listing of shares of Coal India Ltd. in Stock Exchange.
The shares of Coal India Ltd. is listed in two major stock exchanges of India, viz. Bombay Stock Exchange and National Stock Exchange on and from 4th November,2010.
The details of disinvestment/Buyback of shares by Govt of India is furnished below:
4 The Company has only one class of equity shares having a face value Rs.10/- per share. The holders of the equity shares are entitled to receive dividends as declared from time to time and are entitled to voting rights proportionate to their share holding at the meeting of shareholders.
5 Reconciliation of number of shares 6 Refer Note 38 (6) (d) also for Authorised Share capital of the company
1. Interim Dividend- During the year the company has paid first interim dividend of Rs.18.75 and second interim dividend of Rs.1.15 totalling to Rs.19.90 (Rs.27.40) per equity share of face value of Rs.10/- each for the year 2016-17 amounting to Rs.12,352.76 crore (Rs.17,306.84 crore). The Board of Directors of the company decided to recommend such interim dividend already paid as final dividend and no additional dividend has been recommended for the year 2016-17.
2. Corporate Dividend Tax - The above represents the Dividend Distribution Tax pertaining to the Dividend paid over and above the utilization of Dividend received from Subsidiaries, as per provisions of Income Tax Act,1961.
Cash Credit
The bank borrowings of Coal India Ltd. has been secured by creating charge against stock of coal, stores and spare parts and book debts of CIL and its Subsidiary Companies within consortium of banks. The total working capital credit limit available to CIL is Rs.550.00 Crore, of which fund based limit is Rs.250.00 Crore and non-fund based limit is Rs.300.00 crore. Further, Rs.2000.00 crore was set up as non-fund based limit outside consortium in order to facilitate import of HEMM. Coal India Limited is contingently liable to the extent such facility is actually utilised by the Subsidiary Companies.
1. Current Account of Subsidiaries
The current account balances of the Subsidiary Companies are reconciled on regular intervals, and the same as on 31.03.2017 has been reconciled. Adjustment arising out of reconcilation are carried out continuously.
2. Current Account of Indian Institute of Coal Management (IICM)
Current account balance of IICM represents the fund accumulated by receiving Rs.0.50 per tonne of productions of NEC and the Subsidiaries, net of expenditure made / fund remitted on behalf of IICM.
During this year total contribution received from NEC and the Subsidiaries on this account amounted to Rs.27.71 Crore. Further Rs.15.46 Crore (net) were remitted to IICM during the period; and hire charges/ lease rent recovered from IICM amounted to Rs.1.80 Crore (excluding service tax applicable thereon).
3. Unpaid dividend includes interim dividend of Rs.68.77 crore (Rs.24.82 crore as on 31.03.2016 & âNilâ as on 01.04.2015) declared but 30 days have not been lapsed so as to transfer in Unpaid Dividend account.
Refer note 38 (2) for classification
1. Provision for Site Restoration/Mine Closure
The companyâs obligation for land reclamation and decommissioning of structures consists of spending at both surface and underground mines in accordance with the guidelines from Ministry of Coal, Government of India. The estimate of obligation for Mine Closure, Site Restoration and Decommissioning based upon detailed calculation and technical assessment of the amount and timing of the future cash spending to perform the required work. Mine Closure expenditure is provided as per approved Mine Closure Plan. The estimates of expenses are escalated for inflation, and then discounted at a discount rate (@8%) that reflects current market assessment of the time value of money and the risks, such that the amount of provision reflects the present value of the expenditures expected to be required to settle the obligation. The value of the provision is progressively increased over time as the effect of discounting unwinds; creating an expense recognised as financial expenses. In reference to the above guidelines for preparation of mine closure plan, an escrow account has been opened. (Refer Note 9 for deposit with banks under Mine Closure Plan) No mining activity has been undertaken in Lekhapani and Tikak Extension mines as stage II forest clearance approval is pending. In view of this, no provision for mine closure has been considered for Lekhapani and Tikak Extension Mines in 2016-17 accounts. For existing MCP and Escrow Fund, in respect of these mines necessary approval from the Competent Authority is being sought for withdrawal and necessary accounting for this will be carried out after getting such approval.
2. Pending finalisation of National Coal Wage Agreement (NCWA)-X for Non Executives, an estimated adhoc provision @ Rs.8000 /- per employee (Non-Executive) per month, considering total impact of increase in all elements of salary & wages (including the employerâs PF contribution), other employee benefits and all superannuation benefits like Gratuity etc. has been made for the period 01.07.2016 to 31.03.2017 amounting to Rs.15.19 Crore and shown as â Provision for National Coal Wage Agreement Xâ above. (Also refer Note-28)
3. Pending finalization of PSUsâ pay revision for executives, an estimated adhoc provision @Rs.18000/- per employee (Executive) per month, considering total impact of increase in all elements of executive salary (including the employerâs PF contribution), other employee benefits and all superannuation benefits like Gratuity etc. has been made for the period 01.01.2017 to 31.03.2017 amounting to Rs.2.67 crore and shown as âExecutive Pay Revisionâ above. (Also refer Note-28)
4. Provision- Other Employee Benefits-Current includes Rs.45.09 crore (Rs.38.58 crore as on 31.03.2016 & Rs.33.62 crore as on 01.04.2015) provided for Superannuation benefits @9.84%.
Shifting and Rehabilitation Fund
1- Following the direction of the Ministry of Coal, the Company has setup a fund for implementation of action plan for shifting & rehabilitation, dealing with fire & stabilization of unstable areas of Eastern Coal Fields Ltd. & Bharat Coking Coal Ltd. The fund is utilized (by ECL and BCCL) based on implementation of approved projects in this respect.
The subsidiaries of CIL except CMPDIL and Coal India Africana Limitada are making a contribution of Rs.6/- per tonne of their respective coal dispatch per annum to this fund, which remains in the custody of CIL, till they are disbursed/utilised by subsidiaries/agencies implementing the relevant projects. (Refer Note 9 for deposits with bank under Shifting & Rehabilitation Fund scheme)
2- Interest earned (Net of TDS) on bank deposits earmarked for this fund is credited to this fund.
1. Subsidy for Sand Stowing & Protective Works includes Rs.0.08 received from Ministry of Coal, Government of India in terms of Coal Mines (Conservation & Development) Act, 1974 towards reimbursement of expenditure incurred for the Sand Stowing & Protective Works by NEC during the F.Y. 2016-17.
2. Sale of coal includes excise duty of Rs.21.03 Crore (Rs.11.51 crore). Sale of coal net of excise duty is Rs.285.37 crore (Rs.163.15 crore).
3. Loading and additional transportation charges includes excise duty of Rs.0.27 Crore (Rs.0.12 crore). Loading and additional transportation charges net of excise duty is Rs.4.43 crore (Rs.1.95 crore).
1. Interim Dividend of 2016-17 received from CCL (Rs.3634.04 crore) , NCL (Rs.1680.00 crore), SECL (Rs.2133.47 crore) and MCL (Rs.2982.00 crore) has been accounted for during the year.
2. Income of Rs.3914.16 crore (MCL: Rs.1571.88 crore, NCL: Rs.1203.01 crore and SECL: Rs.1139.27 crore) has been accounted for during the year on account of premium received through buyback price of equity shares paid by the subsidiaries over and above the nominal value of shares extinguished through buyback.
3. Interest income from deposits with Banks and dividend income from investment in mutual fund includes interest/dividend income on investments of amount lying in Current Account of IICM. (Refer Note 20) .
4. Miscellaneous income includes incomes like receipt on account of holiday home bookings, RTI fees, application money for recruitments, misc. receipts from banks etc.
NOTE - 3: ADDITIONAL NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31st MARCH, 2017 (STANDALONE)
1. First time adoption of Ind AS
These financial statements of the Company, for the year ended 31st March 2017, are the first financial statements prepared in accordance with Ind AS. For periods up to and including the year ended 31st March 2016, the Company prepared its financial statements in accordance with accounting standards notified under section 133 of the Companies Act 2013, read together with paragraph 7 of the Companies (Accounts) Rules, 2014 (erstwhile - Indian GAAP). Accordingly, the Company has prepared financial statements which comply with Ind AS applicable for periods ending on 31st March 2017, together with the comparative period data as at and for the year ended 31st March 2016, as described in the summary of significant accounting policies. In preparing these financial statements, the Companyâs opening balance sheet was prepared as at 1st April 2015, the Companyâs date of transition to Ind AS. This note explains the principal adjustments made by the Company in restating its Indian GAAP financial statements, including the balance sheet as at 1st April 2015 and the financial statements as at and for the year ended 31st March 2016. Exemptions applied Ind AS 101 allows first-time adopters certain exemptions from the retrospective application of certain requirements under Ind AS. The Company has applied the following exemptions:
(i) Fair value measurement of financial assets or finan cial liabilities (Ind AS 101.D20)
First-time adopters may apply Ind AS 109 to day one gain or loss provisions prospectively to transactions occurring on or after the date of transition to Ind AS. Therefore, unless a first-time adopter elects to apply Ind AS 109 retrospectively to day one gain or loss transactions, transactions that occurred prior to the date of transition to Ind AS do not need to be retrospectively restated.
As a first time adopter of Ind AS, the Company has opted to apply Ind AS 109 prospectively.
(ii) Mine Closure, Site Restoration and Decommissioning Obligation in Property, Plant and Equipment (Ind AS 101.D21)
Appendix âAâ to Ind AS 16 Changes in Existing Decommissioning, Restoration and Similar Liabilities requires specified changes in a decommissioning, restoration or similar liability to be added to or deducted from the cost of the asset to which it relates; the adjusted depreciable amount of the asset is then depreciated prospectively over its remaining useful life. A first-time adopter need not comply with these requirements for changes in such liabilities that occurred before the date of transition to Ind AS. In other words, a first-time adopter will not need to estimate what provision would have been calculated at earlier reporting dates. Instead, the decommissioning liability is calculated at the date of transition and it is assumed that the same liability (adjusted only for the time value of money) existed when the asset was first acquired/constructed.
As a first time adopter of Ind AS, the Company has calculated the Mine Closure, Site Restoration and Decommissioning Obligation at the date of transition assuming that the same liability (present value) existed when the asset was first acquired/constructed.
2. Fair Value measurement
(a) Financial Instruments by Category
(b) Fair value hierarchy
The Company uses the judgments and estimates in determining the fair values of the financial instruments that are recognised and measured at fair value. To provide an indication about the reliability of the inputs used in determining fair value, the Company has classified its financial instruments into the three levels prescribed under the accounting standard. An explanation of each level is given below:
Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices. This includes mutual funds that have quoted price and are valued using the closing NAV.
Level 2: The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which maximize the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.
Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level
3. This is the case for unlisted equity securities, preference shares borrowings, security deposits and other liabilities taken included in level 3.
Mutual Fund Investments are classified as FVTPL have been valued as per Level I of Fair Value Hierarchy.
(c) Valuation technique used in determining fair value Valuation techniques used to value financial instruments include the use of quoted market prices of instruments.
(d) Fair value measurements using significant unobservable inputs
At present there are no fair value measurements using significant unobservable inputs.
(e) Fair values of financial assets and liabilities measured at amortised cost
- The carrying amounts of trade receivables, short term deposits, cash and cash equivalents, trade payables are considered to be the same as their fair values, due to their short-term nature.
- The Company considers that the Security Deposits does not include a significant financing component. The milestone payments (security deposits) coincide with the companyâs performance and the contract requires amounts to be retained for reasons other than the provision of finance. The withholding of a specified percentage of each milestone payment is intended to protect the interest of the company, from the contractor failing to adequately complete its obligations under the contract. Accordingly transaction cost of Security deposit is considered as fair value at initial recognition and subsequently measured at amortised cost.
Significant estimates: The fair value of financial instruments that are not traded in an active market is determined using valuation techniques. The Company uses its judgment to select a method and makes suitable assumptions at the end of each reporting period.
3. FINANCIAL RISK MANAGEMENT
Financial risk management objectives and policies
The Companyâs principal financial liabilities, comprise trade and other payables. The main purpose of these financial liabilities is to finance the Companyâs operations and to provide guarantees to support its operations. The Companyâs principal financial assets include loans, trade and other receivables, and cash and cash equivalents that is derived directly from its operations.
The Company is exposed to market risk, credit risk and liquidity risk. The Companyâs senior management oversees the management of these risks. The Companyâs senior management is supported by a risk committee that advises, inter alia, on financial risks and the appropriate financial risk governance framework for the Company. The risk committee provides assurance to the Board of Directors that the Companyâs financial risk activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the Companyâs policies and risk objectives. The Board of Directors reviews and agrees policies for managing each of these risks, which are summarised below.
The Company is exposed to market risk, credit risk and liquidity risk. This note explains the sources of risk which the entity is exposed to and how the entity manages the risk and the impact of hedge accounting in the financial statements.
The Company risk management is carried out by the board of directors as per DPE guidelines issued by Government of India. The board provides written principles for overall risk management as well as policies covering investment of excess liquidity.
A. Credit Risk: Credit risk arises from cash and cash equivalents, investments carried at amortised cost and deposits with banks and financial institutions, as well as including outstanding receivables.
Credit risk management:
Receivables arise mainly out of sale of Coal. Sale of Coal is broadly categorized as sale through fuel supply agreements (FSAs) and e-auction.
Macro - economic information (such as regulatory changes) is incorporated as part of the fuel supply agreements (FSAs) and e-auction terms
Fuel Supply Agreements (FSAs)
As contemplated in and in accordance with the terms of the New Coal Distribution Policy (NCDP), the company enters into legally enforceable FSAs with customers or with State Nominated Agencies that in turn enters into appropriate distribution arrangements with end customers. Our FSAs can be broadly categorized into:
- FSAs with customers in the power utilities sector, including State power utilities, private power utilities (âPPUsâ) and independent power producers (âIPPsâ);
- FSAs with customers in non-power industries (including captive power plants (âCPPsâ)); and
- FSAs with State Nominated Agencies.
E-Auction Scheme
The E-Auction scheme of coal has been introduced to provide access to coal for customers who were not able to source their coal requirement through the available institutional mechanisms under the NCDP for various reasons, for example, due to a less than full allocation of their normative requirement under NCDP, seasonality of their coal requirement and limited requirement of coal that does not warrant a long-term linkage. The quantity of coal to be offered under E-Auction is reviewed from time to time by the Ministry of Coal.
Significant estimates and judgments for Impairment of financial assets
Provision for expected credit loss: The Company provides for expected credit risk loss for doubtful/ credit impaired assets, by lifetime expected credit losses (Simplified approach).
Expected Credit losses for trade receivables under simplified approach
The impairment provisions for financial assets disclosed above are based on assumptions about risk of default and expected loss rates. The Company uses judgment in making these assumptions and selecting the inputs to the impairment calculation, based on the Companyâs past history, existing market conditions as well as forward looking estimates at the end of each reporting period.
B. Liquidity Risk
Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through an adequate amount of committed credit facilities to meet obligations when due. Due to the dynamic nature of the underlying businesses, Company treasury maintains flexibility in funding by maintaining availability under committed credit lines.
Management monitors forecasts of the Companyâs liquidity position (comprising the undrawn borrowing facilities) and cash and cash equivalents on the basis of expected cash flows. This is generally carried out at local level in the operating companies of the Company in accordance with practice and limits set by the Company.
C. Market risk
a) Foreign currency risk
The Company is exposed to foreign exchange risk arising from foreign currency transactions. Foreign exchange risk in respect of foreign operation is considered to be insignificant. The Company also imports and risk is managed by regular follow up. Company has a policy which is implemented when foreign currency risk becomes significant.
b) Cash flow and fair value interest rate risk
The Companyâs main interest rate risk arises from bank deposits with change in interest rate exposes the Company to cash flow interest rate risk. Company policy is to maintain most of its deposits at fixed rate.
Company manages the risk using guidelines from Department of public enterprises (DPE), diversification of bank deposits credit limits and other securities.
Capital management
The company being a government entity manages its capital as per the guidelines of Department of investment and public asset management under ministry of finance.
4. Employee Benefits: Recognition and Measurement (Ind AS-19)
i) Provident Fund:
Company pays fixed contribution towards Provident Fund and Pension Fund at pre-determined rates to a separate trust named Coal Mines Provident Fund (CMPF), which invests the fund in permitted securities. The contribution towards the fund during the year is Rs.27.71 Crore (Rs.27.73 Crore) has been recognized in the Statement of Profit & Loss (Note 28).
ii) The Company operates some defined benefit plans as follows which are valued on actuarial basis:
(a) Funded o Gratuity
- Leave Encashment
(b) Unfunded
- Life Cover Scheme
- Settlement Allowance
- Group Personal Accident Insurance
- Leave Travel Concession
- Medical Benefits
- Compensation to dependent on Mine Accident Benefits Total liability as on 31.03.2017 based on valuation made by the Actuary, details of which are mentioned below is Rs.378.30 Crore.
