coal india ltd Management discussions

1.0 INDUSTRY STRUCTURE AND DEVELOPMENT Coal in India and Coal India Limited

Coal remains the predominant indigenous energy source in the country. The energy security of the country and its prosperity are integrally linked to efficient and effective use of this abundant, affordable and dependent fuel, coal.

The dependability on coal may be gauged by the fact that about 55% of Indias installed power capacity is coal-based. CIL produces around 80% of Indias overall coal production in India and it alone meets to the tune of 40% of primary commercial energy requirement. As India aims to increase its power generation capacity in the coming years, a significant portion of the capacity is expected to come from coal itself.

As per Draft NITI Aayog Report (Nov21) on "Coal Demand in India - 2030 and beyond", demand for coal in electricity generation in India will remain and gain an increasing trend in absolute term in the near future. In percentage terms, the share of coal in energy mix is likely to reduce from current levels of 72% to 52% by 2030, 43% by 2035 and to 34% by 2040 due to high penetration of renewable in total energy mix. In terms of availability, coal is the most abundant fossil fuel available in India. The geological resources of coal in India are in excess of Rs352 Billion Tonnes (as on 01.04.21). At the current rate of production, the reserves are adequate to meet the demand.

Government of India envisages to provide access to clean, cheap and sustainable electricity to the entire population of the nation. Though the proportion of non-coal sources, particularly renewables, has increased over the last few years, yet coal shall remain the dominant fuel source for electricity generation in India in near future as well.

Today, India is the 2nd largest producer of coal in the world producing about 777.03 Million tonne (Mt) of coal in 2021-22. The coal sector in India is dominated by state producers including Coal India Limited and Singareni Collieries Company Limited. Coal India Limited (CIL), with its seven wholly-owned coal producing subsidiaries and one mine planning and Consultancy Company, is the single largest coal produc ng company in the world, with a total production of about 622.63 Mt during the fiscal 2021-22 which is about 80% of the total coal produced in the country.

2.0 SWOT ANALYSIS

Strengths	Weaknesses
Large Scale of operations allows economies in scale of production.	High cost of production in underground (legacy) mines.
Large coal resource base. Geographical spread of operations in India allows proximity to a large and diversified customer base.	Evacuation infrastructure bottleneck in certain areas due to land, statutory clearance and law & order issues.
Strong financial credentials.	Inherent inferior quality of indigenous coal due to high ash content Constraints in land acquisition.
Skilled and diversified workforce with experience.	High wages cost
Well positioned to cater to high demand of coal in India.
Consistent track record of growth & strong track record of financial performance.
Strong capabilities for exploration, mine planning and operations. Lowest selling price of coal.
Threats	Opportunities
Resistance to part with land, creating problems in possession of land and rehabilitation. Rapid appreciation in land cost.	Coal to remain the key primary energy source in India. Large scale Rural electrification and Power for All UDAY scheme.
Increase in proportion of renewables in the energy mix and demand stagnation in future.	Enhanced demand of power due to increased use of electric vehicles.
Energy storage solutions.	Optimizing production cost through Linkage rationalization. Export opportunities to neighboring countries.
Covid-19 like pandemic may cause havoc in terms of reduced demand to dictate course of business in short term. Pressure of international body like UN to comply Paris Agreement & COP26 at Glasgow on climate change to curb use of fossil fuel.	Strong economic growth in India and resultant demand for energy, particularly coal as an energy source.
	Being a cheaper source of energy compared to alternate sources available in India, demand to continue to remain strong.
	To adopt coal to liquid and coal to gas technology.
Impact of commercial mining	To diversify its operation into solar sector for having significant presence in Indias overall energy mix.
Possibility of availability of low cost imported coal may significantly affect future of indigenous production.	For reducing non-essential imports of thermal coal.

3.0 SEGMENT-WISE PERFORMANCE

Production, Off-take and OBR performances are available in Directors Report.

4.0 OUTLOOK:

CIL had envisaged coal supply target of 700 Mt in 2022-23 which is a growth of about 12% over the previous year. About 80% of the said production would be consumed by power sector only. CILs growth plan for the future is in synergy with the ambitious plan of the Government for 24 X 7 power supply to all homes in the country for which a roadmap to achieve 1 Bt of coal production by 2024-25 has been prepared. For sustainability and growth, thrust on minimizing the environmental impact is laid for qualitative improvement in coal production through selective mining, beneficiation & blending and diversifying into clean coal technologies.

Apart from creating new railway infrastructure, optimum utilization of existing capacity through linkage auction scheme is being ensured through an in-built system of source rationalization for non-regulated sector. Further, it has been envisaged to ensure "First Mile Connectivity (FMC)" to consumer through non-road mode like conveyors, MGR/Rail etc.

CIL is also exploring opportunities to diversify into coal to chemical business (CTL, SCG etc.). This is to ensure greater value addition and thereby improving financial performance of the company, and ensuring long term sustenance.

CIL has planned a capital investment of Rs 16,500 Crores for maintaining its volume growth in 2022-23 and beyond. In addition, the company has also envisaged for investing substantial amount in different schemes in 2022-23 such as development of railway infrastructure project, solar power, Thermal Power Plants, surface coal gasification, Coal Bed Methane (CBM), revival of fertilizer plants etc.

Marketing Outlook:

Considering the demand scenario, the target for the year 2021-22 had been set at the level of 740 MT.

CIL has earmarked evacuation infrastructure projects in both the Greenfield and Brownfield areas under its command areas in the 3 subsidiaries, to have a seamless coal evacuation system. Rail infrastructure is being built both onDeposit Basis as well as by forming SPVs with Rail PSUs and the concemed State Govt.

CIL has identified 07 Railway Projects for evacuation of coal, out of which 03 are funded by CIL on deposit basis and the remaining 04 being executed through JVs/SPVs with a track length of about 620 Km are being constructed at an estimated capital expenditure of about Rs 20,000 Cr.

Funded by CIL on Deposit Basis:

1) Tori-Shivpur New BG Double Rail line (43.70 KM) has been commissioned, thus enabling coal evacuation from the Greenfield areas of North Karanpura Coalfield in CCL.

Tripling of this rail line is under construction at an additional capital of Rs 894 Crs. which shall increase its capacity from - 65 MTPA to - 100 MTPA. Tripling works likely to be operationalized by Mar23.

