Management Discussion and Analysis Report
1.0 INDUSTRY STRUCTURE AND DEVELOPMENT
Coal in India and Coal India Limited
Coal sector plays a crucial role in a country like India where energy security is a critical pillar for sustained economic growth and prosperity. The energy security of the country and its prosperity are integrally linked to efficient and effective use of its most abundant, affordable and dependent fuel, coal.
In Indian economy, a significant proportion of Coals demand is for power generation in the thermal power sector. The balance demand is through non- regulated sectors comprising steel, cement, captive power plants etc. It is envisaged that new segments such as power demand from use of electric vehicles and demand for coal from the chemicals sector etc. would also add to the existing demand.
Today India is the 2nd largest producer of coal in the world. The All India Coal Production during 2023-24 stood at 997.25 MT with a positive growth of 11.65%. Coal India Limited (CIL) produced 773.647 MT with a positive growth of 10.02% during 2023-24. Singareni Collieries Company Limited (SCCL) production of coal during 2023-24 was 70.02 MT with a positive growth of 4.30%. Small quantities of coal are also produced by TISCO, IISCO, DVC and others.
The dependability on coal may be gauged by the fact that about 49% of Indias installed power capacity is coal (excluding Lignite )-based. CIL produces around 78% of Indias overall coal production and it alone meets to the tune of 40% of primary commercial energy requirement. As India aims to increase its power generation capacity in coming years, to cater to demand from rising economy, population growth and rapid urbanization, a significant portion of the capacity is expected to come from coal itself.
Despite the increasing thrust on development of renewable energy sources, coal will continue to remain the bedrock for Indias energy matrix for the time being, given its domestic availability as an efficient fuel. Coal is likely to remain a significant part of Indias energy mix in the short-to medium term, especially in sectors such as power generation, steel and cement, where alternative energy sources are not yet fully viable.
As per assessment under Vision @2047, coal is likely to be the major contributor for energy security of the nation. Though demand may slow down in coming years, the absolute demand will not be less than the present as base load requirement will continue to be met from coal. CIL and its subsidiaries have planned to achieve 1 BT production by 2025-26. Further, considering the demand of coal in the country, the tentative long term production projections for CIL is expected to peak at 1300 MTPA by 2034-35 and it is expected that 1 BT production will continued to be required up to 2047.
In terms of availability, coal is the most abundant fossil fuel available with India. The estimated coal reserves of the country as on 01.04.2023 are 378.21 billion tonnes, which are spread over 69 coalfields, are mainly confined to eastern and south central parts of the country.
The Highlights of inventory of Geological Resources of Indian Coal (as on 01.04.2023), prepared by the Geological Survey of India is tabulated below:
A total of 3,78,207.28 Mt of geological resources of coal have so far been estimated in India, up to the maximum depth of 1200 m. Out of the total resources, the Gondwana coalfields account for 3,76,551.74 Mt (99.56%), while the Tertiary coalfields of Himalayan region contribute 1,655.54 Mt (0.43%) of coal resources.
The type-wise and category- wise break-un is oiven below:
(Resource in million tonne) | |||||
Coal Type | Proved | Indicated | Inferred | Total | % share |
Prime Coking | 5132.65 | 185.64 | 0.00 | 5318.29 | 1.41 |
Medium Coking | 16499.51 | 10266.18 | 1761.43 | 28527.12 | 7.54 |
Semi Coking | 529.68 | 1081.47 | 186.33 | 1797.48 | 0.48 |
Sub-Total of Coking | 22161.84 | 11533.29 | 1947.76 | 35642.89 | 9.43 |
Non-Coking | 177148.25 | 140027.60 | 23733.00 | 340908.85 | 90.14 |
Tertiary | 593.81 | 121.17 | 940.56 | 1655.54 | 0.44 |
Grand Total | 199903.90 | 151682.06 | 26621.32 | 378207.28 | 100.00 |
% share | 52.86 | 40.11 | 7.04 | 100.00 |
The depth-wise and cateqory-wise break-up of Indian coal resources is as follows:
(Resource in million tonne) | |||||
Depth Range (m) | Proved | Indicated | Inferred | Total | % share |
0-300 | 135041.55 | 59791.49 | 7061.87 | 201894.91 | 53.38 |
300-600 | 41627.43 | 68226.44 | 12856.84 | 122710.71 | 32.45 |
0-600 (for Jharia only) | 15229.16 | 26.78 | 15255.94 | 4.03 | |
600-1200 | 8005.76 | 23637.35 | 6702.61 | 38345.72 | 10.14 |
Total | 199903.90 | 151682.06 | 26621.32 | 378207.28 | 100.00 |
At the current rate of production in the country, the reserves are adequate to meet the demand.
2.0 SWOT ANALYSIS
Strengths
Large scale of operations allow economies in scale of production.
Large coal resource base.
Geographical spread of operations in India allows proximity to a large and diversified customer base.
Strong financial credentials.
Skilled and diversified workforce with experience.
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/ cheapest source of energy.
Threats
Pressure of international body like UN to comply Paris Agreement & COP26 at Glasgow on climate change to curb use of fossil fuel.
Impact of commercial mining
Possibility of availability of low cost imported coal may significantly affect future of indigenous production.
Increase in proportion of renewables in the energy mix and demand stagnation in future.
Resistance to part with land, creating problems in possession of land and rehabilitation; Rapid appreciation in land cost.
Weaknesses
High cost of production in underground (legacy) mines.
Evacuation infrastructure bottleneck in certain areas due to the land, statutory clearance and law & order issues.
Inherent inferior quality of indigenous coal due to high ash content.
Constraints in possession of land.
High wages cost.
Absence of indigenous manufacturing support.
Opportunities
Being a cheaper source of energy compared to alternate sources available in India, coal to remain key primary energy source.
Diversification to non-coal sector.
Commitments of Panchamrit and Atma Nirbhar Bharat.
Strong economic growth in India and resultant demand for energy, particularly coal as an energy source.
Large scale Rural electrification and Power for All UDAYscheme.
Export opportunities to neighboring countries.
Optimizing production cost through Linkage rationalization.
To adopt alternative energy by diversifying into clean coal technology.
To diversify its operation into solar sector for having significant presence in Indias overall energy mix.
Enhanced demand of power due to increased use of electric vehicles.
3.0 SEGMENT-WISE PERFORMANCE
Production, Off-take and OBR performances are available in Directors Report.
4.0 OUTLOOK:
OIL has envisaged coal supply target of 838 Mt in 2024- 25 which is a growth of more than 8% over the previous years achievement. 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 Rs.power supply to all homes in the country for which a roadmap to achieve 1 Bt of coal production 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, enhancing production from U/G mines 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 despatches through "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 15,500 Crores for maintaining its volume growth in 2024-25 and beyond. In addition, the company has also envisaged for investing substantial amount in different schemes in 2024-25 such as development of railway infrastructure project, solar power, Thermal Power Plants, Coal Bed Methane (CBM), revival of fertilizer plants etc.
Marketing Outlook:
The total power generation (inch RES) in the country grew to about 1739 BU clocking a growth of nearly Rs.%. The coal-based generation in FY 2023-24 was projected at 1255 BU with a likely growth of 9.5 % over FY 2022- 23. The actual coal based generation in the country for FY 2023-24 was 1261 BU with a 10 % growth over the previous year. The domestic coal based generation grew to 1177 BU (6.5% growth over previous year). Taking into consideration the growth of power generation and consequential increase in coal demand, the target of coal despatch for FY 2023-24 was 780 MT. The demand for supply to power sector was projected as 610 MT against which Coal India Limited (CIL) supplied 619.7 MT(5.6 % growth over previous year)
The coal supply to Non Regulated Sector(NRS) was 134.4 MT (23.8 % growth over previous year). This is the highest supply to NRS. The e-auction coal booking during FY 2023-24 was 84.4 MT against 53.4 MT during previous year. The premium on e-auction during FY 2023-24 was 72 % as against 252 % in previous year.