5. Unrecognised items
a) Contingent Liabilities
I. Claims against the company not acknowledged as debt
II. Guarantee
The company has given guarantee on behalf of subsidiaries Eastern Coalfields Limited and Mahanadi Coalfields Limited to the extent of their obligations under loans (principal and interest) made to Export Development Corporation, Canada and Banque Nationale De Paris and Natexis Banque (for purchase of Machinery from Liebherr France). The outstanding balance as on 31.03.2017 stood at Rs.167.20 Crore (Rs.174.14Crore) and Rs.6.64 Crore (Rs.7.77 Crore) respectively. Other bank guarantee issued is Rs.1.01 Crore (Rs.11.40 Crore).
III. Letter of Credit :
As on 31.03.2017 outstanding letters of credit is Nil (Nil).
b) Commitments
Estimated amount of contracts remaining to be executed on capital account and not provided for: Rs.23.03 Crore (Rs.79.97 Crore).
Other Commitment: Rs.312.24 Crore
6. OTHER INFORMATION
a) Government Assistance
Subsidy for Sand Stowing & Protective Works includes Rs.0.08 Crore received from Ministry of Coal, Government of India in terms of Coal Mines (Conservation & Development) Act, 1974 towards reimbursement of expenditure incurred for the Sand Stowing & Protective Works by NEC during the F.Y. 2016-17.
b) Provisions
The position and movement of various provisions except those relating to employee benefits which are valued actuarially, as on 31.03.2017 are given below:
c) Related Party Disclosures
A. Key Managerial Personnel
Mr. S. Bhattacharya, Chairman-Cum-Managing Director Mr. R. Mohan Das, Director (P&IR)
Mr. C.K. Dey, Director (Finance)
Mr. B. K. Saxena, Director (Marketing) (upto 31.01.2016) Mr. S.N. Prasad, Director (Marketing) (w.e.f. 01.02.2016) Late Mr. N. Kumar. Director (Technical) (upto 17.10.2016) Mr. Shekhar Saran, Director (Technical)- Additional Charge Mr. M Viswanathan, Company Secretary Independent Directors (appointed on 17.11.2015)
Ms. Loretta M. Vas Dr. S.B. Agnihotri Dr. D.C. Panigrahi Dr. Khanindra Pathak Mr. Vinod Jain
B. Related Party Transactions within Group
The Company being a Government related entity is exempt from the general disclosure requirements in relation to related party transactions and outstanding balances with the controlling Government and another entity under same Government.
Coal India Limited has entered into transactions with its subsidiaries which include Apex charges, Rehabilitation charges, Lease rent, Interest on Funds parked by subsidiaries, IICM charges and other expenditure incurred by or on behalf of other subsidiaries through current account. As per Ind AS 24, following are the disclosures regarding nature and amount of significant transactions.
d) Taxation
An amount of Rs.11.38 Crore (Rs.170 Crore) is provided in the accounts during current year towards income tax.
The Company is having a deferred tax asset (net) on the basis of calculation as per Ind AS-12. Since as per existing provisions of tax laws the dividend received from subsidiaries, which accounts for the income of Coal India Ltd., is tax free w.e.f. financial year 2003-04 and since without considering such dividend there is no virtual certainty of generation of future taxable income, as a prudent practice no deferred tax asset is recognised in the accounts.
e) Goods procured by Coal India Ltd. on behalf of Subsidiaries
- There is no change in applicable tax rate as compared to previous year.
- Applicable tax rate i.e. 34.61% (rounded off) is computes as Tax Rate- 30%, Surcharge 12% on such tax and Education cess and Secondary and Higher Education Cess calculated at the rate of 2% and 1% of such income-tax and surcharge.
f) During the year 2016-17, three subsidiaries of CIL viz. NCL, SECL and MCL have bought back its shares from CIL. The details of such buy back are as follows:
As per existing practice, goods purchased by Coal India Ltd. on behalf of subsidiary companies are accounted for in the books of respective subsidiaries directly.
g) Insurance and escalation claims
Insurance and escalation claims are accounted for on the basis of admission/final settlement.
h) Provisions made in the Accounts
Provisions made in the accounts against slow moving/ non-moving/obsolete stores, claims receivable, advances, doubtful debts etc. are considered adequate to cover possible losses.
i) Current Assets, Loans and Advances etc.
In the opinion of the Management, assets other than fixed assets and non-current investments have a value on realisation in the ordinary course of business at least equal to the amount at which they are stated.
j) Current Liabilities
Estimated liability has been provided where actual liability could not be measured.
k) Balance Confirmations
Balance confirmation/reconciliation is carried out for cash &bank balances, certain loans & advances, long term liabilities and current liabilities. Provision is taken against all doubtful unconfirmed balances.
l) During the financial year 2013-14, a case of misappropriation of Companyâs fund for personal gain came to the notice of the management. The matter has been investigated by different agencies and appropriate action for recovery is underway. As per the estimate of the internal audit department of Coal India Limited, the amount involved is Rs.1.17 Crore approximately.
m) Details of Loans given, Investments made and Guarantee given covered u/s 186(4) of the Companies Act, 2013
a) Loans given are shown in Note 8 under the head âLoans to related partiesâand Investments made are shown in Note 7 under the respective heads.
b) Corporate guarantees given by the company in respect of loans taken by subsidiaries as at 31.03.2017-
n) Significant accounting policy
Significant accounting policy (Note-2) has been suitably modified / re-drafted over previous period, as found necessary to elucidate the accounting policies adopted by the Company in accordance with Indian Accounting Standards (Ind ASs) notified by Ministry of Corporate Affairs (MCA) under the Companies (Indian Accounting Standards) Rules, 2015.
The impact of change in accounting policy and other changes to comply with Ind AS in Net Profit is stated below:
o) Others
i. Previous periodâs figures have been restated as per Ind AS and regrouped and rearranged wherever considered necessary.
ii. Previous periodâs figures in Note No. 3 to 38 are in brackets.
iii. Note - 1 and 2 represents Corporate information and Significant Accounting Policies respectively, Note 3 to 23 form part of the Balance Sheet as at 31st March, 2017 and 24 to 37 form part of Statement of Profit & Loss for the year ended on that date. Note - 38 represents Additional Notes to the Financial Statements.
Mar 31, 2016
1. Contingent Liabilities & Commitments
a) Capital commitment : Rs. 79.97Crore (Rs. 21.28 Crore)
b) Revenue commitment : Rs. 68.53 Crore (Rs. 327.04 Crore)
c) Claims against the company : Rs. 33.37Crore (Rs. 1806.13 Crore) not
acknowledged as debt
d) The Competition Commission of India (CCI), on the basis of
complaints by few coal customers against certain conducts of Coal India
Limited, Western Coalfields Limited, South Eastern Coalfields Limited
and Mahanadi Coalfields Limited, heard the case and vide its order
dated 09.12.2013, had inter-alia imposed a penalty of Rs. 1773.05 Crore
against which appeal was filed in the Competition Appellate Tribunal
which directed to deposit Rs. 50 Crore there against
Subsequently vide order dated 17th May, 2016, the Tribunal has set
aside the order of CCI and directed to hear the case afresh as a result
the penalty of Rs. 1773.05 stands cancelled
e) The company has given guarantee for loans obtained by subsidiaries
from Export Development Bank of Canada and Liebherr France the
outstanding balance of which as on 31.03.2016 stood at Rs. 174.14 Crore
(Rs. 170.21 Crore) and Rs. 7.77 Crore (Rs. 7.40 Crore) respectively
f) As on 31.03.2016 outstanding letters of credit isRs. NIL (Rs. 0.13
Crore) and bank gaurantee issued isRs. 11.40 Crore (Nil)
2. Employee Benefits: Recognition and Measurement (AS-15)
a) Provident Fund:
Company pays fixed contribution towards Provident Fund and Pension Fund
at predetermined rates to a separate trust named Coal Mines Provident
Fund (CMPF), which invests the fund in permitted securities. The
contribution towards the fund during the year is Rs. 27.73 Crore (Rs.
26.59 Crore) has been recognized in the Statement of Profit & Loss
(Note 24)
b) The Company operates some defined benefit plans as follows which are
valued on actuarial basis:
(i) Funded
- Gratuity
- Leave Encashment
(ii) Unfunded
- Life Cover Scheme
- Settlement Allowance
- Group Personal Accident Insurance
- Leave Travel Concession
- Medical Benefits
- Compensation to dependent on Mine Accident Benefits
3. Related party disclosure
(a) Related parties and their relationship Key Management Personnel:
Mr. S. Bhattacharya, Chairman-Cum-Managing Director
Mr. R. Mohan Das, Director (P&IR)
Mr. C.K. Dey, Director (Finance)
Mr. N. Kumar. Director (Technical)
Mr. B. K. Saxena, Director (Marketing) (upto 31.01.2016)
Mr. S.N. Prasad, Director (Marketing) (w.e.f. 01.02.2016)
Mr. M Viswanathan, Company Secretary
(b) Transactions with related parties for the year ending 31.03.2016
4. Taxation
An amount of Rs.170.00 Crore (Rs. 230.00 Crore) is provided in the
accounts during current year towards income tax.
The Company is having a deferred tax asset (net) on the basis of
calculation as per Accounting for Taxes on Income (AS-22), issued by
Institute of Chartered Accountants of India. Since as per existing
provisions of tax laws the dividend received from subsidiaries, which
accounts for the income of Coal India Ltd, is tax free w.e.f. financial
year 2003-04 and since without considering such dividend there is no
virtual certainty of generation of future taxable income, as a prudent
practice no deferred tax asset is recognised in the accounts.
5. Goods procured by Coal India Ltd. on behalf of Subsidiaries
As per existing practice, goods purchased by Coal India Ltd. on behalf
of subsidiary companies are accounted for in the books of respective
subsidiaries directly.
6. Insurance and escalation claims
Insurance and escalation claims are accounted for on the basis of
admission/final settlement.
7. Provisions made in the Accounts
Provisions made in the accounts against slow moving/non-moving/obsolete
stores, claims receivable, advances, doubtful debts etc. are considered
adequate to cover possible losses.
8. Micro, Small and Medium Enterprises
There is no reported Micro, Small and Medium Enterprises as defined in
the "The Micro, Small and Medium Enterprises Development Act, 2006", to
whom the company owes dues.
9. Current Assets, Loans and Advances etc.
In the opinion of the Management, assets other than fixed assets and
non-current investments have a value on realisation in the ordinary
course of business at least equal to the amount at which they are
stated.
10. Current Liabilities
Estimated liability has been provided where actual liability could not
be measured including municipal tax in some of the buildings pending
assessment by the collecting authority.
11. Balance Confirmations
Balance confirmation/reconciliation is carried out for cash & bank
balances, certain loans & advances, long term liabilities and current
liabilities. Provision is taken against all doubtful unconfirmed
balances.
12. Classification as per Schedule III of the Companies Act 2013
The classification of Assets and Liabilities into "Current &
Non-current" has been made in Balance Sheet as per below mentioned
prescribed guidelines:-
Current Assets
An asset has been classified as current when it satisfies any of the
following criteria:- - It is expected to be realized in, or is intended
for sale or consumption in, the Company''s normal operating cycle i.e.
one year.
- It is held primarily for the purpose of being traded.
- It is expected to be realized within twelve months after the
reporting date.
- It is cash or cash equivalent unless it is restricted from being
exchanged or used to settle a liability for at least twelve months
after the reporting date.
Non-Current Assets
All assets other than current assets are Non- Current Assets
Current Liabilities
A liability has been classified as current when it satisfies any of the
following criteria:
- It is expected to be settled in the company''s normal operating cycle
i.e. one year.
- It is held primarily for the purpose of being traded.
- It is due to be settled within twelve months after the reporting
date.
- The company does not have an unconditional right to defer settlement
of the liability for at least twelve months after the reporting date.
Terms of a liability that could, at the option of the counterparty,
result in its settlement by the issue of equity instruments do not
affect its classification.
Non-Current Liabilities
All liabilities other than current liabilities are Non- Current
Liabilities.
Operating Cycle for Coal India Limited
As there is no normal Operating cycle the same is considered to be 12
months period.
13. During the financial year 2013-14, a case of misappropriation of
Company''s fund for personal gain came to the notice of the management.
The matter has been investigated by different agencies and appropriate
action for recovery is underway. As per the estimate of the internal
audit department of Coal India Limited, the amount involved is Rs.1.17
Crore approximately.
14. Pursuant to notification no. G.S.R 632 E dated 14.08.2015 issued by
the Ministry of Mines (Government of India) regarding formation of
National Mineral Exploration Trust Fund u/s 9C of the Mines & Minerals
(Development and Regulation) Amendment Act, 2015 (MMDR Act), Company
has collected from customers additional royalty @ 2% on royalty
amounting Rs. 0.29 Crore upto 31.03.2016 which will be deposited on
allotment of code by collecting authority. However, pending
notification by the Assam State Government, the provisions of Section
9B of the MMDR Act, 2015 regarding formation of District Mineral
Foundation has not been implemented.
15. Details of Loans given, Investments made and Guarantee given
covered u/s 186(4) of the Companies Act, 2013
Loans given and Investments made are given under the respective heads.
Corporate guarantees given by the company in respect of loans as at
31st March, 2016
16. Significant accounting policy
Significant accounting policy (Note-33) has been suitably modified /
re-drafted over previous year, as found necessary to elucidate the
accounting policies adopted by the Company.
17. Others
a) Previous year''s figures have been regrouped and rearranged wherever
considered necessary.
b) Previous year''s figures in Note No. 1 to 34 are in brackets.
c) Note 1 to 19 form part of the Balance Sheet as at 31st March, 2016
and 20 to 32 form part of Statement of Profit & Loss for the year ended
on that date. Note  33 represents Significant Accounting Policies and
Note  34 represents Additional Notes on the Accounts.
Mar 31, 2015
The above approach resulted in maintaining an excellent industrial
relations in the company leading to reduction in number of strikes,
production loss & man shift loss.
CSR & Sustainable Development Reserve
Company has adopted the CSR policy for F.Y. 2014-15 as per the
provisions of the Companies Act,2013. Since Sustainable Development
acvtities are merged with CSR activities, the reserve has been
transferred to General Reserve during the year. Adjustment for
depreciation against opening surplus of Statement of Profit & Loss
relates to the transition provision on introduction of depreciation
rates as per Schedule II of Companies Act 2013.
Interim Dividend
During the year the company has paid interim dividend of Rs..20.70
(Rs.29.00) per equity share of face value of Rs..10/- each for the year
2014-15 amounting to Rs. 13074.88 crore.
Corporate Dividend Tax
The above represent the Dividend Tax pertaining to the Dividend paid
over and above the Dividend received from Subsidiaries, as per
provision of Income Tax Act.
Shifting and Rehabilitation Fund
Following the direction of the Ministry of Coal the company has setup a
fund for implementation of action plan for shifting & rehabilitation
dealing with fire & stabilization of unstable areas of Eastern Coal
Fields Ltd. & Bharat Coking Coal Ltd. The fund is utilized (by ECL and
BCCL) based on implementation of approved projects in this respect.
The subsidiaries of CIL [except ECL (upto 31.12.14), CMPDIL and Coal
India Africana Limitada] are making a contribution of Rs. 6/- per tonne
of their respective coal dispatch per annum to this fund, which remains
in the custody of CIL, till they are disbursed/utilised by
subsidiaries/agencies implementing the relevant projects. However ECL
has also started contributing from January 2015 on coming out of BIFR
(Refer to Note11-""Investment in ECL & BCCL").
Interest earned (Net of TDS) on bank deposits earmarked for this fund
is credited to this fund.
Cash Credit
Pending finalisation of formalities for transfer of assets and
liabilities of erstwhile Coal Mine Authorities Ltd. and its divisions,
now Coal India Ltd, the bank borrowings of Coal India Ltd. has been
secured by creating charge against stock of coal , stock of stores and
spare parts and book debts and other assets of CIL and its subsidiary
companies.
The total working capital credit limit available to CIL is Rs. 550.00
crore, out of which fund based limit is Rs. 250.00 crore. The balance Rs.
300.00 crore limit is non-fund based and Coal India Limited is
contingently liable to the extent such facility is actually utilised by
the subsidiaries. There is no credit balance in the cash credit
account.
1 Land:
- Title deeds for land acquired, in some cases, have not been
executed in favour of the company and mutation in certain cases are yet
to be executed.
- Land in possession of North Eastern Coalfields, Assam, includes
8069.70 hectares of lease hold land for which no value has been shown
in the Balance Sheet.
2 Dankuni Coal Complex / Indian Institute of Coal Management :
- Fixed assets comprising power plant and related building and other
assets having written down value as on 31.03.2015 of Rs. 12.30 crore,
continue to be let out to South Eastern Coalfields Ltd. for a nominal
lease rent of Rs.1/- per annum under cancellable operating lease
agreement. The above written down value of Rs. 12.30 crore includes land
of Rs. 3.73 crore (at cost) and building of Rs. 6.10 crore (at WDV).The
actual worth of the property is considered to be much higher than its
WDV and hence no provision is called for.
- Fixed assets comprising plant & machinery and related building and
other assets having written down value as on 31.03.2015 of Rs. 13.14
crore have been let out to Indian Institute of Coal Management, a
registered society under Societies Registration Act, 1860 for an annual
lease rent of Rs. 1.53 crore under cancellable operating lease agreement.
