ANNUAL REPORT 2012-13 LIMITED ( A Miniratna Company) CONTENTS Page No.

1 Board of Directors 1

2 Bankers & Auditors 3

3 Notice 4

4 Performance at a glance 6

5 Chairman's Statement 9

6 Awards and Accolades 17

7 Directors’ Report 25

8 Addendum to the Directors’ Report : 80

a) Comments of the Comptroller and Auditor General of under section 619(4) of the Companies Act, 1956

b) Auditors’ Report and Management’s Reply

9 Balance Sheet as at 31st March, 2013 99

10 Profit & Loss Account for the year ended 31st March, 2013 100

11 Cash flow statement for the year 2012-13 101

12 Notes to Balance Sheet ( Notes 1 to 19 ) 102

13 Schedules (20 to 32) to Profit & Loss Account 121

14 Significant Accounting Policies - Note 33 129

15 Additional Notes on Accounts - Note 34 135

16 Statement of Audited Results for the Quarter and Year Ended 31.03.2013 155

WESTERN COALFIELDS LIMITED

WESTERN COALFIELDS LIMITED ( A Subsidiary of Limited ) Board of Directors ( As on 27th May, 2013 )

Chairman-cum-Managing Director

Shri D.C. Garg

Functional Directors

Shri Om Prakash - Technical Shri Sushil Behl - Finance Shri Rupak Dayal - Personnel Shri S.S. Malhi - Technical

Government Directors (Part time)

Dr. M.R. Anand - Economic Advisor Ministry of Coal.

Shri R. Mohan Das - Director (Personnel & IR), Coal India Limited, Kolkata.

Non-official Directors (Part time)

Ms. Lalitha Kumar - Former IAS Officer, New Delhi Shri Vinod Somani - CA, New Delhi Shri Arun Balakrishnan - Former CMD, HPCL Dr. D. Chamdrashekharam - Professor, IIT, Mumbai

Permanent Invitee(s)

Shri R.D. Tripathi - Chief Operations Manager, Central Railway, Mumbai.

Company Secretary

Shri Rameher

1 ANNUAL REPORT 2012-13 WESTERN COALFIELDS LIMITED (A Subsidiary of Coal India Limited ) Board of Directors ( During the year 2012-13) Chairman-cum-Managing Director Shri D.C. Garg - From 01.05.2007 Functional Directors Shri B.K. Saxena - Technical ( upto 24.06.2012 ) Shri Om Prakash - Technical ( w.e.f. 01.06.2008 ) Shri Sushil Behl - Finance ( w.e.f. 01.11.2009 ) Shri Rupak Dayal - Personnel ( w.e.f. 28.09.2011 ) Shri S.S. Malhi - Technical (w.e.f. 03.03.2013) Government Directors (Part time) Shri A.K. Bhalla - Joint Secretary, Ministry of Coal, New Delhi ( w.e.f. 06.07.2010 ) Shri R. Mohan Das Director (Personnel & IR),Coal India Limited, Kolkata ( w.e.f. 28.06.2007 ) Non-official Directors (Part time) Dr. Ahindra Chakrabarti - w.e.f. 27.04.2010 Ms. Lalitha Kumar - w.e.f. 24.02.2011 Shri Vinod Somani - w.e.f. 24.02.2011 Shri Arun Balakrishnan - w.e.f. 24.02.2011 Dr. D. Chandrashekharam - w.e.f. 24.02.2011 Permanent Invitee(s) Shri S.K. Mishra - Secretary, Mineral Resources Department, Govt. of , Bhopal (upto 18.04.2012 ) Shri Shailendra Singh Secretary, Mineral Resources Department, Govt. of Madhya Pradesh, Bhopal (w.e.f.31.05.2012) Shri Z.A. Siddiqui - Chief Operations Manager, Central Railway, Mumbai (upto 31.10.2012 ) Company Secretary Shri Rameher - ( w.e.f. 01.02.2008 )

2 WESTERN COALFIELDS LIMITED

BANKERS

STATE BANK OF INDIA STATE BANK OF HYDERABAD CENTRAL BANK OF INDIA UCO BANK BANK OF UNION BANK OF INDIA ORIENTAL BANK OF COMMERCE ALLAHABAD BANK INDIAN BANK PUNJAB NATIONAL BANK BANK OF INDIA HDFC BANK IDBI BANK DENA BANK

STATUTORY AUDITORS

M/S JODH JOSHI AND CO CHARTERED ACCOUNTANTS

BRANCH AUDITORS

M/S B. CHHAWCHHARIA & CO CHARTERED ACCOUNTANTS NAGPUR

M/S A . S . DANI & CO CHARTERED ACCOUNTANTS NAGPUR

M/S KPRK & ASSOCIATES CHARTERED ACCOUNTANTS NAGPUR

REGISTERED OFFICE COAL ESTATE , CIVIL LINES , NAGPUR – 440001

3 ANNUAL REPORT 2012-13

WESTERN COALFIELDS LIMITED

Ref : WCL/SECY/BD/AGM-38/2013/190 Date : 19th May, 2013 N O T I C E THIRTY EIGHTH ANNUAL GENERAL MEETING

Notice is hereby given that the Thirty Eighth Annual General Meeting of Western Coalfields Limited will be held at 10.00 A.M. on Monday, the 27th May, 2013 at the Registered Office of the Company at Coal Estate, Civil Lines, Nagpur to transact the following business : ORDINARY BUSINESS:

1. To receive, consider and adopt the Audited Balance Sheet as on 31st March, 2013 and Profit & Loss Account for the year ended 31st March, 2013 together with the Directors’ Report and Reports of the Statutory Auditors & Comptroller and Auditor General of India thereon. 2. To declare dividend.

3. To appoint a Director in place of Dr. M.R. Anand, who retires in terms of Article 33(e)(iii) of the Articles of Association of the Company and is eligible for re-appointment. 4. To appoint a Director in place of Shri R. Mohan Das, who retires in terms of Article 33 (e) (iii) of the Articles of Association of the Company and is eligible for re-appointment.

By order of Board of Directors FOR WESTERN COALFIELDS LIMITED

Sd/-

( Rameher ) Sr. Manager (Finance)/ Company Secretary Registered Office : Coal Estate, Civil Lines, NAGPUR - 440 001

NOTE :

1. A member entitled to attend and vote at the meeting is also entitled to appoint a proxy or proxies to attend and vote instead of himself/herself and such proxy need not be a member of the Company. In order to be effective, the Proxy form duly completed should be deposited at the registered office of the Company not less than forty-eight hours before the scheduled time of the Annual General Meeting. A proxy form is enclosed. Contd..... 4 WESTERN COALFIELDS LIMITED

2. Members are also requested to accord their consent for convening the meeting at a shorter Notice under section 171(2)(i) of the Companies Act, 1956.

To,

1. Members/Shareholders, Western Coalfields Limited

2. Statutory Auditors, Western Coalfields Limited

3. Chairman, Audit Committee, Western Coalfields Limited

Copy to All Directors, Western Coalfields Limited, Nagpur Company Secretary, Coal India Limited, Kolkata General Manager (Finance) I/C-I WCL, Nagpur

5 PERFORMANCE AT A GLANCE

6 PERFORMANCE AT A GLANCE

7 PERFORMANCE AT A GLANCE

8 WESTERN COALFIELDS LIMITED Chairman’s Statement

Friends, I feel great pleasure in reporting another robust year for Western Coalfields Limited, at the 38thAnnual General Meeting of the company. We reported strong top line, that is revenues of Rs. 8703.97 crores along with sturdy bottom line, that is pretax profit of Rs. 428.87 crores during the financial year 2012-13.

I am happy to share that we are well positioned among the coal producers in the country on the strength of our strong balance sheet and sturdy performance year after year, despite the challenges posed by adverse geo mining conditions, paucity of reserves amenable to mega projects, constraints in land acquisition/physical possession, delay in forestry/environment clearances, the highest stripping ratio among all the subsidiaries of CIL, strata control problems due to adverse geo tectonic parameters and high susceptibility of coal to spontaneous heating/fire in underground mines.

Vision

The XIIth plan document envisages,GDP growth of 9% per year, with 6.5% annual growth in energy supply and the demand of 980.50 million tonnes of coal was projected to meet the 55% of the total primary commercial energy requirement in terminal year 2016-17. At Present 58.3 % of the total installed power generation capacity in the country is coal based whichcontributed for 75.83% of the total electricity generation during 2012- 13.It is a matter of fact that exponential rise in Coal demand has resulted in negative coal balance and accordingly coal industry needs to re-orient its production plan for minimizing the demand supply gap.

Keeping the fact in the mind, WCL has set its vision to emerge as a key player in the primary energy sector committed to provide energy security to the country by attaining environmentally and socially sustainable growth through best practices from mine to market.

