Coal India Ltd
Chairman Speech
Dear Stakeholders,
As we enter another year filled with challenges and opportunities, I am pleased to
share with you our progress, achievements, and vision for the future. Over the years, we
have played a pivotal role in fueling the growth of the nation's economy by ensuring a
steady supply of coal, which is the backbone of our energy sector. Our commitment to
excellence, sustainability, and innovation has been instrumental in shaping our journey
and driving positive changes in the industry.
I would like to highlight our key accomplishments, the steps we have taken to ensure
sustainable growth, and our dedication to the well-being of our stakeholders, environment,
and communities.
1. Coal and Coal India Limited in India's Energy Canvas
• India's energy consumption has more than doubled since 2000 propelled by
intensified industrialisation and urbanisation. The need for energy continues to expand.
It is becoming increasingly evident that no single source of energy can shoulder the
entire demand and it has to be a synergy of all sources. Yet, ‘Coal' remains the
country's energy spearhead meeting more than half of the primary commercial energy despite
the renewable energy sources steadily gaining ascendancy. The dependence on coal is
unlikely to diminish soon and its dominance will continue for two decades at the least.
• From an environmental point of view increase of renewable energy sources in the
country's energy basket is certainly well aspired. But the big question is whether they
will be able to supplant coal at this point of time. Solar and wind are big bets and
leading the race. Green and blue hydrogen are getting a keen focus from the country's
planners, but pricing will be a challenge to their economic viability.
• The country's total electricity generation during 2022-23, including renewables
was 1624.16 Billion Units (BU) compared to 1491.86 BU generated in 2021-22. The generation
growth of 8.87% during the year was a 13-year high, which is a testament to the country's
swelling energy appetite.
• Of this total, coal-based generation accounted for 70.6% or 1145.86 BU, with 10%
growth over the preceding year.
• Though renewable sources have grown by a robust 19% in FY 22-23 over FY'22,
their contribution in the overall generation was only 12.5% at 203.36 BU. In other words,
renewables trail coal by 5.6 times. This amplifies the importance of coal's role and the
need for a balanced energy transition from coal to renewables.
• Additionally, coal stokes many non-power industries as well viz. steel, cement,
fertilisers, sponge iron, aluminium and a host of other industries.
• With coal commanding such prominence in the Indian energy sector, Coal India
Limited leads the country's coal production contributing to around 79% of the nation's
entire coal output. Your Company is committed to increasing its production and supplies to
the mandated levels to ensure the country gets power at reasonable price points.
• During the last five years, Coal India's production grew by 24% to 703.20 MT in
FY 22-23 from 567.37 MT in FY 2018.
• In a country where 70.6% of the total electricity generation is coal -based,
your Company virtually empowers the nation's power sector. CIL's supplies to power sector
comprised 84% of its entire despatch during FY 22-23.
• Coal based electricity generation, including imported coal, was 1145.86 BU
during 2022-23. The generation through domestic coal sources was 1105.25 BU or 96.5% with
the major portion of coal supplied by your Company.
• CIL is also one of the largest contributors to the government exchequer –
both Central and State – and also plays a crucial role in country's social fabric
touching the lives of countrymen in more ways than one under its corporate social
responsibility umbrella.
• Coal India supplies its coal to the Indian consumers at highly competitive costs
compared to international coal prices.
• Despite the increase in various input costs, especially diesel and explosives,
your Company still sustained an all-time record profitability registering 61% growth in
PBT and 62% growth in PAT compared to FY 21-22.
2. A Year of record highs
• Shattering the previous records, your Company's vital performance parameters
like production, over burden removal (OBR), coal off-take, supplies to the power plants of
the country, Net Sales, PBT and PAT have peaked to a remarkable all-time high.
• In a unified concerted effort, all subsidiaries of CIL have chipped in with
their best performance to date by achieving growth in production and OBR.
