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Coal India Ltd.

BSE: 533278 Sector: Metals & Mining
NSE: COALINDIA ISIN Code: INE522F01014
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OPEN 157.80
PREVIOUS CLOSE 156.40
VOLUME 815119
52-Week high 164.90
52-Week low 109.50
P/E 12.97
Mkt Cap.(Rs cr) 98,296
Buy Price 159.40
Buy Qty 1057.00
Sell Price 159.55
Sell Qty 1568.00
OPEN 157.80
CLOSE 156.40
VOLUME 815119
52-Week high 164.90
52-Week low 109.50
P/E 12.97
Mkt Cap.(Rs cr) 98,296
Buy Price 159.40
Buy Qty 1057.00
Sell Price 159.55
Sell Qty 1568.00

Coal India Ltd. (COALINDIA) - Auditors Report

Company auditors report

To the Members of Coal India Limited

Report on the Audit of the Standalone Financial Statements Opinion

We have audited the standalone financial statements of Coal IndiaLimited ("the Company") which comprise the Balance Sheet as at March 31 2021the Statement of Profit and Loss (including other comprehensive income) the Statement ofchanges in Equity and the Statement of Cash Flows for the year then ended and notes to thestandalone financial statements including a summary of significant accounting policiesand other explanatory information (hereinafter referred to as the "standalonefinancial statements").

In our opinion and to the best of our information and according to theexplanations given to us the aforesaid standalone financial statements give theinformation required by the Companies Act 2013 (the "Act") in the manner sorequired and give a true and fair view in conformity with the Indian Accounting Standardsprescribed under section 133 of the Act read with the Companies (Indian AccountingStandards) Rules 2015 as amended ("Ind AS") and other accounting principlesgenerally accepted in India of the state of affairs of the Company as at March 31 2021and its profit and other comprehensive income changes in equity and its cash flows forthe year ended on that date.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing(SAs) specified under section 143(10) of the Companies Act 2013. Our responsibilitiesunder those Standards are further described in the Auditor's Responsibilities for theAudit of the Financial Statements section of our report. We are independent of the Companyin accordance with the Code of Ethics issued by the Institute of Chartered Accountants ofIndia together with the ethical requirements that are relevant to our audit of thestandalone financial statements under the provisions of the Companies Act 2013 and theRules thereunder and we have fulfilled our other ethical responsibilities in accordancewith these requirements and the Code of Ethics. We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for our opinion.

Emphasis of Matter

We draw attention to the following Notes to the standalone financialstatements. a) Note 7 regarding Investments of Rs. 9669.65 Crore (as at March 31 2020:Rs. 9526.05 Crore) in two wholly owned subsidiary companies has been shown at book value.The management has not made impairment provision against the erosion of Rs. 3753.43 Crore(as at March 31 2020: Rs. 1550.52 Crore) in the value of the investments as according tothe management the investment in these subsidiary companies is long term and strategic innature and the performance of these subsidiary companies is improving. b) Note 37(5)(m)regarding temporary suspension of mining operations at Tikak Tipong and Tirap mines atNEC since June 03 2020 due to forest and other statutory clearance. The management isreviewing the impact of such suspension on the related assets and liabilities and has notrecognized any provision of impairment in respect of such assets in the standalonefinancial statements. c) Note 5 in respect of Exploration and Evaluation assets amountingto Rs. 2.56 crore related to two mines Tirap OCP and Tikak West extension for which therehas not been any visible progress or development since long. The management has notrecognized necessary provision of impairment in respect of such assets in the books ofaccounts. However the management has written off assets amounting to Rs. 5.76 croreduring FY 2020-21 related to two mines namely Tikak Block and Tirap Block. d) Note 4 inrespect of Capital Work in Progress (Other mining infrastructure / development) amountingto Rs. 17.94 crore and Rs. 51.78 crore related to Tikak extension mine and Lekhapani OCPrespectively which are held up due to non-receipt of forest clearance and other statutoryclearances resulting in absence of any physical development. The management has notrecognized necessary provision of impairment in respect of such assets in the books ofaccounts. e) The Company has not provided for in its books of accounts for ContributoryPost Retirement Benefit Scheme (CPRMSNE) for on roll non-executive employees based onactuarial valuation. However the amount is not ascertainable. Refer Note 37(3).