Performance 2012-13 Financial Year 2012-13 had been a year full of challenges but the undeterred WCL team with concerted efforts achieved coal production of 42.29million tonnes against last year’s 43.11million tonnes and the REtarget of 42.00 million tonnes. The performance was affectedmainly due to the factors that were beyond our control such as delayin acquisition/physical possession of land, forestry clearances, lease renewal and adverse geo-mining conditions. 9 ANNUAL REPORT 2012-13

The coal off-take during the current fiscal was 41.546 million tonnes as against last year’s actual of 41.967 million tonnes and the RE target of 42.00million tonnes. The shortfall in off-take was mainly due to inadequate lifting of coal by MAHAGENCO through captive mode (rope/MGR), and road mode against allocations. Non fructification of cost plus agreement due to the failure of MAHAGENCO to achieve milestones as per LOA in respect of Bhusawal/Parlipower housesled to less offtake from Ukni and Bellora- Naigaon cost plus mines and accretion of coal stock.

However, Coal desptaches through rail have registered appreciable growth as WCL has despatched 21.37 million tonnes coal through rail mode as against the AAP target of 19.05 million tonnes and last year’s actual of 18.28million tonnes registering an achievement of 112% of target & a growth of 16.9% over last year.The wagon loading was 15 rakes/ day as against AAP target of 15 rakes/ day with a growth of 16% over last year.

During 2012-13 WCL achieved growth in coal despatches to core sector industries viz. 2.6% in Power, 11.8% in Cement, 6.5% in Steel, 5.7% in Sponge Iron and 10.1 % in Captive power plants.

The sales realization during current fiscal had been Rs. 8137.05 crores which is 5.61% lower than the last year’s realization of Rs. 8620.70 crores. Additional revenue of Rs. 392.11 crores generated through e-auction during 2012-13 was less than the additional revenue of Rs. 713.55 crores earned during the last year. The drop in realization over previous year is mainly due to fall in off-take by 0.42 million tonnes and less generation of additional revenue through e-auction.

WCL produces about 85.08% of Coal through departmental means, whereas the system capacity utilization in departmental coal production has been 100.08%. The system capacity utilization during the year with respect to departmental OB removal has been 97.59% and the overall departmental system capacity utilization has been 98.22% (89.19 million cubic metres achieved as against the capacity of 90.81 million cubic metres as assessed by CMPDI as on 1/4/2012).

Your company has achieved ever highest overall productivity of 2.97tonnes per man-shift during the year 2012-13, which is 115% of the targeted 2.58 tonnes per man shift, thus registering a growth of 10% over the last year’s actual 2.70 tonnes per man shift.

WCL continued to maintain high utilization of HEMM, which has been more than CIL’s average during the year 2012-13. WCL ranked 2nd in utilization of Dragline, Shovel, Dumper & Dozer amongst all subsidiaries of CIL.For further strengthening WCL purchased 94 new 10 WESTERN COALFIELDS LIMITED equipment including 60T Dumpers and Shovels (Electrical and Hydraulic) against surveyed off during the fiscal.

Financial Performance

During the year, WCL achieved the highest turnover of Rs.8703.97croreswith a pretax profit of Rs. 428.87crores, which is of course less than the last year’s pretax profit of Rs. 440.50crores,despite of increase in employee cost by Rs. 83.00 crores, increase in POL & Explosive Cost by Rs. 77 croresand increase in Power Cost by Rs. 48 crores. Net worth of the company has risen from a level of Rs3315.22crores last year to Rs.3410.91crores on 31-03-2013.

Your Directors have recommended a dividend payment of Rs. 194.60 crores @ 65.50% on the Paid up Capital of the company that isRs. 297.10 crores, a tangible demonstration of WCL’s ability to continue creating value.

Creation of Assets

Company has Invested Rs. 264.05 during FY 2012-13 on development of new mines and infrastructure along with replacement of old assets, entirely from internal resources. HEMM worth Rs.145.38crores were purchased during the year, whereas the equipment for underground mining costing Rs.20.51croreswere added in the fleet.

Planning Preparedness

Planning Preparedness: At present, your company is operating 32 Ongoing Projects/ Schemes with a sanctioned capacity of 32.181 MTY and capital of Rs. 1487.167 crores, out of which, 20 projects have contributed 17.0686 million tonnesof coal production duringthe year2012-13. For sustaining production levels, company has planned 22 Projects during XII Plan period with a capacity of 24.03 MTY, and initial capital of Rs. 6415.64 crores.

Cost Plus Projects

Total 38 projects have been approved till FY 2012-13 on Cost Plus Basis, that is to yield requisite 12% IRR, out of which Coal Supply Agreements for 12 projects have already been signed. 5 projects, namely Sharda UG, Harradol UG, Dhankasa UG, DhuptalaOC(Sasti UG to OC) and Dinesh OC were offered to MAHAGENCO and MPPGCL on cost plus basis prior to issuance of MoC guideline dated 07/10/2008. “In Principle” consent has been received from these State power utilities and Coal Supply Agreements are under finalization.

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As per guidelines from Ministry of Coal, 13 numbers of financially unviable projects were placed on the website of the company and applications were invited from LoA holders/ FSA holders/ Linkage holders both from Cost Plus category and notified price category. Based on the applications CSA on cost plus basis have been executed for partial capacity for BelloraNaigaon Deep OC and Ukni Deep OC. CSA on cost plus basis has been executed for complete capacity for Urdhan OC. Due to enhancement of rates of land compensation by Maharashtra Govt., and implementation of R&R policy 2012, ongoing projects (13 numbers) are likely to come under the cost plus ambit, and no investment even for land acquisition can be done without entering in to cost plus agreement with prospective consumer, resulting in delay in opening of the ongoing/future projects.

Issues related to cost plus agreements have been flagged with CIL/MOC for suitable guidelines for expeditious opening of the on-going/future projects.

Exploration and addition in Reserves

Exploratory drilling to the tune of 65,520 meters has been carried out during the fiscal by CMPDIL in WCL command area. Coal reserves of about 60.56 million metric tonneshave been proved in Shaktigarh Block of Pathakhera Area.

Technology infusion in Underground Mines

For sustaining the current production levels, production from UG mines needs to be augmented, as the production from OC mines will be on decline due to the paucity of suitable reserves.WCL has taken initiatives for adoption of mass production and continuous mining technology in UG mines for increase in production and productivity but results may not be expected immediately.

At present, Continuous Minertechnology is under operation at Tandsi UG mines of WCL and it is planned to introduceatTawa-II Expn. andSaoner-I,both operating mines in 1st phase and atJamunia u/g and Dhankasa u/g new projects in 2nd phase.

WCL has taken further initiatives for adoption of new technology for mass production in underground mines through global tender for development, construction and operation on turn-key basis (MDO concept) of two underground blocks namely Murpar and Bordawith capacity of 2.0million tonnes per year each, in 1stphase,and two more blocksnamely Nand with 1.0 million tonnes per year capacity and Shaktigarh with 2.0million tonnes per year capacity have been identified for development in 2ndphase.

12 WESTERN COALFIELDS LIMITED

In order to eliminate long arduous travel, fatigue and to improve the efficiency of workmen in UG mines, Man Riding Systems have been installed in five UG mines. Further such systems are under installation in three UG mines and one more is under procurement.

Your company has played a leading role in mechanizing the drilling for face as well as roof support,by deploying 31 departmental Universal Drilling Machines (UDMs), which has resulted in significant improvement in the blasting efficiency and in green zone support with added safety.

Energy Efficiency initiatives Accepting the fact that there is scope to save energy by rationalization of operations, WCL has undertaken various initiatives, which have resulted in arresting the energy consumption levels with just 0.20% increase, despite 13.2% increase in average rainfall over previous year requiring additional pumping to dewater our inundated mines during heavy and incessant rains.

Material Management During the year 2012-13, all the procurement cases of material were finalized through e-tendering mode, total 137 nos. of e-tenders were floated with estimated amount of Rs.583 crores. WCL has maintained its position at the top amongst CILsubsidiaries by keeping the lowest inventory during the fiscal, that is inventory of 0.89 month’s consumption against 1.00 month during 2011-12. Your company has realized Rs. 8.69 crores by means of scrap disposal during the year 2012-13.

Environment Management Coal mining is environmentally sensitive activity and mitigation of its adverse impacts is imperative for sustainable development.Your company is aware of its responsibility and has taken initiatives for environmental protection and mitigation measures in all the operating mines.

WCL is committed to restore the degraded land through reclamation, afforestation and green beltdevelopment. Till date, 180.49 Lakh trees have been planted covering an area of 6533.23 Ha.in its command area in the states of Maharashtra & Madhya Pradesh. During 2012-13, a total of 1.60 Lakh saplings were planted in the mining and adjoining areas through expert forest agencies namely Forest Development Corporation of Maharashtra (FDCM) and Madhya Pradesh Rajya Van VikasNigam(MPRVVN).

13 ANNUAL REPORT 2012-13

The progress of afforestation in the 10 major Open cast Projects of WCL is monitored regularly through satellite imagery which indicates that there is an increase in afforestation/plantation area.The Satellite data substantiates that green cover due to plantation has increased by 10.26 Sq. Km. in last five years that is from 2008 to 2012.

