I am delighted to welcome you to the 42nd Annual General Meeting of CoalIndia Limited. The Directors Report and the Financial Statement for the year ended31st March 2016 together with the Report of Statutory Auditors and report ofComptroller & Auditor General of India are already with you.
1. Importance of coal and Coal India Limited
As our country is expanding industrially and economically so are its energy needs. InIndia coal is the answer to escalating energy demand. The countrys plannershowever are alternately exploring to shift from being a largely fossil driven energyeconomy to one that is powered by clean and renewable form especially solar. But tillsuch time other forms of energy begin to contribute significantly coal is and shallremain the most dominant energy fuel in providing energy security to the country. Whatmakes coal such a preferred energy fuel is its abundance availability and affordability.The estimated geological resource of Indian coal stood at 306.59 Billion Tonnes as of 1stApril 2015. Around 72% of the entire power generated in the country is coal based.
Against this backdrop you will be proud to know that your company Coal India Limitedspearheads the countrys coal production and produces over 84% of the countrysentire coal output. It is Coal India which virtually fuels and empowers the power sectorin the country.
2. Accomplishments 2015-16
For the first time Coal Indias production and off-take have exceededHalf-a-Billion Tonne mark an indication that the company is on its pursuit of 1 BillionTonne production by 2019-20.
During FY 2015-16 Coal India as a whole recorded coal production of 538.75 MillionTonnes (MTs). You will be pleased to know that the company has stepped into a highergrowth trajectory registering nearly 44.51 MTs increase in coal production during FY 2016- the highest ever incremental increase in a single financial year since the inception ofthe company.
Raw coal off-take during FY 2016 was 534.50 MTs an increase of 45.11 MTs on ayear-on-year comparison. As in production all subsidiary companies of Coal India haveregistered positive growth in off-take.
Power Utilities of the country the major coal consuming sector during FY 2016 weresupplied with 408.75 MTs of coal against 385.39 MTs in previous fiscal registering agrowth of 6.1% and achieving 95% of the target. Coal supplies to NTPC (Including the NTPCJV) registered a materialization level of 90%.
1) On the financial front you will be pleased to know that Coal India for the firsttime had surpassed the magical figure of Rs 1 Lakh Crores in Gross Sales recording GrossSales of Rs 108150.03 Crores during 2015-16.
2) Not a single power-utility was in a critical or super-critical condition for want ofcoal.
3) Due to the improved despatch and better quality of coal there was a marked declinein import of non-coking coal of 17.7 MT during FY 2016 resulting in substantial saving inforeign exchange.
4) Significantly the Over Burden Removal (OBR) an important performance criterion inexposing coal seam for future mining took a quantum leap during FY16 registering a steepgrowth of 29.60%. This is more than three-fold increase on a year-on-year comparison. OBRalso improves the mine geometry and makes mines safer to operate. Coal India had surpassedthe target of 1031 Million Cubic Metres in OBR more than a month ahead of the closure ofthe fiscal on 24th February 2016 itself achieving an actual of 1148.908 MillionCubic Metres which is 111% of target satisfaction.
5) You may be happy to note that contrary to the popularly held convention that coalmine areas are the places to keep away from Western Coalfields Limited a subsidiary ofCoal India Limited started an eco-friendly mine tourism which has become highly popular.The Honble Prime Minister of India in his Mann Ki Baat programme airedon 27th March2016 made a special mention of this.
Coal India is one the highest contributors to the government ex-chequer in the countryboth- federal and state governments. Coal India paid a corporate tax of Rs 7012.35 Croresto Government of India in FY 2016.
Coal India and its subsidiaries have also paid/adjusted Rs 29084.11 Crores towardsRoyalty Cess VAT and other levies.
During 2015-16 Coal India as a whole earned pre-tax profit of Rs 21589.09 Crores anda Profit After Tax of Rs 14274.33 Crores.
Coal India had paid an interim dividend of Rs 27.40 per share. The total outgo from theCompany was Rs 17306.84 Crores of which Government of India holding 79.649% ofcompanys shares received Rs 13784.86 Crores.
3. Strategies for Growth
Coal India is faced with meeting challenging targets in the years ahead. Going forwardin order to meet the production targets Coal India needs to step up to a double digitgrowth rate from that of around 9% achieved during FY 2016. It is with a feeling ofsatisfaction I share with you that during the first four months of FY 2017 CoalIndias production growth was more than 6 million tonnes over the same period lastyear.