3 Depreciation has been provided as per Schedule II of the Companies
Act,2013. However, pending completion of technical assessment to
segregate the value of certain assets embedded within a different class
of asset, depreciation has been provided on these assets on the basis
of useful life applicable as per Schedule II of the Companies Act,2013
for the un-segregated class of asset.
NOTE - 4
NON - CURRENT INVESTMENTS - Unquoted at Cost
1 Investment in ECL and BCCL
The net worth of BCCL had turned positive at the end of the year
2012-13 and came out of BIFR, and had continued to earn profit.
Considering the improved financial position of BCCL, the investment in
share of BCCL ( Rs. 2118.00 crore & Rs. 2539.00 crore in equity shares & 5%
redeemable cumulative preference shares respectively) are valued at
cost."
During the year further investment in 6% redeemable cumulative
preference shares in ECL (redeemable at par compulsorily after 7 years
from the date of issue or after 5 years from the date of issue at the
option of CIL) was made by way of conversion of past unsecured loan due
to CIL of Rs. 518.97 crore and current account balance (receivable from
ECL) of Rs. 1532.00 crore.
The above arrangement was made as a mutually agreed mechanism between
ECL and CIL as required by the scheme of rehabilitation approved by
BIFR with subsequent modification made by State Bank of India
(monitoring agency) on 1st November, 2014 as per direction of BIFR.
On implementation of above ECL has reported a positive net-worth as on
31.12.2014 and has come out of BIFR and also continued to earn profits.
In view of the improved financial position of ECL the investment in
shares of ECL ( Rs. 2218.45 crore & Rs. 2050.97 crore in equity shares & 6%
redeemable cumulative preference shares respectively) are valued at
cost.
2 Investment in International Coal Ventures Pvt. Ltd.
CIL has entered into a Memorandum of Understanding (vide approval from
its Board in 237th meetting held on 24th November, 2007) regarding
formation of Special Purpose Vehicle (SPV) through joint venture
involving CIL/SAIL/RINL/NTPC & NMDC for acquisition of coking coal
properties abroad. The formation of the SPV had been approved by the
Cabinet, Govt. of India, vide its approval dated 8th November, 2007.
The aforesaid SPV viz. International Coal Ventures Pvt. Ltd. was
initially formed by incorporation under Companies Act, 1956 on 20th
May,2009 with an authorised capital of Rs. 1.00 crores and paid up
capital of Rs.0.70 crore. The authorised Capital and paid up Capital as
on 31.03.2015 stood at Rs.1110.00 crore and Rs. 515.63 crore respectively.
Out of above paid up capital, Coal India Ltd. is owning 0.54% share
i.e. Rs. 2.80 crore face value of equity shares.
3 Investment in CIL NTPC Urja Private Ltd.
CIL NTPC Urja Pvt.Ltd., a 50:50 joint venture company was formed on
27th April''2010 between CIL & NTPC for setting up of joint integrated
power plants along with mining of coal. Coal India Ltd. is holding 50%
equity shares of face value of Rs. 0.02 crore in the joint venture
company.
4 Investment in Coal India Africana Limitada (100% owned subsidiary
-Overseas )
Coal India Ltd., has formed a 100% owned subsidiary in Republic of
Mozambique, named "Coal India Africana Limitada" to explore
non-coking coal properties in Mozambique. The initial paid up capital
on such formation (known as "Quota Capital") is Rs. 0.01 crore (USD
1000).
ADDITIONAL NOTES ON ACCOUNTS (Standalone)
i) Contingent liabilities / Commitments
a) Capital commitment : Rs.21.28crore (Rs.45.44 crore)
b) Revenue commitment : Rs.327.04 crore (Rs.510.83 crore)
c) Claims against the company : Rs.1806.13 crore (Rs.1802.25 crore)
not acknowledged as debt
d) The Competition Commission of India (CCI), on the basis of
complaints by few coal customers (called as ''informant'' in the
case) against certain conducts of M/S Coal India Limited, M/S Western
Coalfields Limited, M/S South Eastern Coalfields Limited, M/S Mahanadi
Coalfields Limited (called as ''opposite party'' in the case) heard
the case and vide its order dated 09.12.2013, had inter-alia imposed a
penalty of Rs. 1773.05 crore which is to be deposited within 60 days of
receipt of the order.
The appeal against the above order has already been filed and the
hearing is taking place from time to time.
The Competition Appellate Tribunal vide its interim order dated
13.01.14, has granted status quo until further orders, in respect of
implementation of directions/restraints (other than the imposition of
penalty) ordered by CCI on 09.12.13.
Further, the Competition Appellate Tribunal in the hearing dated
26.02.2014 has agreed to grant stay in favour of CIL on the order of
penalty of Rs. 1773.05 crore pending disposal of Appeal, on the condition
that CIL deposits a token penalty ofRs. 50 crore within 3 weeks from the
date of the order.. Accordingly the said sum of Rs. 50 crore has been
deposited on 12th March 2014.
In view of the above, the entire amount of penalty of Rs. 1773.05 crore
under appeal has been shown as contingent liability and included with Rs.
1806.13 crore mentioned in (c ) above, with corresponding Rs. 50 crore
under deposits in the books of Coal India Limited being a holding
company.
e) The company has given guarantee for loans obtained by subsidiaries
from Export Development Bank of Canada (EDC) and Liebherr France the
outstanding balance of which as on 31.03.2015 stood at Rs.170.21 crore (Rs.
168.07 crore) and Rs.7.40 crore (Rs.9.75 crore) respectively.
f) As on 31.03.2015 outstanding letters of credits amounted to Rs.0.13
crore (Rs.59.66 crore).
ii) Disclosure for employee benefits:
a) Provident Fund:
Company pays fixed contribution to provident fund and pension fund at
predetermined rates to a separate trust named Coal Mines Provident Fund
(CMPF), which invests the fund in permitted securities. The
contribution towards the fund during the year is Rs.26.59 crore (Rs.26.45
crore) has been recognized in the statement of profit & loss (Note 24).
b) The disclosures as per actuary''s certificate for employee benefits
for gratuity and leave encashment are given below:-
vi) Related party disclosure :
Key management personnel for the year ending 31.03.2015:
Dr. A. K. Dubey, Additional charge of Chairman-Cum-Managing Director
w.e.f. 26th June, 2014 to 4th Jan,2015 Mr. S. Narsing Rao,
Chairman-Cum-Managing-Director (Upto 25th June,2014)
Mr. S. Bhattacharya, Chairman-Cum-Managing Director w.e.f 5th Jan,2015
Mr. R. Mohan Das, Director (P&IR)
Mr. A. Chatterjee, Director (Finance) (Upto 28th Feb,2015)
Mr. C.K. Dey, Director (Finance) (From 1st Mar,2015)
Mr. N. Kumar. Director (Technical)
Mr. B. K. Saxena, Director ( Marketing)
vii) Taxation :
An amount of Rs.230.00 crore (Rs.380.00crore) is provided in the accounts
during current year towards income tax. However there is no deferred
tax liability of the company for this period.
The company is having a deferred tax asset (net) on the basis of
calculation as per Accounting for Taxes on Income (AS-22), issued by
Institute of Chartered Accountants of India. Since as per existing
provisions of tax laws the dividend received from subsidiaries which
accounts for the income of Coal India Ltd, is tax free w.e.f. financial
year 2003-04 and since without considering such dividend there is no
virtual certainty of generation of future taxable income, as a prudent
practice no deferred tax asset is recognised in the accounts.
viii) The fund available with the company from the management period
(Pre-nationalisation) of non-coking coal mines i.e. on 1.5.1973
The fund available with the company against cash, bank balances, road
coupons etc. taken over by the company from the management period of
non-coking coal mines i.e. on 1.5.1973 has been adjusted against the
deposit made by the company on behalf of the Govt of India to
Commissioner of Payments on account of surplus of the said management
period.
ix) Goods procured by Coal India Ltd. on behalf of Subsidiaries
As per existing practice, goods purchased by Coal India Ltd. on behalf
of subsidiary companies are accounted for in the books of respective
subsidiaries directly.
x) Insurance and escalation claims
Insurance and escalation claims are accounted for on the basis of
admission/final settlement.
xi) Provisions made in the Accounts
Provisions made in the accounts against slow moving/non-moving/obsolete
stores, claims receivable, advances, doubtful debts etc. are considered
adequate to cover possible losses.
xii) Micro, Small and Medium Enterprises
There is no reported Micro, Small and Medium Enterprises as defined in
the "The Micro, Small and Medium Enterprises Development Act,
2006", to whom the company owes dues.
xiii) Current Assets, Loans and Advances etc.
In the opinion of the Management Current Assets, Loans and Advances
etc. have realisable value in the course of business at least equal to
the net amount at which they are stated.
xiv) Balance confirmation
Balance confirmation/reconciliation is carried out for bank balances,
all major loans & advances, long term liabilities and current
liabilities. Provision is taken against all doubtful unconfirmed
balances.
xv) Classification as per Schedule III of the Companies Act 2013
The classification of Assets and Liabilities into "Current Assets"
and Non Current Assets" has been made in Balance Sheet as per below
mentioned prescribed guidelines:-
Current Assets
An asset has been classified as current when it satisfies any of the
following criteria:-
- It is expected to be realized in, or is intended for sale or
consumption in, the Company''s normal operating cycle i.e. one year.
- It is held primarily for the purpose of being traded
- It is expected to be realized within twelve months after the
reporting date
- It is cash or cash equivalent unless it is restricted from being
exchanged or used to settle a liability for at least twelve months
after the reporting date.
Non-Current Assets
All assets other than current assets are Non- Current Assets
Current Liabilities
A liability has been classified as current when it satisfies any of the
following criteria:
- It is expected to be settled in the company''s normal operating
cycle i.e. one year
- It is held primarily for the purpose of being traded
- It is due to be settled within twelve months after the reporting
date
- The company does not have an unconditional right to defer
settlement of the liability for at least twelve months after the
reporting date. Terms of a liability that could, at the option of the
counterparty, result in its settlement by the issue of equity
instruments do not affect its classification.
Non-Current Liabilities
All liabilities other than current liabilities are Non- Current
Liabilities.
Operating Cycle for Coal India Limited
As there is no normal Operating cycle the same is considered to be 12
months period.
xvi) During the financial year 2013-14, a case of misappropriation of
Company''s fund for personal gain came to the notice of the management
which is still under investigation by different agencies. Pending
completion of the investigation process the impact of such
misappropriation cannot be ascertained at this stage.
xvii) In the absence of notification of rules by the central/state
Governments the effects of the provisions of the "The Mines and
Minerals (Development and Regulation) Amendment Act, 2015" has not
been considered in the Accounts.
xviii) The information required in paragraph 5 (viii) (a) Part II of
Schedule - III of Companies Act., 2013, value of imports on CIF basis :
xxiii) Significant accounting policy
Significant accounting policy (Note-33) has been suitably modified /
re-drafted over previous year, as found necessary to elucidate the
accounting policies adopted by the company.
xxiv) Change in Accounting Policy regarding capitalisation of certain
costs in acquisition of land.
During the year the Accounting Policy on capitalisation of value of
land acquired has been changed, in as much as compensation in lieu of
employment incurred for displaced persons is being considered as part
of cost of land acquired and capitalised. Such cost was previously
being charged off as revenue expenses. Such change is made effective
from the financial year 2014-15 onwards only and no such transaction
has taken place during the year in NEC, the only production unit under
CIL (Standalone).
xxv) Previous year''s figures
Previous year''s figures have been regrouped and rearranged wherever
considered necessary.
Figures in the parentheses relating to Note nos. 1 to 19 (Balance Sheet
items) correspond to position as on 31.03.2014 and figures relating to
Note nos. 20 to 32 (Profit & Loss items) correspond to year ended
31.03.2014.
Note 1 to 19 form part of the Balance Sheet as at 31st March 2015 and
20 to 32 form part of Statement of Profit & Loss for the period ended
on that date. Note - 33 represents Significant Accounting Policies and
Note - 34 represents additional notes on the Accounts.
Mar 31, 2014
NOTE Â 1
ADDITIONAL NOTES ON ACCOUNTS (STANDALONE)
i) Contingent Liabilities / Commitments
- The amount remaining to be executed on capital account not provided
for is Rs. 45.44 crore (Rs. 108.23 crore).
- The amount remaining to be executed on revenue account not provided
for is Rs. 510.83 crore (Rs. 458.95 crore).
- Claims against the company not acknowledged as debts are Rs. 1802.25
crore (Rs. 23.85 crore).
- The Competition Commission of India (CCI), on the basis of complaints
by few coal customers (called as ''informant'' in the case) against
certain conducts of M/S Coal India Limited, M/S Western Coalfields
Limited, M/S South Eastern Coalfields Limited, M/S Mahanadi Coalfields
Limited (called as ''opposite party'' in the case) heard the case and
vide its order dated 09.12.2013, had inter-alia imposed a penalty of Rs.
1773.05 crore which is to be deposited within 60 days of receipt of the
order.
The appeal against the above order has already been filed and the
hearing is taking place from time to time.
The Competition Appellate Tribunal vide its interim order dated
13.01.14, has granted status quo until further orders, in respect of
implementation of directions/restraints (other than the imposition of
penalty) ordered by CCI on 09.12.13.
Further, the Competition Appellate Tribunal in the hearing dated
26.02.2014 has agreed to grant stay in favour of CIL on the order of
penalty of Rs. 1773.05 crore pending disposal of Appeal, on the condition
that CIL deposits a token penalty of Rs. 50 crore within 3 weeks from the
date of the order. Accordingly the said sum of Rs. 50 crore has been
deposited on 12th March 2014.
In view of the above, the entire amount of penalty of Rs. 1773.05 crore
under appeal has been shown as contingent liability and included with Rs.
1802.25 crore mentioned above, with corresponding Rs. 50 crore under
deposits in the books of Coal India Limited being a holding company.
- The company has given guarantee for loans obtained by subsidiaries
from Export Development Bank of Canada (EDC) and Liebherr France the
outstanding balance of which as on 31.03.2014 stood at Rs. 168.07 crore
(Rs. 160.35 crore) and Rs. 9.75 crore (Rs. 8.72 crore) respectively.
- As on 31.03.2014 outstanding letters of credits amounted to Rs. 59.66
crore (Rs. 216.41 crore).
vi) Related party disclosure
Key management personnel for the year ending 31.03.2014: Mr. S.
NarsingRao, Chairman-Cum-Managing-Director Mr. R. Mohan Das, Director
(P&IR) Mr. A. Chatterjee, Director (Finance) Mr. N. Kumar. Director
(Technical) Mr. B. K. Saxena, Director ( Marketing)
vii) Taxation
An amount of Rs. 380.00 crore (Rs. 460.00 crore) is provided in the
accounts during the current year towards income tax.
There is no deferred tax liability of the company for this year.
However, the company is having a deferred tax asset on the basis of
calculation as per Accounting for Taxes on Income (AS-22), issued by
Institute of Chartered Accountants of India. As per existing provisions
of tax laws the dividend received from subsidiaries which accounts for
the income of Coal India Ltd, is tax free w.e.f. financial year
2003-04. Since without considering such dividend there is no virtual
certainty of future taxable income, as a prudent practice no deferred
tax asset is recognised in the accounts.
viii) Borrowings and other Costs in respect of foreign currency loans
Borrowing and other costs (including exchange difference) in respect of
foreign currency loans obtained for subsidiary companies have been
recovered from the respective subsidiary companies.
ix) The fund available with the company from the management period
(Pre-nationalisation) of non-coking coal mines i.e. on (01.05.1973)
The fund available with the company against cash, bank balances, road
coupons etc. taken over by the company from the management period of
non-coking coal mines i.e. on 01.05.1973 has been adjusted against the
deposit made by the company on behalf of the Govt. of India to
Commissioner of Payments on account of surplus of the said management
period.
x) Goods procured by Coal India Ltd. on behalf of Subsidiaries
As per existing practice, arrangement for procurement of goods by Coal
India Ltd. on behalf of subsidiary companies are accounted for in the
books of respective subsidiaries directly.
xi) Insurance and escalation claims
Insurance and escalation claims are accounted for on the basis of
admission/final settlement.
xii) Provisions made in the Accounts
Provisions made in the accounts against slow moving/non-moving/obsolete
stores, claims receivable, advances, doubtful debts etc. are considered
adequate to cover possible losses.
xiii) Micro, Small and Medium Enterprises
There is no reported Micro, Small and Medium Enterprises as defined in
the "The Micro, Small and Medium Enterprises Development Act, 2006", to
whom the company owes dues.
xiv) Current Assets, Loans and Advances etc.
In the opinion of the Management, Current Assets, Loans and Advances
etc. have realisable value in the course of business at least equal to
the net amount at which they are stated.
xv) Balance conf rmation
Balance confirmation/reconciliation is carried out for bank balances,
all major loans & advances, long term liabilities and current
liabilities. Provision is taken against all doubtful unconfirmed
balances.
xvi) Revision of Schedule VI to the Companies Act 1956 ( w.e.f.