2) Jharsuguda -Barpali- Sardega New BG single line (52.41 KM) has been commissioned, thus enabling coal evacuation from the Greenfield areas of Basundhara Coalfield of MCL.

Doubling of this Rail line from Jharsuguda to Sardega along with coal loading bulb at Barpali and double line Fly-over at Jharsuguda along with Augmentation works of Jharsuguda Railway Station are under execution at an estimated capital of Rs 3200 Cr., thereby enhancing its capacity from - 34 MTPA to -65 MTPA.

3) Rail Connectivity of Lingaraj SILO with Deulbeda siding at Talcher Coalfields of MCL has been commissioned in Jul21 which ha resulted in an incremental evacuation capacity by-5MTPA.

Funded through JVs/ SPVs by CIL: l) Jharkhand Coal Rail Ltd (JCRL), in the State of Jharkhand under CCL command area.

Shivpur-Kathautia Railway Line, 49 km in North Karanpura Coalfield of Jharkhand - Financial Closure and Land acquisition are in progress. This rail line shall facilitate in evacuating - 25 MTPA coal from the Greenfield area of N K Coalfield.

2) Chhattisgarh East Rail Ltd (CERL) - Developing the East Rail Corridor in the state of Chhattisgarh under SECL command area.

Phase - I :

The Main corridor from Kharsia to Dharamjaigarh (0-74 KM) was commissioned in Jul,21. The first block section of the spur line from Gharghoda to Bhalumuda (0-14 Km) is also completed and safety certificate issued by SECR. Loading of coal is regular from Korichhapar, Gharghoda and Dharamj aigarh Freight Terminals.

Phase - II:

Financial Closure and Land acquisition is in progress.

Commissioning of CERL Rail Project shall enhance coal evacuation capacity by - 30 MTPA from the Mand-Raigad coalfield.

3) Chhattisgarh East West Rail Ltd (CEWRL) - Developing the East West Rail Conidor in the state of Chhattisgarh under SECL command area. This new rail line shall connect Gewa Rd. to Pendra Rd., 135 Km, and shall facilitate upcountry movement of coal from Korba Coalfield. Financial closure was achieved in Sep20. construction works are underway and is anticipated to be completed by Mar24. This shall enhance coal evacuation capacity by - 62 MTPA from the Korba coalfield.

4) Mahanadi Coal Railway Limited (MCRL) is developing the Angul-Balram rail link of -14.5 Km in Talcher coalfield under MCL command area in the state of odisha at an estimated cost of Rs 145 Cr. Work is in progress in the entire track length and is anticipated to be commissioned by Jul22. This shall enhance coal evacuation capacity by - 15 MTPA from Talcher coalfield. Commissioning of these new BG railway lines along with the already commissioned line will increase the evaluation capacity to about 330 MTPA to the railway network by CIL.

CIL already has a committed long term linkage of nearly 657.5 MTPA from Power and Non-Power Sectors as on 31.3.2022. It also has a steady demand for offers of sale through various -Auction Schemes. CIL has assured demand for its production projections, as more firm linkages shall be added under the ongoing process of allocation of linkages to various segments of Power Sector consumers through Scheme for Harnessing and Allocating Koyla (Coal) Transparently in India (SHAKTI), the policy introduced by the government on 22.5.2017 for grant of coal linkages to power sector and also through further tranches of auction of linkages for Non-Regulated Sector consumers that shall be conducted by CIL. Customer satisfaction through quality assurance and transparency in business operations have been the priority areas for CIL. The initiatives taken to build Consumers confidence and satisfaction include supply of only sized coal as per FSA provision to power sector consumers, extension of third party sampling facility to all sectors of consumers under all schemes through deployment of empanelled Third Party Agencies, as per the choice of consumer, installation of online ash & energy analyzers in coalfield areas, restriction of grade slippages to the level of 20%, timely issuance of credit/debit notes on quality grounds under purview of FSA etc., NABL accreditation of the major field level laboratories and equipping them with the Automatic "Bomb Calorimeters" for ascertaining calorific value of coal and increasing the production through Surface Miners. The objective of transparency is also achieved with the help of various simple menu driven APPs launched by CIL, like SEVA (Saral EindhanVitran Application) for Power Consumers, Grahak Sadak Koyla Vitran, UTTAM ((Unlocking Transparency by Third Party Assessment of Mined Coal) and CAMS (Coal Allocation Monitoring System) for distribution of coal through State Nominated Agencies, through which the consumers and other related stakeholders have access for information regarding allocation, dispatch, third party quality assessment of dispatch etc Also, in order to expedite and facilitate the reconciliation of coal bills on a quarterly basis, a reconciliation portal has been developed by Coal India Limited. Consumers as well as subsidiaries have been advised to perform online bill to bill reconciliation after registration and executing different activities for smooth functioning of portal. Most of the Power consumers have been on boarded on the portal. It is expected that online reconciliation of all the consumers will be conducted through this portal, in a short time.

Operations Outlook:

117 Ongoing projects costing Rs 20 Crs and above having ultimate capacity of about 919 Mty and sanctioned capital of about Rs 132634 Crs are under various stages of implementation (as on 01.04.2022). For achieving production target in 2022-23, EC for 7 proposals with incremental capacity of about 85.37 Mty are under different stages of approval. In FY22-23, Stage-II FC of 7 proposals involving 1807.27 Ha forest land are required to be commensurate with coal production target. Also, total land to be possessed by the subsidiaries of CIL has been estimated to be 3273 Ha for achieving the target.

The expansion program will be managed in a structured manner with the help of IT enabled solutions. The implementation of ERP solution to enable transparency in operations, maintenance and support functions is already underway and has been introduced in all subsidiaries & in CIL HQ including NEC. The project implementation of vital mines is being monitored through MDMS portal and on MS Project software. CIL has taken initiatives for implementation of digitization of mines for improving operational efficiency for which 6 mines of NCL & SECL have been identified for implementation.

The Company has already concluded two studies through reputed consultant for assessing the possible mechanization and automation levels across a substantial number of mines. This is aimed at identification of opportunities in mine planning, exploration, survey, operations and maintenance.