In the recent past, statutory stipulations such as restrictions imposed on expansion of existing projects in Maharashtra due to River Regulatory zone Policy 2009 even after obtaining EC from MoEF, extension of moratorium on grant of EC under CEPI in Chandrapur industrial cluster, and mandatory Stage-I forest clearance to get EC, etc. are some of the nagging problems that are being faced by WCL. I am sure that most of these issues will be resolved in due course of time as we have taken up these issues with the concerned State Ministry and at Chief Secretary level.

Acquisition of Land

Your company is facing hardships due to undue delay in acquisition/physical possession of land, lease renewal and forestry clearances. The issues have been flagged in the meetings held with Chief Secretary, Govt. of Maharashtra, Minister of forest Govt. of Madhya Pradesh, and other concerned authorities. WCL could acquire 2025.823 Ha land under LA Act, CBA Act, FC Act and Direct Purchase and took physical possession of 201.21 Ha land with constant persuasions. During the fiscal, total 61 Project affected families, have been resettled by providing resettlement grant as opted by land oustees, within the provisions of R&R Policy of CIL. Employment of 753 land oustees and monetary compensation to 46 in lieu of employment during FY 2012-13 has been approved.

Corporate Social Responsibility

With a view to bring meaningful change in the lives of our most important stake holders that is, populace residing in our command area in particular and the society at large, WCL has undertaken massive CSR initiatives during the year 2012-13 and completed 205 CSR activities, with an expenditure of Rs. 20.96crores as compared to Rs. 7.85 crores incurred during last year. The major activities during the year includes construction/repair of 43.56 Km length road, construction of 35 school class rooms, construction/repair of 30 community centers to enrich the village life, provision of 43 borewells/handpumps to meet the drinking water needs of villagers,organization of16 no. of coaching camps to promote sports, organization of 221 Medical camps, with 28,647 beneficiaries, and 906 camps by Mobile Medical Vans with 68,529 beneficiaries in nearby villages.

14 WESTERN COALFIELDS LIMITED Safety Safety is always our top priority and we are continuously thriving for achieving the superior standards through adoption of best practices. Thrust is being givenfor enhancement in safety awareness at the grass root level through participative management forums likesafety committee meetings, and special safety awareness drives,programmed and co-ordinated by internal safety organization (ISO) on various subjects like green roof support, safe practices in haulage, belt conveyors, face equipment, ventilation, dust suppression, explosives and blasting. Tripartite safety committee meetings with active participation of DGMS officials are also being held to review the status. During the calendar year 2012, there had been no change in fatalities that is 10 and reduction of serious injuries from 37 to 29 vis-a-vis 2011.Scientific studies have been carriedout onstability of OB dumps, spontaneous heating etc. by reputed scientific/educational institutions for enhancing the safety in operations. Further, we have continued our focus on training and retraining of the workforce.

Industrial Relations Industrial Relations during the fiscal 2012-13 has been peaceful, cordial and harmonious in the company. However, there was two days nationwide strike on 20th and 21st February, 2013 called by all the five Central Trade Unions on demands related to national level issues.

Awards and Accolades I feel pleasure to share with you that, Golden Peacock (special commendation) Award 2012 has been conferred on WCL in recognition of its excellent environment management. Your company was bestowed with “Caring company Award” for its CSR work by the council of Board members of World CSR Congress.

I am also happy to inform you that as the CEO of your company I have been awarded as “CEO with HR orientation” at World HRD Congress,Raj Bhasha ShreeSamman by the BhartiyaRajbhashaVikasSansthan Dehradun and Best Chief Executive Corporate Management Excellence Award2012-13 during GEOMINETECH symposium.

WCL Stood First amongst different Coal India Subsidiaries and adjudged 3rd Best Overall Company at the National Level in 43rd all India Mines Rescue Competition. Company has secured 1st position in Table Tennis & 2nd position in Carom in CIL Inter Company Tournament.

Corporate Governance WCL has complied with conditions (except a few which are under progress) of Corporate Governance as stipulated in the Guidelines on Corporate Governance issued by the Department of Public Enterprises, Government of India. As required under the said guidelines, 15 ANNUAL REPORT 2012-13 a separate section on corporate governance has been added to the Director’s Report and a certificate regarding compliance of conditions of Corporate Governance obtained from the practicing Company Secretary.

Last but not the Least While summing up in retrospect, I am happy to say that WCL’s sustained performance year after year, despite unsurmountable challenges is the testament of our team’s strength and capability to deliver.

We firmly believe that we will continue to maximize the returns of WCL’s key stake holders- its shareholders, customers, employees and local populace.

I call upon all of WCL family to rise and move towards the goal of 44.20 million tonnes of coal production and offtake of 44.15 million tonnes during FY 2013-14. Thus we will be fulfilling our bounden duty to energize India and in turn contributing to the progress of the nation.

With Best Wishes,

(D. C. Garg) Chairman Cum MD

16 WESTERN COALFIELDS LIMITED

Shri D.C. Garg, CMD, WCL receiving “Golden Peacock Environment Management Award- 2013” from Shri M. Veerappa Moily, Minister of Petroleum and Natural Gas, Govt. of India during 15th World Congress in New Delhi on Environment Management for contribution toward development of new belt and afforestation of Mining area.

Shri D.C. Garg, CMD, WCL receiving “BT-Star PSU Award-2013” from Shri Bhupinder Singh Hooda, Chief Minister of Haryana in New Delhi for Best practices in CSR under Miniratna categories.

17 ANNUAL REPORT 2012-13

Shri D.C. Garg, CMD, WCL receiving “Best Chief Executive Corporate Management Excellence Award 2012-13” from Shri G.B. Mishra during GEOMINETECH Symposium at Bhubneshwar

Shri D.C. Garg, CMD, WCL representing Ministry of Coal, Govt. of India during “Mining Indaba – 2013” held at Cape Town, South Africa. 18 WESTERN COALFIELDS LIMITED

Shri D.C. Garg, CMD, WCL addressing “Global Mining Summit-2012” organised by Confederation of Indian Industry(CII) in Kolkata.

Shri D.C. Garg, CMD, WCL addressing National Seminar “Explo-Safe 2013” on Safety, Security and Recent trends in Explosives, organised by Petroleum and Explosive Safety Organisation (PESO) at Nagpur. 19 ANNUAL REPORT 2012-13

Smt. Shashi Garg, First Lady and President, Jhankar Mahila Mandal, WCL giving Trophy to the winning team of WCL during Coal India Inter Company Table Tennis Tournament

Shri D.C. Garg, CMD, WCL was conferred “Rajbhasha Shree Award” by Bhartiya Rajbhasha Vikas Sansthan, Dehradun. 20 WESTERN COALFIELDS LIMITED WESTERN COALFIELDS LIMITED BALANCE SHEET AS AT 31st MARCH

21 ANNUAL REPORT 2012-13

22

ANNUAL REPORT 2012-13

24 WESTERN COALFIELDS LIMITED DIRECTORS’ REPORT To Overburden removal during the year The Members/Shareholders, 2012-13 was 113.685 million cubic Western Coalfields Limited. meters against the AAP target of Your Directors have pleasure in presenting 130.000 million cubic meters which is the 38th Annual Report of Western Coalfields 16.315 million cubic meters less than the Limited and Audited Accounts for the year target and 8.803 million cubic meters ended 31st March, 2013 together with the less than last year’s actual of 122.488 report of the Statutory Auditors and report and million cubic meters review of the Comptroller and Auditor General Coal off take during 2012-13 was 41.546 of India thereon. Million tonnes which is 3.704 Million 2. LOCATION OF UNITS tonnes less than the targeted 45.250 Million tonnes i.e. 92% achievement and The mines of your Company are 0.421 Million tonnes less than last year’s located in Maharashtra and South- actual of 41.967 Million tonnes West Madhya Pradesh. For effective administrative control and operations, Shortfall in coal production of 2012-13 the mines have been grouped in 10 can be attributed to following reasons:- (Ten) Areas as follows: 1) Delay in physical possession of land Area District State Mines as on 1.4.2013 & forestry clearance Under- Opencast Mixed ground Nagpur and Umrer Nagpur Maharashtra 10 5 - 2) Heavy rainfall in July 2012 (48.82% Chandrapur, Ballarpur, Chandrapur Maharashtra 12 27 - more than July 2011) Majri, Wani and Wani North & Yavatmal Pench and Kanhan Madhya 13 7 1 3) Non commencement, belated Pradesh commencement of work of HOE for Pathakhera Betul Madhya 7 - - Pradesh OB removal

Total Numbers of Mines- WCL 82 42 39 1 4) Some of the HOE tenders for OB removal could not be materialised due to higher unjustified rates 3. PERFORMANCE quoted by bidders, affected coal During the year 2012-13 your production & OBR. Company has achieved coal production of 42.287 Million Tonnes 5) Incidences of fire / Spontaneous against the AAP target of 45.000 heating, encountering geological million tonnes which is 2.713 Million disturbances, bad roof, high water tonnes less than the AAP target and percolation and soft floor affected 0.823 million tonnes less than last coal production in underground year’s actual of 43.110 MT. mines. Productivity of the Company has gone up upto 2.97 tonnes per manshift 3.1 Performance of Production (Coal and during the year 2012-13 which is more Washed Coal), Productivity, Coal Sales than the target of 2.58 tonnes and also and Off-take against Annual Action Plan more than last year actual of 2.70 (AAP) targets and as compared to last tonnes year’s is given in the following table:

25 ANNUAL REPORT 2012-13

2012-13 % % Apropos supply of coal to Steel Plant, SL 2011-12 Achieve- Actual Growth NO Target Actual the production of Coking Coal from PARAMETERS ment Over AAP overTarget last year Tandsi UG, which is only producer of Coking Coal in WCL is less as the i) Coal Production 45.000 42.287 94.0 43.110 -1.9 continuous Miner is working in (million tonnes) geologically disturbed zone where ii) Total Off-take 45.250 41.546 91.8 41.967 -1.0 extensive roof support is required. (million tonnes) 3.2 Coal Production and OB Removal iii) Despatches (Sales) 45.230 41.539 91.8 41.959 -1.0 (million tonnes) from Opencast Mines : iv) Washed Coal 0.1870 0.1445 77.3 0.1365 5.9 Production Sl. PARAMETERS 2012-13 2011-12 % Growth (million tonnes) no. Target Actual %Achie- Actual over last v) Despatch to 0.1870 0.1450 77.5 0.1361 6.5 AAP vement year Steel Plants overTarget (million tonnes) i Coal production 36.180 34.087 94.2 34.720 -1.8 ( Million Tonnes) Productivity OMS 2.58 2.97 vi) 115.1 2.70 10.0 ii Overburden 130.000 113.685 87.5 122.488 -7.2 Removal ( Mill. Cub. Mtrs.)

Shovel Dumper A Shovel-Dumper in operation in one of the opencast Mine of WCL.

26 WESTERN COALFIELDS LIMITED 3.3 Mechanised Underground Coal tonnes. Accreditation in Coal Stock has Production: been mainly due to following reasons: The Mechanised Coal Production from 1) The actual off take was less than MOU Underground mines during the year target mainly due to inadequate lifting 2012-13 was 7.987 million tonnes of coal by MAHAGENCO through which is 0.071 million tonnes less than captive modes (Rope/MGR) and Road last year’s actual of 8.058 million tonnes. Coal production by Conti- mode. nuous Miner (CM) Technology at 2) Evacuation of coal from Ukni & Bellora Tandsi and Kumberkhani Mines was Naigaon cost plus mines was affected 0.1053 million tonnes which is 0.0442 to the tune of 1.14 MT as cost plus million tonnes less than last year actual agreement with Mahagenco did not of 0.1496 million tonnes. Adverse Geo- fructify due to non achievement of Mining conditions at Tandsi UG & expiry of contract for CM operation at milestone in respect of Bhusawal/Parli Kumberkhani UG in July 2012 affected TPS the production of Continuous Miner. 3) The Off take through e-auction route 3.4 Coal Stock: was restricted upto 10% of planned production till November12 which has Coal Stock at the end of fiscal 2012- resulted in less off take of 1.04MT than 13 increased by 0.741 million tonnes the last year’s off take through e- and stood at 5.834 million tonnes as auction route. compared to last year’s 5.093 million

Load Haul Dump - A Coal Mining Machine in operation in one of the underground mine of WCL

27 ANNUAL REPORT 2012-13 4. SAFETY : works in OC mines was carried out from 19.11.2012 to 4.1 During the calender year 2012, there 01.12.2012. had been no change in fatalities i.e, 10 and a reduction of serious injuries (e) Annual Safety Fortnight was from 37 to 29 vis a vis 2011. conducted in all the mines of WCL from 17.12.2012 to 30.12.2012. Skilled human resource are the biggest asset for your company, 2) Special stress has been given on hence their safety is of paramount green roof support & qualitative face importance to us. Thrust is being given support by roof bolting. Resin in your company to increase safety capsules has also been introduced in awareness at the grass- root level by many underground mines specially in inculcating participative management watery strata. at the unit level by way of safety 3) Pit top safety talks are regularly given committee meetings being conducted in all the mines and the same are being every month. Besides, tripartite safety monitored during ISO inspections. committee meetings at Area level with active participation of DGMS officials 4) Pit safety committees of all mines have are also being held. Training and re- been re-activated and are being training of your workforce to follow safe attended by Area level and Hq. level practices at the work place has also officers. The recommendations of been our thrust area in 2012-13. these committees are implemented and monitored regularly. 4.2 Steps Taken during 2012-13 to improve safety and reduce 5) Back shift inspections by senior accidents : officers of mine and area have been intensified. 1) (a) A Special safety awareness drive on Green roof and side support, 6) Officers who have been trained by safe practices in haulage, belt SIMTARS, Australia were engaged for conveyor, SDL/LHD operations imparting training and upgrading the was conducted in all underground knowledge of executives and mines of WCL from 23.04.2012 to supervisors in prevention of fire and 05.05.2012. evaluation of risk management. (b) A Special Safety Awareness Drive 7) Area level committees have been on Ventilation, Dust Suppression, constituted to conduct safety audit of Storage, transport & use of the mines to evaluate the safety status explosives was observed in UG of the mines. mines from 27.08.2012 to 8) Meetings with Area Safety Officers are 07.09.2012. conducted to evaluate the (c) A Special Safety Awareness implementation status of various Drive on Maintenance of Statutory safety measures in the mines. The Records & Plans was conducted mine inspection reports of Workmen in UG and OC Mines from Inspectors (in form U) and other 22.10.2012 to 07.11.2012. officials are regularly monitored and rectification of deficiencies pointed out (d) A special safety drive on are ensured. contractor’s workmen & contractual 28 WESTERN COALFIELDS LIMITED 9) High powered multi-disciplinary task 2. Scientific Study for full extraction of coal force consisting of Steering Committee seam at Tawa-1 and Sarni mine of Members, CGM(S&C) and other Patharkhera Area by NIRM KGF. senior officials of Hq. randomly visit mines to evaluate safety standards. 3. Scientific Study to suggest suitable method for extraction/ liquidation of coal 10) A high level committee have in Kumbharkhani UG mine of Wani- inspected all the mines of WCL to North Area by CIMFR. ascertain the preparedness for monsoon against water danger. 4. Scientific study to asses the impact of depillaring at Saoner Mine 1, Nagpur 4.3 Statistics of Fatal Accidents : Area by NIRM KGF. Particulars 2012 2011 5. Scientifc Study for dragline dump & OB (Calendar year) (Calendar year) No. of fatal accidents 9 9 dump at Mungoli OC, Wani Area for Persons involved 10 10 deployment of M-7400 marion dragline Rate per million tonne output 0.24 0.23 by NIT Rourkela. Rate per 3 lakhs manshift 0.2 0.19 6. Scientifc Study for dump stability at 4.4 Statistics of Injury frequency : mungoli OC, Wani Area by BHU

Particulars 2012 2011 7. Scientific study for suitable method for (Calendar year) (Calendar year) depillaring along with support system Injury frequency 129 137 for seam I of Mohan / Mauri, Kanhan Injury frequency Rate per 3.08 3.16 million tonne output Area by NIRM KGF Injury frequency Rate per 3 2.52 2.55 8. Scientific Study for OB dump stability lakhs manshift at Chinda OC, Pench Area by BIT 4.5 Technical Contribution in 2012-13 : Meshra. i) Vetting of operational plans of all 9. Scientific Investigation for possibilities mines by ISO at Hq. of spontaneous heating in HLC-1, Chandrapur Area by CIMFR, . ii) RMR study for each development district for support design. 4.6.2 To eliminate manual drilling, iii) Accident enquiry in case of fatal & Mechanised roof bolting has been serious accidents and enquiry into introduced by deployment of 31 major dangerous occurrences / departmental UDMs, 1 contractual incidents . quard bolter, 2 converted UDMs, 27 iv) Analysis of all accidents and Hydraulic roof bolting machines, 3 incidents so as to decide preventive pneumatic roof bolting machines and safe practices. 41 Kargil type and other roof bolting 4.6 Special Achivements in 2012-13 machines. 4.6.1Following scientific studies have been undertaken by Scientific/ Educational 4.6.3 To eliminate long and arduous travel, institutes during 2012-13 : five Man Riding Systems are being used (one each) in Tandsi, Mohan/ 1. Scientific study of the OB Dump Stability at Gondegaon OC, Nagpur Area by BIT Mouri Incline, Saoner-1, Tawa-1 and Meshra. 29 ANNUAL REPORT 2012-13

Colliery/ Shobhapur (1st system). Further, Sl. Date Reasons No. Area installation and commissioning of three 01 02.05.12 04.05.12 Mohan/ Sealing of depillaring panel due such systems in WCL, i.e, BC 3&4, Kanhan to Spontaneous heating Panel E4-B in Seam 1. nd Shobhapur (2 system) and 02 30.06.12 03.07.12 HLC-1/ Panel 1B18L - Old area roof fire Kumbharkhani mines is in process. In Chandrapur dealt under rescue cover. addition to the above, one system which 03 21.07.12 22.07.12 DRC/ Panel M2, 22LS/24D - F was procured for Sarni mine is being Chandrapur Spontaneous heating in fallen coal. shifted to Chattarpur-1 mine and one 04 29.09.12 Vishnupuri - Spontaneous heating in D-5 2 / Pench depillaring panel of VB-2 Seam. system is under procurement for Saoner mine no. 2. 05 26.12.12 28.12.12 Ballarpur Fire in Q-A Bottom Development 3&4 Pit Section.