01.04.2011)
The format as per revised Schedule VI has been applied while preparing
this accounts. Following the new guidelines of the revised format
inter-alia , the following segregation have been made in the Balance
Sheet:-
Current Assets
An asset has been classified as current when it satisfies any of the
following criteria:- - It is expected to be realized in, or is intended
for sale or consumption in, the company''s normal operating cycle i.e.
one year.
- It is held primarily for the purpose of being traded
- It is expected to be realized within twelve months after the
reporting date
- It is cash or cash equivalent unless it is restricted from being
exchanged or used to settle a liability for at least twelve months
after the reporting date.
Non-Current Assets
All assets other than current assets are Non- Current Assets
Current Liabilities
A liability has been classified as current when it satisfies any of the
following criteria:
- It is expected to be settled in the company''s normal operating cycle
i.e. one year.
- It is held primarily for the purpose of being traded
- It is due to be settled within twelve months after the reporting date
- The company does not have an unconditional right to defer settlement
of the liability for at least twelve months after the reporting date.
Terms of a liability that could, at the option of the counter party,
result in its settlement by the issue of equity instruments do not
affect its classification.
Non-Current Liabilities
All liabilities other than current liabilities are Non-Current
Liabilities.
Operating Cycle for Coal India Limited
As there is no normal Operating cycle the same is considered to be 12
months period.
xvii) Signif cant accounting policy
Significant accounting policies (Note-33) have been suitably modified /
re-drafted over previous year, as found necessary to elucidate the
accounting policies adopted by the company.
xviii) Impact due to changes in accounting policy.
During the year based on technically estimated useful life depreciation
rates of the following assets were revised:
xix) Previous year''s figures
Previous year''s figures have been regrouped and rearranged wherever
considered necessary.
Figures in the parentheses relating to Note nos. 1 to 19 (Balance Sheet
items) correspond to position as on 31.03.2013 and figures relating to
Note nos. 20 to 32 (Profit & Loss items) correspond to 12 month period
of the previous year.
xx) Use of estimate:
In preparing the financial statements in conformity with Accounting
Principles generally accepted in India, management is sometimes
required to make estimates and assumptions that affect the reported
amounts of assets and liabilities and the disclosures of contingent
liability as at the date of financial statements and the amount of
revenue and expenses during the reported period. Actual results may
differ from those estimates. Any revision to such estimate is
recognized in the period in which the same is determined.
xxi) During the financial year 2013-14, a case of misappropriation of
Company''s fund for personal gain has come to the notice of the
management which is under investigation by different agencies. Pending
completion of the investigation process the impact of such
misappropriation cannot be ascertained at this stage.
xxii) The information required in paragraph 5 (viii) (a) Part II of
Schedule  VI of Companies Act., 1956, value of imports on CIF basis :
Mar 31, 2013
1 Contingent Liabilities & Commitments
i) The amount remaining to be executed on capital account not provided
for is Rs. 2452.16 crores (Rs. 1926.84 crores). The amount remaining
to be executed on revenue account not provided for is Rs. 11587.51
crores (Rs. 10506.38 crores).
ii) Claims against the company not acknowledged as debt are Rs.
16523.41 crores (Rs. 12694.14crores).
iii) Outstanding letters of credit amounted to Rs. 253.09 crores (Rs.
310.70 crores).
iv) The Company has given counter-guarantee to Government of India for
loans obtained from JBIC & IBRD Banks and on lent to its Subsidiaries.
The outstanding balance as on 31.03.2013 stood at Rs. 550.43 crores
(Rs. 720.10 crores) and Rs. 585.80 crores (Rs. 642.62 crores)
respectively.
Further, the Company has also given guarantee for loans obtained by
subsidiaries from Export Development Bank of Canada (EDC) and Liebherr
France the outstanding balance of which as on 31.03.2013 stood at Rs.
160.35 crores (Rs. 155.63 crores) and Rs. 8.72 crores (Rs. 9.03 crores)
respectively.
v) Outstanding Deferred Payment Guarantee issued by banks amounted to
Rs. 23.36 crores (Rs. 4.42 crores).
2 Basis of Preparation of Financial Statements
i) The financial statements of the subsidiaries used in the
consolidation are drawn up to the same reporting date as that of the
Parent Company, i.e. year ending 31st March, 2013.
ii) The financial statements have been prepared under the historical
cost convention and on the accrual basis of accounting. The accounts of
the subsidiaries have been prepared in accordance with the Accounting
Standards issued by the Institute of Chartered Accountants of India and
on the basis of accounting principles generally accepted in India.
iii) The financial statements have been prepared in line with the
requirements of Revised Schedule-VI of Companies Act, 1956 as
introduced by the Ministry of Corporate Affairs from financial year
ended on 31st March 2012. Accordingly, assets and liabilities are
classified between current and non-current considering 12 months period
as operating cycle. The adoption of Revised Schedule- VI does not
impact recognition and measurement principles followed for preparation
of consolidated financial statements. However, it has sufficient impact
on presentation and disclosures made in the financial statements.
Consequently, the company has re-classified previous years figures
to conform to this years classification.
3 Principles of Consolidation and Financial Reporting of Interest in
Joint Venture and Overseas Subsidiary.
i) The consolidated financial statements relate to Coal India Limited,
its wholly owned subsidiary companies, namely Eastern Coalfields
Limited (ECL), Bharat Coking Coal Limited (BCCL), Central Coalfields
Limited (CCL), Northern Coalfields Limited (NCL), Western Coalfields
Limited (WCL), South Eastern Coalfields Limited (SECL), Mahanadi
Coalfields Limited (MCL), Central Mine Planning & Design Institute
Limited (CMPDIL) & Coal India Africana Limitada (Overseas Subsidiary),
proportionate stake in International Coal Venture Pvt. Limited (ICVL)
and CIL- NTPC Urja Pvt. Ltd.
ii) The financial statements of MCL has been consolidated with its
three subsidiary companies - MNH Shakti Limited, MJSJ Coal Limited and
Mahanadi Basin Power Limited.
iii) The financial statements of the company and its subsidiary
companies are combined on a line-by-line basis adding together the book
values of like items of assets, liabilities, income and expenses, after
fully eliminating intra-group balances and intra-group transactions
resulting in unrealised profits or losses in accordance with Accounting
Standard- 21 " Consolidated Financial Statements" issued by the
Institute of Chartered Accountants of India. However the
non-recognition of interest in holding companys accounts from one of
its subsidiaries ( as per Accounting Standard-9 ) has been ignored in
such consolidation
iv) Significant Accounting Policies and Notes to these Consolidated
Financial Statements are intended to serve as a means of informative
disclosure and a guide for better understanding the consolidated
position of the companies. Recognizing this purpose, the Company has
disclosed only such Policies and Notes from individual financial
statements, which fairly present the needed disclosure.
v) CIL has entered into a Memorandum of Understanding (vide approval
from its Board in 237th meeting held on 24th November, 2007) regarding
formation of Special Purpose Vehicle (SPV) through joint venture
involving CIL/ SAIL/RINL/NTPC & NMDC for acquisition of coking coal
properties abroad. The formation of the SPV had been approved by the
Cabinet, Govt. of India, vide its approval dated 8th November, 2007.The
aforesaid SPV viz. International Coal Ventures Pvt. Ltd. has been
formed by incorporation under Companies Act, 1956 on 20th May: 2009
with an authorised capital of Rs. 1.00 crores and paid up capital of
Rs. 0.70 crores. The authorised Capital and paid up Capital as on
31.03.2013 stood at Rs. 1110.00 crores and Rs. 9.80 crores
respectively. Out of above paid up capital, Coal India Ltd. is owning
2/7th share i.e. worth Rs. 2.80 crores face value of equity shares.
vi) The consolidated financial statements include the interest of the
company in the above joint venture (International Coal Ventures Pvt.
Ltd.) which has been accounted for using the proportionate
consolidation method of accounting and reporting whereby the
companys share of each asset, liability of a jointly controlled
entity has been considered. Such accounting has been carried out
considering the latest available un-audited financial statements as on
31.03.2013.
vii) CIL NTPC Urja Pvt. Ltd., a 50 : 50 Joint Venture Company was
formed on 27th April2010 between CIL & NTPC and CIL has invested Rs.
0.02 crores as on 31.03.2013. The un-audited Accounts of the above
joint venture company upto the year ended 31.03.2013 has been
considered in consolidation.
viii) On incorporation of subsidiaries on the basis of joint venture
agreement as per directives from the Ministry of Coal, Mahanadi
Coalfields Ltd has deposited money / transferred debits for capital and
other expenditure.
ix) In terms of Memorandum of Understanding (MOU) signed on 03.11.2012
between South Eastern Coalfields Limited (SECL), IRCON International
Limited (IRCON) and the Government of Chhattisgarh (GoCG) for
establishment of two Railway Corridors viz., East Corridor and East
West Corridor, two(2) Subsidiary Companies of SECL have been
Incorporated under the Companies Act,1956 viz., M/s Chhattisgarh East
Railway Limited (CERL) incorporated on 12.03.2013 and M/s. Chhattisgarh
East-West Railway Limited (CEWRL) incorporated on 25.03.2013 with an
Authorised Capital of Rs. 5.00 Crores each.
x) Investment in Subsidiary (Overseas)
Coal India Ltd., formed a 100% owned subsidiary in Republic of
Mozambique, named "Coal India Africana Limitada". The initial paid
up capital on such formation (known as "Quota Capital") was Rs.
0.01 Crores (USD 1000), The un-audited Accounts of the above subsidiary
company upto the year ended 31.03.2013 has been considered in
consolidation.
4 Provision for Employee Benefits
The year-end liability of certain other employee benefits like
Gratuity, Earned Leave, Life Cover Scheme, Settlement Allowance, Group
Personal Accident Insurance Scheme, Leave Travel Concession, Medical
Benefits for Retired Executives, Compensation to dependants incase of
mine accidental death are valued on actuarial basis. Total liability as
on 31.03.2013 based on valuation made by the Actuary, details of which
are mentioned below is Rs. 17403.60 crores.
5 In BCCL expenditure of erstwhile Kustore Area (now merged with PB
Area) is under investigation by different authorities. Bills lying
amounting to Rs. 24.44 crores has been considered as Contingent
Liabilities due to pending decision,
6 Eastern Coalfields Limited and Bharat Coking Coal Limited
ECL had become sick and were referred to BIFR under Sick Industrial
Company (Special Provisions) Act, 1985, The revival plan/ scheme of ECL
had already been approved by BIFR and thereafter vetted by the
concerned ministry
During the year further investment in 5% redeemable cumulative
preference share in BCCL (redeemable at par compulsorily after seven
years from the date of issue or after five years at the option of CIL)
was made by way of conversion of past loan to BCCL of Rs. 1083.00 crore
and current account balance (receivable from BCCL) of Rs. 1456 crore.
By giving effect to the above issuance of the Preference Shares by BCCL
to CIL, CIL no longer remained a creditor of BCCL with respect to these
funds. Based on this mutually agreed mechanism between BCCL and CIL,
the waiver of the funds by CIL, as required by the Scheme, was
implemented by converting such funds into subscription monies for
issuance of the Preference Shares to CIL,
On the basis of waivers (of past loan of Rs. 1083 crore and current
account balance of Rs. 1456.00 crore) by CIL, under the scheme, BCCL
reported positive net worth. As part of the ongoing proceedings before
the Honble Board, on February, 14, 2013, the Honble Board
concluded in its order that BCCL had ceased to be a sick industry
company in terms of the Sick Industrial Companies (Special Provisions)
Act,1985 ("SICA"), and directed inter-alia that provisions of the
sanctioned scheme, if any would be implemented by all concerned.
The implementation of the revival scheme in ECL will substantially
improve the financial position of the company.
7 Discontinuing Operation
i) CBE Plant, Bhandra - Western Coalfields Limited:
The Plant used to manufacture Nitro-Glycerine based Permitted
Explosives used in the underground mines of the Company till its
closure on 28.04.2003. Consequent upon decision of the Government of
India to discontinue/ban production of NG-based explosives in the
country and its adoption by the Board of Ordnance Factories of India,
the Jt. Venture partner of the Plant, the Plant was closed on and from
28.04.2003.
CIL had given its approval for disposal of the Plant and the Company in
its 197th Board Meeting held on 19.04.2006 had approved the disposal of
P&M by tendering/e-auction and accordingly the P&M along with related
stores & spares have been disposed off during 2006-07 by auction
through MSTC. The Net Block of assets pending disposal is Rs. 0.08
crores. The liability towards Overheads after closure of the Plant till
31.03.2013 for maintenance and upkeep of the Plant is Rs. 0.40 crores.
The revenue expenses incurred during the current year is Nil (Previous
Year Nil). Since the Plant works on No- Profit-No-Loss basis, all
expenses are passed on to the Areas. Hence there is no question of
profit/loss. There is no cash outflow attributable to operating,
investing and financing of discontinuance (Previous Year Nil).
ii) DFD Plant, Hinganghat, Western Coalfields Limited:
The Plant used to manufacture Coal Briquettes from raw coal for
domestic fuel purposes till its closure in 1994. Consequent upon
non-viability of the Plant as per the decision of the Board of the
Company, the Plant was closed in 1994.
The disposal of the Plant is under process and the exact date of
completion of discontinuance is not determinable as of now. The Net
Block of assets pending disposal is Rs. 0.03 crores and the liability
towards Municipal Taxes is Rs. 0.04 crores. The Company has applied to
the Hinganghat Nagar Palika for waiver of the Municipal Taxes for the
past four years on the ground that the Plant is no more in operation.
The revenue expenses incurred during the current year is Rs. 0.01
crores (Previous Year Rs. 0.01 crores). Since the Plant is inoperative
for the past ten years and the final disposal of the Plant is yet to be
done, there is no question of profit/loss. There is no cash outflow
attributable to operating, investing and financing of discontinuance.
8 Bharat Coking Coal Limited has received grant under various SSRC/
EMSC (now included in Master Plan) and R&D Schemes upto 31.03.2013. The
Company has received Master Plan and R&D Grants upto 31.03.2013 for Rs.
315.79 crores, and Rs. 1.75 crores respectively. Total expenditure
incurred against these are as follows:
9 Medical expenses for retired employees (Note-25) of Rs. 285.22
Crores (Rs. 29.08Crores) includes the actuarial valuation of enhanced
medical benefits scheme (as per Order No - CIL/C-5A(PC)/CPRMSE/207
dated 28.12.2012) covering retired employees on and from 01.01.2007.
10 Use of Estimate:
In preparing the financial statements in conformity with Accounting
Principles generally accepted in India, Management is required to make
estimates and assumptions that effect the reported amounts of assets
and liabilities and the disclosures of contingent liability as at the
date of financial statements and the amount of revenue and expenses
during the reported period. Actual results would differ from those
estimates. Any revision to such estimate is recognized in the period
the same is determined.
11 The Company is primarily engaged in a single segment business of
Production and sale of Coal. The income from interest and other income
is less than 10% of the total revenue, hence no separate segment is
recognized for the same.
12 Figures in the parentheses relates to the previous year.
13 Previous years figures have been regrouped and rearranged wherever
considered necessary.
14 Note-1 to 19 form part of the Balance Sheet as at 31st March, 2013
and 20 to 32 form part of Statement of Profit & Loss for the year ended
on that date. Note-33 represents Significant Accounting Policies and
Note-34 represents additional notes on the Accounts.
Mar 31, 2012
I) Contingent Liabilities / Commitments
The amount remaining to be executed on capital account not provided for
Is Rs 67.74 crores {Rs 83.51 crores).
The amount remaining to be executed on revenue account not provided for
is Rs 345.20 crores.
Claims against the company not acknowledged as debts are Rs 142.81
crores (Rs 134.23 crores).
The company has given counter-guarantee to Government of India for
loans obtained from JBIC & IBRD banks am on lent to its subsidiaries.
The outstanding balance as on 31.03.2012 stood at Rs 720.10 crores {Rs
731.76 crores) am Rs 642.62 crores (Rs 638.67 crores) respectively.
Further, the company has also given guarantee for loans obtained by
subsidiaries from Export Development Bank of Canada (EDO and Liebher
France the outstanding balance of which as on 31.03.2012 stood at Rs
155.47 crore (Rs140.45 crores) and Rs 13.87 crores {Rs 13.60 crores)
respectively.
As on 31.03.2012 outstanding letters of credits amounted to Rs 218.63
crores {Rs 48.06 crores).
ii) Long Term & Short Term Provision (Refer Note 5 & Note 9)
Provision for Employee Benefits
The disclosures as per actuarys certificate for employee benefits for
gratuity and leave encashment are given below:-
iii) Related party disclosure
Key management personnel for the year ending 31.03.2012 :
Mr. N. C. Jha, Chairman (upto 31 st January, 2012)
Ms. Z. Chatterji, Chairman-Cum-Managing Director (from 1 st February,
2012)
Mr. R. Mohan Das, Director (P&IR)
Dr. A.K. Sarkar, Director (Marketing) (upto 30th April, 2011)
Mr. A. K.Sinha, Director (Finance)
Mr. N. Kumar. Director (Technical) (from 1 st February, 2012)
iv) Taxation
An amount of Rs 450.00 crores (Rs 190.00 crores) is provided in the
accounts during the current year towards income tax.