Our opinion is not modified in respect of the above matters.

Key Audit Matters

Key audit matters are those matters that in our professional judgmentwere of most significance in our audit of the standalone financial statements of thecurrent year. These matters were addressed in the context of our audit of the standalonefinancial statements as a whole and in forming our opinion thereon we do not provide aseparate opinion on these matters. We have determined the matters described below to bethe key audit matters to be communicated in our report.

Key Audit Matter:

1. Adjustment of revenue and proper application of Ind AS 115"Revenue from Contracts with Customers" in respect of accuracy of revenuerecognition and adjustments for coal quality variances involving critical estimates.

The revenue recognized by the Company in any particular contract isdependent on the sale agreement / allotment in e-auction for the respective customer.Subsequent adjustments are made to the transaction price due to grade mismatch/slippage ofthe transferred coal.

The variation in the contract price if not settled mutually between theparties to the contract is referred to third party testing and the Company estimates theadjustments required for revenue recognition pending settlement of such dispute.

Such adjustments in revenue are made on estimated basis followinghistorical trend. Refer Note 23 to the Standalone Financial Statements.

Auditor's Response: Principal Audit Procedures: z We have assessedthe application of the provisions of Ind AS 115 in respect of the Company's revenuerecognition and appropriateness of the estimated adjustments in the process. z We haveselected transactions on sample basis and tested for identification of contracts involvingdisputes relating to grade mismatch/ slippage with respect to the terms of the contractevaluation of the satisfaction of performance obligation checking for adjustment to therevenue due to variation in transaction price z We have performed tests to establish thebasis of estimation of the consideration and whether such estimates are commensurate withthe accounting policy of the Company.

Audit Conclusion:

Our procedures did not identify any material exceptions. Key AuditMatter:

2. Assessment of provisions and contingent liabilities in respect ofcertain litigations including direct and indirect taxes various claims filed by otherparties not acknowledged as debt.

A high level of judgment is required in estimating the level ofprovisioning. The Company's assessment is supported by the facts of matter their ownjudgment past experience and advice from legal and independent tax consultant whereverconsidered necessary. Accordingly unexpected adverse outcomes may significantly impactthe Company's reported profit and net assets. Associated uncertainty relating to theoutcome requires application of judgment in interpretation of law.

Refer 37(4)(a) to the Standalone Financial Statements. Auditor'sResponse: Principal Audit Procedures:

Our audit was focused on analyzing the facts of subject matter underconsideration and judgments/ interpretation of relevant law. Our Audit approach involved:z Examining recent orders and/or communication received from various Tax authorities/judicial forums and follow up action thereon. z Understanding the current status of thelitigation/tax assessments. z Evaluating the merit of the subject matter underconsideration with reference to the grounds presented therein and available independentlegal / tax advice. z Review and analysis of the contentions of the Company throughdiscussion collection of details of the subject matter under consideration the likelyoutcome and consequent potential outflows on those issues.

Audit Conclusion:

Our procedures did not identify any material exceptions.

Information Other than the Financial Statements and Auditors'Report Thereon

The Company's Board of Directors is responsible for the preparation ofthe other information. The other information comprises the draft Directors' Reportincluding annexures to Directors' Report which we obtained prior to the date of thisauditors' report and other reports included in the Annual report which are expected to bemade available to us after that date but does not include the standalone financialstatements and our auditors' report thereon.

Our opinion on the standalone financial statements does not cover theother information and we do not and will not express any form of assurance conclusionthereon.

In connection with our audit of the standalone financial statementsour responsibility is to read the other information identified above and in doing soconsider whether the other information is materially inconsistent with the standalonefinancial statements or our knowledge obtained during the course of our audit or otherwiseappears to be materially misstated.

