I am delighted to welcome you to the 44th Annual General Meeting of CoalIndia Limited (CIL). The Directors' Report and the Financial Statement for the year ended31st March' 2018 together with the report of Statutory Auditors and report andreview of Comptroller & Auditor General of India are already with you.
1. Importance of coal and Coal India Limited
India is on a high orbit growth trajectory expanding industrially and economically.Concurrently with this exponential transformation the country's energy need is also onthe increase. This is where coal steps in. You all are aware that in India Coal is theready answer to escalating energy demand as around 56% of the India's primary commercialenergy is met by coal alone. Around 73% of the entire power generated in the country iscoal based. The country's planners however are alternatively exploring to shift from beinga largely fossil driven energy economy to one that is powered by clean and renewableenergy especially solar. This is certainly a welcome move as it would supplement coal'srole if not entirely substitute it. As an industry and nation we will have to reconcileto the fact that both coal and renewables will coexist and complement each other in theyears to come. Only then we will be able to chart the course which is sustainableefficient effective and competitive for India. On one hand it will require us to reducethe development risks and constraints to coal mining and on the other ensuring that thecoal industry in India continues its focus on environment and sustainability practices.There has been significant growth on all parameters of environment and sustainability incoal mining in India land reclamation water conservation forest and wildlifeconservation adoption of renewables safety community development and R&R etc.However more needs to be done and as one of the leading players in the Indian coalindustry CIL is committed to do more than what expected from it. But as base fuel forpower coal is expected to retain its position in the foreseeable future. What make coalsuch a preferred energy fuel is its abundance availability and affordability. Theestimated geological resource of India coal stood at 315.15 Billion tones as on 1stApr'17.
With the rural electrification programme and 24 *7 power for all your company ispoised to play a greater and more responsible role as energy supplier in fulfilling thenoble cause of the government. Against this backdrop you will be proud to know that yourcompany CIL spearheads the country's coal production and produce around 84% of thecountry's entire coal output. It is only CIL which virtually fuels and empowers the powersector in the country. It would not be an exaggeration to state that CIL is synonymouswith India's energy scenario. Notwithstanding the extraneous factors CIL is committed toincrease its coal supply and meet the coal demand in the country. We plan to do better onall fronts and are committed to make a difference.
2. Notable Achievements of 2017-18
The performance of Coal India Limited was amply satisfying in more than one duringfinancial year 2017-18. The company had created many new highs' neverwitnessed before:-
Achieved an all-time high off-take of 580.28 Million Tonnes with a 6.8% growthcompared to last year.
In fact coal off-take had surpassed the production with a margin of 12.9Million Tonnes with Ministry of Coal Ministry of Railways and Coal India Limited togetherpushing more coal into the system with increased loading of rakes.
Power Sector the largest coal-consuming segment of Coal India was also suppliedwith 454.24 Million Tonnes of coal the highest off-take to the power plants by satiatingtheir demand. The growth was again 6.8% compared to the last year's achievement of 425.4Million Tonnes.
Coal production of 567.36 Million Tonnes showed an increase of over 13 MillionTonnes in absolute terms compared to last fiscal clocking a growth of 2.4%.
Besides ensuring highest coal production till date coal inventory as on 1stApril 2018 stood at 55.55 MTs against 68.42 MTs of last year thereby resulting in stockliquidation of about 13 MTs.
Commissioned two long pending major rail infrastructure projects Tori-Balumath section (in Tori- Shivpur division under jurisdiction of CCL) and Jharsuguda-Barpali- Dardega section (under jurisdiction of MCL) which were built on coal depositbasis and are now operational.
Two coking coal washeries Dahibari washery with a capacity of 1.6 MTY andPatherdih washery with 5 MTY were commissioned. Plans are on the anvil to set up anon-coking coal washery in the Ib-Valley for which a letter of award was issued.
Two new Coal Handling Plants with Rapid Loading System in Khadia 6 MTPA CHP/RLSNCL and Bharatpur 15 MTPA CHP/RLS in MCL have been commissioned.
10 coal projects with an ultimate capacity of 41.39 Mty with sanctioned capitalof Rs. 1524.27 Crores have been completed.
24 Environment clearances were obtained by CIL and its subsidiaries with a totalEC of 237.22 Million Tonnes of coal per annum. Besides above 14 (Stage I) forestclearances covering an area of 1919.49 HA and 7 (Stage II) forest clearances covering anarea of 832.55 HA were also secured during the year.
In the calendar year 2017 fatalities in CIL and its subsidiaries had decreasedby 33% and serious injuries by 9% compared to 2016.