The provisional Fuel Supply Agreement (FSA) commitments for Power Sector, NRS and bridge linkage were at about 698.6 Million Tonne Per Annum(MTPA) as on 31.03.2024. The likely demand of CIL coal from Power sector for FY 2024-25 is about 661 MT. The yearly target for coal despatch in FY 2024-25 has been set at about 838 MT so as to cater to the entire demand of power sector, NRS and also to substitute the substitutable imported coal in the country. In order to tap the potential future market for coal consumption and explore alternative uses of domestic coal, CIL intends to offer more coking coal to steel sector and also supply coal for upcoming coal gasification projects.
Coal gasification is a process that is environment friendly as compared to the combustion of coal and can be a better option for future use of coal. Coal gasification, a transformative technology, holds the potential to significantly benefit the Indian economy by addressing energy security, reducing greenhouse gas emissions, and fostering economic growth.
The demand of coal for coal gasification may increase to about 100 MTPA by the year 2030. In order to support the gasification initiatives, CIL has created a separate window under NRS auction policy for coal gasification.
To have a seamless evacuation system for the projected production, an action plan to enhance and strengthen the infrastructure of coal evacuation for existing, ongoing and future projects of subsidiary companies is in place. Rail infrastructure is being built both on Deposit Basis as well as by forming SPVs with Rail PSUs and the concerned State Govt, at an investment of about Rs 20,000 Crore.
All these new rail projects when fully commissioned shall add about 365 MTPA coal evacuation capacity to the Indian railway network. Out of this 365 MTPA capacity, about 250 MTPA capacity has already been added to the Indian railway network and construction works for the balance capacity addition is in progress and is anticipated to be completed byAug26.
Apart from the above, CIL is also developing new First Mile Connectivity (FMC) rail connectivity and Railway Sidings with a capital investment of about Rs 5,500 Crore.
Mechanized and Computerised loading
In addition to the 151 MTPA Rapid Loading capacity of CIL as on Aug 2019, CIL has also taken steps to upgrade the mechanized coal transportation and loading system under First Mile Connectivity1 projects in four phases at an estimated capital investment of about Rs.27,750 Crore.
75 FMC projects of 837.5 MTPA are being implemented to consolidate CILs effort towards upgradation and expansion of coal evacuation infrastructure.
CIL has already commissioned 15 FMC Projects of 200.5 MTPA capacity thus enhancing the rapid loading capacity to 351.5 MTPA. 18 FMC projects are expected to be completed in current FY 24-25. CIL plans to operationalize all the projects of Phase-I, Phase-ll, Phase-Ill and Phase-IV by FY 29-30 thereby having a cumulative Rapid Loading capacity of 988.5 MTPA.
Overall, CIL is investing about Rs 53,250 Cr in developing mechanized evacuation infrastructure under its command areas. The average daily rake- loading through SILO is expected to improve from 16% to more than 33% in the FY 2024-25.
In order to understand the requirements of the consumers, CIL is conducting quarterly zone- wise consumer meeting with both power and non-power consumers separately. Further, subsidiaries also conduct meeting with consumers at regular intervals. In addition to promote ease of doing business, Coal India Ltd. has set up a Consumer Grievance Redressal Mechanism to help redress the grievances of consumers related to coal supplies and other related issues. Consumers can email their grievances along with supporting documents to grahaksamadhan@coalindia.in CIL endeavours to evaluate and resolve the grievance at the earliest.
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 (TPA), as per the choice of consumer, restriction of grade slippages, timely issuance of credit/debit notes on quality grounds under purview of FSA etc.
Recently, after discontinuation of services by CIMFR, eleven third party sampling agencies was empaneled by an independent entity under Ministry of Power to cater to both power as well as non-power sector. Further, CIL is also empaneling more third party sampling agencies exclusively for non-power sector. This will give a wide range of options to the consumers to choose TPA from the empanelled agencies.
With the objective of enhancing transparency in the dispatch of quality coal, UTTAM (Unlocking Transparency by Third Party Assessment of Mined Coal) portal was created to provide the customers an overview of the quality of coal being dispatched.
In order to expedite and facilitate the reconciliation of coal bills on a regular basis, an online reconciliation portal has been developed by Coal India Limited. Consumers as well as subsidiaries are performing bill wise as well as periodic reconciliation online. As on date all Power Sector consumers are actively using the Portal. CIL is encouraging Non- Power CPSEs and CPPs to register and reconcile their bills through this portal.
Operations Outlook:
In CIL, as on 01.04.24, 119 ongoing mining projects costing 20 Crores and above having capacity of about 896 Mty with sanctioned capital of Rs. 1,33,576 Crores are under different stages of implementation. For achieving production target in 2024-25, EC for 15 no. of proposals with incremental capacity of about 39.73 Mty are under different stages of approval. In FY-2024-25, Stage-ll FC of 11 nos. of proposals involving 2697.27 Ha (tentative) forest land are required to achieve coal production target. Also, total land to be possessed by the subsidiaries of CIL has been estimated to be 3028.44 Ha for achieving 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. CIL has taken initiatives for implementation of digitization of mines for improving operational efficiency which have been implemented in seven (7) mines of NCL& SECL.
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 up for development & operation of new mines/blocks through MDO route. Further, CIL has identified 36 nos. of closed/ abandoned/discontinued underground mines as of now for operation through MDO route. Out of this LoA has been issued for 20 mines out of which agreement signed for 15 mines.
With a vision to extract coal environmentally and socially friendly manner, CIL is now looking forward to enhance its production from underground mining. As the open castable 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 restriction.
With large nos. of old/discontinued/abandoned potential OC mines now lying idle are being identified for being taken-up through Highwall mining. CIL envisages 30 such HW mines to be implemented within a span of 5-6 years. So far 5 HWs in 4 mines have been implemented and Rs.more are at different stages of implementation of which LoA issued for 2 mines and tender floated for 1 mines.
As such, CIL has already formulated UG vision plan wherein it has been envisaged 100 Mt production from its UG mines by 2029-30. CIL has planned to introduce more and more Mass Production Technology (MPT) in its UG mines and planned to implement 140 Continuous Miners (CM) for achieving the milestone of 100 Mt UG production.
An exercise has been initiated for obtaining relaxation in mandate in order to facilitate 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:
Coal India and its subsidiaries have cumulative electricity contract demand of 1100 MVA approximately with an annual energy consumption of approximately 4600 million units. Coal India Ltd is well poised to adopt clean energy to cater to its electrical energy requirement. The total solar energy generated during 2023-24 was about 20.22 million units through its installed RE units which is 196 % more than the previous year. In this endeavor, CIL has planned to become a net-zero energy company by setting up 3 GW Solar Power Projects to offset the current fossil fuel-based power requirement. CIL intends to add another 2 GW of renewable energy, aiming for a total installed capacity of 5 GW. CIL has also incorporated a subsidiary company namely CIL Navikarniya Urja Limited (CNUL) to venture into the new Business areas of new and renewable Energy (Non-conventional) segments.
CIL envisaged a three-pronged strategy to achieve the 5 GW Renewable plan.
Development of Solar Projects in available land parcels and rooftop spaces at subsidiaries of CIL wherever feasible.
Development of Solar Projects in states with high potential like Rajasthan and Gujarat etc
Developing solar projects by participating in solar tenders of SECI/DISCOMs/Power exchanges etc.