If based on the work we have performed on the other information thatwe obtained prior to the date of this auditors' report we conclude that there is amaterial misstatement of this other information we are required to report that fact. Wehave nothing to report in this regard. When we read the full Annual report which isexpected to be made available to us after the date of this auditors' report if weconclude that there is a material misstatement therein we are required to communicate thematter to those charged with governance.

Responsibilities of the Management and Those Charged with Governancefor the Standalone Financial Statements

The Company's Board of Directors is responsible for the matters statedin section 134(5) of the Companies Act 2013 ("the Act") with respect to thepreparation of these standalone financial statements that give a true and fair view of thefinancial position financial performance including other comprehensive income changes inequity and cash flows of the Company in accordance with the accounting principlesgenerally accepted in India including the accounting Standards specified under section133 of the Act. This responsibility also includes maintenance of adequate accountingrecords in accordance with the provisions of the Act for safeguarding of the assets of theCompany and for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe financial statement that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

In preparing the standalone financial statements management isresponsible for assessing the Company's ability to continue as a going concerndisclosing as applicable matters related to going concern and using the going concernbasis of accounting unless management either intends to liquidate the Company or to ceaseoperations or has no realistic alternative but to do so.

Those Board of Directors are also responsible for overseeing theCompany's financial reporting process.

Auditor's Responsibilities for the Audit of the FinancialStatements

Our objectives are to obtain reasonable assurance about whether thestandalone financial statements as a whole are free from material misstatement whetherdue to fraud or error and to issue an auditor's report that includes our opinion.Reasonable assurance is a high level of assurance but is not a guarantee that an auditconducted in accordance with SAs will always detect a material misstatement when itexists. Misstatements can arise from fraud or error and are considered material ifindividually or in the aggregate they could reasonably be expected to influence theeconomic decisions of users taken on the basis of these standalone financial statements.

As part of an audit in accordance with SAs we exercise professionaljudgment and maintain professional skepticism throughout the audit. We also: z Identifyand assess the risks of material misstatement of the standalone financial statementswhether due to fraud or error design and perform audit procedures responsive to thoserisks and obtain audit evidence that is sufficient and appropriate to provide a basis forour opinion. The risk of not detecting a material misstatement resulting from fraud ishigher than for one resulting from error as fraud may involve collusion forgeryintentional omissions misrepresentations or the override of internal control. z Obtainan understanding of internal financial control relevant to the audit in order to designaudit procedures that are appropriate in the circumstances. Under section 143(3)(i) of theAct we are also responsible for expressing our opinion on whether the Company hasadequate internal financial controls system in place and the operating effectiveness ofsuch controls. z Evaluate the appropriateness of accounting policies used and thereasonableness of accounting estimates and related disclosures made by the management. zConclude on the appropriateness of management's use of the going concern basis ofaccounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditors' report to the related disclosures inthe standalone financial statements or if such disclosures are inadequate to modify ouropinion. Our conclusions are based on the audit evidence obtained up to the date of ourauditors' report. However future events or conditions may cause the Company to cease tocontinue as a going concern. z Evaluate the overall presentation structure and content ofthe standalone financial statements including the disclosures and whether the standalonefinancial statements represent the underlying transactions and events in a manner thatachieves fair presentation.

Materiality is the magnitude of misstatements in the standalonefinancial statements that individually or in aggregate makes it probable that theeconomic decisions of a reasonably knowledgeable user of the standalone financialstatements may be influenced. We consider quantitative materiality and qualitative factorsin (i) planning the scope of our audit work and in evaluating the results of our work; and(ii) to evaluate the effect of any identified misstatements in the standalone financialstatements.

We communicate with those charged with governance regarding amongother matters the planned scope and timing of the audit and significant audit findingsincluding any significant deficiencies in internal control that we identify during ouraudit.

We also provide those charged with governance with a statement that wehave complied with relevant ethical requirements regarding independence and tocommunicate with them all relationships and other matters that may reasonably be thoughtto bear on our independence and where applicable related safeguards.

