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 is H4657 crore (P.Y. H4657 crore) against which the accumulated loss is H872.87 crore ( P.Y. H1383.23 crore). The accumulated loss has come down to H872.87 crore from H4106.03 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 is H4269.42 crore (P.Y. H4269.42 crore) against which the accumulated loss is H1725.55 crore (P. Y. H2455.71 crore). The accumulated loss has come to H1725.55 crore from H2716.00 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)
Coal India Limited, has formed a 100% owned Subsidiary in Republic of Mozambique, named “Coal India Africana Limitada” to explore non-coking coal properties in Mozambique. The paid up capital (known as “Quota Capital”) is H 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 Government 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 Private Limited
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 Private Limited was incorporated under Companies Act, 1956 on 20th May,2009 initially with an authorised capital of H1.00 crore and paid up capital of H0.70 crore. The authorised Capital and paid up Capital as on 31.03.2023 stood at H3500.00 crore and H1460.29 crore respectively. Out of above paid up capital, Coal India Limited is owning 0.19% share i.e. H 2.80 crore face value of equity shares.
4. Investment in CIL NTPC Urja Private Limited
CIL NTPC Urja Private Limited, 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 Limited is presently holding 50% equity shares of face value of H0.08 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 H4200.00 crore. Presently Coal India Limited has invested H805.48 crore (i.e. 33.33%) in the joint venture company upto 31-03-2023.
6. Investment in Hindustan Urvarak and Rasayan Limited
By virtue of agreement dated 16th May, 2016 made between CIL and NTPC Limited, 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 H 5300.00 crore. Presently Coal India Limited has invested H 2295.96 crore (i.e. 33.33%) in the joint venture company upto 31-03-2023.
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 H0.10 crore. Presently Coal India LImited has invested H 0.01 crore (i.e. 50%) in the joint venture company upto 31-03-2023.
8. Particulars of investment as required in terms of section 186(4) of the Companies Act,2013, have been disclosed under note no.7 above.
2. Deposit in Bank under Shifting and Rehabilitation Fund scheme
Following the direction of the Ministry of Coal, the Company has setup a fund for implementation of action plan for shifting and rehabilitation, dealing with fire and stabilization of unstable areas of Eastern Coalfields Limited (ECL) and Bharat Coking Coal Limited (BCCL). The fund is utilized (ECL and BCCL) based on implementation of approved projects in this respect. The coal producing subsidiaries of CIL are making a contribution of H6/- 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 Limited entered into a Consortium Agreement with M/s BEML Limited 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 H 100 crore towards the said acquisition based on the order passed by Hon'ble High Court of Calcutta. An amount was paid towards bid consideration and other miscellaneous expenditure H 35.34 crore (P.Y. H 34.96 crore). 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 purpose of Joint Venture 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.
4. The above include H300 crore to be released from escrow and transfer to the company’s fund being the amount equivalent to the liability discharged by the company.
1. Other Deposits and Advances includes H 20 crore (P.Y. H 20 crore) for income tax paid under protest.
2. Represents provisions of H 2.27 crore (P.Y. H 2.27 crore) against deposit of realisation from sale of seize coal stock in the custody of Margherita Treasury. (Refer note - 38(7) (P))
3. Other Deposit and Receivables includes H98.86 crore ((P.Y. H 57.9 crore) for gratuity fund and leave fund net of liabilities.
4. Represent H 76.81 crore (P.Y. H59.79 crore) in respect of input tax credit relating to GST paid on input materials/services available for utilisation against the GST on output. This to a large extent includes GST on royalty against mining operation paid under Reverse Charge Mechanism (RCM) at rate of 18% against which the recovery is limited to 5% being the rate of duty payable on coal. The amount getting accumulated due to inverted tax structure even though not refundable as per notification issued in this respect, is carried forward considering that there is no time limit for utilising the same.
Hence, the number of shares held by Government of India stood at 4075634553 i.e. 66.13% of the total 6162728327 number of shares outstanding as on 31-03-2023.
4. The Company has only one class of equity shares having a face value H10/- 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. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the Annual General Meeting. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the company after payment of all preferential amount, in proportion to their shareholdings.
2. General Reserve:- General reserve is used from time to time to transfer profits from retained earnings for appropriation purposes.