CIL action plan for the development of 5 GW of solar power is as under:
CIL 5 GW Renewable Plan |
||||||
Plan Till FY 28-29 | Solar Installation till 2023-24 | 2024-25 | 2025-26 | 2026-27 | 2027-28 | 2028-29 |
Capacity in (MW) | 82.68 | 457 | 1415 | 750 | 1050 | 1250 |
a) 70 MW (50 MW NCL, 20 MW SECL) Ground mounted Solar & 1.629 MW Roof Top Solar project was commissioned in FY 23-24.
b) CIL secured 300 MW capacity in the KHAVDA Solar Park as part of its Pan India Participation in GUVNL Tender (Phase XXI). CIL is establishing this solar power project in Gujarat to supply solar power to GUVNL for 25 years.
c) CIL entered into an MOU with Rajasthan Rajya Vidyut Utpadan Nigam Ltd (RVUNL) on 10th March 24 to establish 4100 MW projects through a Joint Venture Company between RRVUNL and CIL. These projects include the commissioning of pithead coal- based thermal power projects, solar projects, pump storage plants (PSP), and wind projects
cl) CIL is implementing an overall 457 MW of Solar projects in FY 24-25. 209 MW, of ground-mounted solar projects and 18 MW of rooftop solar projects are in various stages of implementation and will be commissioned in FY 24-25. Approximately 230 MW of Solar projects are under Tendering Stage/ various stages of approvals. Out of 457 MW, CIL is implementing 307 MW on its own land.
e) BCCL- 45 MW, CCL - 44 MW, ECL-35 MW, MCL- 50 MW, SECL-20 MW, and WCL- 15 MW are under various stages of implementation.
f) 100 MW Gujarat, 40 MW- SECL, 21.5 MW- MCL, 35 MW- WCL, CCL-23 MW, and ECL-10 MW are under various stages of Tendering/Approvals.
g) Approximately 18 MW Rooftop solar power projects are under various stages of implementation at Subsidiaries. More rooftops are being identified to meetthe residential/commercial load of subsidiaries to reduce the power cost.
h) CIL is also exploring the feasibility of repurposing abandoned mines/Closed mines for Pump Storage Projects. Additionally, CIL is also exploring installing floating solar over abandoned query/ reservoirs and ground-mounted solar over stabilized OB dumps.
Research & Development:
CMPDIL is the nodal agency for coordination and monitoring of S&T projects in the coal sector as well as the R&D projects of CIL. The details of S&T and R&D projects taken-up by CMPDI on behalf of CIL are as in AnnexureA.
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 part of Risk Management Framework, Risk owners and Mitigation Plan owners have been identified for each risk & corresponding mitigation plans formulated to ensure continuous risk assessment and mitigation. A subcommittee 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.
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.
As per decision of Risk Management Committee, Risk related to Cyber Security has been included in RTMs. Special thrust has been given to check illegal mining by Drone application. CIL is monitoring and implementing mitigation measures on continuous basis.
6.0 INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
Coal India Limited (CIL) has a 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.
The top management monitors and reviews various activities on continuous basis. A set of standardized procedures and guidelines has been issued for all the facets of activities to ensure that best practices are adopted and those percolate even up to ground level.
In orderto ensure that all 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 Reports are periodically reviewed by the Audit Committee.
Further, the accounts of the Company are subject to C & AG audit in addition to the propriety audit conducted by them.
The Internal Financial Controls of the Company were reviewed and certified by Internal Auditors appointed. The Company has, in all material respects, laid down internal financial controls (including operational controls) and that such controls are adequate and were operating effectively during the year ended 31 st March, 2024.
7.0 DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE FINANCIAL DISCUSSION AND ANALYSIS
Driven by the commitment to meet the nations growing energy demands, group achieved robust operational performance in the 2023-24 fiscal year, thereby strengthening its financial position.
The current capital expenditure (CAPEX) has reached an unparalleled milestone of Rs. 23,475.41 crore against the previous year of Rs. 18,619 crore recording a growth of 26%. Growth is mainly on account of capitalization of Rs. 3,699.73 Crores as Stripping Activity Assets inthe Note-"Property, Plant and Equipment" due to change in accounting policy.
Contribution to Government exchequer during the current Financial Year stood at Rs. 60,198 crore against the previous year contribution of Rs. 56,524 crore.
Increase in the procurement through GeM in the current fiscal to the tune of Rs. 99,305.38 crore from Rs. 3,236.97 crore in the corresponding previous year.
Increase in CSR expenses by 12%
The aforementioned elements provide a partial insight into the lateral perspective of its financial advancement and robustness. Further elaboration on the financial performance, standing, and cash flow of the group is delineated below.
Group Financial Performance
Assessing the financial performance of the group offers valuable insights into its progress toward achieving its financial goals. The provided financial highlights and key performance ratios play a crucial role in evaluating the groups business performance by presenting a succinct overview of essential financial metrics and shedding light on operational efficiency. These highlights and key ratios provide a glimpse into the groups overall financial wellbeing and recent accomplishments.
Key financial performance ratios
I Particulars | Unit | 2023-24 | 2022-23 | Variation |
EBITDA1 | Rs. crore | 51,793 | 47,723 | 9% |
Profit Before Tax (PBT) | Rs. crore | 48,812.61 | 43,275 | 13% |
Profit for the Period (PAT) | Rs. crore | 37,369.13 | 31,723 | 18% |
Earnings per Share (EPS) | Rs. | 60.69 | 51.54 | 18% |
Dividend per Share (DPS)** | Rs. | 25.50 | 24.25 | 5% |
Operating Margin2 | % | 30% | 28% | 2% |
Net Profit Margin2 | % | 29% | 25% | 4% |
EBITDA Margin4 | % | 40% | 37% | 3% |
Return on Capital Employed (ROCE)6 | % | 27% | 28% | (1)% |
Return on Net Worth (RoNW)2 | % | 52.07% | 61.04% | (9)% |
Interest Coverage Ratio7 | Times | 61 | 64 | (6)% |
*FY2022-23 restated
"including recommended final dividend, which is subjectto approval in AGM.
1. Earnings before interest, depreciation and tax (EBITDA) - Profit before Tax + Finance Cost- Interest Income + Depreciation & Amortisation
2. Operating margin = Operating profit to revenue from operation; operating profit = PBT - Other Income- Share of joint venture profit and loss + Finance cost + CSR expense + provisions and write off made during the year
3. Net profit margin = PAT to net sales
4. EBITDA margin = EBIlTDAto net sales
5. ROCE= EBIT to average capital employed; EBIT = Profit before Tax + Finance Cost- Interest Income; Capital employed = Total Equity + Total non current liabilities
6. RoNW = PAT to average net worth
7. Interest coverage ratio = (PBT + Finance cost) to finance cost
Outshining all its previous records, group achieved unprecedented profitability driven by record production, offtake and operational efficiency during financial year 2023-24. During the fiscal year, it registered a pre-tax profit (PBT) of Rs. 48,813 crore and a post-tax profit (PAT) of Rs.37,369 crore. The increase in PBT stands at 13% compared to the previous year (restated), while PAT and EPS witness growth rates of 18% over the same period (restated).
During the year, based on an opinion from the Accounting Standard Board (ASB) of the Institute of Chartered Accountants of India (ICAI), the group implemented a revised accounting on stripping activity in accordance with Appendix B Stripping Costs in the Production Phase of a Surface Mine, of Ind AS 16, Property Plant, and Equipment. Accordingly in accordance with Ind AS 8, Accounting Policies, Changes in Accounting Estimates and Errors and Ind AS 1, Presentation of Financial Statements, the group has retrospectively restated its Balance Sheet as at 31st March 2023 and Statement of Profit and Loss forthe year 2022-23.