• Officials at all levels of hierarchy right from CMDs of CIL's subsidiary
companies down to GMs, Area Managers have donned leadership roles in keeping the spirit up
and elevating their respective Company's performance.
3. Production
• Breaching the 700 MT production mark for the first time your Company has
achieved this challenging target on 30th March one day ahead of the closure of FY 22-23.
• Coal India produced 703.2 MT of coal in FY 22-23, with 100.5% target
satisfaction. The growth was a strong 13% over 622.6 MT over FY'22.
• The volume increase of 80.6 MT production in a single year was a never witnessed
high since the Company's inception. It outstripped by nearly two-fold the previous high of
44.5 MT hike reported in 2015-16.
• Also, the 80.6 MT quantum upsurge during FY 22-23 was almost equivalent to the
combined growth of the previous seven financial years which was 84 MT.
• Five of CIL's coal producing subsidiaries BCCL (113%), MCL (110%), NCL (108%),
WCL (104%), and CCL (100%) have raced ahead of their respective production targets of
2022-23.
• Leading the production growth among CIL's subsidiaries, MCL with a high orbit
production of 193.3 MT accounted for 27.5% of CIL's total production. The production
increase over FY'22 was 25.1 MT.
• SECL making a significant turnaround produced 167 MT by FY'23 end, up by 24.5 MT
compared to 142.5 MT of last year.
3.1 Over Burden Removal
• In a resolute display, CIL made short the OBR target of 1634 million cubic
metres (M.Cu.M) four days before FY 22-23 closure on 27th
March. OBR target was achieved for the first time in seven years since 2015-16.
• Your Company's OBR rose to a new record of 1658.627 M.Cu.M during the fiscal
achieving 101.5% of the target. The previous high of OBR was 1362.06 M.Cu.M in FY'22. The
Growth was 21.77% over last year. The 297 M.Cu.M volume expansion in a single year was the
highest ever increase.
3.2 Coal Off-Take
• CIL's total coal off-take shot up to 694.7 MT in FY'23, the highest till date,
with 32.8 MT increase. The 5% growth was over a high base of last year, when CIL's
supplies were 661.9 MT.
• Five of the seven coal producing subsidiaries of your Company exceeded previous
fiscal's off-take by considerable margin. In the order of logging maximum growth in volume
terms they are: MCL (16.4 MT), NCL (7.9 MT), SECL (4.5 MT), BCCL (3.3 MT) and CCL (3.2
MT).
3.3 Supplies to Power Sector
• Your Company's supplies to power sector rose to an unprecedented high of 586 MT
ending FY 22-23.
• Given a demand target of 565 MT by the power sector at the beginning of FY'23,
CIL topped it by an additional 21 MT by the fiscal's end. This was 103.7% target
achievement.
• Satiating the power sector's increased appetite, the Company supplied 45.6 MT
more coal in FY'23 compared to the preceding fiscal. In the process, CIL posted 8.3%
growth in supplies to power plants over a high base of 540.4 MT of FY 21-22.
4. Other Marketing Achievements
• Quality Coal Supply The efforts for better quality coal supplies
reflected a positive jump as the grade conformity improved to 70% during FY 22-23 from 66%
over FY 21-22 according to the third party sample analysis results received.
Now, all the consumers of CIL have the option for quality assessment of the supplies
through independent third-party sampling agencies.
As a result of conscious and continuous measures taken towards quality maintenance, the
gap between the weighted average of declared and analysed GCV of coal during the year was
only 3 Kcal/kg well within one GCV band.
• Rake loading up Average loading per day was at its highest ever level
of 273.6 rakes against 271.2 rakes/ day compared to FY 21-22. Average loading to Power
Sector consumers was also at a high of 259.4 rakes/ day against 243.1 rakes/day with
year-on-year growth of 7%.
• Single window mode agnostic e-auction Starting 1st March, 2023
onwards coal companies have started conducting ‘single window mode agnostic
e-auction' replacing the spot auction.
