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Coal India Chairman's Speech > Engineering - Heavy > Chairman's Speech from Coal India - BSE: 533278, NSE: COALINDIA

Coal India

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Mar 16
Chairman's Speech (Coal India) Year : Mar '17


I am delighted to welcome you to the 43rd Annual General Meeting of Coal India Limited. The Directors’ Report and the Financial Statement for the year ended 31st March, 2017 together with the report of Statutory Auditors and report and review of Comptroller & Auditor General of India are already with you.

1. Importance of coal and Coal India Limited

There is a perceptible shift in the country in fortifying the energy options currently. Renewable energy sources like Solar and Wind are being explored, encouraged and added as energy upgrades to meet the growing energy demand in the country. As clean energy options they are welcome. The addition from these sources, to the energy mix, can be viewed as complementary but not competitive to coal’s role. They certainly can supplement but cannot substitute coal as preferred energy fuel, at least for now.

Coal has gotten immensely cleaner over the past generation. New and better ways are being found to extract energy from coal without sending its by products into the environment. HELE, that is, High Efficiency Low Emission technology is one such step in bringing down the emissions.

In India, what makes coal such a preferred energy fuel is its abundance, availability and affordability. The estimated geological resource of coal in India stood 315.149 Billion Tonnes as of 1 April, 2017. Around 73% of the entire power generated in the country is coal based.

Reliable energy is a correlate of economic growth and human development. Coal, being reliable, continues to serve the country as its primary commercial energy provider and will remain a mainstay in Indian power generation for decades to come. In fact, reliance on coal might increase in future.

Against this back backdrop, you will be proud to know that your company, Coal India Limited, spearheads the country’s coal production and produces 84% of the country’s entire coal output. It is Coal India which virtually fuels and empowers the power sector in the country.

2. Accomplishments 2016-17

Sustaining the growth arc in production and off-take, the company had exceeded half-a-Billion Tonne mark in both the physical facets for the second consecutive year.

During 2016-17 Coal India achieved coal production of 554.14 Million Tonnes (Mt). You will be pleased to know that company has increased its production by 15.39 million tonnes over last year. Coal production has taken a quantum jump of over 100 MTs in a five-year span, from the level of 452.21 Mt. recorded in 2012-13 to the current level. This scale of increase has never been achieved previously during a 5-year period.

The performance of NCL, CCL and BCCL merit specific mention as the three companies have achieved their respective AAP targets in coal production amid trying circumstances. SECL continues to be at the helm of coal production with 140 Mt. mark during the year, with MCL giving a close competitive run up with 139.21 Mt.

Raw coal off-take during FY 2017 was 543.32 MT, an increase of 8.82 MTs on a year-on-year comparison. NCL has achieved AAP target in off-take also despite heavy monsoon.

ECL, CCL, NCL, MCL and NEC achieved higher off-take than previous year.

Coal despatch to power utilities (including special forward e-Auction) during the year was 425.397 Mt. registering a growth of 3% compared to last year (413.11 Mt.). Despatch to NTPC clocked a growth of 4.9% over last year registering a materialization of 95% against FSA/MoU commitment. But for the regulated intake of coal by many of the GenCos, despatch of coal to power sector could have been higher.

Other positives:

1) You will be pleased to know that your company’s Gross Sales turnover was Rs.1,22,294.46 crores during the financial year 2016-17.

2) The underground production got major boost with the introduction of Long wall technology in Jhanjra Combined UG Mine (3.5 Mty.) of ECL in August’2016.

3) Coal India has been accredited with IS/ISO 9001:2015 (Quality Management System) and IS/ ISO 50001:2011 (Energy Management System) certification on 27th 0ctober’2016. It is now in the process of implementation of ISO 14001: 2015 (Environment Management System).

Financial Performance:

Coal India is one the highest contributors to the government ex-chequer both - Central and State governments. Coal India paid corporate taxes of Rs.8,942.70 crores to Government of India in FY 2016-17.

Coal India and its subsidiaries had also paid/adjusted Rs.44,070.22 crores Royalty, Cess, VAT, DMF and NMET and other levies.