In order to infuse State-of-the-art technology & efficiency of private sector, initiatives have been taken for development & operation of new mines/ blocks through MDO route. Further, CIL have identified 20 closed/abandoned/discontinued underground mines as of now for operati through MDO route.

With a vision to extract coal environmentally and socially friendly manner, CIL is looking forward to enhance its production from underground mining. As the opencastable coal is likely to be exhausted in the near future and high capacity State-of-the -Art underground mines shall be poised for the following: Identification and planning of large high capacity State-of-the-Art underground mines at depth below 250 Mtr. and at places with environmental compliance.

With large nos. of old/discontinued/abandoned potential OC mines now lying idle are being identified for being taken-up through Highwall mining.

An exercise has been initiated for working/extraction of coal below Forest Land in virgin seams and seams standing on pillars. To support increase in production on a sustainable basis, synergic growth in exploration is also envisaged. Increased use of hydrostatic drilling with PCD bits and 3D Seismic Survey Technology to achieve high rate in exploration have been planned. CIL will continue to focus on increasing its reserve base in India.

CIL is also in the process of augmenting the capacity of training institutes across subsidiaries, including IICM. Several other actions for building human resource capacity are being contemplated in collaboration with reputed institutions within the country and even abroad in their respective fields.

Outlook for Sustainable Growth:

CILs Action Plan for development of solar power projects and energy efficiency projects towards meeting green energy requirement and to become a Net Zero Energy Company by 2024 are as under :-

1. CIL is committed to become a Net Zero Energy Company by offsetting its current power consumption by establishing 3000 MW sola power projects in CILs own land or any Govt/Solar Park/Pvt land/large water bodies (floating solar) across PAN India.

2. CILs Roadmap for 3000 MW SPV Projects is drawn as under :

. 21-22 - 290 MW ii. 22-23 - 1500 MW iii. 23-24 - 1210 MW

a. CIL was awarded 100 MW Solar Power project against e-reverse auction conducted by GUVNL for procurement of Solar power to meet their RPO obligation. CIL is required to establish the Solar power project in Gujarat @ Rs 2.20 per unit of electricity to supply solar power to GUVNL for a period of 25 years. CIL signed PPA with GUVNL on 22.4.2021. b. On back to back EPC contract, CIL was awarded 100 MW Solar power project in favour of EPC contractor on 26.04.2021 to install the same at Gujarat within a period of one year from the date of award of work.

Other Solar power Program of CIL : a. Around 140 MW (NCL-50 MW, MCL-50 MW & SECL-40 MW) solar projects have been awarded by CILs subsidiaries & will be commissioned in 2022-23. b. Tender for 160 MW (SECL-100 MW, CCL-20 MW, BCCL-25 MW & WCL-15 MW) is ready and likely to be floated within July 2022 and the projects shall be commissioned within 22-23. c. Tender floated-40 MW (BCCL-25 MW & WCL-15 MW), DPR under approval - 35 MW (ECL), BCCL-20 MW is under finalization. d. Approximately 10 MW Rooftop solar power projects are under various stages of implementation at Subsidiaries. More rooftops are being identified to meet the residential/commercial load of subsidiaries to reduce the power cost. e. Subsidiaries have already identified 800 Ha of land approximately in different subsidiaries of CIL to set up solar projects for captive requirement subject to its viability & state regulations on open access & grid connectivity. f. CIL has incorporated a wholly owned subsidiary company in the name & style of CIL Navikarniya Urja Ltd to undertake renewable energy projects.

Research & Development:

CMPDIL is the nodal agency for coordination and monitoring of S&T projects in the coal sector as well as in R&D projects of CIL. The details of S&T and R&D projects taken-up by CMPDI on behalf of CIL are in Annexure A.

5.0 RISKS AND CONCERNS

CIL has a comprehensive Risk Management Framework which consists of:

(a) Process to identify, prioritize and formulate mitigation plans for prioritized risks/RTMs(Risk That Matters) &

(b) Framework for Roles & Responsibilities of various officials, committee and Board in discharging the Risk Management Process. As a part of Risk Management Framework, Risk owners and Mitigation Plan owners have been identified for each risk & correspondi mitigation plans formulated to ensure continuous risk assessment and mitigation. A sub-committee of Board of Directors i.e. Risk Management Committee (RMC) has been constituted in compliance with SEBI (LODR) Regulations 2015. The RMC provides direction and evaluates the effectiveness of Risk Management Framework. Cyber Security Risk has been included in RTMs of CIL & related mitigation plans are being implemented.

Chief Risk officer (CRO) of CIL and his team under the direction of Risk Management Committee of CIL assess the risk to the company and formulate the risk mitigation plan for prioritized risks and facilitate its implementation.

6.0 INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

"Coal India Limited (CIL) has robust internal control systems and processes for smooth and efficient conduct of business and complies with relevant laws and regulations. A comprehensive delegation of power exists for smooth decision making. Elaborate guidelines for preparation of accounts are followed for uniform compliance. Further, all the key functional areas are governed by respective operating manuals. In order to ensure that checks and balances are in place and all internal control systems are in order, regular and exhaustive internal audits are conducted by experienced firms of accountants in close co-ordination with the Companys Internal Audit Department.

The Internal Financial Controls of the Company were reviewed by Internal Auditors appointed by the company. According to them, the Company has, in all material respects, laid down internal financial controls (including operational controls) and that such controls are adequate and operating effectively during the year ended 31st March 2022."

7 .0 DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE

FINANCIAL DISCUSSION AND ANALYSIS

Riding on the record production and offtake of coal, PBT& PAT of CIL (Consolidated) had increased by 31% and 37% respectively in FY 2021-22 vis-?-vis FY 2020-21.

The major reason for the substantial increase in the profit can be attributed to increase in Net Sales by Rs17,913.05 Crores on account of record offtake of 661.89 Mill.Te. (increase by 87.40 Mill. Te. i.e. 15%) along with increase in average realization per tonne.

A detailed discussion on financial performance and analysis of the group based on the Consolidated Financial Statements is furnished below.