• E-auction fetches higher premium
Increased premiums in e-auction sales along with higher volume sales have augmented the
Company's strong profitability during the year. Though e-auction volume sales at 62.32
(raw coal) MT during FY 22-23 were lower by 43.8% compared to 110.80 MT of FY 21-22, the
higher premiums helped your Company in turning up the sales by H9,347 crore. Realisation
per tonne of coal under e-auction was H4,841.14 against H1,879.42 per tonne in FY 21-22,
up by nearly 158%.
• Consumer grievance redressal For quicker redressal of commercial
grievances of the consumers and to cement better business relations Coal India has set up
‘Consumer Grievance Redressal Committees' at its headquarters as well as at
subsidiary companies.
5. Growth strategies
• Mine Developers and Operators Of the 15 MDO projects (11 OC and 4 UG)
having a combined targeted capacity of 170 MT work orders were issued for nine projects of
127 MT/Y capacity during the year. Three of the nine projects have already begun mining
operations and of the remaining six, bids are under evaluation for two projects while for
four projects the tendering process is on.
• Projects Approved 24 Coal Mining Projects with a total capacity of
140.3 MT/Y were approved in FY 22-23. The total sanctioned capital for these
projects is Rs. 22130.22 crore.
• Focus on UG mining For the revival of output through UG mines CIL has
identified 30 discontinued mines for their operationalisation. These mines have an
estimated mineable reserves of around 600 MT. They are being pursued under two tranches.
In the first tranche, tenders have been floated for reviving 20 mines. Of the 10 bids
received, Letters of Acceptance were issued for all of them. Under the second tranche,
tenders have been floated for nine mines.
• Five Continuous Miners have been commissioned during FY 22-23 to boost
underground mechanisation in ECL, WCL and SECL.
Green clearances CIL secured environmental clearances for 40 proposals having an
incremental capacity of 87.32 MT/Y. Your Company has also secured Stage-l
Forestry clearances for seven proposals of 1920.15 Hectares and final approval
(Stage-II FC) for seven proposals of 885.86 Hectares.
6. Finest Financial Performance
• Your Company has registered a humongous growth in Profit Before Tax (PBT) by
60.91% and Profit After Tax (PAT) by 61.84% in FY 22-23 vis-?-vis FY 21-22. PBT of
CIL consolidated is Rs.38,000.81 crore and PAT is Rs.28,124.94 crore in FY 2022-23. This
was despite provisioning Rs.8,153 crore in the accounts in 2022-23 towards wage revision
of CIL's non-executive manpower.
• Your Company's Net Sales, the highest ever till date, was Rs.1,27,627.47 crore
during the year achieving a robust 27% growth compared to Rs.1,00,562.57 crore in FY 2022.
• Gross Sales have also risen to a record level of Rs. 1,87,455.57 crore during
the fiscal year, eclipsing the previous best of H 1,52,603.30 crore recorded in FY 2022 by
nearly 23%.
• Earnings before interest, tax, depreciation, amortisation, impairment (EBITDA) -
the measure of a Company's financial performance has risen by 49% during FY'23 to
Rs.H40,291.30 crore from Rs.26,973.89 crore in FY 21-22.
• Your Company and its Subsidiaries paid/adjusted Rs.56524.11 crore towards
Royalty, GST, Sales Tax/ VAT, GST Compensation Cess, Cess, District Mineral Foundation
(DMF), National Mineral Exploration Trust (NMET) and other levies. This is a growth of
13.78% compared to FY 21-22.
• Coal India has paid a total interim dividend of Rs.12,479.57 crore during FY
2023 at Rs.20.25 per share. Further, Coal India's Board has recommended a final dividend
of Rs.4.00 per share for FY 22-23 in its meeting held on 7th May, 2023.