The 10th Wage Agreement influencing over 3 lakh workers across thecountry was finalised in the 10th meeting of JBCCI consisting ofrepresentatives of both CIL Management and of Central Trade Unions on 10thOctober 2017 much to the satisfaction of the employees who received a 20% increase inwages.
3. Financial Performance:
Your Company is one the highest contributors to the government ex-chequer both Central and State governments. Coal India paid corporate taxes of Rs. 7432.89 crores toGovernment of India in financial year 2017-18.
Your Company and its subsidiaries had also paid/adjusted Rs. 44046.57 croresRoyalty GST Cess DMF and NMET and other levies. During 2017-18 Coal India earned apre-tax profit of Rs.10726.44 crores and a Profit after Tax of Rs. 7020.22 crores.
Your company had paid an interim dividend of Rs.10242.24 crores @ Rs.16.50 per share.Of the total dividend the share of Govt. of India was Rs. 8044.86 crores and the restRs. 2197.38 crores was given to other shareholders.
4. 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 its growth rate.
11 coal blocks have been allotted to Eastern Coalfields Limited Bharat CokingCoal Limited Central Coalfields Limited and Western Coalfields Limited put together.These new blocks will help these subsidiaries to produce more than 100 Million Tonnes ofcoal per annum in near future.
4 coal mining projects with an ultimate capacity of 24.60 Mty and total capitalinvestment of Rs. 4155.46 Crores were approved by CIL Board which would help to maintainCoal India's production growth tempo.
To further sustain the growth momentum in its production and off-take in future CoalIndia has formulated following multi-pronged strategies:-
(i) Critical Railway Links - Collaboration with State Governments & Railways.
In order to achieve the planned growth in production and evacuation in future CIL hasundertaken major Railway Infrastructure Projects implemented either by Railways or JVCompanies formed with IRCON representing Railways Subsidiary Company representing CIL andconcerned State Government.
13 projects for coal evacuation have been identified:
3 funded by coal companies.
4 funded through SPVs.
6 Railway funded projects.
On deposit Basis by CIL (3 Nos)
1. Tori - Shivpur (Double BG Line).
2. Jharsuguda - Barpalli-Sardega Rail link (SECR) Commissioned on 05.04.2018.
3. Rail Connectivity Lingaraj Silo with existing Deulbeda siding at Talcher Coalfieldsof MCL.
To be taken up by Railways (2 Nos)
1. Singrauli to Shaktinagar via Karaila Road (Doubling of the line) (EC Railways).
2. 4th line in Jharsuguda to Bilaspur (SECR).
Through JVs/SPVs by CIL (1 No)
1. Angul- Balram rail link (through MCRL).
The balance 7 rail lines that are likely to facilitate coal evacuation are envisaged tocome up in the future as under:
Through JVs/SPVs by CIL (3 Nos)
1. Shivpur-Kathautia Railway Line.
2. East Corridor through CERL.
3. East-West Corridor through CEWRL.
To be taken up by Railways (4 Nos)
1. Third line Barkakana-Barwadih-Garhwa Road.
2. Fourth line Jharsuguda to Bilaspur.
3. DFC- Dadri to Sonenagar & extension upto Koderma.
4. Third and fourth lines from Talcher to Budhapunk (10 km) & Third line fromBudhapunk to Rajatgarh (62 km).
(ii) Acquisition and Possession of land:
In all subsidiaries of Coal India the major portion of land is acquired under the CoalBearing Areas (Acquisition & Development) Act 1957. During 2017-18 notificationunder section 9 (1) has been issued for 10688.904 Ha and notification under section 11 (1)has been issued for 11899.112 Ha. During 2017-18 3687.61 Ha of land has been taken inpossession in different subsidiaries of Coal India Limited.
(iii) WEB Based Online Monitoring System:
Monitoring of 69 coal-mining projects costing more than Rs.150 Crores with Projectmonitoring software MS Project have been started in Coal India limited during the year2016-17. Regular interactions with subsidiaries is being done. Regular workshops are alsobeing organised to train the executives in MS Project software.
CIL in association with CMPDI recently launched a portal MDMS (Mine Data BaseManagement System) to monitor the ongoing projects costing Rs.20 Crores and above in CIL.
Crucial issues are also being uploaded by CIL and its subsidiary companies on the MOCe-CPMP portal and MOC is vigorously following up with the state governments and otherassociated ministries by holding meetings with concerned officials to expedite EC & FCapprovals.