The adoption of the above revised accounting of stripping activity during the year has resulted in the restatement of previously reported profit before tax of FY 2022-23 Rs. 38,001 crore to Rs. 43,275crore i.e. increase by Rs. 5,274 crore. During the year, growth in PBT is on account of two facet, one is increase due to change in accounting of stripping activity amounting to Rs. 3,309 crore and another Rs. 2,229 crore on account of operational efficiency.
The Board of Directors of the holding company has recommended a final dividend of Rs. 5 per equity share, subject to approval in the ensuing AGM. This final dividend is over and above interim dividends of Rs. 20.50 which were paid to its shareholders during the current year. Thus, the total dividend forthe FY2023-24 is Rs.25.50 per share which is 255% of Face Value of Rs. 10 per equity share against the previous year of Rs. 24.25 per share.
The operating margin went up by 2% i.e. from 28% to 30% during the current year. This is mainly due to decrease in cost of materials consumed and employee benefit expenses. Similarly, there has been increase of 4% i.e. from 25% to 29% in net profit margin. Decline in return on net worth is mainly due to increase in average net worth by 38% from Rs.51,973 crore to Rs.71,767 crore as compared to this PAT only grew by 18%.
Interest coverage ratio decreased from 64 to 61 due to increased borrowings by ECL and subsidiary of SECL over previous year. Capital employed increased by 14% over previous year due to increase in other equity by 38% and negligible change in non-current liabilities whereas PAT increased by 13% resulting in decrease in return on capital employed by 1%.
A Comprehensive analysis of the groups financial performance, based on the Consolidated Financial Statements
Refer to the consolidated financial statements in this Integrated Annual Report for detailed financial statements, schedules and notes.
Rs. Crore | |||
Particulars | 2023-24 | 2022-23 | Variation |
Net Sales | 1,30,326 | 1,27,627 | 2% |
Other Operating Revenue | 11,998 | 10,624 | 13% |
Other Income | 7,969 | 6,560 | 21% |
Sales (Note 12.1):
Sales are presented as gross sales in notes to financial statements and net of various statutory levies in the 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 the sale of coal is mainly dependent on the notified price and e-auction premium which depends on the demand of coal.
Group recorded the all-time high sales Rs.1,30,326 crore with increase of 2% over previous year due to record offtake in financial year 2023-24. During the year, the group achieved an offtake of 753.52 million tonnes against 694.69 million tonnes in the previous year, registering an increase of 8%. FSA sales increased by Rs.11,439 crore as compared to previous year due to volume growth in FSA sales quantity and increase in the FSA average price per tonne by 4%. E auction quantity registered a volume growth of 13% and sharp decline of 37% in the e-auction average price from Rs. 4,841 to Rs.3,059 per tonne.This sharp decline in e-auction has adversely impacted the sales by Rs. 8684 crore in comparison to FY 2022-23 despite the volume growth of 13%. Thus overall quantitative growth in sales has propelled the growth in net sales value by 2% in spite of the decline in the overall average realisation price per tonne during FY 2023-24 Rs.1 728 per tonne as compared to last year of Rs. 1835 per tonne.
Other operating revenue (Note 12.1):
A major element of other operating revenue is transportation charges recovered from the customers. The company charges transportation costs for the transportation of coal to dispatch points under various slabs of distance and corresponding rates. The loading and transportation charges recovered (net of levies) during the year was Rs. 7,050 crore against Rs. 6,139 crore in the previous year mainly due to an increase in offtake and average surface transportation charges rates. Evacuation facility charges are billed on all dispatches to customers at the rate of Rs. 60 per tonne. Increase in offtake contributed to the increase in evacuation facility charges (net of levies) from Rs. 4,161 crore in the previous year to Rs.4,513 crore in the current year.
Revenue from services mainly includes consultancy and other services provided by CMPDIL, a subsidiary of CIL to parties outside the group, and freight income from rail operation by the subsidiary companies of SECL and MCL. The Revenue from services stood at Rs. 433 crore (net of levies) in FY 2023-24 against Rs. 321 crore (net of levies) in FY 2022-23.
Other Income (Note 12.2):
Other income includes interest income from deposits with banks, gain on the sale of mutual funds, rental income, write-back of provisions and liabilities, other miscellaneous income, etc. During the year, other income increased by Rs. 1,409 crore (21%) from Rs. 6,560 crore to Rs. 7,969 crore.
There is increase in interest income by Rs.1,505 crore mainly due to increase in interest income on income tax refund by Rs. 935 crore as compared to previous year. There is also increase in miscellaneous income by Rs.346 crore due to increase in bank guarantee encashment, penalty and liquidated damage from suppliers, processing fee income for e-auction etc. Further there is decline in of Rs. 505 crore in liabilities write back as compared to previous year.
Rs. Crore | |||
Particulars | 2023-24 | 2022 23 | Variation |
Cost of Materials Consumed | 11,580 | 13,557 | (15%) |
Employee Benefit Expenses | 48,783 | 49,410 | (1%) |
Contractual Expenses | 27,598 | 23,289 | 19% |
Stripping Activity Adjustment | (6,138) | (3,622) | 69% |
Other Expenses | 14,052 | 11,577 | 21% |
Cost of materials consumed (Note 13.1):
The cost of material consumed relates to materials and items of stores used in coal mining and processing operations, primarily POL, explosives, HEMM spares, and timber. Other consumables used in coal mining operations include tyres, spares for other plants and machinery relating to coal handling plants and beneficiation facilities, and other miscellaneous stores and spares. The cost of material consumed has reduced by Rs. 1,977 crore (15%) from Rs.13,557 in FY 2022-23 to Rs.11,580 crore in FY 2023-24. Decline in explosive prices and average bulk diesel rates has resulted in cost saving benefits to the group to the tune of Rs. 1,298 crore and Rs. 825 crore respectively.
Employee benefit expenses (Note 13.3):
The most significant expense of the group, employee benefit expense covering 48% of the total expense, shows human resource strength of the group. Employee Benefits expenses include salary, wages and allowances, contributions to provident fund, pension and gratuity, staff welfare expenses, overtime payments, leave encashment, attendance bonus, productivity and performance linked bonus and other incentives, and other employee benefits.
The employee benefit expenses incurred during the current year has declined by 1% as compared to the previous year. There is a net reduction in manpower by 10,349 employees during the current year, and there was provision for arrear salary of around Rs. 8,153 crore in previous year. NCWA-XI for the Non-Executives has been implemented in June 2023, and salary is being paid at a revised rate now.
Contractual expense (Note 13.7):
Contractual expenses which primarily consist of transportation charges for coal, sand, and materials carried out through third-party contractors, contractor expenses relating to wagon loading operations, outsourcing contracts related to Overburden removal (OBR) and Coal extraction activities and other miscellaneous works carried out through third-party contractors for haul road maintenance at mines and temporary lighting etc.
Increase in the contractual expense is mainly reflection of groups tremendous operational performance of incremental 60 Mill. Te. of coal and 310 MclIM of contractual overburden removal over last year. Increase in hiring charges of outsourcing contracts of Rs.3,780 crore and transportation charges of Rs. 225 crore has been recorded.
Stripping activity adjustment (Note 13.6):
This expense adjustment pertains to open cast mines. Stripping activity adjustment comprises mainly reversal of stripping activity provision and recognition of improved access to coal. Stripping activity provision is being reversed systematically whenever the situation of reversal arises as per material accounting policy of the Group. Improved access to coal arises when the actual volume of overburden removed is greater than the expected volume of overburden removal. The stripping cost for excess overburden removal over the expected overburden removal is capitalised to the stripping activity asset. During the year capitalisation of improved access to coal of Rs.3700 crore in comparison to Rs. 1,497 crore in last year is again portrayal of groups excellent performance of overburden removal over expectation.