There is no deferred tax liability of the company for the year.
However, the company is having a deferred tax asset on the basis of
calculation as per Accounting for Taxes on Income (AS-22), issued by
Institute of Chartered Accountants of India. As per existing provisions
of tax laws the dividend received from subsidiaries which accounts for
the income of Coal India Ltd, is tax free w.e.f. financial year
2003-04. Since without considering such dividend there is no virtual
certainty of future taxable income, as a prudent practice no deferred
tax asset is recognised in the accounts.
Further dividend to GOI / other shareholders has been paid out of
dividends received from subsidiary companies of CIL, on which Dividend
Distribution Tax has been paid by the respective subsidiaries. No tax
on dividend to GOI and other shareholders has been considered as per
the provision of Income Tax Act, 1961.
v) Borrowing and other Costs in respect of foreign currency loans
Borrowing and other costs (including exchange difference) in respect of
foreign currency loans obtained for subsidiary companies have been
recovered from the respective subsidiary companies. The company has
entered into swap transactions against interest. Gains arising out of
swap transactions are being carried as reserve for Foreign Exchange
Transactions. Net result of the said swap transactions will be
recovered / paid to subsidiary companies upon completion of repayment
of foreign currency loans.
vi) The fund available with the company from the management period
(Pre-nationalisation) of non-coking coal mines i.e. on 1.5.1973
The fund available with the company against cash, bank balances, road
coupons etc. taken over by the company from the management period of
non-coking coal mines i.e. on 1.5.1973 has been adjusted against the
deposit made by the company on behalf of the Govt of India to
Commissioner of Payments on account of surplus of the said management
period.
vii) Goods purchased by Coal India Ltd. on behalf of Subsidiaries
As per existing practice, goods purchased by Coal India Ltd. on behalf
of subsidiary companies are accounted for in the books of respective
subsidiaries directly.
viii) Insurance and escalation claims
Insurance and escalation claims are accounted for on the basis of
admission/final settlement. However such details of unsettled claim are
maintained by concerned department.
ix) Provisions made in the Accounts
Provisions made in the accounts against slow moving/non-moving/obsolete
stores, claims receivable, advances, doubtful debts etc. are considered
adequate to cover possible losses.
x) Micro, Small and Medium Enterprises
There is no reported Micro, Small and Medium Enterprises as defined in
the "The Micro, Small and Medium Enterprises Development Act, 2006" to
whom the company owes dues.
xi) Current Assets, Loans and Advances etc.
In the opinion of the Management Current Assets, Loans and Advances
etc. have realisable value in the course of business at least equal to
the net amount at which they are stated.
xii) Balance confirmation
Balance confirmation/reconciliation is carried out for bank balances,
all major loans & advances, long term liabilities and current
liabilities. Provision is taken against all doubtful unconfirmed
balances.
xiii) Revision of Schedule VI to the Companies Act 1956 (w.e.f.
01.04.2011)
Following the Gazette notification dated 30th March, 2011 the Schedule
VI of the Companies Act 1956 dealing with the format of Balance Sheet
has modified and a format for Statement of Profit & Loss is introduced.
The format as per revised Schedule VI has been applied while preparing
this accounts. Following the new guidelines of the revised format
inter-alia, the following segregation have been made in the Balance
Sheet:
Current Assets
An asset has been classified as current when it satisfies any of the
following criteria :-
- It is expected to be realized in, or is intended for sale or
consumption in, the companys normal operating cycle
- It is held primarily for the purpose of being traded
- It is expected to be realized within twelve month after the reporting
date
- It is cash or cash equivalent unless it is restricted from being
exchanged or used to settle a liability for at least twelve months
after the reporting date.
Non-Current Assets
All assets other than current assets are Non- Current Assets
Current Liabilities
A liability has been classified as current when it satisfies any of the
following criteria :
- It is expected to be settled in the companys normal operating cycle
- It is held primarily for the purpose of being traded
- It is due to be settled within twelve month after the reporting date
- The company does not have an unconditional right to defer settlement
of the liability for at least twelve months after the reporting date.
Terms of a liability that could, at the option of the counterparty,
result in its settlement by the issue of equity instruments do not
affect its classification.
Non-Current Liabilities
All liabilities other than current liabilities are Non- Current
Liabilities.
Operating Cycle for Coal India Limited :-
As there is no normal Operating cycle the same is considered to be 12
months period.
xiv) Significant accounting policy
Significant accounting policy (Note - 33) has been suitably modified/
re-drafted over previous year, as found necessary to elucidate the
accounting policies adopted by the company.
xv) Previous years figures
Previous years figures have been regrouped and rearranged wherever
considered necessary.
Figures in the parentheses relating to Additional Notes of Balance
Sheet and Statement of Profit & Loss correspond to 12 month period of
the previous year.
xvi) Use of estimate:
In preparing the financial statements in conformity with accounting
principles generally accepted in India, management is sometimes
required to make estimates and assumptions that effect the reported
amounts of assets and liabilities and the disclosures of contingent
liability as at the date of financial statements and the amount of
revenue and expenses during the reported period. Actual results may
differ from those estimates. Any revision to such estimate is
recognized in the period in which the same is determined.
Mar 31, 2011
1 BASIS OF PREPARATION OF FINANCIAL STATEMENTS
1.1 The financial statements of the subsidiaries used in the
consolidation are drawn up to the same reporting date as that ofthe
Parent Company,i.e. year ending 31st March, 2011.
1.2 The financial statements have been prepared under the historical
cost convention and on the accrual basis of accounting. The accounts
ofthe subsidiaries have been prepared in accordance with the Accounting
Standards issued by the Institute of Chartered Accountants of India and
on the basis of accounting principles generally accepted in India.
2 PRINCIPLES OF CONSOLIDATION
2.1 The consolidated financial statements relate to Coal India Limited,
its wholly owned subsidiary companies, namely, Eastern Coalfields
Limited (ECL), Bharat Coking Coal Limited (BCCL), Central Coalfields
Limited (CCL), Northern Coalfields Limited (NCL), Western Coalfields
Limited (WCL), South Eastern Coalfields Limited (SECL), Mahanadi
Coalfields Limited (MCL), Central Mine planning & Design Institute
Limited (CMPDIL) &Coal India Africana Limitada (Overseas Subsidiary)
and proportionate stake in International Coal Venture Pvt. Limited
(ICVL).
The financial statements of MCL has been consolidated with its two
subsidiary companies - MNH Shakti Limited and MJSJ Coal Limited.
The financial statements of the company and its subsidiary companies
are combined on a line-by-line basis adding together the book values of
like items of assets, liabilities, income and expenses, after fully
eliminating intra-group balances and intra-group transactions resulting
in unrealised profits or losses in accordance with Accounting Standard-
21 "Consolidated Financial Statements" issued by the Institute of
Chartered accountants of India.
2.2 Significant Accounting Policies and Notes to these Consolidated
Financial Statements are intended to serve as a means of informative
disclosure and a guide to better understanding the consolidated
position ofthe companies. Recognizing this purpose, the Company has
disclosed only such Policies and Notes from individual financial
statements, which fairly present the needed disclosure.
2.3 The consolidated financial statements include the interest of the
company in joint ventures (i.e. ICVL), which has been accounted for
using the proportionate consolidation method of accounting and
reporting whereby the company''s share of each asset, liability of a
jointly controlled entity has been considered.
3 FIXED ASSETS
3.1 The assets and liabilities taken over from Coal Mines Labour
Welfare Organisation and Coal Mines Rescue Organisation, for which no
quantitative details are available, have not been incorporated in the
accounts pending determination of value thereof.
3.2 The transfer formalities from the Holding Company and other
subsidiaries have not been completed and consequently some documents
continue to be held in the name of the Holding Company and other
subsidiaries.
3.3 Land acquired under Coal Bearing Areas (Acquisition and
Development) Act, 1957 and Land Acquisition Act, 1984 is accounted for
on payment basis and the same is shown as Leasehold land.
3.4 Land includes certain land taken on possession by the company for
which legal formalities in respect of title deeds are pending.
3.5 Land in possession of North Eastern Coalfields, Assam, includes
8069.70 hectares of lease hold land for which no value has been shown
in the Balance Sheet.
3.6 In respect of Chandrapur area of Western Coalfields Limited, till
date the ownership of land valued at Rs.2324.66 Lakh has not been vested
with the Area, the amount paid is kept in advance account.
3.7 Fixed Assets comprising of Plant & Machinery of «18.99 Lakh and
related building and other assets of Rs.1625.37 Lakh, both at book value
(WDV) as on 31.3.95 have been let out to Indian Institute of Coal
Management, a registered society under Societies Registration Act, 1860
(for an annual lease rent of Rs.153.00 Lakh) under cancellable operating
lease agreement. Additions to these assets from the day of letting out
to 31.03.2011 are Rs.382.60 Lakh on value of plant & machinery and
Rs.388.41 Lakh on value of building and other assets. The cumulative
provision for depreciation upto 31.03.2011 stood at Rs.1214.99 Lakh
(including depreciation charged for the current period ofRs.64.28 Lakh).
The net W.D.V. of the leased assets as per books as on 31.03.2011 is
Rs.1527.53 Lakh. The yearly lease rent of Rs.153.00 Lakh has been
recovered.
3.8 As per lease agreement dated 31st March 1993 executed with
Dishergarh Power Supply Company Ltd., Eastern Coalfields Limited leased
out 2X10MW Chinakuri Thermal Power station including land, building,
plant & machinery etc. The lease agreement is for 20 years from the
commencement of lease w.e.f. 01 -04-1991. The gross value of Power
Plant, Building and other assets is Rs.4024.00 Lakh (Rs.4024.00 Lakh);
Rs.1019.64 Lakh (Rs.1019.64 Lakh) andRs.772.61 Lakh (T772.61 Lakh)
respectively. The cumulative depreciation upto 31.03.2011 against the
above-mentioned assets is Rs.3823.73 Lakh (Rs.3823.73 Lakh);Rs.638.11 Lakh
(Rs.606.85 Lakh) and W41.04 Lakh (Rs.640.85 Lakh) respectively.
The lease rental for the year Rs.350.00 Lakh {Rs. 350.00 Lakh) has been
received.
3.9 South Eastern Coalfields Limited in terms of License Agreement
dated 19th day of March 2001 executed with M/s Apollo Hospital
Enterprises Ltd., Chennai has granted the latter a right to occupy and
use the fully constructed main hospital building measuring 297099.74
Sq.ft. (27611.50 Sqm) and the residential quarters measuring 55333
Sq.ft. (5142.47 Sqm) together with superstructures on the land such as
sub station building, sewerage treatment plant and pump house. The
License Agreement provides for a lease period of 30 years from the
effective date of the commencement of the lease i.e November, 2001. The
cost of the gross assets leased to Apollo Hospital Enterprises Ltd.
furnished under the schedule of Fixed Assets W132.21 Lakh
3.10 In terms of lease agreement with M/s. Imperial Fastners Pvt.
Limited, Central Coal Fields Ltd. has granted a right to occupy and use
the assets of the Company. The cost of gross carrying amount at the
beginning of the year is W019.06 Lakh.The accumulated depreciation as
at the end of the year Rs.7194.25 Lakh. Depreciation for the year is
Rs.289.59 Lakh. The future minimum lease payment receivable in the
aggregate during the period of lease is Rs.5810.00 Lakh.
4. CAPITAL WORK IN PROGRESS
"Prospecting & Boring"and also Development shown underCapital
Work-in-Progress mostly relates to jobs awaiting completion.
5. INVENTORY
5.1 The enquiry proceeding by CBI, Dhanbad for shortage of coal at
Rajmahal OCP of 19.54 Lakh tonne valuing to Rs.6385.73 Lakh in 2007-08
has been completed in 2010-11 and the same has been forwarded to
Chairman, CIL for information and advised the vigilance department for
taking actions against the charged officers as per CBI order.
5.2 In Central Coal Fields Ltd. physical stock has been adopted in the
following cases over the book stock, because of difference being beyond
50/0, pursuant to the Accounting Policy.
5.3 Prospecting and boring and Development expenditure of Mahanadi
Coalfields Limited and South Eastern Coalfields Limited on allotted
non-CIL blocks meant for sale amounting to Rs.894.38 Lakh (Previous year
Rs. 626.89 Lakh) and Rs.747.90 Lakh (Previous yearRs. 885.58 Lakh)
respectively has been shown as "inventories" at cost.
6. SUNDRY DEBTORS
6.1 The Government of Madhya Pradesh by Gazette Notification dated
30.09.2005 has imposed a new tax under "Madhya Pradesh Gramin
AvsanrachanaTatha SadakVikas Adhiniyam, 2005"(MPGATSVA 2005), with
effect from 30.09.2005. This Adhiniyam provides for charging of tax @
50/0 on annual value w.e.f. 30.09.2005. Some consumers as well as WCL
moved the Hon''ble High Court of Madhya Pradesh, Jabalpurand obtained
interim relief. As per the interim orderdated 15.02.2006, the Hon''ble
High Court, Jabalpur had directed the Company not to deposit this tax
to the State Government but to keep it in a fixed deposit. The matter
was later dismissed by the Jabalpur High Court in favour of MP
Government. WCL has filed an SLP before the hon''ble Supreme Court and
the matter is still sub judice.The Hon''ble Supreme Court of India vide
its order dated 02.08.2010 directed the Company to file its returns for
all the years under protest as per MPGATSVA (2005). The hon''ble
Supreme Court directed the assessing officer under the Act to complete
the assessments of returns filed by the Company. In compliance with the
Supreme Court directions the assessing officers raised total demand of
Rs. 20579.35 Lakh against the Company in the year 2010-11. The Company,
as per legal advice, has deposited Rs. 10289.68 Lakh (being 500/c of the
total demand) and has preferred Appeals against the assessment orders
with Competent Appellate Authority, jabalpur and Bhopal. The appeal for
Patherkhera Area has been decided against the Company and as per legal
advice, balance 50% amount of Patherkheda Area amounting to Rs.4262.17
Lakh has also been deposited, making the total deposit of Rs.14551.85
Lakh.
An amount ofRs. 24550.22 Lakh has been received from customers on this
account upto 31.03.2011. Term Deposit, against this receipt upto 31 st
March 2011 (after adjusting Rs.14551.85 Lakh paid for appeal), for Rs.
9471.01 Lakh has been made upto 31 st March 2011 and Term Deposit for
balance Rs.527.36 Lakh will be made in April 2011. The interest on fixed
deposits made on this account is treated as liability.
6.2 South Eastern Coalfields Limited has realized from the customers on
account of under noted statute and as per the orders of Hon''ble courts,
the amount is kept under separate account with the banks:
i) MP Gramin AdhosanrachanaTatha SadakVikas Upkar, 2005 -Rs. 12185.92
Lakh (Principle amount Rs. 9203.76 Lakh and interest Rs. 2982.16 Lakh) is
lying in bank, excluding interest accrued but not due thereon Rs. 431.53
Lakh. Interest earned and accrued amounting to Rs. 3413.69 Lakh has been
shown as liability.
ii) Terminal Tax levied by various Municipal Corporations-Rs. 5201.39
Lakh (Principal amount Rs.5096.23 Lakh and interest Rs. 105.16 Lakh) is
lying in bank excluding Rs. 90.20 Lakh interest accrued but not due there
on. Interest earned and accrued amounting to Rs.195.36 Lakh has been
shown as liability.
6.3 In pursuance of Notification No.F/19/60/04/XII-2 dated 05.08.2005
of MPGATSVA, Tax @5o/0 of the basic coal price of realizable grade
w.e.f. 30.09.2005 has been levied on coal sold to customers. Northern
Coalfields Limited has appealed before the Hon''ble Supreme Court of
India that MPGATSVA Tax for the period 01.08.2007 to 31.03.2011 to the
extent not realised from the customers, amounting to W8180.76 Lakh is
adjustable against Royalty collected and deposited, which has been
shown as contingent Liability.
6.4 In absence of balance confirmation from some parties, the Sundry
Debtors, Creditors, Loans & Advances and Deposits have been taken in
the Accounts as per their book value.
7. LOANS AND ADVANCES
Commercial Tax Department, Madhya Pradesh, has raised a demand of
W1455.95 Lakh (previous year Rs.27891.39 Lakh) till 31- 03-2011 for Sales
Tax and Entry tax, against which an appeal has been filed and Rs.5222.15
Lakh (previous year Rs.3925.62 Lakh) has been deposited under protest by
Northern Coalfields Limited and the claim of W1455.95 Lakh has been
shown as Contingent Liability.
