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Coal India Ltd

BSE: 533278 | NSE: COALINDIA ISIN: INE522F01014
Market Cap: [Rs.Cr.] 2,77,477.69 Face Value: [Rs.] 10
Industry: Mining / Minerals / Metals

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Director's Report
DIRECTORS

To

The Members, Coal India Limited

Ladies & Gentlemen,

On behalf of the Board of Directors, I have great pleasure in presenting to you, the 40th Annual Report of Coal India Limited (CIL) and Audited Accounts for the year ended 31st March, 2014, together with the reports of Statutory Auditors and Comptroller and Auditor General of India thereon.

Coal India Limited (CIL) is a Maharatna company under the Ministry of Coal, Government of India with headquarters at Kolkata, West Bengal. CIL is the single largest coal producing company in the world and one of the largest corporate employers with a manpower of 3,46,638 (as on 1st April, 2014). CIL operates through 82 mining areas spread over eight provincial states of India. Coal India Limited has 429 mines of which 237 are underground, 166 opencast and 26 mixed mines. CIL further operates 17 coal washeries, (13 coking coal and 4 non-coking coal) and also manages other establishments like workshops, hospitals, and so on. CIL has 27 training Institutes. Indian Institute of Coal Management (IICM) is an excellent training centre operates under CIL and imparts multi disciplinary management development programmes to the executives. Coal India's major consumers are Power and Steel sectors. Others include cement, fertilizer, brick kilns, and a host of other industries.

CIL has eight fully owned Indian subsidiary companies (direct): Eastern Coalfields Limited (ECL),

Bharat Coking Coal Limited (BCCL),

Central Coalfields Limited (CCL),

Western Coalfields Limited (WCL),

South Eastern Coalfields Limited (SECL),

Northern Coalfields Limited (NCL),

Mahanadi Coalfields Limited (MCL) and

Central Mine Planning & Design Institute Limited (CMPDIL).

In addition, CIL has a foreign subsidiary in Mozambique namely Coal India Africana Limitada (CIAL).

The mines in Assam i.e. North Eastern Coalfields continue to be managed directly by CIL. Similarly, Dankuni Coal Complex also continues to be on lease with South Eastern Coalfields Limited.

MCL has three subsidiaries, namely MNH Shakti Ltd., MJSJ Coal Ltd. and Mahanadi Basin Power Ltd.

a. MNH Shakti Limited

MNH Shakti Limited has been formed with MCL having 70% stake along with Neyveli Lignite Corporation and Hindalco holding the rest. The coal production is targeted from Talabira OCP with an annual capacity of 20 MT.

b. MJSJ Coal Limited

MJSJ Coal Limited has been formed with MCL having 60% stake along with JSW Steel, Jindal Thermal Power Limited, Jindal Stainless Steel and Shyam Metallics & Energy Limited holding the rest. The coal production is targeted from Gopalprasad OCP with an annual capacity of 15 MT.

c. Mahanadi Basin Power Limited

Mahanadi Basin Power Limited has been formed on 2nd December'2011 as a SPV with 100% shares held by MCL with power generation capacity of 2X800 MW through Pit Head power plant at Basundhara Coalfields.

Joint Venture with OPTCL

MCL has also formed a joint venture Company viz., Neelanchal Power Transmission Company Pvt. Limited (NPTCPL) on 8th January, 2013 with an objective of carrying out power transmission business jointly with M/s OPTCL having an equity share holding of 50:50.

Subsidiaries of SECL

SECL has formed two subsidiary companies viz. M/s Chhattisgarh East Railway Ltd on 12th March' 2013 and M/s Chhattisgarh East-West Railway Ltd on 25th March' 2013 with 64% holding in each of the subsidiaries for construction of railway lines for evacuation of coal.

1. NOTABLE ACHIEVEMENTS

• For the year 2013-14, the Company has achieved a production of 462.42 MT, removed OB of 806.544 MM3 and achieved an off-take of 471.58 MT., with a growth of 2.26%, 8.01% and 1.38% respectively compared to last year.

• ECL and BCCL not only achieved their AAP targets of coal production, OB removal and off-take but also recorded a significant growth in coal production and OB removal. SECL has also achieved the AAP target of coal production with 5.11% growth.

• OB removal during this year is noteworthy as it has registered an overall growth of 8.01% over last year. The composite excavation (Coal + OB) in CIL has registered a growth of 6.7% over last year.

• Coal supply to power utilities during the year is 353.83 MT., which is 94.1% of the target and has registered a growth of about 2.4% compared to last year. This dispatch achievement is 86% against the quantity committed under FSA/MoU to power utilities.

• CIL has paid an interim dividend @ of 290% i.e. Rs. 29/-per share of face value of Rs. 10/-. This is the highest ever dividend paid by the Company till date.