To sustain the growth momentum in its production and off-take in the future Coal Indiahas formulated the following multi-pronged strategies.
(i) Critical Railway Links - Collaboration with State Governments & Railways
There are a few important coalfields in the country which have huge productionpotential but are without rail linkages for evacuation of coal produced. Among these 3rail lines linked to CCL (Jharkhand) MCL (Odisha) and SECL (Chhattisgarh) are criticaland expected to play a key role in the evacuation of coal.
For speedy commissioning and implementation of these critical rail lines Joint Venturecompanies have been formed in a tripartite partnership arrangement between State NodalAgencies respective CIL subsidiary companies and IRCON synergizing the efforts.
(ii) Technology Development
In geological exploration hydrostatic drilling is the most state-of-the arttechnology. CMPDIL has deployed twelve hydrostatic drills for exploration of coal byreplacing the conventional mechanical drills. We plan to procure seven more hydrostaticdrills in 2016-17. These drills are high-tech and improves efficiency of operationsignificantly to achieve higher productivity.
In 2015-16 the tungsten carbide inserts of Crab Bits were replaced with PCD insertswhich enabled higher penetration rate and bit life in Motur formation of WCL. To improveboreholes stability mud mixer assembly will be introduced within the hydraulic system ofmechanical drills for continuous mixing of drilling fluid.
Phenomenal development of technology applied in Geophysical Survey has also been takenplace. In 2015-16 five Geophysical Loggers were available. It is planned to expand theapplication of Geophysical Logging by increasing the strength to ten by 2016-17. Thisequipment is used for delineation of different formations and in-situ characteristics in aborehole at different depth.
Five Resistivity Imaging System were introduced in 2015-16. In 2016-17 one more willbe procured for sub-surface geological investigation.
We proposed to introduce a new technology by utilizing Ground Probing Radar system(GPR) for shallow depth investigation with high precision. It is also intended tointroduce Gravity Survey equipment for high depth basement studies of coalfields. Furtherit is planned to replace manual hammering technique with high power electro-mechanicalvibrating source for generating acoustic wave (e.g. Vibroseis) for greater depth ofgeological investigation in 2D/3D Seismic Survey.
B. Opencast Mining
The latest version of Geovia Minex Software has been put to use which facilitatesstate-of-the-art resource planning through pit design pit optimization scheduling ofresources and dumps etc.
Laser Scanners as TLS (Terrestrial Laser Scanner) for measurement of overburden andmine face that are in use entails significantly higher accuracy levels and speed.Further it is also proposed to use drones with laser scanner for survey purpose.
A wide variance of HEMM size have been provisioned in coal mining projects. Higher sizeHEMM viz. Electric Rope Shovels of 42 Cum together with Dump Trucks of 240 T have beenintroduced in CIL mines. Surface Miners of varying sizes are being used & proposed fornew mines wherever suitable. Dozers fitted with rippers are also being proposed for bandand thin seam removal in many of the projects. For better management and control of HEMMfleet GPS based truck dispatch system has been introduced in large OC mines.
The use of silos with rapid loading system in large mines have been stepped up forfaster and environment friendly loading in the sidings. GPS and GPRS technology are usedfor vehicle tracking system for better surveillance.
C. Underground Technology
In underground mines persistent efforts are being made to embark upon the use of massproduction technologies wherever the geo-technical conditions permit. During the year2015-16 a power support long-wall set having planned production capacity of 0.7 Mty hasbeen installed in Moonidih XVI seam and another long-wall set for Jhanjra mine (havingplanned production capacity of 1.7 Mty) is under installation. The long-wall set atMoonidih commenced operation during the year.
Four continuous miners have been added and put into operation during the year in threemore mines of CIL with total planned capacity of 1.84 Mty. Deployment of more numbers ofcontinuous miners are expected in the coming years to enable enhancement of production& productivity from underground mines.
In 2015-16 the first ever diesel operated Free Steered Vehicle (FSV) has beenintroduced in Jhanjra mine of ECL for transportation of men and material. Additionallyeight (8) numbers of man-riding system has been installed in arduous and long distantmines of CIL which plays a significant role in enhancing safety and productivity inunderground mines. It is envisaged to install more man riding systems in CIL mines in thenear future.