8. CASH AND BANK BALANCES
Cash and Bank Balance includes:
a) Rs.120.47 Lakh (as at 31.03.2010 Rs.113.35 Lakh) balance with Scheduled
Bank in Deposit Account which is under lien to Hon''ble District Court
of Sundergarh.
b) W6.60 Lakh (unclaimed OREEPTax) received from Hon''ble Supreme Court
of India towards corpus fund of trust. This amount has been kept as
fixed deposit since the trust is yet to be formed. The interest accrued
thereon upto 31.03.2011 is Rs.36.00 Lakh (upto 31.03.2010 Rs.28.96 Lakh).
c) Rs.20.00 Lakh deposits with SBI, MCL complex earmarked for corpus fund
of Utkal Rangamanch Trust, interest income of which is disbursed to the
Trust.
d) Fixed deposit amounting to Rs.6674.40 Lakh and Rs.11131.40 Lakh have
been placed under lien of State Bank of India for issuing letter of
comfort for issuance of Bank Guarantee in favour of President of India
to fulfil the terms of allocation of blocks on behalf of Subsidiary
Companies i.e. M/s. MJSJ Coal Ltd. and M/s. MNH Shakti Ltd.
respectively.
9. CURRENT LIABILITIES
9.1 Advance from customers of Mahanadi Coalfields Limited includes Cess
on Coal including principal of Rs.840.27 Lakh (net of payments) and
interest of W47.11 Lakh (net of payments) against receipts from
Government of Orissa in the year 2005- 06 as per directive of Hon''ble
Supreme Court judgement dated 31.7.2001. The money is refundable to the
customers. During the current year the Group has provided interest of
Rs.100.84 Lakh (Previous year Rs.100.83 Lakh) calculated at the rate of 12%
for the unpaid principal amount of the Cess liability. The total
liability thus included therein as on 31.03.2011 stood at Rs.2344.55 Lakh
(Previous Year Rs.2243.71 Lakh). The Group has not identified the
customers / parties to whom the refund is to be made. Finalization of
modalities for refunding the same to the customers / parties is yet to
be done.
9.2 In the process of making payment of cess by Eastern Coalfields
Limited on the annual value of coal bearing land based on average
production of preceding two years valuing at a rate prevailing as on 1
st April of each year and realization made from customers on the value
of despatches of coal, there remains a balance accumulating to W0591.47
Lakh (W4939.37 Lakh), which has been shown in Cess Equalisation Account
under Current Liabilities and Provision. There is an additional demand
of W2258.00 Lakh (Rs.32258.00 Lakh) arising out of the assessment made
upto 2002-03 which has been shown as Contingent Liability.
9.3 Bazaar fees amounting to Rs.16404.87 Lakh frl 2109.22 Lakh) collected
by Bharat Coking Coal Limited on sale of coal/coke vide Gazette
Notification No.34 dated 18th Jan''2006 but the same has not been
deposited to the appropriate authority as the matter is subjudice at
Jharkhand High Court under case no.6507 of 2006.
9.4 In Bharat Coking Coal Limited, revised agreement in respect of
price of rejects and power tariff with DLF is not yet finalized.
However, interest receivable/payable at this stage is not accounted
for. The matter is also pending before an arbitrator. However,
interest due to delay in payment to DLF has been provisionally
determined as Rs.1246.14 Lakh (Rs.1038.45 Lakh ) upto year ending on
31.03.2011.
9.5 By virtue of enactment of Cess and Other Taxes on Mineral
Validation Act, 1992, Western Coalfields Limited raised supplementary
bills on customers''upto 4.4.1991. An amount of Rs.295.66 Lakh (Previous
Year Rs.295.66 Lakh) has been shown as liability for Cess on Royalty
under the head Current Liabilities & Provisions. In view of the
judgment of Hon''ble High Court, Patna,Ranchi Bench, in writ petition
no.CWJC/1280 of 1992, Cess is not payable. However a Special Leave
Petition is pending in Supreme Court against it.
10. FOREIGN CURRENCY LOAN
10.1 The foreign currency loans drawn from IBRD and JBIC banks on
account of Coal Sector Rehabilitation Project to be implemented in
various subsidiaries has been shown under the head Unsecured Loan. The
company has entered into swap transactions against a portion of above
stated borrowing and interest thereon. Gains/ losses arising out of
swap transactions are being carried as Reserve for foreign currency
transactions.
10.2 The overall Marked to Market position of the existing hedge
transactions (net of the positive values) as on 31.03.2011 stood
atRs.8740.00 Lakh (negative). However, the negative Marked to Market
valuation of outstanding position involving six individual foreign
currency transactions as on 31.03.2011 before netting up with
transactions having positive values stood at Rs.8770.00 Lakh (Rs.3898.00
Lakh ), which have been fully provided for.
11. PROFITS LOSS ACCOUNT
11.1 Total claim of W766.84 Lakh was lodged with the Director of
Electricity, Govt, of West Bengal, in support of relief/concession
required for revival of ECL according to BIFR''s sanctioned scheme vide
its letter No. 40/PA/PR.Secy./IRPE dated 30.8.2005. During the year
2010-11,^266.64 Lakh (S212.88 Lakh) has been received and recovery of
the balance amount of Rs.2162.23 Lakh (Rs.2428.87 Lakh) are in process.
11.2 The year-end liability of certain other employee benefits like
Life Cover Scheme, Settlement Allowance, Group Personal Accident
Insurance Scheme, Leave Travel Concession, Medical Benefits for Retired
Executives, Compensation to dependants incase of mine accidental death
are valued on actuarial basis. Total liability as on 31.03.2011 based
on valuation made by the Actuary, details of which are mentioned below
is Rs.1185109.58 Lakh.
11.3 Against actuarial liability of Gratuity, fair value of plan assets
at the end of the year is Rs.460706.79 Lakh. (Rs.385396.91 Lakh).
11.5 Allocation of the fund for the CSR activities is based on 3% of
the retained earnings of the previous year, subject to minimum of
Rs.5/-per tonne of coal production of previous year of coal producing
subsidiary companies. Incase of CIL, allocation is 2.5% of retained
profit of last year of CIL for execution of CSR activities. During the
year reserve for meeting expenses relating to CSR activities has been
created.
11.6 Profits realised from subsidiaries of MCL (viz MNH Shakti Ltd. and
MJSJ Coal Ltd) towards sale of Blocks have been recognized during the
year upon issue of Equity Share by these subsidiaries to MCL, and the
same have been adjusted with opening balance of Profit & Loss Brought
forward .
12. EASTERN COALFIELDS LIMITED AND BHARAT COKING COAL LIMITED
ECL and BCCL have become sick and were referred to BIFR under Sick
Industrial Companies (Special Provisions) Act,1985. The revival plan of
both ECL & BCCL has already been approved by BIFR and thereafter vetted
by the concerned Ministry. The implementation of these revival schemes
will substantially improve the financial positions of these companies.
Accumulated Profit(Loss) and Net Worth of ECL and BCCL as on 31.03.2011
are as under:-
13 DISCONTINUING OPERATION
13.1 CBE Plant, Bhandra - Western Coalfields Limited:
The Plant used to manufacture Nitro-Glycerine based Permitted
Explosives used in the underground mines of the Company till its
closure on 28.04.2003. Consequent upon decision of the Government of
India to discontinue/ban production of NG-based explosives in the
country and its adoption by the Board of Ordnance Factories of India,
the Jt. Venture partner of the Plant, the Plant was closed on and from
28.04.2003.
CIL had given its approval for disposal of the Plant and the Company in
its 197th Board Meeting held on 19.04.2006 had approved the disposal of
P&M by tendering/e-auction and accordingly the P&M along with related
stores & spares have been disposed of during 2006-07 by auction through
MSTC.The Net Block of assets pending disposal isRs. 8.14 Lakh. The
liability towards Overheads after closure of the Plant till 31.03.2011
for maintenance and upkeep of the Plant is Rs.39.56Lakh.
The revenue expenses incurred during the current year is Rs. NIL
(Previous YearRs. 3.64 Lakh). Since the Plant works on No- Profit-No-Loss
basis, all expenses are passed on to the Areas. Hence there is no
question of profit/loss. There is a nil cash outflow attributable to
operating, investing and financing of discontinuance (Previous YearRs.
0.19 Lakh).
13.2 DFD Plant, Hinganghat, Western Coalfields Limited:
The Plant used to manufacture Coal Briquettes from raw coal for
domestic fuel purposes till its closure in 1994. Consequent upon
non-viability of the Plant as per the decision of the Board of the
Company, the Plant was closed in 1994. The disposal of the Plant is
under process and the exact date of completion of discontinuance is not
determinable as of now. The Net Block of assets pending disposal is
Rs.2.57 Lakh and the liability towards Municipal Taxes is Rs.3.39 Lakh.
The Company has applied to the Hinganghat Nagar Palika for waiver of
the Municipal Taxes for the past four years on the ground that the
Plant is no more in operation. The revenue expenses incurred during the
current year is TO.52 Lakh (Previous Year TO.52 Lakh). Since the Plant
is inoperative for the past ten years and the final disposal of the
Plant is yet to be done, there is no question of profit/loss. There is
no cash outflow attributable to operating, investing and financing of
discontinuance.
14. GENERAL
14.1 In Coal Mines, for compliance of AS-29, the total obligation
arising out of Mine Closure plan as on 31.03.2011 is Rs.84239.34 Lakh.
During the yearRs. 35358.26 Lakh has been provided after netting of the
provisions provided earlier for Back Filling/Land Reclamation. No
separate Escrow account has been opened, as modalities have not been
received from the Coal Controller Organisation and the approval of Mine
Closure plan is yet to be obtained.
14.3 Shifting and Rehabilitation Fund (Schdule-C) shown in the Balance
Sheet represents the fund set-up for"lmplementation of action plan for
Shifting & Rehabilitation dealing with Fire & Stabilisation on Unstable
Areas of Eastern Coalfields Ltd. &Bharat Coking Coal Ltd.". The above
fund is invested in Fixed Deposit and any interest income arising
thereon (net of TDS) is also transferred to the said Fund. Total
interest income earned and transferred this year (net of TDS) is *
9951.89 Lakh (.8038.06 Lakh).
14.5 Use of Estimate:
In preparing the financial statements in conformity with Accounting
Principles generally accepted in India, Management is required to make
estimates and assumptions that effect the reported amounts of assets
and liabilities and the disclosures of contingent liability as at the
date of financial statements and the amount of revenue and expenses
during the reported period. Actual results would differ from those
estimates. Any revision to such estimate is recognized in the period
the same is determined.
15. FINANCIAL REPORTING OF INTEREST IN JOINT VENTURE AND OVERSEAS
SUBSIDIARY
15.1 CIL has entered into a Memorandum of Understanding (vide approval
from its Board in 237th meets held on 24th November, 2007) regarding
formation of Special Purpose Vehicle (SPV) through joint venture
involving CIL/SAIL/RINL/NTPC & NMDC for acquisition of coal properties
abroad. The formation of the SPV had been approved by the Cabinet,
Govt. of India, vide its approval dated 8th November, 2007.
The aforesaid SPV viz. International Coal Ventures Pvt. Ltd. has been
formed by incorporation under Companies Act, 1956 on 20th May,2009 with
an authorised capital of Rs.100.00 Lakh and paid up capital of Rs.70.00
Lakh. The authorised Capital and paid up Capital during the year have
been increased and as on 31.03.2011 they stood at Rs.110000.00 Lakh and
W80.00 Lakh respectively. Out of above paid up capital, Coal India Ltd.
is owning 2/7th share i.e. worth Rs.280.00 Lakh equity shares.
15.2 CIL NTPC Urja Pvt. Ltd., a 50 : 50 Joint Venture Company has been
formed on 27th April''2010 between CIL& NTPC Pending allotment of shares
and other formalities; amount paid to the said joint venture company
has been shown as advance. Amount outstanding as on 31.03.2011 -TO.50
Lakh.
15.3 On incorporation of subsidiaries on the basis of joint venture
agreement as per directives from the Ministry of Coal, Mahanadi
Coalfields Ltd has deposited money / transferred debits for capital and
other expenditure.
15.4 Investment in Subsidiary (Overseas)
Coal India Ltd., formed a 100% owned subsidiary in Republic of
Mozambique, named "Coal India Africana Limitada". The initial paid up
capital on such formation (known as "Quota Capital") was TO.49 Lakh
(USD 1000).
15.5 Pre operative expenses under the head, Miscellaneous Expenses (to
the extent not written off) includes Rs.64.03 Lakh for Coal India
Africana Limitada, Mozambique and Rs.119.42 Lakh
16. CONTINGENT LIABILITIES / CAPITAL COMMITMENTS
16.1 The amount remaining to be executed on capital account not
provided for is Rs.224886.28 Lakh {Rs. 179569.17 Lakh).
16.2 Claims against the company not acknowledged as debt are
,1102849.77 Lakh (Rs. 824997.42 Lakh).
16.3 Outstanding letters of credit amounted toRs. 16597.07 Lakh
16.4 The Company has given counter-guarantee to Government of India for
loans obtained from JBIC & IBRD Banks and on the amount lent to its
Subsidiaries. The outstanding balance of which as on 31.03.2011 stood
at Rs.73175.60 Lakh
Further, the Company has also given guarantee for loans obtained by
subsidiaries the outstanding balance of which as on 31.03.2011 stood at
Rs. 15404.65 Lakh {Rs. 14611.70 Lakh).
16.5 Outstanding Deferred Payment Guarantee issued by Banks amounted
toRs. 421.84 Lakh {Rs. 156.46 Lakh).
16.6 Pending finalisation of formalities for transfer of assets and
liabilities of erstwhile CMAL and its divisions, now Coal India Ltd,
the bank borrowings of Coal India Ltd. has been secured by creating
charge against stock of Coal, stock of stores and spare parts and book
debts and other assets of CIL and its Subsidiary Companies.
The total working capital credit limit available to CIL as on
31.03.2011 is Rs. 55000.00 Lakh, out of which fund based limit is Rs.
25000.00 Lakh. The balance Rs. 30000.00 Lakh limit is non-fund based. The
facility is secured by hypothecation of book debts, stock of raw
materials, semi-finished goods, finished goods and consumable stores &
spares of both present and future. Coal India Limited is contingently
liable to the extent such facility is actually utilised by the
subsidiaries.
16.7 Figures in the parentheses relates to the previous year.
16.8 Previous years figures have been regrouped and rearranged wherever
considered necessary.
16.9 The Company is primarily engaged in a single segment business of
Production and sale of Coal. The income from interest and other income
is less than 10% of the total revenue, hence no separate segment is
recognised for the same.
16.10 Listing of shares of Coal India Ltd. in Stock Exchange.
Pursuant to divestment of 10% of total equity shares held by Govt, of
India, to the public, the shares of Coal India Ltd. has been listed in
two major Stock Exchanges of India, viz. Bombay Stock Exchange and
National Stock Exchange on and from 4thNovember,2010.
Post such listing Govt, of India holds 90% of the entire equity share
capital.
16.11 Schedule A to L form part of the Balance Sheet as at 31 st March,
2011 and 1 to 15 form part of Profit & Loss Account for the year ended
on that date and Schedule- M represents Accounting Policies and
explanatory notes on the Accounts.
Mar 31, 2009
1.1 The financial statements of the subsidiaries used in the
consolidation are drawn up to the same reporting date as that of the
Parent Company, i.e. year ending 31st March.
1.2 The financial statements have been prepared under the historical
cost convention and on the accrual basis of accounting. The accounts of
the subsidiaries have been prepared in accordance with the Accounting
Standard issued by the Institute of Chartered Accountants of India and
on the basis of accounting principles generally accepted in India.
2 PRINCIPLES OF CONSOLIDATION
2.1 The consolidated financial statements relate to Coal India Limited
and its wholly owned subsidiary companies, namely, Eastern Coalfields
Limited (ECL), Bharat Coking Coal Limited (BCCL), Central Coalfields
Limited (CCL), Northern Coalfields Limited (NCL), Western Coalfields
Limited (WCL), South Eastern Coalfields Limited (SECL), Mahanadi
Coalfields Limited (MCL) and Central Mine planning & Design Institute
Limited (CMPDIL). The financial statements of MCL has been consolidated
with its two subsidiary companies - M/s, MNH Shaku* Limited and M/s,
MJSJ Coal Limited.The financial statements of the company and its
subsidiary companies are combined on a line-by-line basis adding
together the book values of like items of assets, liabilities, income
and expenses, after fully eliminating intra-group balances and
intra-group transactions resulting in unrealised profits or losses in
accordance with Accounting Standards - 21 " Consolidated Financial
Statements" issued by the Institute of Chartered accountants of India.
2.2 Significant Accounting Policies and Notes to these Consolidated
Financial Statements are intended to serve as a means of informative
disclosure and a guide to better understanding the consolidated
position of the companies. Recognizing this purpose, the Company has
disclosed only such Policies and Notes from individual financial
statements, which fairly present the needed disclosure.
3 FIXED ASSETS
3.1 The assets and liabilities taken over from Coal Mines Labour
Welfare Organisation and Coal Mines Rescue Organisation, for which no
quantitative details are available, have not been incorporated in the
accounts pending determination of value thereof.