2. FINANCIAL PERFORMANCE

2.1 Financial Results (CIL consolidated)

CIL is one of the largest profit making and tax and dividend paying enterprises. CIL and its subsidiaries have achieved an aggregate pre-tax profit of Rs. 22,879.54 crores for the year 2013-14 against a pre-tax profit of Rs. 24,979.04 crores in the year 2012-13.

(Rs. in crores)

Company (CIL subsidiaries/ CIL standalone) 2013-14 Profit 2012-13 Profit
ECL (+) 1299.28 (+) 1897.18
BCCL (+) 2089.01 (+) 1709.06
CCL (+) 2525.87 (+) 2683.56
NCL (+) 3355.71 (+) 4420.58
WCL (+) 325.86 (+) 428.87
SECL (consolidated) (+) 7202.40 (+) 6290.37
MCL (consolidated) (+) 5429.08 (+) 6202.48
CMPDIL (+) 34.60 (+) 29.77
CIL (standalone) (+) 15420.47 (+) 10338.03
Sub-Total 37682.28 (+) 33999.90
Less: Dividend from Subsidiaries (-) 14406.82 (-) 9038.08
Total (+) 23275.46 (+) 24961.82
Adjustment for deferred revenue income (+) - (+) 18.34
Adjustment for exchange rate variation on Current Account of overseas subsidiary (+) 0.72 (+) (1.12)
Adjustment for waiver of accrued interest of BCCL (396.64)
Overall Profit as per Consolidated Accounts (+) 22879.54 (+) 24979.04

CIL as a group has achieved post tax profit of Rs. 15,111.67 crores in 2013-14 (excluding share of minority loss of Rs. 0.04 crore; previous year: Nil) as compared to Rs. 17,356.36 crores in 2012-13.

Highlights of performance

The highlights of performance of Coal India Limited including its subsidiaries for the year 2013-14 compared to the previous year are shown in the table below:

2013-14 2012-13
Production of Coal (in million tonnes) 462.42 452.21
Off-take of Coal (in million tonnes) 471.58 465.18
Sales (Gross) (Rs./Crores) 89374.51 88281.32
Capital Employed (Rs./Crores) Note- 1 74891.87 78984.09
Capital Employed (Rs./Crores)- excluding capital work in progress and intangible assets under development. 70386.60 75488.14
Net Worth (Rs./Crores) (as per Accounts) 42391.86 48460.81
Profit Before Tax (Rs./Crores) 22879.54 24979.04
Profit After Tax (Rs./Crores) 15111.67 17356.36
PAT / Capital Employed (in %) 20.18 21.97
Profit before Tax / Net Worth (in %) 53.97 51.54
Profit after Tax / Net Worth (in %) 35.65 35.82
Earning Per Share (Rs.) (Considering face value of Rs. 10 per share) 23.92 27.63
Dividend per Share (Rs.) (Considering face value of Rs. 10 per share) 29.00 14.00
Coal Stock (net) (in terms of no. of months net sales) 0.72 0.76
Trade Receivables (net) (in terms of no. of months gross sales) 1.11 1.42

Note-1:

Capital employed = Gross Block of Fixed assets (including capital work in progress and intangible assets under development) less accumulated depreciation plus current assets minus current liabilities.

Transfer to reserves

During the year 2013-14, transfer to various reserves out of CIL (standalone) profits are as under:-

Transfer to General Reserves - Rs. 1500.85 crores

Transfer to CSR Reserves - Rs. 25.34 crores

Transfer to Sustainable Development Reserves - Rs. 10.19 crores

2.2 Dividend Income and Pay Outs (CIL- standalone)

While the financial statements of both CIL standalone and CIL consolidated are presented separately, it is only the CIL (standalone) which is listed and is relevant for dividend payment to its shareholders. The dividend to its shareholders are paid out of CIL's standalone income, the major part of which constitutes the dividend income received by it (CIL - standalone) from its five profit

making subsidiaries i.e. CCL, NCL, WCL, SECL and MCL.

The breakup of such dividend (interim + final) received and accounted for during the year from different subsidiaries are given below:-

(Rs. in crores)

Company (paying subsidiaries)

Dividend Income of CIL (standalone)

2013-14 2012-13
CCL 1009.37 1486.74
NCL 2746.12 1662.05
WCL 194.60 184.04
SECL 3444.63 2984.73
MCL 7012.10 2720.52
Total 14406.82 9038.08

During the year, Coal India Limited (standalone) has paid a total dividend (by way of interim dividend) of Rs. 18317.46 crores @ Rs. 29/- per share on 6316364400 number of Equity Shares of Rs. 10/- each fully paid up. Out of the above total dividend, the share of Govt of India was Rs. 16485.71 crores and for other shareholders, Rs. 1831.75 crores. (Earlier year - Govt of India - Rs. 7958.62 crores and other shareholders - Rs. 884.29 crores)

2.3 Observation of the Statutory Auditors

The Statutory Auditors have given their observations on the standalone accounts of the Company for the year ended 31st March' 2014. The Auditors' observations in terms of Section 217(3) of the Companies Act'1956 and Management Explanation are enclosed as

Annexure IV.