4.7 Utilisation of Safety Budget 2012-13 : 5.3: EXPANDING EXPERTISE TO Head Capital Revenue CALIBRATE GAS DETECTORS

Budget Rs. 2254.82* lakhs Rs. 8800.00 lakhs The importance of gas detectors in mines need no explanation. Though Expenditure Rs. 425.27 lakhs Rs. 8300.00 lakhs maintenance and calibration of gas detectors are not in the ambit of our * Out of BE 2012-13 allocation of Rs. core competence, two officers were 2565 lakhs, Rs. 310.18 lakhs re- trained to calibrate Drager, Oldham/ appropriated to other head. Industrial Scientific and Honeywell make gas detectors. 5. RESCUE This initiative has resulted in 5.1 MAJOR ACHIEVEMENTS considerable amount of saving of 5.1.1 ISO 9001:2008 CERTIFICATION Rs.19,78,659.00. Further, the acquired in-house expertise in these gas Your Company added in its cap the detectors calibrations has increased the prestigious ISO 9001:2008 reliability, efficiency as well as Certification when Mines Rescue availability of the detectors. Station, Nagpur, the first Rescue 5.4 BECOMING A REVENUE Organization in India amongst the GENERATING ORGANIZATION Coal and Metal Companies Mines Rescue Station, Nagpur imparted obtained this certification. Now Rescue training to employees of M/S. RRRT Parasia, Pathakhera and Sunflag Iron & Steel Company as well Tadali have also been accorded as M/S. Manganese Ore India Limited ISO 9001:2008 Certification. (MOIL) and generated revenue to the tune of Rs.18,91,904/- (Rs. Eighteen 5.2 Prompt Service in Emergency & lakhs ninety one thousand nine hundred Reopening four) during the financial year 2012-13. 5.2.1 During 2012-13, Three Sponta- 5.5 Competition/Drives in Rescue neous Heating and Two Fire Services operations have been dealt 5.5.1Inter Rescue Room Competition was successfully. The details are as held in the month of January, 2013. under. RRRT, Parasia bagged the First Prize

30 (Rs. in Lakhs)

WESTERN COALFIELDS LIMITED under RRRT group and Rescue Room 7. Population & Performance of Majri was adjudged First in Rescue Equipment Room group. 7.1 Population of Equipment 5.5.2 Zonal /Inter Area Rescue Competition was held at RRRT, Parasia. Overall S.No. Equipment Population As Remarks on 31st March First Prize was bagged by Pench Area, 2013 2012 Overall Second - Nagpur Area, Overall 1 Dragline 3 4 15/90 Dragline Sl.No. 101 of Umrer OCP has been surveyed off and Third-Kanhan Area, Best Captain-Shri grounded. R.K. Suman, Pench Area & Second 2 E.R.Shovel 41 42 During 2012-13, 3 nos. have been procurred against Survey-off best Captain Shri Mahendra Singh, of 4 nos. Nagpur Area. Best Member Shri Kunal 3 HydraulicExcavator 93 104 During 2012-13, 20 nos. of higher capacity (4.3/5 Cu.Mt.) have been Gajbhiye, Nagpur Area and Second procurred against Survey-off of 26 Best Member Shri Sharad Kumar, nos. (2.8 Cu.Mt.), 10 nos. Hydraulic Excavators have to be supplied and Pathakhera Area. commissioned. 4 Dumper 542 568 During 2012-13, 64 nos. of higher 5.5.3 All India Mines Rescue Competition capacity (60T) dumpers have been procured against Survey-off of 60 was held at Mines Rescue Station, nos. (35(T) and 21 nos. (50T) Singareni Collieries Company Ltd., dumpers. 5 Dozer 155 165 During 2012-13, 10 nos. have been Ramagundam from 27th to 29th surveyed-off 6 Drill 96 104 During 2012-13, 8 nos. have been November, 2012. In this competition surveyed-off WCL Team bagged the following prizes : TOTAL 930 987 1. Overall 3rd Prize 7.2 Annual system Capacity of WCL 2. Drill and Turnout - 1st prize assessed by CMPDIL as on 3. Fresh Air Base 2nd Prize 01.04.2011 was 82.45 M.Cu.M. and that 4. Rescue 2nd prize 01.04.2012 was 85.03 M.Cu.M. 5. Statutory test 3rd prize 7.3 Performance of HEMMs 6. Theory test 3rd prize In this 43rd all India Mines Rescue 7.3.1 Availability of HEMMs Competition, We were adjudged 3rd i) Dragline & Dumper have achieved Best Overall Company at the National CMPDIL-Norms for availability. Level and Stood First amongst different Coal India Subsidiaries. ii) Availability of Dragline,Shovel & 6. AVAILABILITY OF POWER AND Dumper is more than CIL average POWER & FUEL CONSUMPTION : 7.3.2 Utilization of HEMMs 6.1 Availability of Power i) Utilization of Dragline is higher than Area 2012-13 2011-12 % Varitation CMPDIL - Norms. Average Contract Demand in MVA 139.421 136.200 2.36 Average Availed Demand in MVA 125.651 123.590 1.67 ii) Utilization of all the HEMMs in WCL is higher than CIL average. 6.2 Power and fuel consumption 7.4 Special Achievements 6.2.1Electricity 7.4.1 WCL is ranked as 2nd in utilization of Purchased 2012-13 2011-12 Dragline, Shovel, Dumper & Dozer, Units in MKWH 614.04 612.93 while 3rd in Drill among all Rate / unit 7.42 6.49 subsidiaries of CIL.