From the matters communicated with those charged with governance wedetermine those matters that were of most significance in the audit of the standalonefinancial statements of the current period and are therefore the key audit matters. Wedescribe these matters in our auditors' report unless law or regulation precludes publicdisclosure about the matter or when in extremely rare circumstances we determine that amatter should not be communicated in our report because the adverse consequences of doingso would reasonably be expected to outweigh the public interest benefits of suchcommunication.

Other Matters

Our Report on the Standalone Financial Statements dated June 14 2021as approved by the Board of Directors of the Company is revised to incorporateobservations of the Comptroller and Auditor General of India. Pursuant to the observationsof the Comptroller and Auditor General of India we further report that: (i) Para (c) ofthe Emphasis of Matter has been modified to add the words "However the managementhas written off assets amounting to Rs.

5.76 crore during FY 2020-21 related to two mines namely Tikak Blockand Tirap Block."

(ii) Para (e) of the "Emphasis of Matter" has been insertedwith words "The Company has not provided for in its books of accounts forContributory Post Retirement Benefit Scheme (CPRMSNE) for on roll non-executive employeesbased on actuarial valuation. However the amount is not ascertainable. Refer Note37(3)." (iii) Our remarks on Item no. xiii of Annexure A to the Independent Auditors'Report on the Standalone Financial Statements in respect of the Companies (Auditor'sReport) Order 2016 ("the Order") issued by the Central Government of India interms of sub-section (11) of section 143 of the Companies Act 2013 is to be read as"According to the information and explanations given to us and based on ourexamination of the records of the company transactions with the related parties are notin compliance with Section 177 and Section 188 of the Act where applicable and details ofsuch transactions have been disclosed in the financial statements as required by theapplicable accounting standards." (iv) Our remarks on para 3(d) of Report on OtherLegal and Regulatory Requirements has been modified to add the words "except inrespect of disclosure pertaining to employee benefits as required under Ind AS 19"Employee Benefits." This revised Audit Report has no material impact on thereported figures in the standalone financial statements of the Company. This audit reportsupersedes the original audit report dated June 14 2021. Our audit procedure subsequentto the date of original report is restricted solely to the amendments made as mentioned inSl. Nos. (i) (ii) (iii) and (iv) above under "Other Matters".

(v) Due to the ongoing COVID-19 pandemic that caused lockdowns invarious states and other travel restrictions imposed by the Central and StateGovernments/local administration during the period of our audit we could not travel tosome of the units and carry out the audit processes physically at the respective offices.

Wherever physical access was not possible necessary records reportsdocuments and certificates were made available to us by the unit through digital mediumand emails. To this extent the audit process was carried out on the basis of suchdocuments reports and records made available to us which were relied upon as auditevidence for conducting the audit and reporting for the current period.

Such restrictions in performing audit procedures have enhanced the riskin effectively carrying out the audit and the quality of audit evidence gathered by us.

Report on Other Legal and Regulatory Requirements

1) As required by the Companies (Auditor's Report) Order 2016("the Order") issued by the Central Government of India in terms of subsection(11) of section 143 of the Companies Act 2013 we give in the "Annexure - A"a statement on the matters specified in paragraphs 3 and 4 of the Order to the extentapplicable.

2) As required under Section 143 (5) of the Companies Act 2013 wegive in the "Annexure - B" a statement on the Directions issued by theComptroller and Auditor General of India after complying with their suggested methodologyof audit the action taken thereon and its impact on the accounts and financial statementsof the Company.

3) As required by Section 143(3) of the Act we report that: a) We havesought and obtained all the information and explanations which to the best of ourknowledge and belief were necessary for the purposes of our audit. b) In our opinionproper books of account as required by law have been kept by the Company so far as itappears from our examination of those books. c) The Balance Sheet the Statement of Profitand Loss including other comprehensive income statement of changes in equity andstatement of cash flows dealt with by this Report are in agreement with the books ofaccount. d) In our opinion the aforesaid standalone financial statements comply with theIndian Accounting Standards specified under Section 133 of the Act except in respect ofdisclosure pertaining to employee benefits as required under Ind AS 19 "EmployeeBenefits". e) In pursuance to the Notification No. G.S.R 463 (E) dated 05-06-2015issued by the Ministry of Corporate Affairs Section 164 (2) of the Companies Act 2013pertaining to disqualification of Directors is not applicable to the Company being aGovernment Company.