(iv) Technology Development
Exploration capacity is being augmented with more use of hydrostatic drillsgeophysical loggers 2D/3D Seismic Survey Technology and optimization of number ofcoring/non-coring boreholes based on the complexity of geology of the block.State of theart Paradigm Software' for seismic data processing and interpretation hassuccessfully been commissioned to enhance the quality processing of data and itsutilization. M/s Sercel make mini vibrator seismic energy' source has been procuredwhich will enable to record seismic traces from depths in the range of 800-1000 metre withbetter resolution and thereby expediting coal exploration.
CIL has introduced high capacity HEMMs Operator Independent Truck DispatchSystem (OITDS) in-pit crushing & conveying to augment its coal production andoperational efficiency. Other technologies like High Angle Conveyor and Pipe conveyor areproposed for coal transportation which will reduce the operational cost of the mine. Forslope stability CIL is using slope stability radar and is planning to introduce thistechnology in all open cast mines for improving the safety and consequently productivityof the mine. Drones were used for the first time in CIL for benchmarking its capabilitiesin various technical applications like generation of contours ortho photos andcomputation of stock pile volumes
Introduction of Continuous Miner Technology on large scale including BolterMiners and Low Height Continuous Miners Long Wall Technology at selected places ManRiding system in major mines and Use of Tele-monitoring techniques continued to receivepriority to increase production from underground mines. Multi Utility Vehicles (MUV) andFree Steered Vehicles (FSV) are also being deployed for quick safe and efficienttransport of material and men respectively in mechanised underground mines.
v) Other Improvement Areas
To synergize the total operational processes and further facilitate effectivedecision making Enterprise Resource Planning (ERP) is likely to be implemented in CoalIndia soon. This will ensure cohesive cogent and efficient inputs into the systemresulting in rationalisation of resources and finally cost reduction.
The Union Government has recently allowed Coal India to extract natural gasCoal Bed Methane from coal seams. Earlier Coal India had to apply for a license toMinistry of Oil and Natural Gas to extract CBM from its coal seams. With this move CoalIndia and its subsidiaries no longer require such permissions. CIL is planning to set acoal based methanol plant at Dankuni Coal Complex of SECL. In the fiscal year 2017-18 thelicensors for supply of coal gasification technology have been pre-qualified and aPre-Feasibility Study for producing 6.76 Lakh metric tonnes per annum of methanol has beencompleted. The methanol to be produced at DCC will likely find a definitive market in theeastern states of India once the policy of Government for blending of methanol with petrolcomes into practice.
Vision 2030 for coal sector has been deliberated with the subsidiaries. Aworkshop with the stakeholders has also been conducted and with the recommendation of CILBoard it was sent to Ministry of Coal for further action.
CIL and its subsidiaries companies have introduced various initiatives usinginformation technology (IT) to increase transparency and for the optimum utilisation ofresources. E-office a solution from NIC was implemented to ensure paperless office. Ane-portal was launched by CIL for quality monitoring of its coal by the customers. CIL hasalso launched mobile apps like SEVA and GSKV for its customers Biometric attendance hasbeen introduced in CIL and its subsidiary companies.
(v) Customer Satisfaction i. For enhanced customer satisfaction special emphasishas been given to Quality Management of coal from mine to dispatch point. ii. Continuingwith the steps for independent assessment of grades of mines through various academicinstitutes of national repute by CCO annual grade declaration of 2018-19 has beenfinalized by CCO. Total 386 mines were re-assessed and out of these 61 mines aredowngraded and 42 mines are up-graded. iii. In order to monitor coal quality a portalUTTAM (Unlocking Transparency by Third Party Assessment of Mined Coal ) has been launchedby CIL to capture entire life cycle of sample. With the help of the portal information ofcoal quality on regular basis will be accessible to both Coal Cos. and Consumers.
5. Green Initiatives
Environmental and eco-system restoration is a conscious effort in Coal India. Yourcompany is aware of the importance of environmental issues and tries to the extentpossible to restore the environment and Nature to its original pristine condition.Mandatory obligations apart Coal India takes it upon itself as a moral obligation.
To promote Green Initiatives taken by GoI CIL has submitted Green Energy Commitmentletter to MNRE for developing 1000 MW Solar Power Projects. For implementation ofthese projects CIL has signed MoU with Solar Energy Corporation of India (SECI).
In the 1st phase tender was floated for setting up of 2x100 MW Solar PVProject in the state of Madhya Pradesh. But due to downward trend in prices of solarprojects and availability of land in Madhya Pradesh Solar park the tenders were cancelledand SECI is in the process of retendering the same in the state solar park of MadhyaPradesh.
CIL's initiatives had resulted in installation of more than 3 MW capacity in CIL HQ andits Subsidiary Companies.