3. COAL MARKETING 3.1

(a) Off-take of Raw Coal

Off-take of raw coal continued to maintain its upward trend and reached 471.58 million tonnes for fiscal ended March 2014, surpassing previous highest figure of 465.18 million tonnes achieved during the last year, i.e., an increase of 1.4 % over the last year. The overall raw coal off-take achieved was 95.8 % of the Annual Action Plan Target.

Company-wise coal off-take:-

The Company-wise target vis-a-vis actual off-take for 2013-14 and 2012-13 are shown below:

Figs. in million tonnes

2013-14

2012-13

Growth over last year

Company AAP Target Achieved % Achieved Achieved Abs.
ECL 35.20 36.26 103.0 35.84 0.42 1.2
BCCL 33.20 34.20 103.0 33.04 1.16 3.5
CCL 57.20 52.12 91.1 52.89 -0.77 -1.5
NCL 73.50 72.11 98.1 67.29 4.82 7.2
WCL 44.10 39.94 90.6 41.55 -1.61 -3.9
SECL 124.50 122.03 98.0 121.99 0.04 0.03
MCL 123.30 114.34 92.7 111.96 2.38 2.1
NEC 1.00 0.58 58.0 0.62 -0.04 -6.5
CIL 492.00 471.58 95.8 465.18 6.40 1.4

From the above, it may be seen that ECL and BCCL had not only exceeded their targets but also achieved positive growth over last year's off-take. Barring CCL, WCL and NEC all other coal companies registered a positive growth in off-take. Off-take from CCL was affected due to i) strike by contractor's workers, dismantling of Purnadih bridge as per the order of High Court ii) stringent restrictions imposed by State Government to ensure implementation of permissible carrying capacity causing resentment among the contractors and their reluctance to execute the contract iii) Naxalite/Extremists restricted loading from Tori siding for a considerable period of time and iv) frequent Bandhs / local agitation. At WCL, unprecedented heavy rain during monsoon had a devastating effect. Damaged roads and bridges, inundation of open-cast mines, badly affected coal transportation and off-take. Less lifting by MAHAGENCO-Power stations, MPEB-Sarni, HPGCL-Panipat, GEB-Ukai etc. also led to the shortfall.

(b) Sectorwise dispatch of coal & coal products:-

Sector-wise break-up of dispatch of coal and coal products during 2013-14 against target and last year's actuals are given below:-

Figs. in million tonnes

Year

2013-14

2012-13

Growth over Last Year

Sector AAP Target Dispatch % Satn. Actual Abs. %
Power (Util) 376.18 353.83 94.1 345.43 8.40 2.4
Steel * 4.72 3.66 77.5 4.74 -1.08 -22.8
Cement** 7.08 5.45 77.0 6.47 -1.02 -15.8
Fertilizer 2.84 2.29 80.6 2.50 -0.21 -8.4
Others 99.72 106.25 106.5 107.07 -0.82 -0.8
Despatch 490.54 471.48 96.1 466.21 5.27 1.1

* despatch of washed coking coal and raw coking coal for direct feed, blendable coal to steel plants and to external washeries. ** despatch to cement plants excluding cement cpp.

3.2 Dispatch of coal and coal products by various modes:-

Dispatch of coal and coal products during 2013-14 went upto 471.48 million tonnes from 466.21 million tonnes registering a growth of 1.1 %. Overall despatch by non-rail mode had been almost 104% of the target. Growth in despatches via rail mode was 3.3 % whereas overall non-rail mode it went down by 1.4 % compared to previous year. Movement by MGR was at par with last year. The performance could have been even better, but for less movement through MGR at ECL, NCL, MCL and WCL. Road dispatch of CIL was more than the target set.

Dispatch of coal and coal products by various modes for the years 2013-14 and 2012-13 are given below:

(Figs. in million tonnes)

Year

2013-14

2012-13

Growth over Last Year

Mode AAP Target Despatch % Satn. Actual Abs.
Rail 285.76 259.41 90.8 251.11 8.30 3.3
Road 99.12 112.81 113.8 115.68 -2.87 -2.5
MGR 93.24 88.75 95.2 88.77 -0.02 0.0
Other Modes 12.42 10.51 84.6 10.65 -0.14 -1.3
Overall 490.54 471.48 96.1 466.21 5.27 1.1

3. 3 Wagon Loading

Overall wagon loading materialization was 90.3 % of target. This was achieved due to sustained efforts and regular coordination with railways at different levels. The increase in loading over last year was of 6.12 rakes per day. Company wise performance showed that ECL, NCL and SECL had exceeded last year's level of loading and almost achieved their target. Also, Rake loading performance was more than last year at BCCL, WCL and MCL.