f) The company has not complied with the provisions of section 149 ofthe Companies Act 2013 in respect of constitution of its Board of Directors which didnot have any independent director from September 6 2020. There was also non-compliance ofthe provisions of Section 177 178 188 of Companies Act 2013 and regulations 17 18 1920 24 33 read with Schedule II of SEBI

(Listing Obligations and Disclosure Requirements) Regulations 2015 inrespect of mandatory requirement of independent directors and an independent womandirector constitution of Audit committee Nomination and Remuneration CommitteeStakeholders Relationship Committee Corporate Social Responsibility Committee and thebusiness required to be transacted at these committee meetings. The standalone financialstatements audited by us have been approved by the Board of Directors in the absence of anAudit Committee and we have given our opinion on the same. g) With respect to the adequacyof the internal financial controls over financial reporting of the Company and theoperating effectiveness of such controls refer to our separate Report in "Annexure- C".

4) With respect to the matter to be included in the Auditors' Reportunder Section 197(16) of the Act:

As per notification number G.S.R. 463 (E) dated 5th June 2015 issuedby Ministry of Corporate Affairs section 197 of the Act regarding remuneration todirectors is not applicable to the Company since it is a Government Company. The Ministryof Corporate Affairs has not prescribed other details under Section 197(16) of the Actwhich are required to be commented upon by us.

5) With respect to the other matters to be included in the Auditor'sReport in accordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 inour opinion and to the best of our information and according to the explanations given tous: i. The Company has disclosed the impact of pending litigations on its financialposition in its financial statements - Refer 37(4)(a) to the standalone financialstatements; ii. The Company did not have any long-term contracts including derivativecontracts for which there were any material foreseeable losses; iii. There has been nodelay in transferring the amounts required to be transferred to the Investor Education andProtection Fund by the Company.

For RAY & RAY
Chartered Accountants
(Firm's Registration No. 301072E)
Sd/-
(Nabanita Ghosh)
Place: Kolkata Partner
Date: July 30 2021 Membership No. 058477
UDIN: 21058477AAAABX2598

"Annexure-A" to the Independent Auditors' Report

(Referred to in Paragraph 1 of "Report on Other Legal andRegulatory requirements" section of our Audit Report) i. In respect of FixedAssets:

a) The Company has generally maintained proper records showing fullparticulars including quantitative details and situation of fixed assets except dates ofcommissioning of some old assets location identification and codifications which need tobe updated. b) The fixed assets located at Head Office North Eastern Coalfields (NEC)New Delhi Liaison Office Regional Sales offices and other offices have been physicallyverified periodically as certified by the management. The process should be furtherimproved by having a well-defined programme of physical verification to cover all theassets in phased manner. The reconciliation of physically verified assets with the bookrecords is in progress. According to the information and explanations given by themanagement discrepancies noticed on the physical verification and consequentialadjustments are not material; c) According to the information and explanations given to usand on the basis of our examination of the title deeds lease deeds and/or other evidencesof title freehold land amounting to Rs. 12.07 Crore (Rs. 12.07 Crore) and leasehold landamounting to Rs. 44.17 Crore (Rs. 44.17 Crore) are held in the name of the Company exceptfor freehold land 5.60 hectares amounting to Rs. 0.03 Crore for which title deeds are notavailable for North Eastern Coalfields (NEC).

Title deeds are not available for 946.34 hectares of freehold land and4489.82 hectares of leasehold land at North Eastern Coalfields (NEC) which were acquiredby the Company or came in the possession of the Company on Nationalization and for which'nil' value is recorded in the books of accounts.

