COAL INDIA LIMITED
ANNUAL REPORT 2011-2012
The Members of
Coal India Limited
AUDITORS` REPORT MANAGEMENT`S REPLY
1. We have audited the attached Balance Sheet
of COAL INDIA LIMITED as at 31 st March, 2012,
the Statement of Profit and Loss and also the
Cash Flow Statement of the Company for the
year ended on that date annexed thereto in
which are incorporated the accounts of North
Eastern Coalfields (NEC), CGM`s office at Delhi
and Kolkata Marketing office which have been
visited by us. Accounts of twelve regional
Sales Offices (RSO) are included in the
accounts of the said Kolkata marketing
Office on the basis of monthly returns sent
by the RSO`s. The said Balance Sheet,
Statement of Profit & Loss and the Cash Flow
Statement have been signed by us under
reference to this report. These financial
statements are the responsibility of the
Company`s management. Our responsibility is to
express an opinion on these financial
statements based on our audit.
2. We conducted ouraudit in accordance with
auditing standards generally accepted in
India. Those standards require that we plan
and perform the audit to obtain reasonable
assurance about whether the financial
statements are free of material misstatement.
An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures
in the financial statements. An audit also
includes assessing the accounting principles
used and significant estimates made by
management, as well as evaluating the overall
financial statement presentation. We believe
that our audit provides a reasonable basis for
3. As required by the Companies (Auditor`s
Report) Order, 2003 (as amended) issued by the
Government of India in terms of sub-section
(4A) of section 227 of the Companies Act, 1956,
on the basis of such checks as considered
appropriate and according to the information
and explanations given to us during the course
of the audit, we give in the Annexure hereto, a
statement on the matters specified in the
paragraphs 4 and 5 of the said order.
4. Without qualifying our report, attention is
(a) Notes No. 11(1), 12(2) and 18(2) dealing This being a statement
with investments in and short term Loans & of fact calls for no
Advances (Current Account debit Balances) comments separately.
respectively to two sick Subsidiaries of the
Company, that is, Bharat Coking Coal Limited
(BCCL) and Eastern Coalfields Limited (ECL)
which are under the Board of Industrial &
Financial Reconstruction (BIFR). Revival plans
have been approved by BIFR and vetted by the
concerned Ministry. On implementation of
revival schemes these Subsidiaries are
turning around and have started earning Profit
and have also started repaying old advances.
In view of the changing circumstances, the
management is of the opinion that no writing
down or provisioning is required.
(b) Note No. 21(1) dealing with non- This being a statement of
recognition of interest income from BCCL fact calls for no
one of the said sick Subsidiaries. comments separately.
(c) Note No. 10A (2) regarding non-provision This being a statement of
against fixed assets in Dankuni Coal Complex fact calls for no
leased to South Eastern Coalfields Limited comments separately.
(SECL) for lease rent of Rs. 1 per annum. In
the opinion of the management the nominal
income earning is a temporary policy matter
and actual worth of the assets including land
is much higher than the book value and as
such no provision is called for.
5. Further to our comments in the Annexure
referred to above, we report that:
(i) We have obtained all the information
and explanations, which to the best of our
knowledge and belief were necessary for the
purposes of our audit;
(ii) In our opinion, proper books of account
as required by law have been kept by the
Company, so far as it appears from our
examination of those books and proper returns
adequate for the purpose of our audit have
been received from the RSO`s not visited by us;
(iii) The Balance Sheet, the Statement of
Profit & Loss and Cash Flow statement dealt
with by this report are in agreement with the
books of account;
(iv) In our opinion, the Balance Sheet, the
Statement of Profit & Loss and Cash Flow
statement read with Significant Accounting
Policy and Additional Notes to Accounts as
referred in Notes 33 and 34 respectively comply
with the Accounting Standards referred to in
sub-section (3C) of section 211 of the
Companies act, 1956.
(v) As per Notification No.GSR 829 (E) dated
21.10.2003 provisions of clause (g) of
sub-section (1) to section 274 regarding
disqualification of directors are not
applicable to the Company.
(vi) In our opinion and to the best of our
information and according to the explanations
given to us, the said Statements of Account
read together with Significant Accounting
Policies and Additional Notes to Accounts as
referred in Notes 33 and 34 respectively give
the information required by the Companies Act,
1956 in the manner so required and give a
true and fair view in conformity with the
accounting principles generally accepted in
(a) In the case of Balance Sheet of the state
of affairs of the Company as at 31st March,
(b) In the case of Statement of Profit & Loss,
of the profit for the year ended on that date;
(c) In the Cash Flow Statement, of the Cash
Flows for the year ended on that date.