A. Total Income:

Total Income of the Company comprises of Revenue from operations and Other Income. Major revenue of the company under above two heads of total income includes income from sale of coal, other operating revenue such as Loading and Transportation charges, Evacuation Facility Charges, consultancy and other services related to mine planning & designing, interest earned on investments such as term deposits with banks etc. The Total Income for Financial Year 2021-22 is Rs 1,13,618.02 Crores as against Rs 93,768.84 Crores in the previous year registering an increase of 21.17 %. The breakup of major elements of income are discussed below:

			Rs in crore)
Particulars	FY 2021-22	FY 2020-21	Change %
Sale of Coal	1,52,667.14	1,26,786.13	20.41%
Less: Statutory Levies	52,043.77	44,075.81	18.08%
Net Sales	1,00,623.37	82,710.32	21.66%
Other Operating Revenue (Net)	9,090.13	7,315.69	24.26%
Revenue from Operations	1,09,713.50	90,026.01	21.87%
Other Income	3,904.52	3,742.83	4.32%
Total Income	1,13,618.02	93,768.84	21.17%

1. Revenue from Operations: i. Sale of Coal

Sales are presented as gross sales (in notes to accounts) and net of various statutory levies (in Statement of Profit & Loss) comprising royalty, GST, GST Compensation cess, cess on coal, payment to national mineral exploration trust (NMET), district mineral foundation (DMF) and other levies etc. The Income from sale of coal is mainly dependent on pricing, production and distribution of coal.

CIL recorded highest ever Gross Sales & Net Sales in FY 2021-22 on account of record Offtake. The Gross Sales of the company stood at

Rs 1,52,667.14 Crores in FY 2021-22 against the previous year Gross Sales of Rs1,26,786.13 Crores. The Net sales (net of all levies) for the year was Rs 1,00,623.37 Crores against Rs 82,710.32 Crores during the previous year, thereby registering a substantial increase of 21.66%.

During the year, company achieved an offtake of 661.89 million tonne against 574.48 million tonnes in previous year, registering an increase of 15.22 %. The increase in volume and increase in average realization per tonne accounted for the increase in sales revenue. Average realization per tonne increased mainly on account of fetching of better premium in E-Auction sales and booking of Performance Incentive by Subsidiaries in FY 21-22. In previous FY for ease of doing business due to the COVID-19 pandemic, Performance Incentive was waived and reserve price under E-Auction Scheme was brought down at par with notified price up to 2nd Quarter of FY 2020-21. The revenue from sales also includes the debit notes/credit notes issued on the basis of results of third-party sampling and netted off with provision of coal quality variance. ii. Other Operating Revenue:

Loading and Additional transportation charges

Major element of other operating revenue is on account of transportation charges recovered from the customers. The company char e transportation costs for transportation of coal to dispatch points under various slabs of distance and corresponding rates. The loading and transportation charges recovered (net of all levies) during the year was Rs5,236.39 Crores against Rs4,442.95 Crores in the previous year due to increase in Offtake.

Evacuation Facility Charges

Evacuation Facility Charges are levied at Rs 60 per tonne on all dispatches. During the year, total revenue on account of evacuation facility charges (net of all levies) was Rs3,571.27 Crores against Rs 2,321.65 Crores in the previous year due to increase in Evacuation Facility Charges to Rs 60 per tonne w.e.f. 01.08.2021 and increase in Offtake.

Revenue from services

Revenue from services includes consultancy and other services provided by CMPDIL, a subsidiary of CIL to parties outside the CILs group and Freight Income from Rail Operation by the subsidiary of SECL. Revenue from services which also forms part of other operating revenue w Rs281.01 Crores (net of levies) in 2021-22 as against Rs542.78 Crores (net of levies) in 2020-21. Revenue from Services decreased mainly on account of decrease in Exploration Sales of CMPDIL.

2 . Other Income

Other income includes interest income from deposits with banks, gain on sale of mutual funds, rental income, write back of provisions and liabilities made in earlier years which are no longer required and other miscellaneous incomes.

During the year, other income increased by 4.32% from Rs 3,742.83 Crores in FY 2020-21 to Rs 3,904.52 Crores in FY 2021-22.

Other Income increased mainly due to increase in Interest Income by Rs124.02 Crores due to booking of Interest on Income tax refund of Rs 446.05 Crores (PY Rs36.53 Crores).

B. Expenses

The detailed breakup of expenses is included in the annual financial statements.

Break up of Major Heads: -

1) Cost of Materials Consumed

Cost of material consumed relate to materials and items of stores used in coal mining and processing operations, primarily oil and lubricant (including diesel), explosives, HEMM spares and timber. Other consumables used in coal mining operations include tyres, spares for other plant and machinery relating to coal handling plants and beneficiation facilities, and other miscellaneous stores and spares.

Cost of Material consumed increased by Rs 1,853.64 Crores, from Rs 7,588.54 Crores in FY 2020-21 to Rs 9,442.18 Crores in FY 2021-22 i.e. by 24.43%, mainly due to increase in average diesel rate and explosives rate.

2) Employee Benefits Expenses

Employee benefit expenses constitutes the largest component in the total expenses and is about 45 % of the total expenses. The employee benefit cost during the current year was Rs40,700.82 Crores as against Rs38,592.42 Crores in previous year.

Employee Benefits expenses include salary, wages and allowances, contributions to provident fund, pension and gratuity, overtime payments, leave encashment, attendance bonus, productivity and performance linked bonus and other incentives, and other employee benefits Employee benefits expense increased by 5.46% in the current fiscal mainly on account of -Additional Provision of around Rs 1100 Crores for Contributory Post Retirement Medicare Scheme for Non-Executives for on-roll Non-executive employees.

Pending finalization of wage revision of Non-Executive employees (National Coal Wage Agreement XI - NCWA XI) a provision of around

Rs 880 Crores have been provided for the nine months period 01.07.2021 to 31.03.2022.

There was a net reduction in manpower by 10466 employees from 31.03.2021 to 31.03.2022.

3) Corporate Social Responsibility Expenses (CSR expenses)

The Company has framed CSR Policy on the basis of guidelines issued by Department of Public Enterprises and the provisions of Companies Act, 2013. As per the said policy CIL would undertake select CSR activities out of the themes listed in Schedule-VII of the Companies Act as amended from time to time.

During FY 2021-22, CSR expenses has increased by 22.18 % from Rs 449.31 Crores in FY 2020-21 to Rs 548.98 Crores. Actual CSR spent was

Rs 583.32 Crores in Financial Year 2021-22.