Title deeds for buildings at New Delhi Liaison Office and Delhi RSOwritten down value as on March 31 2021 amounting to Rs. 76.75 Crore (Rs. 21.37 Crore) arenot available. ii. As informed to us physical verification of inventories at NorthEastern Coalfields the production unit of the Company has been conducted at reasonableintervals during the year by the management. Year-end inventories of coal is nil hencereporting under paragraph 3 (ii) of the order is not applicable to the Company. iii.According to the information and explanation given to us the Company had not granted anyunsecured loan to companies covered in the register maintained under section 189 of theCompanies Act 2013. Hence reporting under paragraph 3 (iii) of the Order is notapplicable to the Company. iv. In our opinion and according to the information andexplanations given to us the Company has complied with the provisions of Sections 185 and186 of the Act in respect of grant of loans making investments and providing guaranteesand securities as applicable. v. The company has not accepted any deposit in terms ofthe directives issued by the Reserve Bank of India and the provisions of Sections 73 to 76or any other relevant provisions of the Companies Act and the rules framed there under.vi. The maintenance of cost records has been specified by the Central Government underSection 148(1) of the Companies Act 2013 in respect of Mining activities of the Company.We have broadly reviewed the records and are of the opinion that prima facie theprescribed accounts and records have been made and maintained. However we have not madeany detailed examination of the records with a view to determine whether they are accurateor complete. vii. a) According to the information and explanations given to us and on thebasis of our examination of books of accounts the Company has generally been regular indepositing the undisputed statutory dues including provident fund income tax sales taxwealth tax duty of customs duty of excise value added tax goods and services tax cessand any other statutory dues with the appropriate authorities. As informed to usemployee's state insurance is not applicable to the company.

According to the information and explanations given to us noundisputed amounts payable in respect of provident fund income tax sales tax wealthtax duty of customs duty of excise service tax value added tax goods and servicestax cess and other material statutory dues were in arrears as at March 31 2021 for aperiod of more than six months from the date they became payable. b) According to theinformation and explanations given to us and as per the records of the Company examined byus following dues of income tax and central excise were in arrears as at March 31 2021:

(Rs in Crores)
Name of the Statute Nature of Dues Gross Amount Under dispute Period to which the amount relates Forum where the dispute is pending Amount deposited under protest Amount not deposited
78.07 AY 2011-12 ITAT 20.00 58.07
Income Tax Act Income Tax 81.58 AY 2012-13 ITAT 0.00 81.58
90.30 AY 2013-14 ITAT 0.00 90.30
Total 249.95 20.00 229.95
Central Excise Act1944 Central excise 4.45 FY 2010-11 to FY 2014-15 CESTAT 0.17 4.28

viii. The Company does not have any loans or borrowings from anyfinancial institution banks Government or debenture holders during the year and as suchparagraph 3(viii) of the Order is not applicable to the Company. ix. According to theinformation and explanations given to us the Company has not raised moneys by way ofinitial public offer or further public offer (including debt instruments) or term loansand hence reporting under paragraph 3 (ix) of the Order is not applicable to the Company.x. To the best of our knowledge and according to the information and explanations given tous no fraud by the Company or no material fraud on the Company by its officers oremployees has been noticed or reported during the year. xi. As per notification no. GSR463(E) dated June 05 2015 issued by the Ministry of Corporate Affairs Government ofIndia Section 197 is not applicable to the Government Company. Accordingly paragraph 3(xi) of the Order is not applicable to the Company. xii. According to the information andexplanations given to us the Company is not a Nidhi Company as such paragraph 3(xii) ofthe Order is not applicable. xiii. According to the information and explanations given tous and based on our examination of the records of the company transactions with therelated parties are not in compliance with Section 177 and Section 188 of the Act whereapplicable and details of such transactions have been disclosed in the financialstatements as required by the applicable accounting standards. xiv. During the year theCompany has not made any preferential allotment or private placement of shares or fully orpartly convertible debentures and hence reporting under paragraph 3 (xiv) of the Order isnot applicable to the Company. xv. According to the information and explanations given tous during the year the Company has not entered into any non-cash transactions with itsDirectors or persons connected to its directors and hence provisions of Section 192 of theCompanies Act 2013 are not applicable to the Company. xvi. The Company is not required tobe registered under section 45-IA of the Reserve Bank of India Act 1934.