Other Expenses (Note 13.8):
Major components affecting the surge in the other expenses by 21% are deliberated below:
In adherence to guidelines issued by the Department of Public Enterprises and the provisions of The Companies Act, 2013, Group has developed its CSR Policy. In accordance with the policy, the Group undertakes CSR activities out of the themes listed in Schedule-VII of the Companies Act. The group incurred Rs.654 crore during the current year which is 12% higher when compared to CSR expenses of Rs.587 crore incurred during the previous year.
There has been increase in repair and maintenance expenses on plant and equipment by Rs. 137 crore. Recognition of expected credit loss Rs.815 crore during the year on trade receivables led to increase in provision. Surge in the expenditure on environment and tree plantation by whooping 26% over last year, is witness of groups perseverance towards environmental consciousness and awareness.
Government of Jharkhand has brought a scheme "The Jharkhand Karadhan Adhiniyamo ki Bakaya Rashi ka Samadhan Adhiniyam 2022" (in short "Kar Samadhan Yojna 2022") for settlement of old arrears and disputes of JVAT Act 2005, CST Act 1956, Electricity Duty Act 1948 etc. Accordingly old pending cases of CCL and BCCL has been settled under scheme during the year which led to increase in the rates and taxes expenses by Rs. 649 crore. Further in NCL, recognition of provision for terminal taxes caused increase in rates and taxes by Rs. 497 crore during the year.
In miscellaneous expenses, Rs.514 crore was recognised during the year for SECL payable to Ministry of Coal in respect of profit accrued on Gare Palma mines for which Coal India Ltd. was appointed as custodian akin to a designated custodian.
Dividend Pay-out:
The Board of Directors of the company has recommended a final dividend of Rs. 5.00 (50.00%) per equity share subject to approval in the forthcoming Annual General Meeting of the company. The first interim dividend of Rs. 15.25 (152.50%) per equity share and second interim dividend of Rs. 5.25 (52.50 %) per equity share for the financial year 2023-24 were declared on 10th November 2023 and 12th February, 2024 respectively, resulting into total dividend of Rs.25.50 (255.00%) per equity share. In FY 2022-23, the holding company has declared a total dividend of Rs. 24.25 (242.50%) per equity share in the form of final dividend Rs. 4.00 (40%) per equity share and interim dividend of Rs.20.25 (202.50%) per equity share.
A summary of the financial performance of the wholly owned domestic coal producing subsidiary companies and Central Mine Planning & Design Institute during the financial year 2023-24:
Company | Equity Investment | Gross Turnover | PAT | Dividend for the year* |
Eastern Coalfields Limited (ECL) | 4,269 | 19,000 | 252 | - |
Bharat Coking Coal Limited (BCCL) | 4,657 | 17,601 | 1,564 | 44** |
Central Coalfields Limited (CCL) | 940 | 23,342 | 3,661 | 1,099 |
Northern Coalfields Limited (NCL) | 126 | 34,425 | 8,318 | 3,943 |
Western Coalfields Limited (WCL) | 297 | 23,281 | 3,245 | - |
South Eastern Coalfields Limited (SECL) | 278 | 38,905 | 6,877 | 2,092 |
Mahanadi Coalfields Limited (MCL) | 132 | 37,201 | 11,842 | 8,600 |
Central Mine Planning & Design Institute Limited (CMPDIL) | 19 | 2,041 | 503 | 100 |
including final dividend recommended, which is subject to approval in respective AGM of the subsidiary companies.
** Preference dividend
Proportion of ownership and share in financial performance of joint venture companies considered for the year:
Rs. Crore | ||||
Company | Equity Investment | Share Holding | Profit/(loss) Of Joint Venture | Share in profit (loss) |
CIL NTPC Urja Private Limited | 0.08 | 50% | 0.04 | 0.02 |
Talcher Fertilizers Limited (TFL)* | 805 | 33% | (9) | (3) |
Hindustan Urvarak & Rasayan Limited (HURL) | 2,643 | 33% | 1324 | 442 |
Coal Lignite Urja Vikas Private Limited (CLUVPL) | 0.01 | 50% | 0.13 | 0.07 |
*ln TFL loss of Rs. 35.10 Crores (CIL share of loss Rs. 11.70 crore) pertaining to FY 2022-23 was taken as adjustment in current year as the same was not considered in their provisional statements of previous year.
Group Financial Position
Financial position analysis of the group involves evaluating its financial statements to assess its overall financial health and stability. This analysis primarily focuses on the balance sheet, which provides a snapshot of the companys assets, liabilities, and shareholders equity as at 31.03.2024. Key elements include current assets, such as cash and inventory, which indicate liquidity, and fixed assets like property and equipment, representing long-term investments. Liabilities are scrutinized to understand the companys debt levels and obligations. The equity section reveals the owners stake in the company, highlighting retained earnings and contributed capital. Ratios such as the debt-to-equity ratio, current ratio are calculated to evaluate leverage, liquidity, and financial resilience. This comprehensive analysis helps stakeholders, including investors and creditors, to gauge the companys ability to meet its short-term obligations and sustain long-term growth.
Key financial position ratios
Particulars | Unit | FY 2023-24 | FY 2022-23 | Variance |
Debtors Turnover Ratio | Times | 13 | 13 | - |
Days Sales Outstanding | Days | 26 | 29 | (10)% |
Inventory Turnover Tatio : | Times | 14 | 17 | (14)% |
Days in Inventory (Qty)1 | Days | 42 | 36 | 17% |
Current Ratio5 | Times | 1.70 | 1.57 | 8% |
Long-Term Debt: Equity Capital | Times | 0.91 | 0.67 | 36% |
Net Worth: Equity Capital | Times | 13 | 10 | 36% |
1. Gross sales to average gross trade receivables excluding unbilled dues
2. Gross trade receivables excluding unbilled dues to average daily gross sales
3. Cost of goods sold to average inventory
4. Closing coal stock quantity to average daily production
5. Current assets to current liabilities
The growth in gross sales and increase in average debtors is by almost same proportion, keeping the turnover ratio intact. There has been significant improvement in the debtors collection. Inventory turnover ratio has declined due to increase in average inventory by 18% whereas there has been marginal increase of only 1 % in cost of goods sold. Increase in inventory holding from 36 days to 42 days of production is basically due to higher coal production performance of 10% over previous year in comparison to offtake growth of 8%. Net worth to equity capital has increased due to an increase in closing net worth. Additional non-current borrowings by subsidiary companies of SECL and CCL have led to increase in long term debt to equity capital ratio. Group has maintained its current ratio within ideal expected range.
A Comprehensive analysis of the groups financial position, based on the Consolidated Financial Statements
Refer to the consolidated financial statements in this Integrated Annual Report for detailed financial statements, schedules and notes.