(iii) Role of HR
Coal India is largely man-power intensive industry. Human Resource has to play anactive role if Coal India has to achieve the challenging targets of the future. Coal Indiahad identified various areas that would supplement its efforts in invigorating itsmanpower and is charting out a plan for recruiting multi-disciplinary professionals skillupgradation of existing employees and identifying key areas of improvement.
Coal India had also signed a Memorandum of Understanding with National SkillDevelopment Corporation (NSDC) to promote special education and employment enhancingvocational skills. The beneficiaries would also include Project Affected Persons(PAPs).The objective is to promote special education and employment enhancing vocationalskills especially among children women elderly and the differently abled.
4. Other Improvement Areas
(i) Coal Washing - A step towards Quality improvement
At present Coal India has a total coal washing capacity of 36.8 million tonnes peryear (MTY) through its 15 existing washeries of which 12 are coking and 3 non coking with23.30 MTY and 13.50 MTY capacities respectively.
In addition Coal India plans to set up further 15 washeries with state-of-the-art andinnovative technologies in coal beneficiation with an aggregate throughput capacity of112.6 MTY. Out of these 6 are coking coal washeries with a cumulative capacity of 18.6MTY and the rest 9 are non-coking coal washeries with a total capacity of 94 MTY.
(ii) System Improvements
Ease of doing business:E-procurement universalized and more effectively implemented.ERP as a route towards organisational synergy will also be fast tracked.
Coal India has already adopted a host of ICT initiatives to make internal processes ITdriven and to enhance all round system efficiency and transparency to improve employeecustomer and vendors' satisfaction.
Coal India has put in place electronic surveillance initiatives to keep watch on itscoal stock and to keep a track on movement of coal loaded vehicles. Major initiativesinclude:
a) GPS/GPRS based VTS (Vehicle Tracking System) on coal transport vehicles.
b) OITDS (Operator Independent Truck Dispatch System).
c) Installation of CCTV at vulnerable points like entry/exit points coal stock yardsrailway sidings material stores explosive magazines and important offices.
d) RFID based boom barriers.
e) Wide Area Networking for connecting all the Mines Projects Sidings Weigh Bridgesand HQ through dedicated network for data transfer and Coalnet implementation.
f) Installation of in-motion Weigh Bridges with RFID tags.
g) Weigh Bridge connectivity for weight tracking.
h) Geo-fencing of mine areas.
Coal India is also adopting improved measurement system of coal and OB through 3DTerrestrial Laser Scanner System for greater accuracy. Other initiatives include projectmonitoring system land management system integrated business solutions documentdigitization management and archival system amongst others.
For greater employee satisfaction initiatives such as Grievance Management System EIS(Executive Information System) Online filing of APR Online PRIDE/PAR (PerformanceAppraisal Report) Online Vigilance Clearance System Online CPRMSE (Coal IndiaPost-Retirement Medical Scheme for Executives) have been undertaken.
5. Green Initiatives
Coal India is conscious of its commitment towards the environment and its ecosystem.The Company strives to give back to Nature to the best extent possible what has beenpried away from her. The Company does this by taking appropriate measures to mitigate theimpact of mining and associated activities in accordance with EIA / EMP of each project.
Coal India has created a green wealth of about 92.35 million trees covering an areaover 36896.26 Ha till March 2016. Of this 1.68 million trees have been planted over 719Hectares (Ha) in FY 2016. Satellite surveillance has been adopted for monitoringreclamation activities of 50 major OCPs producing 5.0MM3 (Coal + OB) or more every yearand for other OCPs once in three years. It is evident from satellite surveillance thatreclaimed land area has increased by 9.63 Sq.Km during FY 2016 in 50 major OCPs w.r.t FY2015.
Study of National Remote Sensing Centre (NRSC) ISRO Hyderabad in 2013 revealed thatthe fire area in Jharia Coalfields had reduced from 8.9 Sq. Km (as assessed in MasterPlan) to 2.18 Sq. Km after undertaking various methods while implementing the Master Plan.