Plantation and Green belt are developed through extensive tree plantation programmeevery year by the subsidiaries of Coal India Ltd. The subsidiaries of CIL have plantedaround 96 million plants covering an area over 38378 Ha. During 2017-18 1.99 millionsaplings have been planted covering an area of 821.52 Ha.
6. Safety Always a priority
Safety at work is always our supreme priority. Safety is engrained in our missionstatement and is one of the most influential factors in our inclusive business strategy.CIL have framed a well- defined safety policy to ensure safety in all our mines andestablishments. All our operations systems and processes are meticulously planned anddesigned with due regard to safety conservation sustainable development and environment.
Our best endeavors are continued for achieving Best Safe Practices and PreventiveSafety Culture. CIL have adopted internationally recognized advanced tool for RiskManagement in our mines. CIL always encourage and promote a proactive participatory safetyculture to improve safety awareness at all levels. This year we have introduced"Safety Flag" as a symbol for CIL's endeavour in fortification of Mine Safetyand observation of ILO's "World Day for Safety and Health at Work" to promoteenhance and instill awareness and appreciation on the importance of occupational safetyand health and to stimulate the mutual cooperation and support amongst all stakeholders ofsafety.
Over the years the safety standard of our mines have improved appreciably due tosincere commitment and mutual efforts continuous and sustainable safety awareness drivesimparting the best training and application of the technology. Our accident statistics -the relative indicator for mine safety have touched to all time lowest figures in 2017-18since inception of CIL in 1975. However we are not complacent and our sincere efforts arepersisted for further improvement in safety standard to achieve Zero Accident'.
7. Corporate Social Responsibility
Apart from improving the quality of lives of people Coal India's Corporate SocialResponsibility initiatives also take them along towards the company's goal by partneringwith them. While pursuing the enhancement of Coal production CSR is being undertaken forinclusive growth of community as a whole and the nearby affected communities. Coal Indiahas spent Rs. 483.78 crores in FY ending 2018 on CSR initiatives. Major activitiesundertaken are :
1. Cure and better management of disease in Thalassemia patients by way of financialassistance of Rs. 10 lakhs per patient to Christian Medical College Vellore Tata MedicalCentre Kolkata Rajiv Gandhi Cancer Institute and Research Centre New Delhi All IndiaInstitute of Medical Sciences New Delhi and Post Graduate Institute of Medical Educationand Research Chandigarh.
2. Different development works in Purulia West Bengal through The Energy and ResourcesInstitute (TERI):-
a. Promoting renewable solutions for the energy needs of the households Installation of Integrated Domestic Energy Systems and Solar Street Lights.
b. Agriculture greening and capacity building initiatives.
c. Sanitation Construction of Individual Household toilets in 5660 households.
d. Education through Knowledge cum Resources Centers in 40 schools.
3. Construction of Medical College and hospital Mahanadi Institute of MedicalScience and Research (MIMSR) by MCL at Talcher Odisha.
4. CCL KE LAL / CCL KI LAADLI an initiative aimed at facilitating themeritorious students of PAPs (Project Affected People) residing in the command areas ofCCL by providing them coaching from experts with lodging boarding and formal schoolingfor Class 10th & 12th to prepare them for appearing in admission in Engineeringcolleges like IIT NIT and other prestigious colleges of the country.
5. Adoption of Green Highway by SECL - Roadside plantations (around 100km) along NH-78from Shahdol to MP/CG Border implemented through NHAI.
6. Treatment of villagers through Mobile Medical Vans by BCCL more than 1.19lakh beneficiaries.
7. Financial support towards setting up of Indian Institute of Liver and DigestiveSciences (IILDS) at Kolkata by CIL by way of procurement of costly medical equipment.
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 Regulation 34(3) read withschedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015with the Stock Exchanges. As required under the guidelines and provisions a separatesection on Corporate Governance has been added to Directors' Report and a Certificateregarding compliance of conditions of Corporate Governance has been obtained from apractising Company Secretary.
Coal India has conducted Secretarial Audit for 2017-18 as required under Companies Act2013 and the Secretarial Audit Report is enclosed as a part of Directors report.
Coal India's vision is to ensure that there is no shortage of coal in the country andto make the country self-reliant in coal. Coal India envisions to be a commercially viablecompany and endeavours to move ahead as a contemporary 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 Company's Board of Directors I wish to convey my deep gratitude toyou our valued shareholders for your continued support and trust. This motivates us toexcel in all our pursuits and constantly create value for you as well as for the nation.
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 AuditorsConsumers and Suppliers for their continuous co-operation.
| ||Anil Kumar Jha |
| ||Chairman |
|Kolkata ||(DIN: 06645361) |
|Dated: 7th July' 2018 || |