3. Retained Earnings:- Retained Earnings are the profits of the Group earned till date net of appropriations.
Retained Earnings includes fair value change in investment in mutual fund which is notional/unrealised in nature and not available for distribution of dividend. The balance of H (0.50) crore as at 31-03-2023 and H 1.14 crore as at 31-03-2022.
4. Other Comprehensive Income:- Represents changes in the fair value of Actuarial Benefit of Gratuity and Post Retirement Medical Benefit.
5. Dividend
The Board of Directors of the company has recommended a final dividend of H 4 (40%) per equity share subject to approval in the forthcoming Annual General Meeting of the company. The 2nd interim dividend of H 5.25 (52.50%) per equity share and 1st interim dividend of H 15.00 (150%) per equity share were declared for the Financial Year 2022-23 on 31st January 2023 and 07th November 2022 respectively.
The company had declared a final dividend of H 3.00 (30%) per equity share and an interim dividend of H14 (140%) per equity share for the previous financial year.
In case of security on current assets:
Physical quantity of finished goods and work-in-progress are ascertained and taken from the production and other records maintained and are valued at each quarter based on the policy followed in this respect by the company. The Quarterly Return/ Statements submitted to banks for current assets include these inventories and figures of other current assets taken and compiled from the books and records and as such are in agreement therewith.
1. Pending finalization of the National Coal Wages Agreement (NCWA-XI) for Non-Executives, considering the total impact of the increase in all elements of salary & wages an estimated provision of H 41.14 crore (includes H 9.09 crore carried from earlier year) @ H 19,100/- per employee (Non-Executive) per month has been recognized for the period from 01.07.2021 to 31.03.2023 (P.Y. H 9.09 crore). The financial assumptions in the actuarial valuation of long-term benefits of the non-executive employees consider a 6.25% p.a. of increase in salary for all benefits set out in the formal terms of the plan which includes NCWA also. Also Refer footnote 1 to Note 28 Employee Benefits Expense.
2. Provision for Site Restoration/Mine Closure
The Company'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, so 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 above guidelines for preparation of mine closure plan, an escrow account has been opened. (Refer Note - 9)
The Company's pending litigation comprises of claim against the company and proceeding pending tax/statutory/ Government authorities. The Company has reviewed all its pending litigations and proceedings and has made adequate provisions, and disclosed the contingent liabilities, where applicable, in its Standalone Financial Statements. The Company does not expects the outcome of these proceedings to have a material impact on its financial position. Future cash outflows in respect of above are dependent upon the outcome of judgements/decisions.
Contingent Assets:- A contingent asset is a possible asset that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the entity. During the normal course of business, several unresolved claims are currently outstanding. The inflow of economic benefits, in respect of such claims cannot be measured due to uncertainties that surround the related events and circumstances.
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 31-032023 stood at H 163.73 crore (H158.22 crore) and H 4.58 crore (H4.93 crore) respectively.
(b) Commitments
Estimated amount of contracts remaining to be executed on capital account and not provided for H 17.28 crore (P.Y.H 10.39 crore) {net of capital advance of H44.23 crore (P.Y. H46.80 crore)}.
Other Commitment: H 235.58 crore (P.Y. H 87.45 crore)
Terms and condition of transaction with related parties
All transactions from related parties are made on terms similar in arm’s length transactions. Outstanding balances at the year end are unsecured and interest free and settlement of these occur in cash. The company has not recorded any impairment allowances in respect of receivables relating to amounts owed by related parties. This is used on the assessment undertaken in each financial year by examining the financial position of the related party and the market conditon in which the related parties operates.
3 Miscellaneous Information
a. Note - 1 and 2 represents Corporate information and Significant Accounting Policies respectively, Note 3 to 23 form part of the Balance Sheet as at 31-03-2023 and 24 to 37 form part of Statement of Profit and Loss for the year ended on that date. Note - 38 represents Additional Notes to the Financial Statements.
b. There is no system to ascertain and provide comprehensive list of transactions with struck off companies. However, based on the information to the extent available with the company, there were no transactions with the companies struck off under section 248 of the Companies Act, 2013
c. The Standalone Financial Statement, have been approved by the Board of Directors of the company in their meeting dated 07th May, 2023 for issue to the shareholders for their adoption.
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.
5 Financial Risk Management
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 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 (“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.