3.2 The transfer formalities from the Holding Company and other
subsidiaries have not been completed and consequently some documents
continue to be held in the name of the Holding Company and other
subsidiaries. _
3.3 Land acquired under Coal Bearing Areas (Acquisition and
Development) Act, 1957 and Land Acquisition Act, 1984 is accounted for
on payment basis and the same is shown as Leasehold land.
3.4 Land includes certain land taken on possession by the company for
which legal formalities in respect of-title deeds are pending.
3.5 The assets taken over on nationalisation by Bharat Coking Coal
Limited amounting to Rs. 1145.81 lakhs being gross value of assets
including land valuing Rs.88.30 lakhs (quantitative and value-wise
details of which are not available ) on which depreciation has been
fully provided for in the Accounts except land.
3.6 41959.32 Ha of land at Central Coalfields Ltd has been acquired
under CBA (A&D) Act, 1957. Out of this, approximately 13644.32 Ha. is
tenancy land and rest is forest and GMK land. Out of 13644.32 Ha. of
tenanacy land compensation has been assessed for 6578.32 Ha. for an
amount of Rs.3253 lacs. Out of this an amount of Rs.3087 lakhs has been
paid and the balance is being paid by holding regular payment camps in
different projects.
3.7 In respect of Chandrapur area of Western Coalfields Limited, till
date the ownership of land valued at Rs. 2324.66 lakhs has not been
vested with the Area, the amount paid is kept in advance account and
shown in Capital Commitments. Similarly, in Kanhan area an amount of
Rs. 132.71 lakhs paid to forest department for acquisition of land for
Kothideo OC patch , is kept in Advance account as the final clearance
from the forest department is pending and hence the ownership of land
has not vested with the Area.
3.8 DFD Plant and CBE Plant at Western Coalfields Limited continue to
remain inoperative during the year. CBE Plant stands closed since
28.04.03 and DFD Plant since 1994. Leasehold Land of DFD Plant is
being amortised over the lease period of 30 years. Plant & Machinery of
CBE Plant excepting hospital equipments has been disposed of by auction
through MSTCi All the other assets of both these plants are carried in
the books at a residual value of 5% of their cost.
3.9 Discarded/Surveyed off assets of Western Coalfields Ltd.and
Mahanadi Coalfields Limited amounting to Rs.2265.79 lakhs ( Rs. 1851.36
lakhs) valued at residual 5%, have not been physically verified.
Against which there is a provision of Rs.645.93 lakhs (Rs.457.62
lakhs).
3.10 In Central Coalfields Limited, provision of Rs. 18.26 lakhs
(Rs.618.92 lakhs) has been made during the year for
unserviceable/damaged/obsolete stores and also for Stores & Spares
unmoved for five years. The provision of Rs.3159.24 lakhs (Rs. 4086.47
lakhs) after withdrawal of excess provision of Rs.945.49 lakhs as on
31.03.2009 is considered adequate.
3.11 Fixed assets comprising of Plant & Machinery of Rs.218.99 lakhs
related to building and other assets of Rs. 1625.37 lakhs, both at book
value (WDV) as on 31.03.95 have been let to the Indian Institute of
Coal Management, a registered society under Societies Registration Act
1860, under cancellable operating lease agreement. Addition to these
assets from letting out to 31-03-2009 are Rs.370.35 lakhs on value of
plant & machinery and Rs.381.41 lakhs on value of building and other
assets. The cumulative provision for depreciation upto 31.03.2008
stood at Rs. 1084.45 lakhs (including depreciation charged for the
current year of Rs.69.25 lakhs). The net WDV of the leased assets as
per book as on 31-03-2008 is Rs.1638.83 lakhs.
3.12 As per lease agreement dated 31st March 1993 executed with
Dishergarh Power Supply Company Ltd., Eastern Coalfields Limited leased
out 2X10MW Chinakuri Thermal Power station including land, building,
plant & machinery etc. The lease agreement is for 20 years from the
commencement of lease w.e.f. 01-04-1991. The gross value of Power
Plant, Building and other assets is Rs. 4024.00 lakhs (Rs.4024.00
lakhs); Rs. 1019.64 lakhs (Rs.1019.64 lakhs) and Rs.772.61 lakhs
(Rs.772.61 lakhs) respectively. The cumulative depreciation upto
31.03.09 against the abovementioned assets is Rs. 3806.84 Lakhs (Rs.
3700.471akhs); Rs.575.60 Lakhs ( Rs.544.35 lakhs) and Rs. 612.72 Lakhs
(Rs. 5 84.67 lakhs) respectively.
3.13 The lease rental for the year Rs.350 lakhs (Rs.350 lakhs) has been
received.
3.14 In terms of license agreement dated 19th day of March 2001
executed with M/s Appollo Hospital Enterprise Ltd. Chennai, South
Eastern Coalfields Ltd has granted a right to occupy and use the fully
constructed main hospital building measuring 2,97,099.74 sq. ft. and
the residential quarters measuring 55,333 sq. ft. with super structures
on the land such as sub station building, sewerage treatment plant and
pump house. The cost of the gross assets is Rs.3132.21 lakhs
(Rs.3132,21 lakhs) against which cumulative depreciation is Rs. 550.84
lakhs (Rs. 494.84 lakhs). The license agreement provides for a lease
period of 30 years from the effective date of commencement of lease
i.e. November 2001. The future minimum lease payments in the aggregate
during the period of lease are Rs.3249.53 lakhs (Rs. 3585.42 lakhs)
The lease rental payable is accounted for as per agreement. During the
year Rs.237.00 Lakhs (Rs. 249.00 lakhs) has been accounted for against
the said lease rent.
3.15 Pending receipt of option from the land oustees, on account of
resettlement compensation payable, based on past experience, Rs.377.49
lakh have been capitalized, by Northern Coalfields Limited, as the cost
of leasehold land, on an estimated basis.
4. CAPITAL-WORK-IN-PROGRESS
4.1 Provision has been made on Plant & Machinery which have not been
put to use for more than three years and on incomplete civil jobs lying
for more than four years at the rates of depreciation which would have
been otherwise applicable to such items.
4.2 "Prospecting & Boring" and also Develooment shown under
Caoital-ifekdn-Progress mostly relates to jobs awaiting completion.
5. DEVELOPMENT EXPENDITURE
Expenditure relating to projects yet to be sanctioned or construction
yet to be taken up has been carried forward under "Prospecting & Boring
under construction". Development expenditure of South Eastern
Coalfields Limited has been shown in the accounts after deduction of
Rs. 1154.79 lakhs (Rs.925.19 lakhs) being sale of coal from development
mines and Rs.57.36 lakhs (Rs. 32,33 lakhs) being closing stock of coal
at development mines.
6. INVENTORY
6.1 Coal of 4713 61 MT mixed with matti etc. is non-vendable and has
been taken at NIL value by Eastern Coalfields Ltd.
6.2 Shortage of coal at Rajmahal OCP of 19.54 lakhs ton including fired
stock valued at Rs. 63 85.73 lakhs was accounted for by Eastern
Coalfields Limited in accounts of 2007- 08 for which enquiry is in
progress.
6.3 Inventories of Bharat Coking Coal Ltd do not include 0.91 lakhs
tones of slurry stock flown out of Washery premises and lying on land
not belonging to the company (Dugda Washery 0.54 lakh tones and Barora
Washery 0.37 lakh tones).
6.4 A provision of Rs.210.00 lakhs was made in the accounts of 2006-07
pending investigation of shortage/difference in the closing stock of
raw coal as on 31.03.07 in between the Kathara colliery and Kathara
washery under Central Coalfields Limited. The said provision has been
retained as on 31.03.2009 as considered necessary.
6.5 Some blocks at Western Coalfields Limited are held for sale. In
conformity with As-2 expenses on Agarzari block of Chandrapur Area
falling in this category amounting to Rs.99.11 lakhs have been
transferred to Inventory schedule and for similar reasons, in Nagpur
Area an amount of Rs.403.01 lakhs has been transferred to Inventory
from Capital Work-in-progress.
Similarly, prospecting, boring and development expenditure of Mahanadi
Coalfields Limited on allotted non-CIL blocks meant for sale amounting
to Rs. 1054.51 lakhs has been shown as Inventories at cost.
7.0 SUNDRY DEBTORS
7.1 At Western Coalfields Limited, Ministry of Power, Government of
India, had advised Madhya Pradesh Power Generation Corporation Ltd. to
securitise outstanding principal and interest upto 30-09-2001 of
Rs.17194.00 lakhs and Rs. 2199.00 lakhs respectively.
MPGCL has securitised Rs.12391 lakhs in 2003 leaving Rs.7002 lakhs as
un-securitised.
7.2 In Western Coalfields Ltd. The Government of Madhya Pradesh by
Gazette Notification dated 30.09.2005 imposed a new tax under "Madhya
Pradesh Gramin Avsanrachana Tatha Sadak Vikas Adhiniyam, 2005". This
adhiniyam provides for charging of tax @ 5% on annual value w.e.f.
30.09.2005. Some consumers as well as WCL moved the Honble High Court
of Madhya Pradesh, Jabalpur and obtained interim relief. As per the
interim order da^ed 15.02.2006, the Honble High Court, Jabalpur had
directed the Company not to deposit this tax to the State Government
but to keep it in a fixed deposit. The matter was later dismissed by
the Jabalpur High Court in favour of the MP Government. WCL has filed a
Writ before the honble Supreme Court and the matter is still sub
judice. Total amount due as per bills raised is Rs. 13484.48 lacs (P.Y.
Rs.10838.21 lacs). An amount of Rs.435.71 Lacs collected from coal
consumers towards Sales/Entry Tax on Gramin Tax has not been deposited
due to dispute regarding Gramin Tax.
SAIL has not made payment of this tax, totaling Rs.1917 lacs upto
31.03.2009, to the Company but consented to abide by decision of
honble Supreme Court. For other consumers the Company has received
upto 31.03.2009 an amount of Rs.1688 lacs on this a/c. which is shown
under Advances and Deposits from Customers. An amount of Rs. 319 lacs
against the receipt of Rs.319 lacs on account of MP Tax during the year
2008- 09 is deposited in fixed deposit as on 31.03.2009. Interest on
such fixed deposits is treated as liability by WCL. The case is now
pending in the honble Supreme Court of India.
7.3 Sundry debtors balances are subject to confirmation by the parties.
8.0 LOANS AND ADVANCES
8.1 Out of Rs.492.16 lakhs deposited with SEC Railway by Mahandai
Coalfields Limited for railway overbridge, Rs.333.94 lakhs has been
adjusted till date as asset not belonging to company. The balance of
Rs. 158.22 lakhs (Rs. 167.16 lakhs) is to be adjusted on receipt of
final utilisation certificate from SEC railway.
8.2 An amount of Rs.3335.94 lakhs has been deposited by Mahanadi
Coalfields Limited with East Coast Railways for renovation of railway
tracks as depository work in Jagannath area. The utilization report
thereof upto 31.03.2009 has not been submitted by railways. On the
basis of estimation given by the companys the executive department,
Rs. 783.47 lakhs has been charged to revenue giving corresponding
credit to liability.
An amount of Rs.880.81 lakhs is paid to SEC Railway as advance for line
electrification for Hingula area.
8.3 The debit balance in tax deducted at source of Rs.1469.85 lakhs
(Rs. 1318.03 lakhs) under the head Loans & Advances of Eastern
Coalfields Limited represent incom6 tax deducted for several years but
remaining un refunded.
8.4 The expenditure incurred for carrying out exploratory drilling in
blocks tinder Eastern Coalfields Ltd. command area by CMPDIL as per the
approved Annual Action Plan of Coal India Limited and its subsidiaries,
in view of critically week financial position of Eastern Coalfields
Limited, now under BEFR, shall initially be borne by Coal India Limited
and accounted for suitably in holding companys books for recovery
thereof only when mining activities in that block is projectised and
implemented. Such expenses on exploratory drilling in blocks under
command area of Eastern Coalfields Limited is to be funded by holding
company and awaiting adjustments shall continue to reflect in holding
companys book for 5 years since they were incurred and accounted for
thereafter if remains unresolved / unadjusted for want of
projectisation of mining activities, such unadjusted amounts shall be
written off in the books of holding company.
The total amount on this account as on 31-03-09 stood at Rs. 5007.67
lakhs including current year addition of Rs. 1236.94 lakhs. However, as
an abundant precaution it has been fully provided.
Further, considering the expiry of five years from the date of
incurring and accounting of such expenses an amount of Rs. 675.51 lacs
(Rs.950.861akhs), for which full provision exists on the date has been
written off.
8.5 Notices were served on Western Coalfields Limited during 2007-08 on
HQ, Umrer & Nagpur Areas raising demands of income tax on deemed
perks for rental accommodation provided to employees for the period
2004-05 to 2006-07. The company filed appeals before the CIT (Appeals),
Nagpur who insisted on payment of the demand with interest in order to
admit the appeals. Accordingly, the company has paid the demand of Rs.
338.84 lakhs during 2007-08 on account of HQ, Umrer & Nagpur Areas.
The same has been booked under Advances Recoverable from Employees. A
total of 75 appeals were filed and the same were disposed off in favour
of the company. However, the income tax department filed writ before
the Bombay High Court, Nagpur Bench which is pending for want of COD
permission to the department.
8.6 Loans and Advance includes Rs.342.99 lakhs (Rs.342.99 lakhs) paid
by Mahanadi Coalfields Limited to GRIDCO/OPTCL for construction of
220KV overhead line and 3/20 MVA 220 KVA sub-station at Garjanbahal.
8.7 Advance payment for Sales tax of Rs.3710.46 lakhs (Rs. 2591.57
lakhs) by Northern Coalfields Limited includes Sales Tax and Entry Tax
paid under protest of Rs.2437.90 lakhs (Rs.2116.53 lakhs), which
pertains to the cases under appeal.
8.8 Loans and Advances include an amount of (USD 2.6544 million) Rs J
358.74 lakhs, being 15% advance against supply of Plant & Machinery to
WJ. Area of Bharat Coking Coal Limited valuing USD 17.692 million by
M/s, Zhenzhou Coal Mining Machinery (Group) Co.Ltd. China. Advance is
supported by bank guarantee.
8.9 Year-end provision of Eastern Coalfields Limited includes Rs.275.84
lakhs (Rs.275.84 lakhs) and net un-linked debit and credit balances of
advance to suppliers and Sundry Creditors appearing prior to March 1985
has been adjusted / written off as approved in 228th meeting of Board
of Directors of ECL held on 22nd June 2009.
8.10 In Eastern Coalfields Limited, amount of Rs. 1585.78 lakhs (Rs.
1588.86 lakhs) for net un-reconciled advance to suppliers, contractors,
employees with the corresponding liabilities appearing in the accounts
after 31s March,1985.
9.0 CASH AND BANK BALANCE
It includes Rs. 116.12 lakhs (including OREEP Tax), out of which
Rs.96.60 lakhs represent amount received by Mahanadi Coalfields Limited
from Honble Supreme Court of India towards corpus fund of trust and
the balance of Rs. 19.52 lakhs being interest thereon. As per
directives of the court, the interest income is to be utilised for
welfare of employees. The trust is yet to be formed. It also includes
Rs.20.00 lakh deposits with SBI, Mahanadi Coal Complex earmarked for
corpus fund of Utkal Rangamanch Trust, interest income of which is
disbursed to the trust.
10. CURRENT LIABILITIES
10.1 Advance from customers includes cess on coal which includes
principal of Rs. 840.27 lakhs (net of payments) and interest of Rs.
947.11 (net of payments) against receipt from Government of Orissa in
the year 2005-06 by Mahanadi Coalfields Limited as per directive of
Honble Supreme Court judgement dated 31-07-2001. The company has
provided interest of Rs. 100.83 lakhs (Rs.100.84 lakhs) calculated at
the rate of 12% for the unpaid principal amount of cess liability as
the money is refundable to the customers. The total liability becomes
Rs.2142.88 lakhs (Rs.2042.05 lakhs) as at 31-03-2009. The company has
not identified the customers / parties to whom the refund is to be
made. Finalisation of modalities for refunding the same to the
customers/ parties is yet to be done.
10.2 The Current Liabilities and Provision includes Rs. 746.73 lakhs
(Rs.800.30 lakhs) on account of provision taken towards stowing and
stabilization of unstable workings of Deulbera colliery under Mahanadi
Coalfields Limited. This provision is in addition to the current year
expenditure (other than expenditure on Salaries & Wages) of Rs, 53.57
lakhs (Rs.144.11 lakhs) against comprehensive scheme of Rs.944.41 lakhs
(Rs.944.41 lakhs) (excluding- Salaries & Wages). As the stabilization
of unstable workings of Deulbera colliery through sand stowing is being
carried out by existing departmental manpower, Salaries and Wages for
Rs.1643.53 lakhs (Rs.1643.53 lakhs) being part of the scheme has not
been provided for.
10.3 In the process of making payment of cess by Eastern Coalfields
Limited on the annual value of coal bearing land based on average
production of preceding two years valuing at a rate prevailing on
31-03-2008 and realization made from customers on the value of
despatches of coal there remains a balance accumulating to Rs.91797.42
lakhs (Rs. 86227.44 lakhs), which has been shown in Cess Equalisation
Account under Current Liabilities and Provision. There is an additional
demand of Rs. 26003 lakhs (Rs. 26003 lakhs) arising out of the
assessment made upto 2001-02 which has been shown as Contingent
Liability.