Rs. Crore | |||
Particulars | 31.03.2024 | 1 31.03.2023* | Change |
Net Tangible Fixed Assets (PPE, CWIP and E&E) | 87689 | 77222 | 14% |
Net Intangible Assets | 6,940 | 4,947 | 40% |
Investments | 7,110 | 7,139 | (0.4)% |
Inventories | 10,177 | 8,155 | 25% |
Cash & Cash Equivalent and Other Bank Balance | 30,235 | 39,922 | (24)% |
Trade Receivables | 13,256 | 13,060 | 2% |
Other Financial Assets | 20,709 | 19,017 | 9% |
Other Current and Non-current Assets | 48,899 | 41,041 | 19% |
Rs.restated |
Net tangible fixed assets (PPE, CWIP and E&E) (Note 3.1 to Note 3.3):
Additions to gross block of property plant and equipment are mainly on plant and equipment of Rs. 7,019 crore, other land Rs. 3,194 crore, building Rs. 1,1 78 crore and railway siding Rs. 378 crore. Further addition of Rs. 3,700 crore for stripping activity assets, Rs. 898 crore in other mining infrastructure and Rs. 206 crore is in site restoration cost. Net addition in exploration and evaluation is Rs. 333 crore. Total charge of depreciation, amortization and impairment during the year on property plant and equipment is Rs. 6,326 crore.
Net intangible assets (Note 3.4 to Note 3.5):
Addition in Intangible assets under development of Rs. 1,541 is mainly for rail corridor under development of subsidiary companies of South Eastern Coalfields Limited namely Chhattisgarh East Railway Limited (CERE) and Chhattisgarh East-West Railway Limited (CEWRL).
Investments (Note 4.1):
Non-current investment comprises mainly investment in Joint venture companies. During the year Rs. 347 crore was invested in Hindustan Urvarak and Rasayan limited. Group has accounted profit of Rs. 427 crore in comparison to loss of Rs.8 crore in previous year as share in profit and loss of its joint venture companies.
Inventories (Note 5.1):
Growth in coal production has resulted in an increase in stock of raw coal of 20 Mill. Te. as compared to previous year, thereby surging value of stock by Rs. 1,466 crore. Value of store, spares and other inventories has also augmented by Rs. 593 crore mainly due to continuous induction of additional plant and equipment in mines to achieve higher production milestones.
Cash & cash equivalent and other bank balance (Note 4.4 to Note 4.5):
Groups balance mainly comprises deposits with scheduled commercial banks in current and term deposits. Discussion on inflow and outflow of cash and cash equivalent is covered in group cash flow position section of this discussion.
Trade Receivables (Note 4.3):
Trade receivables are mainly from central and state public sector entities of power and steel industries. Groups trade receivable excluding unbilled dues and allowance for expected credit loss stood Rs. 13,905 crore against Rs. 14,893 crore of last year. In spite of growth in sales, trade receivable outstanding has improved from 29 days to 26 days of gross sales, due to the managements strong focus on ensuring timely collection from customers.
Other financial assets (Note 4.6):
It includes mainly security deposits from vendors, deposit in escrow account of mine-closure plan, deposit for shifting and rehabilitation fund, other deposits and receivables and accrued interest. During the year, Coal Controller Organisation (CCO) has changed the system of deposit in escrow account from year-end deposit to advance deposit. As a result during the year Rs. 1,320 crore has been deposited in escrow account for FY 2023-24 and advance for FY 2024-25. There has been realisation of other deposits and claims of Rs.459 Crores and increase in accrued interest on bank deposits by Rs. 510 crore.
Other current and non-current assets (Note 6.1 to Note 6.2):
Continuous capex growth trend and future plan of the group has steered the increase in capital advance by Rs.2,993 crore. Parallel to mine expansion and production, incessant mine closure activities are also being undertaken by the group in line with its committed plans. Increase in progressive mine closure cost receivables from escrow fund of Rs.1,022 crore during the year is thriving depiction of groups mine closure commitment.
Deposits and receivables has increased by Rs.1,004 crore during the year mainly due to increase in deposit under protest for income tax cases. Increase in GST input tax credit of Rs.2,693 crore is majorly attributed to inverted duty structure in the Coal Industry.
Rs. Crore | |||
Particulars | 31.03.2024 | 31.03.2023* | Change |
Equity Share Capital | 6,163 | 6,163 | - |
Other Equity | 76,567 | 54,680 | 40% |
Borrowings | 6,289 | 4,115 | 53% |
Trade Payables | 8,386 | 8,549 | (2)% |
Other Financial Liabilities | 19,617 | 16,014 | 23% |
Other Current and Non-current Liabilities | 36,552 | 38,915 | (6)% |
Provisions | 80,992 | 91,339 | (11)% |
restated
Equity Share Capital (Note 7.1):
There is only one class of equity share of Rs.10/- each fully paid. There has not been any change in the equity share capital of the company. However through Offer for sale method of disinvestment, there has been change in the Government of India shareholding from 66.13% to 63.13%.
Other Equity (Note 7.2):
The movement in retained earnings was on account of profit earned during the year and payment of dividends. During the year, Coal India has paid Rs.2,465 crore final dividend for the FY 2022-23 and Interim dividend of Rs.12,633 crore. During the year MCL, NCL and CCL have issued bonus shares of Rs.3,495 crore utilising capital redemption reserve Rs.96 crore and remaining amount of Rs.3,399 crore out of general reserve.
Borrowings (Note 8.1):
The borrowings appearing in the books of the group are mainly on account of borrowings Rs.4,959 crore made by Chhattisgarh East Railway Limited (CERL) and Chhattisgarh East-West Railway Limited (CEWRL), which are subsidiary companies of SECL and Rs.478 crore by Jharkhand Central Railway Limited (JCRL), a subsidiary of CCL. Long term loan from Export Development Corporation, Canada 7158 crore and Bank overdraft 7663 crore against fixed deposits is related to Eastern Coalfields Limited (ECL).
Trade Payables (Note 8.3):
With growing procurement and transactions with MSME parties, trade payable balance from them has shown rise by Rs.103 crore. This is also a mark of groups continuous endeavor to promote the micro, small & medium enterprises (MSME). There has been decline of Rs.267 crore in the outstanding dues of creditors other than MSME.
Other Financial liabilities (Note 8.4):
Commensurate with operational growth, additional procurement of goods and services has resulted into increase in the security deposits from the vendors by7 467 crore. Soaring balance payable for capital expenditure by Rs.1,714 crore is indication of groups growing capital expenditure on the infrastructure .Employee benefit payable is basically payable amount for the latest month of the year. As a result of implementation of National Coal Wages Agreement (NCWA-XI) for the Non-Executives in June 2023, and annual increment effect, employee benefits payable increased by Rs.982 Crore. During the year, Rs.513 crore payable to Ministry of Coal recognized in South Eastern Coalfields Limited, in respect of profit accrued on Gare Pelma mines for which Coal India Ltd. was appointed as custodian akin to a designated custodian.
Other current and non-current liabilities (Note 10.1 to Note 10.2):
There has been increase of 71,222 crore in the government grants received for various public infrastructure capital projects works at Bharat Coking Coal Limited, Central Coalfields Limited and Mahanadi Coalfields Limited. Shifting and Rehabilitation work are undertaken for fire and stabilization of unstable areas of Eastern Coal Fields Limited and Bharat Coking Coal Limited under direction of the Ministry of Coal. During the year there has been utilisation of fund with corresponding reduction in the liability for the works by Rs.435 crore net of interest credit and contributions dues from subsidiary companies. Growth in the offtake has resulted into increase in the statutory dues payable by Rs.1,020 crore.
Provisions (Note 9.1):
The main factor of reduction in provision has been implementation of NCWA-XI during the year. The arrear payment for the period effective from July 2021 till May 2023 has been released during the year. This has caused the sharp decline in the employee benefit provision by Rs.8478 crore.
The second main reason for reduction of provision has been the systematic reversal of stripping activity provision by Rs.2438 crore in the mines where volume of overburden removed during the year has been more than expected volume of overburden removal. Increase in provision for Gratuity, Leave encashment and postretirement medical benefit due to reduction in discounting rate from 7.30% to 7.00%, has been inversely compensated by increase in respective plan assets balances. As a result, there is overall marginal increase of only Rs.112 crore for these employee benefits in the provision head. There has been increase in the mine closure provision of Rs.396 crore net of withdrawal during the period.