For De Chakraborty & Sen
FR No. 303029E
Partner Membership No. 005660
Date : The 18th day of May, 2012.
ANNEXURE TO THE AUDITORS` REPORT:
(Referred to in paragraph 3 of
our report of even date).
On the basis of checks carried out during
the course of audit and as per information
and explanations furnished to us and to the
best of our knowledge and belief we report
i. (a) The Company has maintained proper The few old items of
records showing full particulars including fixed assets mentioned by
quantitative details and situation of Fixed the auditors are fully
Assets. However, certain details as regards depreciated.
purchase order reference, date of
commissioning and locations are absent in
some cases of old items.
(b) Fixed Assets located at North Eastern Efforts for verification
Coalfields, the production unit of the of fixed assets at other
company, has been physically verified by the locations have already
management periodically in phased manner and been taken, and the same
no material discrepancies have been noticed has since been carried
as confirmed by the Management. Fixed assets out during 2012-13.
located elsewhere remain unverified.
(c) No substantial part of fixed assets has This being a statement of
been disposed off during the year, which has fact calls for no
bearing on the going concern assumption. comments separately.
ii. (a) Physical verification of Inventory has The said Stockyards of
been conducted at reasonable intervals during West Bengal Regional
the year by the management, except for Stock- Sales Office are not
yard of West Bengal Regional Sales Office, the operative since long.
inventories of which is very old and has been The bookstock is not
provided for. The inventories have been significant and its value
measured on the basis of volumetric system. has been fully provided
for since long.
(b) In our opinion, the procedures of physical This being a statement of
verification of Inventory followed by the fact calls for no
management are reasonable and adequate in comments separately.
relation to the size of the company and the
nature of its business.
(c) The Company has maintained proper records This being a statement of
of Inventory. No material discrepancies were fact calls for no
noticed on physical verification. comments separately.
iii. (a) The company has not granted any loans, These are 100%
secured or unsecured to companies, firms subsidiaries of CIL, and
or other parties covered in the register are sick and referred to
maintained under section 301 of the Companies BIFR. Certain interest
Act, 1956 except advances to its subsidiaries from advances to these
BCCL and ECL where interest has been deferred/ companies were deferred
waived. In other cases, clause 4 (iii) (b) to due to uncertainties
(d) of the order are not applicable. involved in realization
owing to their poor
(b) The company has not taken any loans, financial condition and
secured or unsecured, from companies, firms in certain cases such
or other parties covered in the register interest were waived as
maintainer under section 301 of the Companies per their revival scheme
act, 1956 except some surplus funds of the under BIFR reference.
subsidiaries parked with this holding company
where reasonable interest has been paid except
two cases of Northern Coalfields Limited and
Mahanadi Coalfields Limited where no interest
has been paid as these funds were transferred
to Eastern Coalfields Limited and Bharat
Coking Coal Limited for specific purposes as
interest free advance. The terms and
conditions of these advances are not
prejudicial to the interest of the company.
iv. There is an adequate internal control Noted, action is being
system commensurate with the size of the taken to adjust/reconcile
company and the nature of its business for the differences.
the purchase of inventory and fixed assets
and for the sale of goods and services.
During the course of our audit no major
weakness in internal control has been
noticed except for certain advances/
receivable accounts where detail schedules
are absent for a long time and the
adjustments made there against are basically
effected on adhoc basis leading to the
emergence of credit balances often.
v. There are no contracts and arrangements as This being a statement of
referred to in section 301 of the Companies fact calls for no
Act, 1956, particulars of which needs to be comments separately.
entered into a register maintained under
section 301 of the said Act. Accordingly,
clause 4 (v) (b) of the order is not
vi. The Company has not accepted any deposits This being a statement of
from the public within the meaning of the fact calls for no
provisions of section 58A and 58AA or any comments separately.
other relevant provision of the Companies
Act, 1956 and rules made there under.
vii. The Company has an Internal Audit Noted. Efforts will be
system commensurate with the size and nature taken to improve in the
of its business. But it requires substantial areas of inadequacies
revamping in respect of timeliness and teeth mentioned by the
of reporting together with risk based analysis auditors.
of the inadequacies.
viii. The maintenance of cost records has been This being a statement of
prescribed by the Central Government under fact calls for no
section 209 (1) (d) of the Companies Act, 1956 comments separately.
vide notification dt 3rd June, 2011 in respect
of mining activities of the company. We have
checked the records and are prima facie of the
opinion that the same are properly maintained.
ix. (a) The Company is regular in depositing This being a statement of
undisputed statutory dues including Provident fact calls for no
Fund, Investor`s Education and Protection Fund, comments separately.