During 2016-17, Coal India as a whole earned pre-tax profit of Rs.14,433.71 crores and a Profit after Tax of Rs.9,265.98 crores.

Your company had paid an interim dividend of Rs.12,352.76 crores @ Rs.19.90 per share. Of the total dividend, the share of Govt. of India was Rs.9,736.40 crores and the rest Rs.2,616.36 crores was given to other shareholders.

3. Strategies for Growth

Coal India is faced with meeting challenging targets in the years ahead. Going forward, in order to meet the production targets, Coal India needs to step up to a double digit growth rate.

To sustain the growth momentum in its production and off-take in future, Coal India has formulated following multi-pronged strategies.

(i) Critical Railway Links - Collaboration with State Governments & Railways.

In a move of ‘Synergy for Energy’ to achieve the planned growth in production and evacuation in future, your company has undertaken three major Railway Infrastructure Projects, implemented either by Railways or JV Companies formed between IRCON, Subsidiary Company and concerned Statement Government.

The three major Railway Infrastructure Projects are :-

(a) Tori - Shivpur-Kathotia New BG Line. This railway line caters to North Karanpura Area of CCL and it is Planned to evacuate about 32 MTY of coal once the line comes through.

(b) Jharsuguda - Barpali - Sardega Rail Link relates to the coalfields of MCL and the envisaged capacity evacuation is 70 MT/Y of coal from MCL.

(c) East Rail Corridor and East West rail corridor is planned for evacuation of coal of Mand- Raigarh and Korba - Gevra Coalfields of SECL respectively. In all, about 180 MTY of coal shall be evacuated through these two corridors.

(ii) Acquisition and Possession of land

During 2016-17, total of 3826.19 Hectares of land has been taken into possession in various subsidiaries of Coal India.

In all subsidiaries of Coal India, the major portion of land is acquired under the Coal Bearing Areas (Acquisition & Development) Act, 1957.

(iii) WEB Based Online Monitoring System

Following the introduction of Web based online monitoring of coal mining projects costing more than Rs.100 crores, so far, the monitoring of 69 projects costing more than Rs.150 crores and capacity 3.0 MTY and above has been completed during the 2016-17.

Additionally, monitoring of 67 coal mining projects (more than Rs.150 crores) has also been taken up during the year.

Critical issues are uploaded by CIL and its subsidiary companies on MOC’s e-CPMP portal which enables MOC to follow up with the state governments and associated ministries to accelerate EC & FC approvals.

(iv) Technology Development

a. Exploration capacity is planned to be augmented with more use of hydrostatic drills, geophysical loggers, 2D/3D Seismic Survey Technology and Optimization of number of coring boreholes based on the complexity of geology of the block.

b. Introduction of high capacity equipment, Operator Independent Truck Dispatch Systems, Vehicle Tracking System using GPS/GPRS, CHP and SILOS for faster loading and monitoring using laser scanners have been planned to augment coal production from opencast mines.

c. Introduction of Continuous Miner Technology on large scale, Long Wall Technology at selected places, Man Riding system in major mines and Use of Tele - monitoring techniques continued to receive priority to increase production from underground mines.

(v) System Improvements

Introduction of e-procurement of equipment and spares, e-tender of work and services, ERP implementation, establishment of connectivity, revision of guidelines and manuals, use of GPS for monitoring operational efficiency in road transport of coal have been planned to improve the overall system.

(vi) Customer Satisfaction

a) For enhanced customer satisfaction, special emphasis has been laid on Quality Management, deciding to declare 2017-18 as ‘Quality Year’.

b) To monitor coal quality internally, a portal has been designed by CIL to analyze coal quality on regular basis to capture entire life cycle of the sample.

c) The guidelines/SoP issued by MoC on third party sampling at loading ends had already been implemented through Central Institute of Mining and Fuel Research (CIMFR). Sampling for quantity covered under FSA is continuing across various loading points of coal companies.

d) For greater consumer satisfaction and to resolve consumer complaints, quality management is being following diligently. On-line filing for redressal of complaints has been initiated. 99.42% of consumer complaints have been resolved during the year 2016-17.