GrouD Cash Flow Position
Rs. Crore | ||
Particulars | 31.03.2024 | 31.03.2023 |
Cash and Cash Equivalent as at the beginning of the year | 5,627 | 7,063 |
Net Cash Flow Generated from Operating Activities | 18,103 | 35,734 |
Net Cash Used in Investing Activities | (4,486) | (23,466) |
Net Cash Used in Financing Activities | (13,899) | (13,704) |
Net Cash Flow | (282) | (1,436) |
Cash and Cash Equivalent as at the end of the year | 5,345 | 5,627 |
The group earned Rs.18,103 crore from operating activity after payment of income taxes. Realisation of the bank deposits, mutual fund and interest income were Rs.12,611 crore under investing activity. Above cash flow earned amount has been used towards the purchase of property, plant, and, equipment and expenses towards exploration and evaluation assets were Rs.16,821 crore. Rs.347 crore was invested in the Joint Venture - Hindustan Urvarak & Rasayan Limited. Rs.15098 crore was paid as dividends to the shareholders of the company. Thus with the proceeds from non-current borrowings of Rs.1501 crore, the opening balance of cash and cash equivalent of Rs.5627 crore has reached to Rs.5345 crore i.e. net cash outflow of Rs.282 crore.
8.0 MATERIAL DEVELOPMENT IN HUMAN RESOU RCES/IND USTRIAL RELATIONS FRONT, INCLUDING NUMBER OF PEOPLE EMPLOYED.
Report on the above point is given below: -
I. Manpower: -
The manpower strength of the company as on 1.04.2024 against the previous year was as under: -
Year | Executive | Non-Executive | Total |
01.04.2023 | 16,305 | 2,22,905 | 2,39,210 |
01.04.2024 | 15,777 | 2,13,084 | 2,28,861 |
The manpower strength has come down by 10,349 during 2023-24
II. 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 Apex JCC, Corporate JCC/ Steering Committee, Safety Committee, Housing Committee, Welfare Board/ Committee, etc. are functional in order to resolve the issues pertaining to service conditions, welfare, safety, etc. of employees. Besides, structured Industrial Relations meetings are held with the Trade Unions periodically.
b) Contract Labour Cell:-
Approximately, 1,11,124 Contractors workers (as on 31 st March 2024) were deployed by the contractors in various activities of the company
Reservations: -
CIL complies with the provisions of Presidential Directives on reservations for SC/ST/OBC/PWD/ EWS as per circulars issued thereof.
c) Diversity Management: -
CIL recruits its employees from across the country through GATE score and all India based open examination and for Lateral Recruitment through Interview wherein reservation policy is strictly complied.
Manpower of CIL constitutes 19.30 % of SC, 14.34% of ST and 25.23 % of OBC as on 01.01.2024.
Female employees of CIL constitutes 8.48 % of its total manpower.
d) Non-Discrimination: -
No discrimination on the ground of religion, caste, region, creed, gender, languages etc. is done in CIL & its Subsidiaries.
e) Special Benefits to Persons with Disabilities
CIL has an Equal Opportunities Policy and special provisions in Transfer Policy, TA/DA Rules, Housing Policy, Promotion Policy and Leave Rules for safe guarding the interests of Persons with Disabilities, and also for pro-active actions to facilitate the inclusion and participation of Persons with Disabilities in work and other activities.
f) Prevention of Sexual Harassment at workplace: -
Sexual harassment of any form is handled strictly at CIL and its subsidiaries. The statutory provisions with respect to the same are adhered to. It is treated as 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 beapartof any registered Trade Union / Employees Association. Representation of employees is allowed in the bipartite bodies through Trade Unions / Associations.
h) Post-Retirement Medical Support: -
Contributory Post Retirement Medicare Schemes for Executives and Non-Executive Cadre employees of CIL/Subsidiaries have been formulated. Medical coverage extended to the employees is given below:
Benefit under Contributory Post Retirement Medicare Schemes | Retired Executives & Spouse (Coverage) | Retired Non- Executive, Spouse & Divyang Children (Coverage) |
Normal Diseases | Rs. 25 Lakh | Rs. 8 Lakh for Retd. Employee & Spouse Rs. 2.5 Lakh for Divyang Child |
Specified Critical Diseases | At CGHS rates without ceiling |
i) 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. from 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 theirtotal emoluments as monthly pension.
5. Life Cover Scheme: - An amount upto Rs.1,56,250/- is paid under the Life Cover Scheme
6. Ex-Gratia: - An Ex-gratia compensation of Rs. 15 lakhs in case of fatal mine accident 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 CILUSubsidiaries.
7. Employment / Monthly monetary compensation in lieu of employment: -
There is provision of 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 contractors.
1. An Exgratia amount of Rs.1 5 lakhs is paid to the next of kin of the contractors worker in case of fatal mine accident.
2. Compensation under the Employees compensation Act, 1923
3. Medical facility to the contractor workers in the Company Hospitals and dispensaries.
4. Nominee of deceased contractors workers are eligible for payment of accumulated amount under EPF/CMPF.
HUMAN RESOURCE DEVELOPMENT
Human Resource Development is considered as a strategic activity of the company with a long-term vision to develop the existing workforce so that they gain the capability to cope up with the challenges emerging out of technological advances, talent depletion, and growing demand of coal along with diversification of business into allied and non-allied areas.
Overall Performance
During the FY 23-24, 6,47,533 training man-days were achieved for the employees including executives and nonexecutives (excluding contract workers).
In Financial year 2023-24 a total of 1,03,820 employees/ attendees have undergone various trainings in CIL and its subsidiaries, out of which 30,270 attendees belonged to executive workforce and 73,550 attendees belonged to nonexecutive workforce, which is 45.36% of the total manpower. Employees are provided multiple trainings as per their training needs.
Training
In-house Training
During 2023-24 different training programs were organized at subsidiary headquarters, training centres, vocational training centre (VTCs) and also at CILs own in-house training facility Indian Institute of Coal Management Ranchi (IICM). These training programs were organized after accessing the training needs in the respective category of employees within the subsidiary.
Details of In-house training program are as below:
1. Cadre-wise
Long Training | Short Training* | Workshop/Seminar | Total | |
Executive | 3953 | 18567 | 2982 | 25502 |
Non-executive | 44480 | 26441 | 1957 | 72878 |
Total | 48433 | 45008 | 4939 | 98380 |
2. Gender-Wise:-
Long Training | Short Training* | Workshop/Seminar | Total | |
Male | 46061 | 41583 | 4277 | 91921 |
Female | 2372 | 3425 | 662 | 6459 |
Total | 48433 | 45008 | 4939 | 98380 |
Training Outside Company (Within the country)
In addition to in-house training, employees were trained at reputed training institutes within the country, in their respective field of operations for supplementing our in-house training efforts. The break-up is as below:
1. Cadre-Wise:
Long Training | Short Training* | Workshop/seminar | Total | |
Executive | 1266 | 2862 | 640 | 4768 |
Non-executive | 397 | 266 | 9 | 672 |
Total | 1663 | 3128 | 649 | 5440 |
2. Gender-Wise:-
Long Training | Short Training* | Workshop/Seminar | Total | |
Male | 1536 | 2673 | 564 | 4773 |
Female | 127 | 455 | 85 | 667 |
Total | 1663 | 3128 | 649 | 5440 |
* Less than 5 days
Training Abroad
86 Executives attended workshops/Conferences/training/ visits outside the country in this FY
Engagement of Apprentices:
During the year 2023-24, in Cl Land subsidiaries a total of 7,623
Apprentices were engaged through NATS and NAPS portals.