Income Tax, Sales Tax, Wealth Tax, Service
Tax, Custom Duty, Excise Duty, Cess and other
Statutory dues with the appropriate authorities.
There were no undisputed arrears of statutory
dues outstanding as on 31.03.2012 for a period
of more than six months from the date they
(b) There are no dues of Sales Tax, Income Tax, This being a statement of
Custom Duty, Wealth Tax, Excise Duty, Cess and fact calls for no
Other Statutory dues which have not been comments separately.
deposited on account of any dispute.
x. The Company does not have any accumulated This being a statement of
losses at the end of financial year and has fact calls for no
not incurred cash losses in the current comments separately.
financial year and in the immediately preceding
xi. The Company has not defaulted in repayment This being a statement of
of dues to Financial Institutions or Banks. fact calls for no
xii. The Company has not granted any loans or This being a statement of
advances on the basis of security by way of fact calls for no
pledge of shares, debentures and other comments separately.
xiii. The Company is not a Chit Fund or a This being a statement of
Nidhi/Mutual Benefit Fund/ Society. fact calls for no
xiv. The Company is not in the business of This being a statement of
dealing or trading in shares. The Company has fact calls for no
investments in shares of its wholly owned comments separately.
subsidiaries, SPV Joint Venture and in Mutual
Funds only and has maintained proper records
of transactions and contracts in respect
thereof and timely entries have been made
therein. The Company, in its own name, has
held all these shares.
xv. The terms and conditions on which the This being a statement of
Company has given guarantees for loans taken fact calls for no
by its subsidiaries from banks and financial comments separately.
institutions are not prima facie prejudicial
to the interest of the Company.
xvi. No term loan has been availed during the This being a statement of
year. However, the term loans availed by the fact calls for no
Company in earlier years had been utilized comments separately.
for the purposes for which the said loan had
xvii. The funds raised on short-term basis This being a statement of
have not been used for long-term Investments. fact calls for no
xviii. During the year under audit the Company This being a statement of
has not made any preferential allotment of fact calls for no
shares. comments separately.
xix. The Company has not issued any debentures This being a statement of
during current or earlier year(s). fact calls for no
xx. The Company had made an Initial Public This being a statement of
offering (IPO) of shares in October, 2010 and fact calls for no
the shares were listed on Bombay Stock comments separately.
Exchange and National Stock Exchange on
04.11.2010. Since this was a divestment made
by the Govt. of India, the proceeds of the
same were used by Govt. of India and not by
xxi. No fraud, on or by the Company has been This being a statement of
noticed or reported during the year. fact calls for no
For De Chakraborty & Sen
FR No. 303029E
Membership No. 005660
Date : The 18th day of May, 2012.
COMMENTS OF THE COMPTROLLER AND AUDITOR GENERAL OF INDIA UNDER SECTION
619(4) OF THE COMPANIES ACT, 1956 ON THE ACCOUNTS OF COAL INDIA LIMITED FOR
THE YEAR ENDED 31 MARCH 2012.
The preparation of financial statements of Coal India Limited for the year
ended 31 March 2012 in accordance with the financial reporting framework
prescribed under the Companies Act, 1956 is the responsibility of the
management of the company. The statutory auditors appointed by the
Comptroller and Auditor General of India under Section 619(2) of the
Companies Act, 1956 are responsible for expressing opinion on these
financial statements under section 227 of the Companies Act, 1956 based on
independent audit in accordance with the auditing and assurance standards
prescribed by their professional body the Institute of Chartered
Accountants of India. This is stated to have been done by them vide their
Audit Report dated 18.05.2012.
I, on behalf of the Comptroller and Auditor General of India have conducted
a supplementary audit under section 619(3) (b) of the Companies Act, 1956
of the financial statements of Coal India Limited for the year ended 31
March 2012. This supplementary audit has been carried out independently
without access to the working paper of the statutory auditors and is
limited primarily to inquiries of the statutory auditors and company
personnel and a selective examination of some of the accounting records. On
the basis of my audit nothing significant has come to my knowledge which
would give rise to any comment upon or supplement to Statutory Auditors
report under section 619(4) of the Companies Act, 1956.
For and on behalf of the
Comptroller & Auditor General of India
(Yashodhara Ray Chaudhuri)
Place: Kolkata Pr. Director of Commercial Audit &
Dated: 24.05.2012 Ex-officio Member, Audit Board-II