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 Limited 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 J430.00 crore, of which fund based limit is ?140.00 crore and non-fund based limit is J290.00 crore. Further, ?1000.00 crore was set up as Fund based limit and J5190.00 crore(P.Y.?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.
The Company has been sanctioned a term loan of J 364.30 crore 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 riska) 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.
6 Employee Benefits: Recognition and Measurement (Ind AS-19)(I) 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 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 H 0.20 crore 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/empanelled 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 H 25 lakhs except for specified diseases with no upper limit. The Scheme is funded through trust for group, maintained with Life Insurance Corporation of India. 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 non-executives (CPRMSE-NE) to provide medical care to the non-executives and their spouses and Divyang Child(ren) in Company hospital/empanelled 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 H 8 lakhs except for specified diseases with no upper limit. The Scheme is funded through trust for group, maintained with Life Insurance Corporation of India. The liability for the scheme is recognised based on actuarial valuation done at each reporting date.
(II) 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 Variable 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 and 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). The Scheme is funded through trust for group, maintained with Life Insurance Corporation of India. 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.
(III) Other Long Term Employee Benefitsa) Leave encashment
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 scheme is funded by qualifying insurance policies from Life Insurance Corporation of India. 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 the social security scheme, the Company has a Life Cover Scheme known as “Life Cover Scheme of Coal India Limited” (LCS) which covers all the executive and non-executive cadre employees. In case of death in service, an amount of H 1,25,000 is paid to the nominees under the scheme w.e.f 01.10.2017. The expected cost of the benefits is recognized 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 H 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 H 8000/- and H 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 H 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 H 0.02 crore 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 and loss.
(ii) Lease - as a lessor
(A) CIL has leased out the assets viz. land, building, structures, furniture and fixtures and other assets of Dankuni Coal Complex to South Eastern Coalfields Limited. The lease rent payable by SECL to CIL is H 0.15 crore per month.
(B) CIL has leased out the assets viz. land, building, structures, furniture and fixtures and other assets to IICM, Ranchi (Jharkhand). The lease rent payable by IICM to CIL is H 0.001 crore per month w.e.f. 01.04.2020.
(C) CIL has leased out the office premises in Delhi to Coal Controller Organisation (CCO) at H 0.08 crore per months w.e.f. 01.11.2021. The rent is enhanced by 5% every year.
(D) CIL (North Eastern Coalfields) has leased out land in Assam at nominal rent of H 0.0002 crore Per annum.
(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 Limited on behalf of Subsidiaries
As per existing practice, goods purchased by Coal India Limited 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 and to the best of their knowledge and belief , the value on realisation on current assets, loans and advances in the ordinary course of business would not be less than the amount at which they are stated in the Balance sheet. The debit/credit balances of parties are subject to confirmation and realisation thereof.
(k) Current Liabilities
Estimated liability has been provided where actual liability could not be measured.
(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 H1.17 crore 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 made operational.
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 sell 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 H 0.37 crore in FY 2020-21 and 3904.30 tonnes of coal amounting to H 1.93 crore in FY 2019-20 and collected Royalty of H 0.04 crore in FY 2020-21 and H 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 H 0.32 crore (Note-12).
Further, on the direction of Divisional Forest Officer, Digboi Division NEC has deposited amounting H 2.26 crore under the custody of Margherita Treasury. The management has also recognised the provision against such deposit in the Financial Statement (Refer Note 20)
(q) No funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person(s) or entity (ies), including foreign entities (“Intermediaries”) with the understanding, whether recorded in writing or otherwise, that the Intermediary shall lend or invest in party identified by or on behalf of the Company (Ultimate Beneficiaries). The Company has not received any fund from any party(s) (Funding Party) with the understanding that the Company shall whether, directly or indirectly lend or invest in other persons or entities identified by or on behalf of the funding party (“Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
(r) The Company's main business is Coal mining. All other activities of the company revolve around the main business. As such, there are no separate reportable segments for the company.
(s) Based on the information to the extent available with the company, there were no transactions with the companies struck off under section 248 of the Companies Act, 2013
(t) Figures for the previous year have been regrouped wherever necessary, in order to make them comparable.
(u) The Standalone Financial Statementt, have been reviewed and recommended by the Audit Committee and thereafter approved by the Board at their respective meeting held on 07th May, 2023. As required under Regulation 33 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Statutory Auditors have conducted audit of the Financial Statement for the For the Year Ended 31-03-2023.
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