7. Record Capex
• Capital expenditure of CIL has registered a phenomenal growth of 20.90% over
previous year. This helped your Company spend Rs.18,619.27 crore in FY 22-23 compared to
Rs.15,400.96 crore in FY 21-22
• The target Capital Expenditure of Rs.16,500 crore has been accomplished with
112.84% achievement rate. The achievement comes at a time when Govt. of India had advised
CPSEs of the country to scale up their expenditure to boost the economy.
• The capital expenditure, fully funded through internal resources, was driven up
by many developments of your Company like accelerated HEMM procurement process, land
acquisition, coal evacuation initiatives, rail infrastructure strengthening, timely
contract finalizations and execution, Joint Ventures, and so on.
• The year's record Capex will yield positive results for the Company in ensuing
years in terms of production and coal transportation.
8. Strengthening evacuation infrastructure
• To ensure seamless transportation of coal through rail mode especially from
mines having high growth potential, your Company has invested in the construction of new
rail lines.
Some of the major developments in FY 22-23 include -
• Starting the construction of the Shivpur-Kathautia new railway line of 49.09 km
with achieving the Financial Closure of the project in May 2022.
• ‘Inflated Mileage' has been approved by Railway Board for two railway tines
funded by CIL on ‘Deposit Basis'. Capacity enhancement works have started during the
year in both the railway lines of Jharsuguda- Barpali-Sardega, stretch of 52.41 km and
Tori- Shivpur, stretch of 44.37 km.
• Angul- Balram rail link project of 14.22 km, undertaken by Mahanadi Coast
Railway Ltd, has been commissioned on 14th November, 2022, thereby enhancing
rail evacuation capacity by about 15 MTPA from Talcher coalfields of MCL.
• Under the First Mile Connectivity, the eco-friendly mechanised transportation of
coal, construction of 7 projects having a total of 92 MT have been commissioned till date.
9. Procurement through GeM
• According to the government mandate of enhancing procurement of goods and
services through GeM portal, CIL has exceeded the targeted value of procurement of goods
at Rs.3107.33 crore. Target for 2022-23 was Rs.3035 crore.
10.Efforts for Enriching the Environment
• Greening the mining areas In a two-year period, your Company's
plantation in its mining areas almost went up two-fold to 1613.39 Hectares (Rs.a) in FY
22-23 from 1,468 Rs.a of FY'22. During the fiscal year, CIL has planted over 31.01 lakh
saplings.
• CIL has exceeded the year's target of 1,510 Rs.a achieving 107% satisfaction.
The increased plantation helped in creating about 81,000 tonnes of carbon sink potential
per year.
• Creation of Eco-Park CIL is converting its abandoned mines into
eco-parks as part of reclamation to boost local tourism and promote conservation in mining
areas. These have become popular as eco-tourism points. CIL's Subsidiaries have developed
3 eco-parks over an area of 41 Rs.a with a budget of Rs.5.67 crore during the year. A
total of 30 such eco-parks are already attracting steady footfalls. Plans are afoot for
the creation of more eco parks, eco-tourism sites and eco-restoration sites in mining
areas.
11. Energy Efficiency Measures
• Coal India has adopted of a mix of energy efficient measures by beginning FY
21-22. Ending FY 22-23 these measures have resulted in a reduction of 69,000 tonnes of
emissions this year which was
Co
2
124% of the estimated target of 55,766 tonnes.
• Total savings on energy was 84.20 million KwH (units) as a result of
implementation of energy efficient LED lights, ACs, super fans, water heaters, motors, and
auto timer street lights.
12.Creating Wealth from Waste through Sand segregation Plants
• As part of a novel out-of-the-box initiative, your Company is creating sand from
overburden material. Three such sand segregation projects one each in WCL (2,08,229 Cu.M,)
ECL (18,000 Cu.M,) and NCL (38,200 Cu.M,) during the year, have cumulatively produced a
total of 2,64,429 cubic metres of sand from OBR. This initiative makes inexpensive sand
available for construction in eco-friendly manner.
• Sand, one of the essential commodities commands huge demand in the construction
industry. Presently, the demand is met through sand mining and dredging from water courses
of rivers, which severely affects the riverine eco-system. This move by Coal India helps
preserve the ecosystem to some extent.