Special Initiatives:
1. Policy reforms:
a. Review of existing Talent Management Policy with consultancy support from M/s Deloitte Touche Tohmatsu India LLP. Recommendations for changes in Talent Management Policy are being reviewed.
2. Signing up of Moll:
a. One-year PGPEx on Logistics & Operations Excellence through Digitalization jointly organised by 11M Mumbai & IIM Sambalpur
b. 2 weeks "General Management Program" at IIM Lucknow for Middle level executives across all disciplines.
3. Training outside country:
a. Advanced Global Techno-Management Program
2023 at ASCI Hyderabad in collaboration with ESCP Business School, France and University of Maribor, Slovenia (For international component)- For 9 General Manager (Mining).
4. Key training programs organised for employees
across CILand its subsidiaries:
a. IPV6 Skill Training program for 30 E&T executives by E&Y in June 2023
b. Principles of Eco-Responsive Architecture towards Energy Efficient Buildings for 15 General Manager (Civil) of ClL/ Subsidiaries at HIAL, Ladakh in June 2023.
c. Training program on "E-vigilance, Cyber Awareness and tools for Leveraging Technology for Preventive Vigilance" for 25 executives from 25th to 27th May, 2023 at International Management Institute (IMI), Kolkata campus.
d. Training Program on "Investigation into Accidents/ Incidents in Mines based on Root Cause Analysis Techniques" at IIT (ISM), Dhanbad. (2 Batches with 44 Participants)
e. Training Program on "Implementation of Solar Project" at National Power Training Institute (NPTI), Badarpur in November 2023 (20 participants)
f. Management Development Program on "Analysis of Financial Management at AJNIFM Faridabad, Haryana
g. Training on "Hospital Management & Administration" from 04th to 30th December, 2023 at Indian Institute of Public Health Gandhinagar(IIPHG) for 30 medical executives.
h. Safety Training and Certification Program/ courses for Executives of CILthrough Talisman Technical Pty. Ltd (40 participants)
5. Future-Focused & compliance-related Training
Programs organised at CIL(HQ), Kolkata:
a. Financial Modeling Training Program for Executives of CIL HQ
b. Training Program on "Stress Management & Work Life Balance at CIL HQ
c. Workshop on Emerging Trends & Best Practices in HR
d. Workshop on Gender Sensitization and POSH Act.
6. Flagships Programs Organized for Senior Level
Executives of CIL by IICM:
a. MANTHAN & MANTHAN 2.0: A journey of building a sustainable competitive edge for Coal India - Designed forthe newdirectors of CIL,the workshops focused on building a sustainable and competitive edge for the company. Conducted a two-day workshop, "MANTHAN 2.0", in collaboration with MCL at Bhubaneswar on August 07-08, 2023. 23 Directors in Manthan 2.0 participated in this workshop, equipping them to excel in their roles and contribute effectively to the organizations success.
b. DISHA: A Way Ahead: Tailored for newly promoted General Managers, this leadership program aims to mentor and prepare them for their upcoming roles & responsibilities. Disha 1, Disha 2 and Disha 3 were organized from September 18-20, 2023 and September 25-27, 2023 and Feb. 09-11, 2024 respectively. Total 88 General Managers were trained during two programs.
c. LAKSHYA: A personal Journey for Leadership & Transformation: This initiative is geared towards preparing potential candidates for interviews for board-level positions within CIL. LAKSHYA 2.0 was organised from Nov 16-18, 2022 (nos. of Participants -24)
d. Jigyasa: A march towards Future:-An Online session of 90 minutes duration for all the Directors of CIL & Subsidiaries of CIL to sensitize and share upcoming trends and development globally in emerging topics aligned with strategic priorities.
e. Outbound trainings:- 125 employees participated in outbound training program organised in collaboration with TSAF at places like Manali, Ladakh, Mussorie, Jim Corbett.
Talent Acquisition:
In the financial year 2023-24, CIL has expanded its wingspan of Executive cadre by recruiting 154 new members, including 67 Management Trainees and 87 Medical Executives, through Open Recruitment. Additionally, towards career progression of employees, the company internally promoted / appointed 503 Non-Executive employees to the Executive cadre. This dual strategy fortifies our Executive team for succession planning and production targets, exemplifying our commitment to a dynamic and skilled leadership team for sustained success.
These new recruits are undergoing a comprehensive development program, blending off-the-job and on- the-job training interventions. Guided and mentored by experienced senior executives within the company, this process is designed to prepare them for assuming roles as responsible senior executives in the future. By facilitating their easy adaptation to the next level of the organization, with an inclusive culture for seamless transition, it would aim for long-term success for both the individuals and the company.
9.0 ENVIRONMENTAL PROTECTION AND CONSERVATION
Environmental protection measuresaretakenconcurrently 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, CEIPs, Feeder Breakers, Crushers, coal transfer points and coal stock areas have been installed. Further, Sustainable development activities like alternative use of OB, creation of amritsarovar, activities under Mission Life-style, Energy efficiency measures etc. are being undertaken.
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 year CIL has planted more than 121.13 Lakh saplings over more than 5076.56 Ha inside mine lease area and at the same period CIL planted 12.28 Lakh saplings over more than 1848 Ha outside mine lease area. The carbon sink potential created in last 5 years inside mine lease area is about 2.54 Lakh Tonne/year.
CIL planted 44.40 Lakh saplings covering an area about 2167.61 Ha within and outside mine leasehold area in FY 2023-24, CIL also carried out grassing over 248.65 Ha during this period.
Eco Parks have been developed in many of the mined out areas and command areas of CIL like Kalidaspur Bio-diversity Park ECL, Parasnath Uclyaan AKWMC Colliery BCCL, Bishrampur Tourism Site SECL, Chancier Shekhar Azad Eco Park Bina NCL, Neem Vatika Raiyatwari Chandrapur WCL, Kayakalp Vatika CCL, Ananta Medicinal garden MCL, etc. CIL has established 32 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-siIting of existing poncls/tanks etc. In 2023-24, discharged mine water was utilized in 857 no. of villages for irrigation and domestic use, benefitting more than 11.62 Lakh villagers.
Technological Conservation, Renewable Energy Developments, Foreign Exchange Conservation- details are given in Directors Report
10. CORPORATE SOCIAL RESPONSIBILITY
Budget allocated in Annual Action Plan for CSR activities during FY 23-24 by Coal India Ltd., Kolkata was Rs. 140.62 crores, much more than the amount calculated as per the minimum statutory provisions i.e. Rs. 11.30 Crore CIL was able to utilize Rs. 98.56 Crore for CSR during the financial year, more than the statutory obligation as per Companies Act 2013.
As per DPEs guidelines, the priority theme during the year was kept as Healthcare and Nutrition in which 66% of the total expenditure was made. Other themes which were given due focus during the year were Education & Livelihood and Environmental Sustainability. Many high- investment, high-impact CSR projects were continued during the year such as the Thalassemia Bal Sewa Yojana (TBSY) which crossed the milestone of 500 Bone Marrow Transplants during the year, construction of sports hostels through Dept, of Sports, Govt, of India and different employment oriented skill development programmes for unemployed youth.
CIL and CCL jointly organized a CSR and Sustainability Conclave named Re-engineering CSR on 25th and 26th April 2023 at Ranchi where six thought leaders/domain experts shared their thoughts with 300+ participants which included executives engaged in CSR, students from local academic institutes, implementing agencies and management of CIL & subsidiaries.
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