4. Green Initiatives

Environmental and eco-system restoration is a conscious effort in Coal India. Your company is aware of the importance of environmental issues and tries to the extent possible to restore the environment and Nature to its original pristine condition. Mandatory obligations apart, Coal India takes it upon itself as a moral obligation.

To promote Green Initiatives taken by GoI, CIL has submitted Green Energy Commitment letter to MNRE for developing 1000 MW Solar Power Projects. For implementation of these projects, CIL has signed MoU with Solar Energy Corporation of India (SECI).

Coal India has given its consent for floating of NIT for 800 MW Solar PV Project to Solar Energy Corporation of India (SECI). In the 1st Phase, land has been identified by SECI for setting up of 250 MW Solar PV Project in the Solar Park of Madhya Pradesh Government in Neemuch Area. The power generated from the Projects will be used for captive consumption.

Plantation and Green belt are developed through extensive tree plantation programmes every year by the subsidiaries of Coal India. The subsidiaries of CIL have planted around 94.015 million of trees covering an area over 37557.458 Ha. till March’2017 and during 2016-17, 1.66 million trees have been planted covering an area of 661.20 Ha.

5. Safety - Always a priority

Safety of miners and mines remains a top priority concern for Coal India. In pursuit of higher production, no compromise would be made on safety front. Safety of miners and mines override any other priority. Coal India has a well-defined safety policy to ensure safety in all mines and establishments. There are many preventive measures being pursued against accidents. Safety personnel are exposed to the best practices internationally and are sent for training abroad enabling them to hone up their skills and to sensitize them to approach safety issue in a scientific and holistic manner. We are also inculcating and monitoring a safety culture and attitude. The endeavor is to elevate safety standards radically further, since in this regard there could be only ‘Zero Accident’ as the goal.

6. Corporate Social Responsibility

Apart from improving the quality of lives of people, Coal India’s Corporate Social Responsibility initiatives also take them along towards the company’s goal by partnering with them. While pursuing the enhancement of Coal production, CSR is being undertaken for inclusive growth of villagers and the nearby affected communities. Coal India has spent Rs.489.67 crores in FY ending 2017 on CSR initiatives. Major activities undertaken are :

1) Training and preparation of Sports persons for Olympics and Para Olympics at project outlay of Rs.75 crores (Rs.25 crores per annum) through Ministry of Youth Affairs, Govt. of India.

2) Setting up 16 Continuous Ambient Air Quality Monitoring Stations in 10 cities at an outlay of Rs.65 crores.

7. Corporate governance

Coal India complied with the conditions of Corporate Governance, as stipulated in the Guidelines on Corporate Governance for Central Public Sector Enterprises (CPSEs) issued by the Department of Public Enterprises, Government of India and Regulation 34(3) read with schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 with the Stock Exchanges. As required under the guidelines and provisions, a separate section on Corporate Governance has been added to Directors’ Report and a Certificate regarding compliance of conditions of Corporate Governance has been obtained from a practising Company Secretary.

Coal India has conducted Secretarial Audit for 2016-17, as required under Companies Act 2013 and the Secretarial Audit Report is enclosed as a part of Directors report.

8. Vision

Coal India’s vision is to ensure that there is no shortage of coal in the country and to make the country self-reliant in coal. Coal India envisions to be a commercially viable company and endeavours to move ahead as a contemporary, professional, consumer friendly and successful corporate entity committed to national developmental goals. The vision also extends to dedicate itself to the service of the countrymen in providing the primary commercial energy in an affordable and environmentally friendly manner. Coal India aims to be not only a valued company but a company with values through constantly innovating on ease of doing business.

9. Acknowledgement

On behalf of your Company’s Board of Directors I wish to convey my deep gratitude to you, our valued shareholders, for your continued support and trust. This motivates us to excel in all our pursuits and constantly create value for you as well as for the nation.

I appreciate the unstinted support and valuable guidance received from the Ministry of Coal, Government of India. I also express my sincere thanks to other Central Government Ministries and Departments, State Governments, all employees, Trade Unions, Auditors, Consumers and Suppliers for their continuous co-operation.


Sutirtha Bhattacharya


(DIN 00423572)


Dated: 9th August’2017

Source : Dion Global Solutions Limited
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