13.Effective Utilisation of Mine Water
• Mine water discharged from Coal India's mines benefitted 11.10 lakh people in
837 villages in the proximity of its mining areas during the year. The water was used for
domestic and irrigation purposes. Nearly 110 more villages and 42,000 more populace
benefitted compared to FY 21-22. A total of 2,832 Kilo Litres of water was utilised for
own use including industrial and domestic whereas the use of 2,692 Kilo Litres benefitted
the community for domestic and irrigation purposes .
14.CSR: Concern for Community
• Coal India is a major CSR spender among the CPSEs of the country. Your Company
as whole spent Rs.586.50 crore on CSR activities during the fiscal year.
• Some of the major CSR projects undertaken during FY 2022-23, include the
construction of a 5,000 seater library at Ranchi University, reconstruction of rain
shelter cum common facility center in Badrinath, and the establishment of centralised
kitchen for providing mid-day meals to 50,000 students in Ramgarh (Jharkhand), among
others
• MCL and CCL were declared winners in ‘Agriculture & Rural Development'
and ‘Promotion of Sports,' respectively in the prestigious National CSR Awards 2020,
declared in August 2022.
• CSR spend of Rs.2,172.63 crore during a four-year period till the end of FY
22-23, was 25.7% higher than
Rs.1,731.6 crore that the Company was statutorily obligated to spend.
15. Breakthrough for wage agreement under NCWA-XI
• Your Company is the largest corporate employer in the country and the large base
of it comprises skilled non-executives. CIL lays high priority on timely conclusion of
their wage revision.
• On a positive note, Coal India and the four central trade unions BMS, HMS, AITUC
and CITU, on 3rd January, 2023 have signed a Memorandum of Understanding (MoU)
recommending 19% Minimum Guaranteed Benefit (MGB) to its 2.38 lakh non-executive
employees, as part of National Coal Wage Agreement –XI (NCWA-XI).
• MGB of 19% is over the emoluments as of 30th June, 2021, which include basic
pay, variable dearness allowance, special dearness allowance and attendance bonus.
• Further, 25% increase in allowances has been agreed by your Company at time of
conclusion of NCWA-XI wage pact.
• During previous three editions of NCWA, Coal India was the first CPSE in the
country to have successfully concluded the wage pact of the workforce.
16. Signing of MoUs
• CIL has executed three Memorandums of Understanding (MoUs) with BHEL, GAIL India
Limited and IOCL for undertaking coal-to-chemical business, using surface coal
gasification, which is proposed to be implemented jointly through JV companies.
• Coal India signed two MoUs for its foray into thermal power business.
First is for a joint venture between SECL and Madhya Pradesh Power Generating Company
Limited (MPPGCL) to implement 1 x 660 MW Supercritical Thermal Power Station replacing the
retired generating units situated at the existing premises of MPPGCL's Amarkantak Thermal
Power Station, Chachai, district Anuppur, Madhya Pradesh.
• The other initiatives is setting up of 2 x 800 MW Super critical thermal power
plant in Odisha, through Mahanadi Basin Power Ltd. (MBPL), a 100% subsidiary of MCL. MoU
between CIL and Assam Power Distribution Company Limited (APDCL) was executed for purchase
of 1200 MW from the proposed MBPL Power Plant.
17. Employee learning and Vocational Training
• A total of 1,083 multi-disciplinary executives across different levels and
disciplines were offered training in premier management institutes. The total number of
Coal India's employees trained were 95,635 which is 39.86% of the Company's total
manpower. Roughly 36,644 contractors' workers were provided with Skill Development
trainings in CIL's Vocational Training Institutes in accordance to Mines Vocational
Training Rules. Nearly, 8,891 apprentices were engaged and offered on-the-job-training
at Coal India and Subsidiaries for one year.