10.4 Bazaar fees collected by Bharat Coking Coal Limited on sale of
coal/coke as per Gazettee Notification no.34 at 18th January 2006 but
the same has not been deposited to the appropriate authority as the
matter is subjudice at Jharkahnd High Court under case no 6507 of 2006.
10.5 Interest receivable / payable is not accounted for as revised
agreement in respect of price of rejects and power tariff, with DLF is
not yet finalized at Bharat Coking Coal Ltd. The matter is also pending
before an arbitrator. However, interest due to delay in payment to DLF
has been provisionally determined as Rs. 830.76 lakhs upto financial
year 2008-09.
10.6 Singrauli Municipal Authority has claimed license and composite
fees for construction of building of Rs. 986.62 lakhs (Rs.986.62 lakhs)
from Northern Coalfields Limited and the same is not provided for in
the accounts. However, Rs.600.00 lakhs has been deposited under
protest.
10.7 From Northern Coalfields Ltd, Government of Madhya Pradeash has
claimed Land Revenue Premium for an amount of Rs. 6213.04 lakhs (
6213.04 lakhs ) against which an amount of Rs. 300.00 lakhs has been
deposited under protest.
10.8 SSADA cess on sale of coal has not been collected from a few
parties by Northern Coalfields Limited after the stay obtained by the
respective parties from Honble High Court, Allahabad. The amount not
collected on this account amounts to Rs. 399.07 lakhs (Rs. 339.26
lakhs) upto 31.03.2009.
10.9 Central excise department had been issuing show cause notice over
the years with regard to CWS, Tadali of Western Coalfields Limited,
considering the workshop as under Factories Act instead of Mines Act
where eligibility exists for exemption. In this regard an appeal
pending before the Honble Supreme Court of India (CA no 8403-04/2003)
has been decided in favour of the company. The balance refund of
Rs.53.47 lakhs is pending clearance of CESTAT though necessary COD
permission has been obtained and the appeals before CESTAT revived
during the year.
10.10 By virtue of enactment of Cess and Other Taxes on mineral
Validation Act, 1992, Central Coalfields Limited and Western Coalfields
Limited raised supplementary bills on customers upto 04.04.91. An
amount of Rs. 10328.70 lakhs (Rs.10328.70 lakhs) has been shown as
liability for cess on royalty under the head Current Liabilities &
Provisions. In view of the judgement of Honble High Court, Patna,
Ranchi, Bench in writ petition no. CWJC/1280 of 1992, cess is not
payable. However, a special leave petition is pending in Supreme Court
against it.
10.11 The Government of Madhya Pradesh had passed Madhay Pradesh
Gramin Avsanrachna Tatha Sadak Vikash Adhiniyam 2005 which provided
for charging of Gramin Tax @5% on annual value of acquired coal bearing
land / mineral land from financial year 2005-06 onwards. This tax has
been duly collected by Western Coalfields Limited from coal customers.
Some of the consumers had moved the Madhya Pradesh High Court at
Jabalpur and as per the honble High Court of Jabalpurs interim order
dated 15.02.2006, the company was directed not to deposit this tax to
state government but to keep it in the Fixed Deposit. Pending final
decision of the court, the company has not deposited this 5% Gramin tax
but kept them in FDs at HQ. The amount so billed under this head till
31.03.2009is RsJ3484.48 lakhs (Rs. 10838.21 lakhs).
10.12 Northern Coalfields Ltd has received a demand notice of Rs.272.45
lakh from the Service Tax Authority regarding transportation of coal by
road for the period 01.01.2005 to 30.09.2006 in respect of MP projects
of NCL. As per legal opinion obtained, no service tax is payable on
account of transportation of coal and as such an appeal has been filed
against the above order. However, the company has deposited Rs.687.67
lakhs (Rs 505.81 lakhs) for the period from 01.01.05 to 31.03.09 under
protest.
10.13 The Company has billed Rs.27680.67 Lakhs upto 31.03.2009.to
customers towards MP Gramin Adhosanrachana Tatha Sadak Vikas Upkar
levied by Madhya Pradesh Government. The levy of cess by the Madhya
Pradesh Government has been challenged before the Honble Supreme Court
by way of Special Leave petition and hence the amount has not been paid
to Madhya Pradesh Government.
The validity of MP Sadak Vikash Upkar has been challenged in the Court
of law by certain customers in SECL and the case is subjudice. However
SECL is recovering the tax and kept in books of Accounts as a
liabilities and the amount has been invested in interest bearing CLTD
w.e.f. April 2009.
The liability towards interest payment by SECL for the period from
9.12.2005 to 31.03.2009 is not clear. Hence no provision is made in
books however if any adverse decision comes then company may have to
incur liability of interest which is unascertained as on date.
The Company has also billed Rs.30489.95 Lakhs upto 31.03.2009 on
customers towards Chhatisgarh (Adhosanrachana Vikas Evem Paryavaran)
Upkar levied by Chhatisgarh Government. The Honble High Court in its
interim order Dt. 26.10.07 has permitted the Chhatisgarh Government to
collect the Taxes from the company subject to final result of the writ
petition and the company has deposited an amount of Rs.29596.39 Lakhs
upto 31.03.2009.
The Company has billed Rs. 2883.06 Lakhs upto 31.03.2009 on customers
towards Terminal Tax levied by Madhya Pradesh Government. The levy of
this Cess by the Madhya Pradesh Government has been challenged in the
Honble High Court of Jabalpur. As per Interim Order of the Court
Rs.929.66 Lakhs has been deposited.
11.0 FOREIGN CURRENCY LOAN
11.1 The foreign currency loans drawn from IBRD and JBIC banks on
account of Coal Sector Rehabilitation Project to be implemented in
various subsidiaries has been shown under the head Unsecured Loan.
In terms of agreement with IBRD and JBIC banks, Coal India Ltd has
entered into back to back loan agreements with its participating
subsidiaries and loans including effect of exchange rate variation
thereon have been shown in the accounts.
Borrowing and other costs (including exchange difference) in respect of
foreign currency loans obtained for subsidiaries have been recovered
from the respective subsidiary companies. The company has entered into
swap transactions against a portion of above stated borrowing and
interest thereon. Gains/ losses arising out of swap transactions
(except gain/loss on principal only swap which are being recovered from
the respective subsidiary companies) are being carried as Reserve for
foreign currency transactions. Net result of the said swap transactions
will be recovered from/paid to subsidiary companies upon completion of
repayment of foreign currency loans.
11.2 The overall Marked to Market position of the existing hedge
transactions (net of the positive values) as on 31.03.2009 stood at Rs.
1676.00 lakhs (negative). However, the negative Marked to Market
valuation of outstanding position involving six individual Foreign
Exchange transactions as on 31.03.2009 before netting up with
transactions having positive values stood at Rs.1913.00 lakhs (Rs.
2330.00 lakhs).
Further, the Accounting Standard - 30 on Financial Instruments :
Recognition and Measurement issued by Institute of Chartered
Accountants of India (ICAI) has been issued with recommendatory
implementation from 01-04-2009 and mandatory from 01- 04-2011. However,
following the announcement of ICAI on accounting for derivatives the
value of negative marked to market position of foreign exchange
transactions amounting to Rs. 2330.00 lakhs had been provided for in
the Accounts of 2007-08. Considering the negative Marked to Market as
on 31-03-2009, the provision so created as aforesaid has been suitably
adjusted.
11.3 The carrying cost of the fixed assets and corresponding stores
consumption in World Bank aided projects have been adjusted to the
extent of foreign exchange fluctuations in case of loans from World
Bank except in case of Central Coalfields Limited where the adverse
impact of Rs.3257.21 lacs has been debited to Profit & Loss account.
12 PROFIT & LOSS ACCOUNT
12.1 Total claim of Rs. 4766.84 lakhs was lodged with the Director of
Electricity, Govt, of West Bengal, in support of relief/concession
required for revival of ECL according to BIFRs sanctioned scheme vide
its letter no. 40/PA/PR.Secy./IRPE dated 30.08.2005. During the year
Rs.608.54 lakhs ( Rs, 1516.55 lakhs ) has been received and recovery of
the balance amount of Rs.2641.75 lakhs (Rs.3250.28 lakhs) are in
process.
12.4 The year-end liability of certain other employee benefits like
Life Cover Scheme, Settlement Allowance, Gross Personal Accident
Insurance Scheme, Leave Travel Concession, Medical Benefits for Retired
Executives, Compensation to dependants incase of mine accidental death
are valued on actuarial basis.
12.5 Except Central Coalfields Limited, the liabilities for two new
employee benefits viz. Retired Executives Medical Benefit Scheme and
Compensation to Dependants of deceased in mines accident have been
valued on actuarial basis from the current year. The cost based on
such actuarial valuation as at 31-03-09 has been adjusted in the income
statement of the current year.
12.6 Due to such valuation on actuarial of these two employee benefit
schemes the profit of the company reduced by Rs. 15214.52 Lakhs i.e.
Rs. 454.66 lakhs on account of medical benefit for retired executives
and Rs. 14759.86 on account of Compensation payable to Dependants of
deceased in mines accident.
12.3 Liability for some employee benefits viz,. VRS for non-executives,
Ex-gratia in lieu of employment on death in harness for employees, etc
have not been valued on actuarial basis.
13 INVESTMENT IN EASTERN COALFIELDS LIMITED AND BHARAT COKING COAL
LIMITED
13.1 Investment of the Company, in share capital of Bharat Coking Coal
Limited and Eastern Coalfields Limited which are long term in nature
amounted to Rs. 211800.00 lakhs ands Rs.221845.00 lakhs respectively as
on 31-03-2009. Eastern Coalfields Ltd and Bharat Coking Coal Limited
have become sick and are referred to BIFR under Sick Industrial
Companies (Special Provisions) Act, 1985. Plans for restructuring /
revival of Eastern Coalfields Limited and Bharat Coking Coal Limited
are in an advanced stage. Scheme recommending restructuring/revival of
Eastern Coalfields Limited has been formulated by Operating Agency and
is under consideration of BIFR. In case of Bharat Coking Coal Limited,
the plan for restructing/revival has been formulated and has been
reviewed by an external agency.
The same has since been approved by the CIL Board and is under
consideration of the competent authority. Once the revival schemes are
finalised and implemented the financial position of these Companies
will substantially improve which will turn them into viable Companies.
In view of the above the decline in the value of investments, if any,
is temporary in nature, and hence, are valued at cost. On the same
analogy i.e. these subsidiaries on the above stated grounds will turn
into viable companies; no provision on the loans outstanding from these
subsidiaries are considered.
14 EFFECT OF CHANGES IN ACCOUNTING POLICY
14.1 The useful life of LHD and SDL have been reviewed during the year.
Consequently, depreciation rates of those categories have been revised,
resulting in additional charge of depreciation of Rs.5200.61 lalch and
profit for the year is lower to that extent.
14.2 Due to change in policy of the company for capitalization of land,
the cash compensation expenses and resettlement expenses incurred
during the year has been capitalized. Hence, the profit for the year
has been increased to the extent of Rs.247.62 lakh.
14.3 Due to chage in the method to determine the value of closing stock
of coal on full absorption cost basis (normal capacity), the current
years profit is decreased by Rs.316.56 lakhs.
15 DISCONTINUING OPERATION
15.1 CBE Plant, Bhandra - Western Coalfields Limited:
The plant used to manufacture Nitro-Glycerine based permitted
explosives used in the underground mines of the company, Consequent
upon decision of the Government of India to discontinue / ban
production of NG-based explosives in the country and its adoption by
the Board of Ordinance Factories of India, the joint venture partner of
the plant, the plant was closed on and from 28-04-03.
Coal India Limited had given its approval for disposal of the plant and
the company in its 197lh Board meeting held on 19-04-2006 had approved
the disposal of plant & machinery by tendering /e-auction and
accordingly the plant & machineries along with related stores & spares
have been disposed of during the year by auction through MSTC. The net
block of assets pending ^disposal is Rs. 11.84 lakhs. The liability
towards overheads after closure of the Plant till 31-03-2009 for
maintenance and upkeep of the Plant is Rs.39.56 lakhs.
The revenue expenses incurred during the current year is Rs. 0.0(Rs.2.69 lakhs). Since,
Hence, there, is no question of profit/loss. There is a net cash
outflow attributable to operating, investing and financing of
discontinuance to the tune of Rs.0.01 lakhs (Rs, 0.23 hikh.s).
15.2 DFD Plant, I-Iinganghat, Western Coalfields Limited:
The plant used to manufacture Coal Briquettes from raw coal for
domestic fuel purposes. Consequent upon non-viability of the plant as
per the decision of the Board, the plant was closed in 1994.
The disposal of the plant is under process and the exact date of
completion of discontinuance is not determinable as of now. The net
block of assets pending disposal is Rs.2.64 lakhs and the liability
towards Municipal Taxes is Rs.2.42 lakhs. The company has applied for
the waiver of taxes to the authority. The revenue expenses incurred
during the year is Rs. 0.52 lakhs (Rs. 1.10 lakhs). Since, the Plant is
inoperative for the past 10 years and the final disposal of the plant
is yet to be done, there is no question of profit/loss. There is no
cash outflow attributable to operating, investing and financing of ¦
discontinuance.
16. GENERAL
16.1 AmountRs. 31406.73 Lakhs (Rs. 34778.65 Lakhs ) has been provided
in the accounts with the "Report of the Committee on Methodology to be
adopted in connection with the provision for back filling and other
necessary jobs to meet environmental requirements whether covered under
EMP or not", an amount equivalent to Rs.75,000/- per hectare each for
technical and biological reclamation of the area excavated at the end
of the year less the pro-rata area, which are not required to be
backfilled.
16.2 The applicability of the Micro, Small and Medium Enterprises
Development Act,2006 (MSMEDA, 2006) to the Company for the purpose of
disclosure and other requirements are being examined, pending which,
the disclosure required under MSMEDA,2006 has not been made.
16.4 As per significant Accounting Policy for opencast mine with a
rated capacity of 1 million tones or above, OBR accounting is to be
done. However, it has not been followed in case of Amlo project of
Central Coalfields Limited since inception i.e. during the last 22
years.
16.5 There is an un-reconciled difference of Rs. 19.39 lakhs as on
31.03.2009 against the bank balance of Western Coalfields Limited as
per books with that of bank statement of state Bank of Indhi, Kings way
branch, Niigpur. The records arc under re-verification lo reconcile the
same.
17. FINANCIAL REPORTING OF INTEREST IN JOINT VENTURE
17.1 As per directives from the Mini.sliry of Con I, the company has
enlered inlo n Joint Venture Agreement (J VA) on 30.06.2007 with
Neyvcii Lignite Corporation Limited and Hindnlco Industries, with the
mnin objective lo enrry out; coal mining nclivHy jointly (it Tnliibirn
II mul III eon! MnekN mi n Mingle mine for deployment of optimum
technology and conservation of coal. The expenditure incurred in this
regard is booked under the head Prospecting and Boring in the books of
IB Valley Area.
17.2 Further as per the directives from the Ministry of Coal, the
company has entered into another Joint Venture Agreement on 12.11.07
with JSW Steel Ltd, JSW Energy Ltd, Jindal Stainless Ltd and Shyam DRI
Power Ltd for coal mining activity jointly at Utkal-
A and Gopalprasad (West). The expenditure in these projects so far
incurred by the company has been booked under the head Prospecting &
Boring in the books of Hingula Area. Pending identification of the
expenditure in detail, these have not been transferred to the
respective Joint Venture Companies.
17.3 CIL has entered into a Memorandum of Understanding (vide approval
from its Board in 237th meeting held on 24lh November, 2007) regarding
formation of Special Purpose Vehicle (SPV) through joint venture
involving CIL/SAIL/RINL/NTPC & NDMC for acquisition of coal properties
abroad. The formation of the SPV had been approved by Govt of India
vide its approval dated 8th November 2007.
As per agreement, CIL would invest Rs.1000 crores in the SPV. The
registration of company for the purpose of SPV is at an advanced stage,
and till 31.03.2009 CIL has paid a sum of Rs.50.00 lakhs towards its
share for initial expenses (pre-incorporation). Pending the
finalisation of formation of the company for the SPV, the initial
contribution in the SPV has been shown as investment in SPV in the
Loans and Advance Schedule.
18.4 The company had given counter guarantee to Government of India for
loans obtained from JBIC & IBRD banks and on lent to its subsidiaries,
outstanding balance of which stood at Rs.90076.66 lakhs and Rs.88585.83
lakhs respectively.
Further, the company has also given guarantee for loans obtained by
subsidiaries the outstanding balance of which as on 31.03.2009 stood at
Rs. 17028.41 lakhs (Rs. 13726.27 lakhs).
18.5 Outstanding Deferred Payment Guarantee issued by Banks amounted to
Rs. 1385.77 Lakhs (Rs. 1860.71 lakhs)
Mar 31, 2008
Not Available
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