31 ANNUAL REPORT 2012-13 7.4.2 Equipments under break down for more 8. FINANCIAL PERFORMANCE: than 3 months (8.4% of total population The Company has earned a profit before of equipments as on 31st March, 2013), tax in the year 2012-13 Rs. 429 Crores is 1.1% less than last year (9.5% of total as against Rs.441 Crores in the population of equipments). previous year 2011-12. The financial 7.4.3 94 nos. new equipments including 60T performance of the Company for the Dumpers and Shovels (Electrical and year 2012-13 vis-a-vis 2011-12 is Hydraulic) were purchased against furnished below: surveyed off during the year. (Rs. in Crores) Sl. Particulars Amount Amount 7.4.4 To increase reliability of aged equip- No ments, 6 Equipments have been 1 Profit before tax for the year 2011-12 441 2 FACTORS CONTRIBUTING TO DECREASE covered under Rehabilitation IN PROFIT programme and 14 Dumpers have been i Increase in POL & Explosive Cost (POL 64.39 and Explosive 12.11 ) 77 overhauled under Extended Life ii Decrease in Sales revenue 45 iii Increase in Employee Cost 83 Programme during 2012-13. iv Increase in Power Cost 48 7.4.5 v Increase in Post-Retirement Medical Benefit System Capacity Utilization of Open cost to retired employee 42 Cast Mines of WCL vi Increase in Coal Transportation and other contract work 39 Year Capacity in Capacity Remarks vii Increase in other Miscellaneous expenses 10 344 Mill. Cu.m. Utilization 3 FACTORS CONTRIBUTING TO INCREASE 2012-13 85.03 98.68% Based on CMPDI capacity as on IN PROFIT 1st April, 2012. i OBR Adjustment (After considering revision in Standard Ratio) 179 Based on CMPDI capacity as on 2011-12 82.45 104.67% ii Decrease in Mine closure expenses 146 1st April, 2011. iii Decrease in Depreciation 7 332 Profit before tax for the year 2012-13 429 7.4.6 Reason for Decrease in Capacity 8.2 The working results for the year as Utilisation : compared to the previous year are given 1. Various constraints in land acquisition, below :- mainly in Majri, Nagpur, Wani, (Rs. in Crores) Chandrapur, Ballarpur, Umrer and Wani PARTICULARS 2012-13 2011-12 North Areas. GROSS SALES 8703.97 8357.48 2. Idling of HEMM awaiting environmental Less: LEVIES MAHARASTRA 1677.48 1359.41 clearance from State govt. at Wani(N) MADHYA PRADESH 321.34 1998.82 248.06 1607.47 NET SALES 6705.15 6750.01 and Nagpur Area. Less: EXPENDITURE - 3. 44.9% of total fleet of equipments (as on Net of Misc. Income 6073.32 6119.43 GROSS MARGIN 631.83 630.58 25.03.2013) have qualified for survey- Less: DEPRECIATION/ 188.53 195.65 off (i.e. covered their life in hours as well AMORTIATION/IMPAIRMENT as in years). GROSS PROFIT 443.30 434.93 Less: INTEREST 2.87 3.20 4. Prolonged Breakdown of equipments PROFIT BEFORE PPA 440.43 431.73 due to delay in supply of critical spares Add : PRIOR PERIOD ADJUSTMENTS -11.56 8.77 like bearings for transmission, torque PROFIT BEFORE TAX 428.87 440.50 Add/(Less): Withdrawal provision for convertor and final drive of dozers. Deferred Tax Assets/Liabilities 122.73 105.59 5. Unavailable capacity of 1.34 M.Cu.M. of Less: PROVISION FOR TAXATION 227.29 239.37 PROFIT AFTER TAX 324.31 306.72 15/90 drafline (damaged in accident) was Add : Profit/(Loss) from finally deleted after its survey off after discontinuing operation (0.01) (0.01) approval by WCL Board in December, Add: Profit Brought Forward 2013.77 1988.80 2012. Distributable Surplus 2338.07 2295.51 32 WESTERN COALFIELDS LIMITED APPROPRIATION : 9.2 Loan Fund : (Rs. in Crores) Unsecured Loans : ( Rs. in crores) 2012-13 2011-12 FINAL DIVIDEND 194.60 184.04 Name Balance as Addition Repayment Balance as Security of Financial on Due to during on details TAX ON DIVIDEND 33.07 29.86 Institution 01.04.2012 exchange the year 31.03.2013 TRANSFER TO CSR RESERVE 21.55 21.83 Fluctuation (1) (2) (3) (4) (5)(2+3-4) (6) TRANSFER TO SD RESERVE 0.71 0.00 CIL– World 101.97 -0.34 16.71 84.92 Ref.note TRANSFER TO GENERAL RESERVE 48.64 46.01 Bank Loan 1& 2 TOTAL 101.97 -0.34 16.71 84.92 TRANSFER TO BALANCE SHEET 2039.50 2013.77 NOTES : 8.3 Dividend: 1) Loans from Coal India Ltd. amounting to Rs.84.92 crores comprises of : Directors are pleased to recommend a final dividend of Rs.194.60 Crores a)Coal Sector Rehabilitation Project (Previous Year Rs.184.04 Crores) from International Bank for @65.50% (Previous Year 61.95%) on Reconstruction and Development the paid up Equity Shares Capital of the (IBRD) - Rs. 43.18 crores. Company. The total dividend per share b)Coal Sector Rehabilitation Project is @ Rs. 655 ( Previous Year Rs. from Japan Bank of International 619.45 per share ) on 29,71,000 Equity Cooperation (JBIC) - Rs. 41.74 Shares of the Company. crores. 8.4 Source and Application of funds : 2) The loan amount of Rs.84.92 crores (Rs. in Crores) includes adjustment of downward SOURCES OF FUNDS 2012-13 fluctuation of foreign exchange to the 1 Addition to reserve & surplus 96.63 tune of Rs. 0.34 crores. 2 Addition to cumulative depreciation & Impairment -32.84 3) A charge has been created for 3 Decrease in non-current investment 16.04 Rs.165.00 crores on current assets for 4 Increase in Other Long Term Liabilities & Provisions 173.56 securing working capital facility from Total 253.39 CIL’s Consortium Banks as per joint APPLICATION OF FUNDS : deed of hypothecation dated 1 Additions to fixed assets & capital WIP 27.97 01.09.2008. This loan has, however, not 2 Increase in working capital 88.30 been availed so far. 3 Decrease in long term Loans & Advances -3.20 4 Decrease in Long Term Borrowings 17.60 10. WORLD BANK ASSISTANCE: 5 Increase in deferred tax assets 122.72 Your Company has not received any Total 253.39 assistance directly from World Bank, though assistance through Coal India 9 . CAPITAL STRUCTURE : Limited , under ESMP and CSRP Schemes to the extent of Rs.2.87 crores 9.1 Share Capital : (Previous Year Rs.3.20 crores) has The Authorised Share Capital of your been received during the year 2012-13 . Company is Rs. 800 crores comprising of 80 lakhs Equity Shares of Rs.1000/- 11. BORROWINGS FROM GOVT. OF INDIA : each of which Rs.297.10 crores is paid up Equity Share Capital (29.71 lakhs Your Company has not borrowed any Equity Shares of Rs.1000/- each) which amount from the Government of India remained unchanged during the year. directly during the year 2012-13. 33 ANNUAL REPORT 2012-13 12. CAPITAL EXPENDITURE : 14. PLANNING During the year ending 31st March, 2013 14.1 The production achieved during the year an amount of Rs.264.05 crores 2012-13 and targeted production for the (excluding capital commitment of year 2013-14 is given below: Rs.376.36 crores) was invested in Fixed Assets and Capital Work-in-progress of Particulars 2012-13 2013-14 Target Actual AAP Target existing and upcoming Mines/Projects. (As Per Annual Action Plan) The capital expenditure for the previous 1 Production (in million tonnes) 45.00 42.287 44.00 year was Rs.275.72 crores. 2 Productivity (OMS) 02.58 02.970 02.70 13. ROYALTY, SALES TAX, ENTRY TAX, EXCISE DUTY & OTHER DUTIES ON COAL: 15. DRILLING & EXPLORATION

13.1 Royalty, Sales Tax, Entry Tax, Stowing 15.1 During the fiscal 2012-13, 65,520 meters Excise Duty, Clean Energy Cess and exploratory drilling has been carried out Central Excise Duty paid to Govt. during by CMPDIL in WCL command area. the year are as given below :- 60.56 Mte coal reserves have been (Rs. in Crores ) proved in Shaktigarh Block of Pathakhera Area. 2012-13 2011-12 Maha- Maha- M.P. rashtra Total M.P. rashtra Total The target for drilling in 2013-14 in WCL Royalty 140.31 704.23 844.54 99.07 526.30 625.37 command area is 1,13,000 meters. Sales Tax: State 53.82 238.60 292.42 50.13 222.07 272.20 Central 6.91 30.10 37.01 9.10 34.93 44.03 16. REPORT FORMULATION Entry Tax 9.34 0.00 9.34 10.23 0.00 10.23 S.E. Duty 6.43 34.86 41.29 6.49 35.69 42.18 Clean Energy 16.1 Geological Reports Cess 31.33 174.16 205.49 29.63 163.95 193.58 Central During the year the following Excise Duty 73.59 363.67 437.26 53.87 288.23 342.10 Total 321.73 1545.62 1867.35 258.52 1271.17 1529.69 Geological Report was prepared :

S. No Name of Geological Reports 13.2 By virtue of enactment of Cess & Other 1. Shaktigarh Taxes on Minerals (Validation) Act, 1992, the Company raised supplementary bills 16.2 Mining Project Reports on customers upto 04.04.1991. An amount of Rs.2.96 Crores (Previous During 2012-13 following 6 Mining year Rs. 2.96 Crores) has been shown Project Reports were formulated : as liability for Cess on Royalty under the S. Name of Project Capacity Capital head Other Current Liabilities. In view No. (Mty.) (Rs. Crores) of the judgement of the Hon’ble High 1 Expansion of Nandgaon Incline 0.27 95.0996 Court, Patna, and Ranchi Bench in Writ 2 Pimpalgaon Deep OC 1.20 223.3083 3 Pauni Combined OC 2.50 466.8690 Petition No.CWJC/1280 of 1992, the said 4 Hindustan Lalpeth Expansion OC 1.00 87.8883 Cess is not payable. However, a Special 5 RPR for Bhatadih Expansion OC 1.50 494.5909 6 RPR for Kolgaon OC 0.80 246.8041 Leave Petition (SLP) is pending in Total 7.27 1614.56 Hon’ble Supreme Court against it. 34 WESTERN COALFIELDS LIMITED 16.3 PLANNING PREPAREDNESS enhancement of rate of land 16.3.1 X Plan Projects compensation by Maharashtra Government and implementation of R&R 24 mining projects were envisaged in X Policy, 2012. The PRs of these projects Plan, mainly to sustain present level of are being updated. None of these 6 production from existing and completed projects are likely to remain viable at group of mines. notified price. The total capacity & production contribution of these X Plan projects is 16.3.2 XI Plan Projects given below : Out of 33 XI Plan projects, 4 projects STATUS OF X PLAN PROJECTS were shifted to XII Plan. Presently, there No. of Capacity Capital Contribution are 29 Projects of XI Plan with a Project (Mty.) (Rs. Crs.) of production in 2012-13 sanctioned capacity of 38.75 MTY and (M.Te.) PROJECTS ALREADY APPROVED 21 16.64 980.83 12.0194 capital of Rs. 5765.77 crore identified PROJECTS SHIFTED TO XI PLAN 2 * Details given below with XI Plan to sustain the present level of production projects. PROJECTS DROPPED 1 ** ——— of the Company. Total 24 16.64 980.83 12.0194 STATUS OF XI PLAN PROJECTS * Waghoda UG (0.39 Mty) and Junad