4) Contractual Expenses

Contractual expenses primarily consist of transportation charges for coal, sand and materials carried out through third party contractors, contractor expenses relating to wagon loading operations, hiring charges for Heavy Earth Moving Machinery representing cost of coal extraction and overburden removal activities and other miscellaneous works carried out through third party contractors for haul road maintenance at mines and temporary lighting etc.

The contractual expense is incurred for both coal production as well as removal of overburden. Contractual Expenses increased b Rs 2,820.95 Crores, from Rs 16,045.91 Crores in FY 2020-21 to Rs 18,866.86 Crores in FY 2021-22, i.e. 17.58 %. The increase in contractual expenses was largely on account of increase in average diesel rate and increase in the volume of contractual Coal production and contractual removal of Overburden.

5) Finance Costs

Finance costs decreased by Rs 100.75 Crores, from Rs 642.24 Crores in FY 2020-21 to Rs 541.49 Crores in FY 2021-22, i.e. 15.69%, mainly due to decrease in Short Term Loan taken by Subsidiaries.

6) Depreciation/Amortisation/ Impairment

Depreciation on property, plant and equipment, except freehold land, is provided as per cost model on straight line basis over the estimated useful lives of the asset. Impairment loss is recognized wherever the carrying amount of an asset is in excess of its recoverable amount and the same is recognized as an expense in the Statement of Profit and Loss and carrying amount of the asset is reduced to its recoverable amount. Depreciation/Amortization/Impairment increased by Rs 710.82 Crores, from Rs 3717.85 Crores in FY 2020-21 to Rs 4428.67 Crores in FY 2021-22, i.e. 19.12%, owing to higher Capital expenditure during the year.

7) Stripping Activity Adjustment

In accordance with the Accounting policy of the company, in open cast mines with rated capacity of one million tonne per annum and above, the cost of Stripping is charged on technically evaluated average ratio (overburden: coal) at each mine with due adjustment for stripping activity asset and ratio variance account after the mines are brought to revenue. The net of balances of stripping activity asset and ratio variance at the Balance Sheet date is shown as Stripping Activity Adjustment under the head Non-Current Provisions or Other Non-Current Assets as the case may be.

The Stripping Activity adjustment (cost) varies from mine to mine depending on geo-mining condition of raising the overburden. OB to Coal ratio in the current year is lower than the ratio in previous year. In view of above, the Stripping Activity adjustment increased by Rs 2,310.49 Crores from Rs 1,450.37 Crores in FY 2020-21 to Rs3,760.86 Crores in FY 2021-22, i.e. 159.30%.

8) Other Expenses

Other expenses includes various operational and administrative expenses, under-loading expenses paid to Indian Railways, rehabilitation expenses, security expenses, rent, rates & taxes, traveling expenses, employee training expenses, advertisement and publicity related expenses, freight charges for stores and materials, donations, demurrage paid to Indian Railways and hire charges for office administration equipment and other miscellaneous expenses .

Other Expenses increased by Rs 719.47 Crores, from Rs 4,246.18 Crores in FY 2020-21 to Rs 4,965.65 Crores in FY 2021-22, i.e. 16.94 % mainly due to increase in Hire Charges by Rs 106.25 Crores, Security Expenses by Rs 86.37 Crores, Under Loading Charges by Rs 126.55 Crores, Rehabilitation Charges by Rs 52.29 Crores, Environmental & Tree Plantation Expenses by Rs 93.62 Crores etc.

C. Cash Flows (in nutshell)

		Rs in Crores)
Particular	For the year ended 31st March
	2022	2021
Opening Cash & Cash equivalents	5,112.28	2,791.10
Net cash flow from operating activities	41,087.51	10,592.42
Net cash flow from investing activities	(26,481.03)	181.90
Net cash used in financing activities	(13,441.24)	(8,453.14)
Change in Cash & Cash equivalents	1,165.24	2,321.18
Closing Cash & Cash equivalents	6,277.52	5,112.28

Net cash inflow from operating activities for the year ended March 31, 2022 increased by Rs 30,495.09 Crores i.e. 287.90% from the previous year mainly due to increase in Profit, realization of Trade Receivables and increase in Advance from Customers/others.

Net cash used in investing activities was Rs 26,481.03Crores in FY 21-22 as against net cash inflow of Rs 181.90 Crores in the previous year mainly because of more money invested in Bank Deposits in FY 21-22 due to better liquidity as compared to withdrawal of money from Bank Deposits n Previous Year.

Net cash outflow from financing activities for the year ended March 31, 2022 increased by Rs 4,988.10 Crores i.e. 59.01% from the previous year, which is mainly attributable to repayment of Short-Term Borrowings and higher Dividend payment in FY 21-22.

D. Dividend

During the year ended 31.03.2022, the company has paid interim dividends @ Rs 14.00 (PY Rs12.50/share) per equity share of face value of Rs10/ - each amounting to Rs8,627.82 Crores (PY Rs7,703.44 Crores) for FY 21-22 and Final Dividend of Rs 3.50 per equity share amounting to Rs2,156.97 Crores for FY 20-21. Further, Final Dividend of Rs 3.00 per equity share for FY 2021-22 has also been recommended by the Board subject to approval in the ensuing AGM.

E. The various ratios related to the financials of Coal India: -

Particulars	April to March 22	April to March 21	Variance
Net Profit (As % Net Sales )	17.27%	15.36%	12.43%
Operating Profit as % of Revenue from Operations	19.14%	18.20%	5.16%
Debtors Turnover	8.49	6.59	28.80%
nventory Turnover 2	12.84	11.11	15.56%
Return on Net Worth (%) 3	40%	35%	15.80%
Liquidity Ratios
Current Ratio	1.62	1.68	-3.57%
Trade receivables as no. of Days sales	32.97	63.81	-48.33%
Stock of Coal as no. of Days of production (Qty) 3	35.67	60.69	-41.23%
Interest Coverage Ratio4	44.61	29.04	53.62%
Structural Ratios
Long Term Debt: Equity Capital 5	0.54	0.44	22.73%
Net Worth: Equity Capital	7.00	5.92	18.24%

1. Debtors Turnover is Ratio of Gross Sales to Average Gross Debtors. The Debtors turnover ratio has increased due to highest ever Gross Sales recorded by CIL and decrease in Average Gross Debtors due to better realization. Trade Receivables as no. of days sales has decreased due to realization of trade receivables.