6. Safety Always a priority
Safety of miners and mines remains a top priority concern for Coal India. In pursuit ofhigher production no compromise would be made on safety front. Safety of miners and minesoverride any other priority. Coal India has a well-defined safety policy to ensure safetyin all mines and establishments. There are many preventive measures against accidents andthese are being followed attentively. Safety can be increased with improved trainingskill development and approaching the issue in a scientific and holistic manner. Sosafety personnel are exposed to the best practices internationally and are sent fortraining abroad. We are also inculcating and monitoring a safety culture and attitude. Thefatality rate per million tonne of coal produced has reduced by 22.2% and serious injuryrate per million tonne has reduced by 28.9% in 2015 compared to its previous year. Theendeavour is to elevate safety standards radically further since in this regard therecould be only Zero Accident as the goal.
7. Corporate Social Responsibility
Apart from improving the quality of lives of people Coal Indias Corporate SocialResponsibility initiatives also take them along towards the companys goal bypartnering with them. While pursuing the enhancement of Coal production CSR is beingundertaken for inclusive growth of villagers and the nearby affected communities.
(i) During the year total expenditure on CSR in pursuance to Section 135 of theCompanies Act 2013 was Rs 1076.07 crore and further Rs 6.00 crore was towards donation toNepal Earthquake relief fund totalling to Rs 1082.07 crore as against Rs 298.10 croreduring FY 2014-15 (ii) Coal India has taken an initiative towards Swachh Vidyalay Abhiyaanby constructing 53412 toilets. A total of Rs 820.44 Crores has been spent on theconstruction of these toilets by 31st March2016.
(iii) In a tie-up with Tata Medical Centre (TMC) Coal India has sanctioned Rs 41.11Crores for the construction of "Premashraya" a ten storied building whichprovides housing facilities for the economically weak and outstation patients visiting TMCfor treatment. The facility is also extended to the relatives of the patients whoaccompany them. Apart from patient stay units the building also has palliative carecubicles child care centres counselling rooms and physiotherapy facility.
(iv) Coal India has executed different development works through The Energy andResources Institute (TERI) New Delhi in 40 villages of the backward district of PuruliaWest Bengal as identified by the Planning Commission.
(vi) Coal India has also funded -
1. Construction of Aquatic sports hostel at Kolkata at a cost of Rs 1.14 crores.
2. Traffic Department Kolkata Police for conducting awareness programmes among schoolchildren towards road safety at a cost of Rs 69.85 Lakhs.
3. West Bengal Housing Finance Development Corporation Kolkata towards purchase of 3electric buses and 1 small electric service maintenance vehicle at a cost of Rs 5 crores.
4. Department of School Education Govt. of West Bengal for providing 9000 bicyclesto girl students in the district of South 24 Parganas North 24 Parganas and Nadiadistrict West Bengal at a cost of Rs 2.88 Crores.
8. Corporate governance
Coal India complied with the conditions of Corporate Governance as stipulated in theGuidelines on Corporate Governance for Central Public Sector Enterprises (CPSEs) issued bythe Department of Public Enterprises Government of India and Clause 49 of the ListingAgreement as well as Regulation 34(3) read with Schedule V of the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 with the Stock Exchanges exceptfor appointment of two Independent Directors. As required under the said guidelines andprovisions a separate section on Corporate Governance has been added to DirectorsReport and a Certificate regarding compliance of conditions of Corporate Governance hasbeen obtained from a Practising Company Secretary.
Coal India has conducted Secretarial Audit for 2015-16 as required under Companies Act2013 and the Secretarial Audit Report is enclosed as a part of Directors report.
Coal Indias vision is to ensure that there is no shortage of coal in the countryand to make the country self-reliant in coal. Coal India envisions to be a be commerciallyviable company and endeavours to move ahead as a modern professional consumer friendlyand successful corporate entity committed to national developmental goals. The vision alsoextends to dedicate itself to the service of the countrymen in providing the primarycommercial energy in an affordable and environmentally friendly manner. Coal India aims tobe not only a valued company but a company with values through constantly innovating onease of doing business.
On behalf of your Companys Board of Directors I wish to convey my deep gratitudeto you our valued shareholders for your continued support and trust. This motivates usto excel in all our pursuits and constantly create value for you as well as for thenation.
I appreciate the unstinted support and valuable guidance received from the Ministry ofCoal Government of India. I also express my sincere thanks to other Central GovernmentMinistries and Departments State Governments all employees Trade Unions consumers andsuppliers for their continuous co-operation.
| ||Sutirtha Bhattacharya |
| ||Chairman |
|Kolkata || |
|Dated: 9th August 2016 || |