Extn. OC (0.60 Mty) have been shifted No of Capacity Capital to XI Plan, as CSA on cost plus basis Projects MTPA Rs. Crore 3 3.90 61.90 was finalized on18.04.2007 On-going Project (Under Production) On-going Project (Under Implementation) 3 4.39 491.33 ** Saoner UG Mine No. III (with Conti- Future Projects (Approved Stage-I /Cost Plus) 22 29.21 5081.22 nuous Miner Technology), has been Projects to be Approved/under recast 1 1.25 131.31 38.75 5765.77 dropped, due to insufficient balance Total 29 reserve for deployment of Continuous Miner. 16.3.3 XII PLAN PROJECTS

Out of 21 X Plan projects, 5 projects have 22 projects, including 4 projects shifted been completed. 15 projects (10 ongoing from XI Plan, with an anticipated and 5 completed) are contributing capacity of 24.03 MTPA and estimated production. One Project viz Junakunada capital expenditure of Rs. 6415.64 crore OC has been commi-ssioned in 2011- have been planned for the XII Plan period for sustaining production levels. 12 and it has contributed to coal production in 2012-13. Remaining 6 Number of Anticipated Estimated Capital projects could not be started because Projects Capacity MTPA Rs. crore physical possession of land could not be On-going Project 1 2.00 64.11 obtained due to expectations of very high Stage I Approved/ Cost Plus 5 3.83 1240.88 land compensation by land losers, which Under Approval/Formulation 6 7.40 1632.42 To be formulated was beyond norms. Capital requirement 10 10.80 3478.23 Total 22 24.03 6415.64 in these projects has increased due to

35 ANNUAL REPORT 2012-13 17. DETAILED STATUS OF XI PLAN projects have already been signed. PROJECTS 5 projects, namely, Sharda UG, Harradol UG, Dhankasa UG, Dhoptala 17.1 APPROVED SUBJECT TO COST (Sasti UG to OC) and Dinesh OC, have PLUS DURING 2012-13 been offered to MAHAGENCO and

S.No. Name of Project Capacity Capital MPPGCL on cost plus basis prior to (Mty) (Rs. Crs.) issuance of MoC guideline dated 07/10/

1 Chinchala Chikhalgaon 3.00 1176.1265 2008. “In Principle” consent has been Amalgamated OCM received from these State Power Utilities & Coal supply agreements are 17.1.1Out of 29 Projects of XI Plan, PR for all under finalisation. 29 projects has been formulated by 17.3 In order to open new mines, which are CMPDIL & out of 29 projects, 6 projects financially non-viable at Notified Price, have been approved by WCL Board the following alternatives are being and are at different stages of explored :- implementation, while 22 projects have been approved subject to finalization of a) Efforts are being made to plan mines Cost Plus Agreement with prospective by total/partial hiring of equipment at consumer/ accorded I stage Approval. enhanced capacity ensuring Remaining 1 Project i.e. Bhatadih II minimum 12 % IRR at 85 % capacity Expansion OC is under recast. utilisation as per Govt. of India guidelines. 17.1.2Project Report of Chinchala Chikhalgaon Amalgamated OCM was b) To enter into Coal Supply Agreement approved subject to cost plus with the consumers who are agreement by CIL Board in its 292nd agreeable to pay the price yielding meeting held on 12/12/2012 on Total 12 % IRR at 85 % capacity. Hiring Option. c) As per MOC guidelines details of 17.1.3Out of 6 approved ongoing projects of thirteen financially non-viable projects XI Plan, 3projects namely Scheme for were placed on the Website of WCL Extension of Ghugus OC, Scheme for and applications were invited from Extension of Gauri- I and Gauri -II LOA holders /FSA holders/ Linkage (Merger) OC & Junad Extension OC are holders both from Cost Plus contributing production. The production Category & Notified Price Category. from these mines during 2012-13 is Based on the applications, allocation 3.62 MTe. of Coal from 3 mines namely Urdhan 17.2 Coal Supply Agreement (CSA) on OC, Bellora Naigaon OC and Ukni negotiated price to yield requisite Deep OC, has been approved for M/s MAHAGENCO and M/S Wardha IRR % for approval of Project Power Ltd on Cost Plus Basis. Coal Total 38 Projects have been approved Supply Agreement on cost plus basis till 2012-13 on cost plus basis, out of has been executed for five projects which Coal Supply Agreements for 12 during the year. Details are as follows: 36 WESTERN COALFIELDS LIMITED

Name of the Capacity in Sanct. Contracted Date of projects was placed before WCL Board rd Project Million Te Capital in Capacity in Million agreement in its 243 meeting held on 05/12/2012. Per Annum Rs. crore Te Per Annum After deliberation it was directed to refer Ukni Deep OC 2.00 319.97 0.80 03/04/2012 the issue to CIL/MoC for decision/ Bellora Naigaon 1.00 114.41 0.40 03/04/2012 deliberation on alternatives suggested Deep OC New Majri UG 0.80 72.57 0.68 30/06/2012 below : to OC Scheme for 1.357 0.00 1.15 31/08/2012 1. Price of WCL as a whole by pooling Durgapur OCM cost plus projects and notified Urdhan OC RCE 0.50 70.23 0.425 03/04/2012 projects. Total 5.657 577.17 3.455 2. Pooling the difference between desired selling price of cost plus Proposal for allocation for six projects projects of WCL with the notified price was placed before SLC-LT in its on the whole of CIL for each GCV band. meeting held on 07/01/2013 for In case one or both options are agreed approval of shifting of linkage from to, all projects of WCL may come out of notified price to cost plus price. the cost plus ambit thereby facilitating Minutes of the meeting awaited. The expeditious approval and execution of details are as below: ongoing/future projects.

Sr. Name of the Project Capacity in Sanctioned The matter has been referred to CIL. No No.Million Te Capital per annum in Rs. crore 18. PROJECTS / SCHEMES APPROVAL 1 Chincholi OC 0.30 24.6410 2 Saoner UG Mine -1 Expn. (CMT) 0.75 68.1679 AND COMPLETION 3 Sakhari-Irawati (Pauni-III) OC 1.25 360.7987 4 Tawa-II Expn. UG* 0.75 89.1888 18.1 Approval of Project Reports 5 Jamunia UG (CMT) 0.72 127.5223 6 Tawa-III UG* 0.48 105.6926 During the year 2012-13, the following *- Applications received for partial project has been accorded Stage I capacity. approval for making application for EC/ FC and identification of consumer for Allocation could not be done for two entering into Coal Supply Agreement on projects viz. Bhakra and Extension cost plus basis. of Nandan II in Dhau North Block due S.No. Name of Project Capacity Capital to non-receipt of applications under (Mty) (Rs. Crs.) Coking Coal Linkage. Allocation could not be done for Motaghat OC as it 1 Parsoda OC 0.80 451.0397 was decided to revise this PR for carving out reserves for maintaining continuity of production of Durgapur 18.2 Projects approved subject to Cost OCM. This was required to be done plus agreement as OB removal at Durgapur Extension Deep OC had to be discontinued due During the year 2012-13, the following to non-diversion of forest land. project has been accorded approval Application received for Maori UG subject to Coal Supply Agreement on (CCT) was withdrawn by customer. cost plus basis.

Further it has been observed that the S.No. Name of Project Capacity Capital present procedure for allocation of cost (Mty) (Rs. Crs.) plus projects is long and cumbersome. 1 Chinchala Chikhalgaon 3.00 1176.1265 A proposal depicting difficulties being Amalgamated OCM faced in implementation of cost plus

37 ANNUAL REPORT 2012-13 18.3 Approval of Schemes for sustaining projects in coal production for 2012-13 production was 17.0686 Mte with an increment of 0.3563 Mte over last year. Due to During the year 2012-13, following two enhancement of land rates by schemes have been accorded approval Maharashtra Govt. and implementation for sustaining production : of R&R Policy, 2012 most of the

Sr. Name of the Schemes Capacity Capital opencast projects approved on notified No. (Mty) (Rs. crore) price are not likely to remain viable at 1 Scheme for Narayani OC 0.17 2.6809 such price. For projects approved on 2 Scheme for Bharat OC 0.27 5.5860 cost plus basis, cost plus price is also Total 0.44 8.2669 likely to undergo upward revision due to the factors mentioned above. 18.4 Final Approval of Projects/Schemes

During the year 2012-13, following two 18.7 Acquisition of land projects/schemes have been accorded final approval : 18.7.1The Coal Bearing Areas (Acquisition & Development) Act, 1957 is the main Sr. Name of the Project Capacity in Million Sanctioned Capital stay of Central Government for No. Te Per Annum in Rs. crore acquiring land and vesting with WCL for 1. Scheme for Diversion 2.00 64.1133 of Amb River Phase- IV coal mining activities. The at Umrer OC compensation is assessed by WCL as 2. Urdhan OC RCE 0.50 70.2267 per the provisions of the Act and Total 2.50 134.3400 disbursed after getting sanction from the Ministry of Coal, Government of India. 18.5 Commissioning of Projects All facilities under the R&R Policy of CIL are extended while acquisition through During the year Scheme for Gauri Deep CBA (A&D) Act, 1957. Since OC has been commissioned and the Nationalization WCL has acquired project has started to contribute coal 18821.581 Ha. of land till March, 2013 production also. under CBA Act out of which 9828.151