2. Return on Net Worth has increased as the Profit after tax has increased by 37% whereas Net worth increased by 18%.

3. Stock of Coal as no. of Days of production (Qty.) has decreased due to depletion of inventory of Coal.

4. Interest Coverage ratio indicates coverage of Finance Cost with available earnings. Profit before tax during FY 2021-22 increased to

Rs 23,616.28 crore against Rs 18,009.24 crore in FY 2020-21, whereas interest on borrowing has decreased due to decrease in short-term borrowings by Subsidiaries. Hence, due to the above reasons, the interest coverage ratio has increased in FY 2021-22.

5. Debt equity ratio determines financial leverage of the company. For FY 2021-22 Long term Debt was Rs 3,301.78 Crores as against

Rs 2,688.10 Crores in FY 2020-21. Hence due to the increase in long term borrowing, Debt to equity capital became 0.54 times as o 31.03.2022 as against 0.44 times as on 31.03.2021. The long-term debt mainly includes Long term loans taken by two Subsidiaries of SECL namely CERL and CEWRL.

8.0 MATERIAL DEVELOPMENT IN HUMAN RESOURCES/INDUSTRIAL RELATIONS FRONT, INCLUDING NUMBER OF PEOPLE

EMPLOYED. I. Manpower

The manpower strength of the company as on 1.04.2022 against the previous year was as under:

Year	Executive	Non-Executive	Total
01.04.2022	15,694	2,32,856	2,48,550
01.04.2021	15,234	2,43,782	2,59,016

The manpower Strength has come down by 10,466 during 2021-22.

II. Talent/Skill Development Initiatives

To ensure regular learning and development of the employees, company has established Indian Institute of Coal Management (IICM), Ranchi as an apex Training Institute and in addition a Management Development Institute at every subsidiary, Vocational Training Centers in all projects and other Training Centers for imparting management and skill development trainings are in place.

During the financial year 2021-22, 61,268 employees have been trained in house, out of which 13,292 are executives. In addition, 3,243 employees were sent outside for training out of which 3,104 were executives. Thus, 64,511 employees were trained During the year, more than 526755 training man-days were achieved for executives and non-executives.

In CIL and its subsidiaries, 8,295 Apprentices were engaged through NATS and NAPS.

II. Talent Acquisition & Career progression

During the Financial Year (F.Y.) 2021-22, Coal lndia Limited (ClL) has inducted Management Trainees, Medical Executives and other Executives at lateral level through direct recruitment to fill up the vacancy arising out of retirement, resignation etc.

Further Departmental promotion / selection were also made in different disciplines by promoting Non-Executive employees to the Executive cadre.

The details of Executive manpower influx in CIL for F.Y. 2021-22 are as follows:

1. 1286 Management Trainees (MTs) were selected against MT-2019 Open Recruitment Advt. No. 0112019 wherein 978 MTs have joined till date at different Subsidiaries.

2. Against Recruitment Advt. No. 03/2021, 581 MTs have been selected in 06 technical disciplines on the basis of GATE-2021 scores, list of which was published in CIL website.

3. Against CILs Policy for Decentralised Recruitment of Medical Executives through Subsidiary /CIL, 145 Medical Executives i.e.33 Medical Specialists and 107 Sr. Medical Officer (GDMO) & 5 Sr. Medical Officer (Dental) have joined till date. Against vacancies in lieu of non-joining of Medical Executive in 1st Phase, 30 Medical Executives i.e. 4 Medical Specialists and 25 Sr. Medical Officer (GDMO) & 1 Sr. Medical Officer (Dental), have joined till date.

4. Regarding career progression of Non-executive employees & to provide impetus and avenues for their growth: a) 275 departmental candidates have been promoted/selected from Non-Executive to Executive cadre in Survey discipline and posted at different Subsidiaries. b) 330 departmental candidates have been promoted/selected from Non-Executive to Executive cadre in 10 disciplines and posted at different Subsidiaries.

5. 11 Company Secretary (CS) selected from E3 to E8 grade against Open Rect. Advt. No. 0212021 and their joining process is currently underway.

6. 01 Executive Director (Indian Institute of Coal Management) on Fixed Tenure Contract Basis has been selected and their joinin proces is currently underway.

These executives are being groomed as GenNext leaders through off-the-job as well as on-the-job training interventions under th guidance of experienced senior experts in the company. This process facilitates easy transfer of tacit knowledge base of the organization from the elder generation to the GenNext leaders, besides easy adaptation into the organizational culture.

III. Industrial Relations

The following pro-active and strategic Industrial Relations (IR) approaches & practices have ensured harmonious & sustainable industrial relations in the company: -

a) Workers Participation in Management: -

Several bilateral fora such as Safety Committee, Housing Committee, Welfare Committee, Canteen Committee, etc. are functional in order to resolve the issues pertaining to service conditions, welfare, safety, etc. of employees.

b) Contract Labour Cell & Contract Labour Information Portal (CLIP): -

As on 01.04.2022, 91,175 Contractors workers were deployed by the registered contractors in various activities of the company. CIL has a portal named Contract Labour Information Portal (CLIP) in which database of all Contractors and their workers i.e. contractors workers is maintained.

c) Reservations: -

CIL complies with the provisions under Presidential Directives on reservations for SC/ST/OBC/PWD/EWS as per circulars issued there of.

d) Diversity Management: -

CIL recruits its employees from across the country through all India based open selection as well as through campus selection p wherein applicable reservation to SC, ST, OBC communities is provided.

