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.
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)
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)
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
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
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
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
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
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
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
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.