18.Sporting Activities
• During the year, Coal India spent H2.97 crore towards creation of sports
infrastructure, assistance to players excelling in their respective fields and sponsorship
of major sports events. Coal India has also organised Cricket and Golf Tournament for All
India Public Sector Sports Promotion
Board where several PSUs have participated.
19. Safety: A priority Concern
• Your Company's concentrated focus on ensuring safety of its workmen resulted in
fatalities and fatal accidents falling by a third in 2022. Fatalities have hit an all-time
low of 20 in 2022 coming down by 31% in a year compared to 29 recorded in 2021.
• Demonstrating a downward trend, fatal accidents were also reduced by one third
to 18 in 2022. Comparatively the same were 27 in 2021.
• Fatality rate per million tonne (MT) of coal produced was 0.028 in 2022
decreasing sizeably by 40%, as against 0.047 of 2021; whereas coal production during the
referred period has gone up by 71 MT.
• Coal India views safety as a priority concern at par with its performance
parameters. The primary concern of CIL is to safeguard its prime assets – Men, Mines
and Machines. Safety norms are viewed holistically to make all mining operations safe and
hazard free.
20.Integrated Report
• The Company has voluntarily prepared its first integrated Annual Report that
aims to provide a comprehensive view of our integrated and sustainable approach,
showcasing the value we create while addressing the needs and expectations of our
stakeholders.The report presents Coal India's strategic framework for creating value in
the short, medium, and long-term. It provides a concise review of the Company's
performance over the fiscal year, showcasing how it aligns with the strategic objectives
of the Company.
21.Business Responsibility and Sustainability:
• During the year, your Company has published its ‘Business Responsibility
and Sustainability Report' (BRSR) in the Annual Report. The BRSR indicates the Company's
performance against the principles of the ‘National Guidelines on Responsible
Business Conduct'. This would enable the members to have an insight into Environmental,
Social and Governance initiatives of the Company.
22.Corporate Governance
• Your Company has complied with the conditions of Corporate Governance, as
stipulated in the Guidelines on Corporate Governance for Central Public Sector Enterprises
(CPSEs) issued by the Department of Public Enterprises, Government of India and Regulation
34(3) read with Schedule V of the SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015 with the Stock Exchanges. As required under SEBI (LODR) Regulations
2015, a separate section on Corporate Governance has been added to Directors' Report and a
Certificate for compliance of conditions of Corporate Governance has been obtained from a
peer reviewed, practising Company Secretary.
• Your Company has conducted Secretarial Audit by a peer reviewed Practicing
Company Secretary firm for F.Y. 2022-23 as required under Companies Act 2013. The Company
has complied with the provisions of Companies Act, 13 and SEBI (LODR) Regulations 2015
except for appointment of Woman Independent Director resulting in levy of penalty by Stock
Exchanges for non-appointment of Woman Independent Director. The Secretarial Audit Report
2022-23 forms part of Director's Report. The power to appoint Woman Independent Director
vests with the Govt. of India. Your Company has taken up the matter with Ministry of Coal
even before vacancy arose as well as subsequent to the vacancy.
23.Vision
• Your Company's vision is to ensure that there is no shortage of coal in the
country and to make the country self-reliant in terms of coal. Coal India envisions to be
a commercially viable Company and endeavours to move ahead as a contemporary,
professional, consumer friendly and successful corporate entity committed to national
developmental goals. Our vision also extends to dedicate our services to the service of
the countrymen in providing the primary commercial energy in an affordable and
environment-friendly manner. Coal India aims to be not only a valued Company, but a
Company with values.
24.Acknowledgement
• On behalf of your Company's Board of Directors, I wish to convey my deep
gratitude to you, our valued shareholders, for your continued support and trust. This
motivates us to excel 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 of Coal, Government of India. I also express my sincere thanks to other Central
Government Ministries and Departments, State Governments, all employees, Trade Unions,
Auditors, Consumers, Suppliers and all other stakeholders for their continuous
co-operation.
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