Manpower of CIL constitutes 19.30 % of SC, 14.48 % of ST and 23.94 % of OBC as on 1.01.2022. Female employees of CIL constitutes 7.89% of its total manpower.

e) Non-Discrimination: -

No discrimination on the ground of religion, caste, region, creed, gender, languages etc. is done in CIL/Subsidiaries.

f) Prevention of Sexual Harassment at workplace: -

Sexual harassment of any form is a misconduct for Executive Cadre employees as per the Conduct, Discipline and Appeal Rules as well as for Non-Executive Cadre employees as per the Certified Standing Orders.

g) Freedom of Associations: -

Employees are free to be a part of any registered Trade Union / Employees Association. Representation of employees is allowed in the bipartite bodies through Trade Unions / Associations.

h) Employee Welfare:-

CIL adheres to a "total care approach" towards its employees. The employee welfare programmes addresses not only the need of employees but also their families with respect to housing, recreation, sports, health, education of children etc. The company has also developed medical facilities at all its operational areas. It has a strong network of 70 fully equipped Hospitals with 4431 Beds, 367 Dispensaries, 562 Ambulance and 1042 Doctors including Specialists to provide Medical Services to the employees and their families. Further, for specialized treatment, facilities are available at reputed empanelled Hospitals across the country. There are 107 public schools financed by the company to provide quality education and grants-in-aid is given to 281 privately managed schools. CIL is also providing assistance to other 76 schools in and around the coalfield areas. The company provides scholarships to meritorious students and supports higher education of children of nonexecutive employees studying in Government Engineering Colleges & Medical Colleges.

i) Post-Retirement Medical Support: -

Contributory Post Retirement Medicare Schemes for Executives and Non-Executive Cadre employees of CIL/Subsidiaries have been formulated wherein by making nominal contribution following benefits are extended: -

Benefit under Contributory Post Retirement Medicare Schemes	Retired Executives & Spouse	Retired Non-Executive, Spouse & Divyang Children
Normal Diseases	Rs 25 Lakh	Rs 8 Lakh for Retd. Employee & Spouse Rs 2.5 Lakh for Divyang Child
Specified Critical Diseases	Unlimited
Yearly reimbursement of OPD/Domiciliary Expenses	Rs 36,000

j. Social Security:

All employees of CIL and its subsidiaries / contractors workers are covered under the social security schemes as given below: (A) For employees of CIL and its Subsidiaries:

1. Compensation under the Employees Compensation Act, 1923

2. Gratuity: Upto 20 Lakhs as per Payment of Gratuity (Amendment) Act, 2018

3. Coal Mines Provident Fund (CMPF): - All employees of CIL/Subsidiaries are covered under the Coal Mines Provident Fund scheme with equal share of contribution from both (i.e. by employees and the employer).

4. Coal Mines Pension Scheme (CMPS): - All employees are covered under the Coal Mines Pension Scheme by which, on superannuation, they receive upto 25% of their total emoluments as monthly pension.

5. Life Cover Scheme: - An amount upto Rs1,25,000/- is paid under the Life Cover Scheme

6. Ex-Gratia: - An Ex-gratia compensation of Rs 15 lakhs in case of fatal mine accident or death due to COVID-19 is paid to the next of kin of the deceased employee.

An additional amount of Rs 90,000 as ex-gratia, in addition to Employees Compensation Act, 1923, is paid to the eligible dependents, in case of death or permanent total disablement of the Non-Executive Cadre employees of CIL/Subsidiaries.

7. Employment / Monthly monetary compensation in lieu of employment: -

There is a provision for employment to one dependent of the worker who dies while in service.

Female dependents of the employees dying while in service are provided the Monthly Monetary Compensation, in lieu of employment, till attainment of 60 years of age or death whichever is earlier.

8. Defined Contribution Superannuation Pension Scheme (DCSPS): - CIL has formulated a DCSPS for executives as per DPE guidelines covering Board level and below Board Level Executives to provide superannuation benefit in the form of annuity through an Annuity Service Provider, post retirement.

(B) For contractors workers engaged in CIL and its subsidiaries by registered contractors.

1. Compensation under the Employees Compensation Act, 1923

2. An Exgratia amount of Rs 15 lakhs is paid to the next of kin of the contractors worker in case of fatal mine accident or death due to COVID-19.

3. Nominee of deceased contractors workers are eligible for payment of accumulated amount under EPF/CMPF.

9.0 ENVIRONMETAL PROTECTION AND CONSERVATION

Environmental protection measures are taken concurrently with mining operations for maintaining acceptable levels of major physical attributes of environment namely air & water quality, hydrogeology, noise level & land resources. Suitable water spraying systems for arresting fugitive dust in roads, washeries, First Mile Connectivity (FMC) Projects, CHPs, Feeder Breakers, Crushers, coal transfer points and coal stock areas have been installed.

Massive tree plantation is being carried out in and around mining areas and modern mining techniques are being practiced in the mines of CIL to reduce air and noise pollution. In last 5 years CIL has planted more than 104.35 Lakh saplings in 4391 Ha inside mine lease area and at the same period CIL planted 10.82 Lakh saplings in 808 Ha outside mine lease area. The carbon sink potential created in last 5 years inside mine lease area is the about 1.76 Lakh Tonne/year.

CIL has planted 30.42 Lakh saplings covering an area about 1,468 Ha within and outside mine leasehold area in FY 2021-22.

During Vriksharopan Abhiyan - 2021, more than 3.84 lakh saplings were planted in 479 sites across 8 states and around 1.93 lakh saplings were distributed to CIL employees and local people. Mudwani Dam Eco-Park Jayant OC of NCL, was inaugurated and foundation stones were laid for 3 eco-tourism projects namely Kayakalp Vatika in Piparwar Area of CCL, Lilari Eco-park in Lakhanpur Area of MCL and Chandra Shekhar Azad Eco-Park, in Bina project of NCL.

Eco Parks have been developed in many of the mined out areas and command areas of CIL like Jhanjra Eco-park ECL, Parasnath Udyaan Eco-Park BCCL, Bishrampur Tourism Site SECL, Nandan Kanan Eco Park NCL, Saoner Park WCL, Kayakalp Vatika CCL, Ananta Medicinal garden MCL, etc. CIL has established 27 Eco-parks & Mine Tourism & eco-restoration sites on date.

Effluent treatment facilities for mine, workshop & CHP effluents like oil & grease traps, sedimentation ponds and facilities for storage of treated water and its reuse have been provided in all the major projects. Domestic sewage treatment plants have also been established for treatments of domestic effluents. Recharging of ground water is also taken up within mine premises as well as in the nearby villages through rainwater harvesting, digging of ponds/development of lagoons and by de-silting of existing ponds/tanks etc. In 2021-22, discharged mine water was utilized in 727 villages for irrigation and domestic use, benefitting more than 10.68 Lakh villagers

10. Corporate Social Responsibility

Budget allocated for CSR activities during FY 21-22 by Coal India Ltd., was Rs 105.31 crores, much more than the amount calculated as per the minimum statutory provisions i.e. Rs 6.81 cr. CIL was able to utilize Rs 77.64 cr. for CSR during the financial year, more than the statutory obligation as per Companies Act 2013.