For RAY & RAY
Chartered Accountants
(Firm's Registration No. 301072E)
Sd/-
(Nabanita Ghosh)
Place: Kolkata Partner
Date: July 30 2021 Membership No. 058477
UDIN: 21058477AAAABX2598

"Annexure-B" to the Independent Auditors' Report

(Referred to in Paragraph 2 of "Report on Other Legal andRegulatory requirements" section of our Audit Report)

Part I

(i) Whether the Company has system in place to process all theaccounting transactions through IT SystemRs If yes the implications of processing ofaccounting transactions outside IT system on the integrity of the accounts along with thefinancial implications if any may be stated.

The company uses the Coalnet IT System to process most of itsaccounting transactions at CIL Head Office. Operational processes and their inter-phasewith Coalnet are maintained manually.

The accounting transactions of the Delhi Liaison office and RSOs underCIL (HO) are maintained in Tally. Major discrepancies in this regard are given below: zAll calculations related to Fixed Assets are performed separately outside IT system. z GST(RCM) and TDS are calculated manually during the bill payment to suppliers or Contractorsand subsequently entered in the IT system. z Payroll system is not integrated withAccounts. Relevant entries are passed manually into accounting system. z In NEC divisionsales module is not linked with dispatch of coal. Also stock register for movement ofcoal is not processed through IT system.

Above inadequacies in design of information technology systems havebeen reported in our report on the Internal Financial Controls. As per the managementdevelopment of integrated ERP system is in process. The financial implications if anyare unascertainable.

(ii) Whether there is any restructuring of an existing loan or cases ofwaiver/write off of debts/loans/interest etc. made by a lender to the company due to thecompany's inability to repay the loanRs If yes the financial impact may be stated.

As per the information and explanations given by the management thereis no restructuring of loan or cases of waiver/write off of debts/ loans/interest etc.made by a lender to the company.

(iii) Whether funds received/receivable for specific schemes fromCentral / State agencies were properly accounted for /utilized as per its term andconditionsRs List the cases of deviation.

As per the information and explanations given by the management thefollowing grants/funds were received:

During the financial year 2020-21 NEC has received Rs. 0.32 Croresfrom Ministry of Coal as "assistance for sand stowing and protective works" doneby NEC and were properly accounted for under "Other Operating Revenue" as'Subsidy for Sand Stowing & Protective Works' Further grant for railway sidingamounting to Rs. 1.72 crore received by NEC from Central Government in the FY 2019-20 isalso properly accounted for as per its terms and conditions on the basis of deferral ofincome recognition

Part II - Additional Directions:

(i) Whether coal stock measurement was done keeping in view the contourmap. Whether physical stock measurement reports are accompanied by contour maps in allcasesRs Whether approval of the competent authority was obtained for new heap if anycreated during the year.

As informed by the management only year-end coal stock measurement isdone keeping in view the contour map. NEC does not have year-end coal stock as on31.03.2021. Hence contour maps are not used.

There is no addition of new heap during the year as all the operatingmines are suspended from operation since 03.06.2020

(ii) Whether the company has conducted physical verification exerciseof assets and properties at the time of merger/split/re-structure of an area. If sowhether the concerned subsidiary followed the requisite procedureRs

As per the information and explanations given by the management thereis no such merger/split/restructure of an area during the year.

(iii) Whether separate Escrow Accounts for each mine has beenmaintained in CIL and its subsidiary companies. Also examine the utilization of the fundof the account.

Separate escrow account for each mine (Tikak extension Lekhapani OCPTipong Ledo OCP Tikak OCP and Tirap OCP) of North East Coalfields (NEC) the productionunit of Coal India Limited has been maintained. No such fund as explained by themanagement has been withdrawn during the year.

(iv) Whether the impact of penalty for illegal mining as imposed by theHon'ble Supreme Court has been duly considered and accounted forRs

According to the information and explanations given to us no penaltyfor illegal mining has imposed by the Honourable Supreme Court during the year on theCompany.

