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Coal India

BSE: 533278|NSE: COALINDIA|ISIN: INE522F01014|SECTOR: Mining & Minerals
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Notes to Accounts Year End : Mar '15
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
 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
 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
 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
 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
 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
 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
 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
 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
 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
 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
 - 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
 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
 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.
Source : Dion Global Solutions Limited
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