Dept. of Public Enterprises (DPE) had specified "Health and Nutrition with special focus on COVID related measures" as the common theme for undertaking CSR activities by CPSEs in FY 21-22. These activities were especially focused upon and ~78% of total CSR expenditure was made on these themes against the DPE specified target of 60%.

CIL stepped up to play its part in the service of the nation during COVID-19. CIL arranged more than 3600 beds (out of these 2500 with oxygen support) for Covid patients. Under Mission Praana Vayu, financial assistance was provided for 31 oxygen plants in 28 hospitals with a total capacity of over 35,200 LPM which can support 5,040 beds with medical oxygen. Sufficient no. of ventilators, oxygen cylinders, ambulances, baby warmers and Remdesivir injections were arranged in Covid treatment facilities. During the year, around 2.8 lakh cooked food/dry ration packets, 65,000 liters of hand sanitizers and 11.3 lakh masks were distributed to inculcate the habit of proper hand hygiene in the community. As part of facilitating Ease of Doing Business, relief to vendors and suppliers was provided by delivery extensions, non-imposition of EMD provisions and reduction in performance security deposit from 5-10% to 3%. Relief to buyers was provided through the facility of Usance LC to address liquidity crunch, waiver from payment of performance incentive for power sector and increase in trigger level of Annual Contracted Quantity (ACO) from 75% to 80%

The widespread public outreach of CSR activities is very important in order to establish and enhance CILs image as a socially responsible company as well as to attract sincere partners as implementing agencies with innovate ideas for the upliftment of the underprivileged. To achieve this, achievements under CSR were given wide publicity using print and electronic media. A short film, pamphlets and posters were made for increasing the awareness about Thalassemia Bal Sewa Yojana (TBSY), one of the prominent projects of CIL.

CSR budget vs expenditure for FY 21-22 for CIL (HQ)

S. No. Item	Amount (Rs Crores)
1 CSR budget as per minimum statutory provisions	6.81
2 CSR budget as per CILs CSR policy (incl. carryover)	105.31
3 Expenditure incurred	77.64

Theme wise Expenditure during FY 2022 by CIL (HQ)

S. No. Thematic Area	Expenditure in F.Y. 21-22 (Rs Crores)	As a % of Total CSR Expenditure in F.Y. 2021-22
1 Healthcare, Nutrition & Sanitation	59.56	76.71%
2 Education & Livelihood	14.12	18.19%
3 Contribution to PM-CARES Fund	2.50	3.22%
4 Others	1.46	1.88%
Total	77.64	100.00%

Major Projects for which CSR fund was utilized in FY 21-22 by CIL (HQ) Healthcare a) The flagship project of Thalassemia Bal Sewa Yojana ran successfully in FY 2021-22 with total CSR spent of Rs 3.21 cr. during the year on cure and better management of Thalassemia and Aplastic anemia of eligible patients. b) An amount of Rs 26.00 cr. has been spent for construction of 7th Floor of National Cancer Hospital, Nagpur. c) A CSR expenditure of Rs 10.00 cr. has been made for Linear Accelerator Radio Therapy Unit to enhance affordable cancer treatment facility at Saroj Gupta Cancer Centre & Research Institute at Kolkata. d) A CSR expenditure of Rs 10.00 cr. has been made on setting up of Oxygen Plants at 3 Government Hospitals in Nagpur. e) An amount of Rs 2.50 cr. has been spent on development of health infrastructure by upgradation of medical equipment at Institute of Neurosciences, Kolkata. f) A multi-specialty diagnosis and health care service center is being constructed at Faridabad, Haryana in which an amount of Rs 1.35 cr. has been spent. g) As a part of COVID response, Oxygen concentrators, COVID Cold Chain Equipment, ICU equipped ambulance, Health camps, CT scan machines and Ventilators have been provided in different hospitals all over India with a total expenditure of Rs 4.85 cr. h) Rs 2.14 cr. has been spent for establishing oxygen plants at District Hospital, East Singhbhum and Simdega in Jharkhand.

Rural Development

Rs 52.00 lakhs has been spent for setting up of "Gou" development and organic farming research and training institute at Kaujalagi Gokak Taluk, Belagavi, Karnataka.

Education a) An amount of Rs 7.50 cr. has been spent on an ongoing project of construction of school building damaged during flood at Dharwad and Bagalkot, Karnataka. b) A pre-fabricated school building has been constructed at Government Primary School at Kumarsain District, Himachal Pradesh wherein an expenditure of Rs 1.00 cr. has been made. c) Rs 55.50 lakhs has been spent on construction of G+4 school building at a school for underprivileged students at Mayapur, West Bengal. d) Rs 55.05 lakhs has been spent on construction of Krishi Vigyan Kendra at Medak, Telangana. e) Rs 47.01 lakhs has been spent on construction of hostel Facility at Vidya Bharti School, Hoshangabad. f) Rs 6.41 lakhs has been spent on setting up Ekal Vidyalayas in Aspirational Districts of Narayanpur (Chattisgarh), East Singhbhum, West Singhbhum and Simdega (Jharkhand).

Eradicating hunger and malnutrition - During the third wave of COVID, relief measures through fresh and hygienic cooked packed food was distributed outside hospitals of Kolkata and areas of Delhi NCR where more than 5000 packets per day was distributed with a total CSR spending of Rs 1.01 Cr.

Social Welfare, Women Empowerment and Welfare of Differently Abled - Rs 74.00 lakhs was spent on several activities like renovation of Old Age Home, procurement and handing over of utility equipment in home for old age and orphanage, empowerment of women living as l ve in couple of a tribe of Jharkhand, Rehabilitation of Children with disabilities in Bhopal and school for specially abled at Dhanbad, Jharkhand.

Disaster Management - Contribution of Rs 2.50 cr. has been made to PM CARES Fund.