For RAY & RAY
Chartered Accountants
(Firm's Registration No. 301072E)
Sd/-
(Nabanita Ghosh)
Place: Kolkata Partner
Date: July 30 2021 Membership No. 058477
UDIN: 21058477AAAABX2598

"Annexure-C" to the Independent Auditors' Report

Report on the Internal Financial Controls under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financialreporting of Coal India Limited (hereinafter referred to as 'the Company') as of March 312021 in conjunction with our audit of the standalone financial statements of the Companyfor the year ended on that date.

Management's Responsibility for Internal Financial Controls

The Company's management is responsible for establishing andmaintaining internal financial controls based on the internal control over financialreporting criteria established by the Company considering the essential components ofinternal control stated in the Guidance Note on Audit of Internal Financial Controls overFinancial Reporting issued by the Institute of Chartered Accountants of India ('ICAI').These responsibilities include the design implementation and maintenance of adequateinternal financial controls that were operating effectively for ensuring the orderly andefficient conduct of its business including adherence to company's policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under the Companies Act 2013.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internalfinancial controls over financial reporting based on our audit. We conducted our audit inaccordance with the Guidance Note on Audit of Internal Financial Controls over FinancialReporting (the "Guidance Note") and the Standards on Auditing issued by ICAIand deemed to be prescribed under section 143(10) of the Companies Act 2013 to theextent applicable to an audit of internal financial controls both applicable to an auditof internal financial controls and both issued by the Institute of Chartered Accountantsof India. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence aboutthe adequacy of the internal financial controls system over financial reporting and theiroperating effectiveness. Our audit of internal financial controls over financial reportingincluded obtaining an understanding of internal financial controls over financialreporting assessing the risk that a material weakness exists and testing and evaluatingthe design and operating effectiveness of internal control based on the assessed risk. Theprocedures selected depend on the auditor's judgment including the assessment of therisks of material misstatement of the financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the Company's internal financialcontrols system over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A company's internal financial control over financial reporting is aprocess designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles. A company's internal financial control overfinancial reporting includes those policies and procedures that (1) pertain to themaintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of the company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of financialstatements in accordance with generally accepted accounting principles and that receiptsand expenditures of the company are being made only in accordance with authorizations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized acquisition use or disposition of thecompany's assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls over FinancialReporting

Because of the inherent limitations of internal financial controls overfinancial reporting including the possibility of collusion or improper managementoverride of controls material misstatements due to error or fraud may occur and not bedetected. Also projections of any evaluation of the internal financial controls overfinancial reporting to future periods are subject to the risk that the internal financialcontrol over financial reporting may become inadequate because of changes in conditionsor that the degree of compliance with the policies or procedures may deteriorate.

Opinion

According to the information and explanations given to us and based onour audit in our opinion the Company has generally maintained in all material respectsadequate internal financial controls over financial reporting and such internal financialcontrols over financial reporting were generally operating effectively as of March 312021 based on the internal control over financial reporting criteria established by theCompany considering the essential components of internal controls stated in the"Guidance Note on Audit of Internal Financial Controls over Financial Reporting"issued by the Institute of Chartered Accountants of India.

However further improvement is required in i) the documentation ofInternal Financial Controls of the Company in respect of its risk assessment process riskanalysis of different functional areas and incorporating the process flows at departmentallevels including risk mitigation in respect of insurance coverage ii) strengthening ofthe monitoring of controls in respect of expenses and fixed assets confirmation/reconciliation/ adjustment of balances of other financial assets other current andnon-current assets trade payables other financial liabilities and other currentliabilities and iii) inadequate design of information technology system and applicationcontrols that prevent the information system from providing complete and integratedinformation consistent with financial reporting objectives.

Our opinion is not modified in respect of the above matters.

For RAY & RAY
Chartered Accountants
(Firm's Registration No. 301072E)
Sd/-
(Nabanita Ghosh)
Place: Kolkata Partner
Date: July 30 2021 Membership No. 058477
UDIN: 21058477AAAABX2598

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