(Figs. in Rake/day)

2013-14

2012-13

Growth over last year

Company AAP Target Achieved % Achieved Achieved Abs. %
ECL 18.22 18.02 98.9 17.78 0.24 1.3
BCCL 24.97 22.16 88.7 20.84 1.32 6.3
CCL 34.95 25.21 72.1 27.26 -2.05 -7.5
NCL 20.98 20.88 99.5 18.67 2.21 11.8
WCL 16.99 15.70 92.4 15.16 0.54 3.6
SECL 35.02 34.25 97.8 32.90 1.35 4.1
MCL 58.69 53.51 91.2 50.83 2.68 5.3
NEC 0.87 0.43 49.4 0.60 -0.17 -28.3
CIL * 210.69 190.16 90.3 184.04 6.12 3.3

Note: Due to revision of wagon loading figures submitted by Railway Board, Kolkata and WCL, Nagpur for the year 2012-13 - the loading is shown as 184.04 rakes/day, instead of 186.4 rakes/day. The difference was caused due to inclusion of non-CIL loading by Railways in the loading figures of WCL which was subsequently corrected by Railways and CIL.

The loading would have been more but for the following reasons:

• Cyclone 'Phailin' followed by devastating rainfall in October' 2013.

• At ECL, regulated lifting by many power utilities like WBPDCL, NTPC, DPL and RGTP-Hissar etc either, due to high stock at TPS end or non-payment of advance coal values as per terms of FSA and frequent railway restrictions due to movement of imported rakes/up-country movement.

• At CCL, Naxalite/Extremists restricted loading from Tori siding for a considerable period of time; frequent bandhs/ local agitation and regulated lifting by HPGCL power stations.

• At NCL, regulated lifting by HPGCL, RRVUNL and Rajghat TPS and non-payment of advance coal values as per terms of FSA by the Power Stations.

• At WCL, less lifting by MAHAGENCO-Power stations, MPEB-Sarni, HPGCL-Panipat, GEB-Ukai etc.

• At SECL, regulated lifting by GEB & RRVUNL.

• At MCL, contractor's workers went on strike at S-3 and S-4 siding of Talcher field during October'13-January'14 and restriction in transportation and loading activity imposed by State Govt of Odisha from 11.00 AM to 3.30 PM during summer due to excessive heat.

3.4 Consumer satisfaction

i) In order to ensure enhanced customer satisfaction, special emphasis has been given to quality management. Steps were taken to monitor quality right at the coalface apart from bringing further improvements in crushing, handling, loading and transport system.

ii) CIL has built coal handling plants with capacity of about 296 MT per annum so as to maximize despatches of crushed/sized coal to the consumer.

In addition, washeries at BCCL, CCL, WCL and NCL have adequate crushing/sizing facilities of about 39.4 million tonnes.

iii) Measures like picking of shale/stone, selective mining by conventional mode as well as by surface miners, adopting proper blasting procedure/technique for reducing the possibility of admixture of coal with over-burden materials, improved fragmentation of coal etc. are being taken for improving coal quality.

iv) Surface Miners have been deployed for selective mining at some of the mines to improve the quality of coal. Action is being taken for deployment of more surface miners in other mines where geo-mining condition permits. Already 56 Surface Miners have been deployed in opencast mines and are wor

Futures & Options Quote
Expiry Date :
363.90    [12.90] ([3.42]%)
Instrument: FUTSTK
Expiry Date: 31-Jul-2014
Open Price: 376.55
Average Price: 366.57
No. of Contracts Traded: 7,363
Open Interest: 93,92,000
Underlying: COALINDIA
Market Lot: 1,000
Previous Close: 363.90
Day's High | Low: 377.80 | 362.80
Turnover (Cr.): 269.91
Open Int. Change: 0,23,70,000 ([20.15]% )
Key Information

Key Executives:

R Mohan Das , Director (Personnel)

M Viswanathan , Company Secretary

Nagendra Kumar , Director (Technical)

B K Saxena , Director (Marketing)


Company Head Office / Quarters:

Coal Bhawan 3rd Floor Core-2,
Plot AF-III New Town Rajarhat,
Kolkata,
West Bengal-700156
Phone : West Bengal-91-33-23246526 / West Bengal-
Fax : West Bengal-91-33-23246510 / West Bengal-
E-mail : complianceofficer@coalindia.in
Web : http://www.coalindia.in

Registrars:

Karvy Computershare Pvt Ltd
Plot No 17-24 ,Vittal Rao Nagar ,Madhapur ,Hyderabad-500081

 
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