Sr. Name of Project Capacity Capital Ha. is under possession. No. (Mty) (Rs. Crore) 18.7.1.1 1 Gauri Deep 0.40 86.210 The Land Acquisition Act has also been invoked invariably for acquiring 18.6 Brief Status of Ongoing Projects land by our Company, which is done through State Government on At present there are 32 ongoing projects requisition by Central Government. All (20 projects having a sanctioned capital facilities under the R&R Policy of CIL of more than Rs.20 Crore & 12 projects/ are extented under this acquisition also. schemes having a sanctioned capital of Sinc Nationalization WCL has acquired less than Rs.20 Crore). The sanctioned 4184.64 Ha. land till March, 2013 out of capacity of these projects is 32.181 which 3973.26 Ha. is under possession. Million Tonne per Annum and 18.7.1.2 sanctioned capital of Rs.1487.167 crore. The provisions of Land evenue Code Out of 32 Projects, 20 are contributing of Madhya Pradesh and Maharashtra to coal production and rest are under have also been referred for acquiring implementation. Contribution of 20 land in cases where mining lease has 38 WESTERN COALFIELDS LIMITED been obtained under Mineral 18.7.3 Forest land acquisition Concession Rules. WCL has acquired and taken possession of 1558.096 Ha. Forest land is diverted from State land under this provision. Government as per the provisions of Forest Conservation Act, 1980 after 18.7.1.3 This year your Company has made a approval from MOEF, New Delhi. This nd remarkable achievement in acquisition year 2 Stage clearance for 9.50 Ha. of land for mining and allied activities. (Surface Right) forest land obtained for The details of acquisition in 2012-13 is Sharda UG Mine of Kanhan Area. as under :- 18.7.4 Rehabilitation and Resettlement

Sl. Area Project Mode of Total Area No. acquisition (In Ha.) 39 families of Beghar Basti under 1 Wani North Ghonsa OC (RPR) CBA 110.660 Mungoli OCP, Wani Area, 8 families of 2 Umrer Dinesh OC (Makardhokra - III) CBA 1596.000 Pits Colony under Ghugus OCP, Wani 3 Kanhan Sharda UG FC Act 9.500 4 Pench Dhankasa UG CBA 294.293 Area, 7 families of Takiya Nallah 5 Nagpur Gondegaon-Ghatrohana Direct 11.140 (Ghorawari) of Kanhan Area, 5 families Amalgamated OC Purchase of Kamptee UG to OC, Nagpur Area 6 Wani Penganga OC LA 4.230 Total 2025.823 and 2 families of Padmapur OC, Chandrapur Area have been resettled 18.7.2 Details of physical possession by providing resettlement grant as opted during 2012-13 is as under :- by land oustees, within the provisions of R&R Policy of CIL. Sl. Mode of Total No Area Project acqui- Tenancy Govt. Forest Area sition (in Ha.) Total Project Affected Families 1 Ballarpur Gouri Deep OC CBA 26.04 14.78 0.00 40.82 2 Nagpur Gondegaon- CBA 6.02 0.00 0.00 6.02 Resettled in 2012-13 are 61 Nos. Ghatrohana Amalgamated OC Administrative approval for 3 Nagpur Gondegaon- Direct 11.14 0.00 0.00 11.14 Ghatrohana Purchase employment during 2012-13: Amalgamated OC 4 Nagpur Singori OC CBA 23.21 0.00 0.00 23.21 5 Nagpur Kamptee UG to OC 17.00 0.00 0.00 17.00 LA Year Employment/ Monetary compensation 6 Nagpur Bhanegaon OC 5.01 0.00 0.00 5.01 CBA monetary compensation in lieu of empolyment 7 Chandrapur Bhatadi 3.54 0.00 0.00 3.54 LA administratively approved approved Expansion OC by WCL Board 8 Umrer Makardhokra – I OC LA 31.70 0.00 0.00 31.70 9 Umrer Makardhokra – II OC LA 37.97 0.00 0.00 37.97 10 Wani North Kolarpimpri CBA 9.19 0.00 0.00 9.19 2012-13 753 Nos. 46 Nos. Extension OC 11 Wani North Junad CBA 10.19 0.00 0.00 10.19 Extension OC 12 Wani North Ghonsa (RPR) CBA 5.42 0.00 0.00 5.42 18.7.5 Special Achievement Total 186.43 14.78 0.00 201.21 The notification U/s. 11 of CBA Act is 18.7.2.1Summarised Status of land 5115.48 Ha. against MoU Target of acquired during the year 2012-13 533.90 Ha. (for very good rating), which is as under : is 958.13 %.

Details Total land Land taken in The physical possession of land is acquired possession 201.21 Ha. against MoU Target of Under LA Act, CBA Act, FC ACT 2025.823 201.21 and Direct Purchase. 190.00 Ha. (for very good rating), which is 105.90%. 39 ANNUAL REPORT 2012-13

18.7.6 Constraints in acquisition of land vi)State Government officials show their inability for providing Government land i) There is undue delay in acquisition of for resettlement of Project Affected land applied for acquisition under LA Families. Identification of land for Act, 1894 by State Government resettlement in consultation with PAFs Authorities such as in Gondegaon- causes delay in their resettlement. Ghatrohana Amalgamated OC, Singori OC, Kamptee UG to OC and To overcome the above constraints Inder UG to OC Projects of Nagpur New R&R Policy of CIL – 2012 has Area. been approved by CIL Board in its 279th Meeting held on 12th & 13th ii) For the land notified U/s. 9(1) of CBA March, 2012, which is implemented Act, 1957 considerable time elapsed in WCL. in executing agreement with each land owners U/s. 14(1) of CBA Act, Meeting held with Chief Secretary, which is required for preparation of Government of Maharashtra on 2nd compensation bill at the rate declared November, 2012, 12th December, by Government of Maharashtra for 2012 and 19th December, 2012 for compensation of land. expediting the proposals of land acquisition under LA Act and iii) Provision of fund in the project expeditious processing of forestry reports under the head “Land” is not clearance proposals. The progress sufficient for payment of was reviewed in subsequent compensation of land as per the rate meetings held on 4th February, 2013 declared by Government of and 4th March, 2013. Besides above Maharashtra. Therefore project several meetings are also held with reports are being revised/cost Divisional Commissioner, Nagpur, updated. APCCF/ Nodal Officer and other Officials at Nagpur for expediting the iv)Due to the enhanced rate of land, proposals of LA Act and forestry many of the ongoing projects clearance proposals. approved on notified price may become unviable at notified price and Meeting was held with Minister of may fall in cost plus category. The Forest, Government of Madhya compensation of land in such projects Pradesh on 8th August, 2012 and with cannot be paid under present Addl. PCCF (LM), Bhopal on 28th April, guidelines until cost plus agreement 2012, 29th August, 2012 and 14th is executed with consumers, March, 2013 for expediting the resulting in delay in physical forestry clearance proposals in possession of land. Madhya Pradesh. Meeting was also held with APCCF (C), MoEF, v) There is inordinate delay in Regional Office, Bhopal on 25th May, processing the forestry clearance 2012 and meeting with DG (Forests), proposals at different levels of State MoEF, New Delhi on 11th/12th Forest Department causing delay in January, 2013 for expediting forestry obtaining clearance for diversion of clearance proposals, which are under forest land from MoEF. process at MoEF. 40 WESTERN COALFIELDS LIMITED 19 COAL MARKETING could not fructify due to non- achievement of milestone in respect of Bhusawal/Parli 19.1 Raw Coal Offtake during the Fiscal 2012- TPS. 13 was 41.546 Mill Te against the TGT of 45.25 Mill Te i.e achievement of 92 iii) The offtake through e-auction route % of Target. Offtake during the fiscal was restricted upto 10% of the planned 2011- 12 was 41.967 Million tonne thus production till November, 2012 which has growth during 2012-13 as against resulted in less offtake of 1.04 MT than 2011-12 was (-)1%. The reasons for the last year’s offtake through e- auction short fall are : route. i) The offtake of WCL has been less than MOU target mainly because of 19.1.1 Modewise AAP TGT and despatches inadequate lifting of coal by ( Sales) by Rail & Road for 2011-12 & MAHAGENCO through captive 2012-13 are furnished below : modes (Rope/MGR) and Road modes DESPATCHES to the tune of 2.45 MT against allocations. (Fig in Mill Te) YEAR AAP TGT ACTUAL DISPATCHES ii) Evacuation of coal from Ukni and RAIL ROAD MGR OTHER TOTAL Bellora Naigaon Cost Plus Mines was MODE DESPATCHES affected to the tune of 1.14 MT as Cost (SALES) 2012-13 45.250 21.374 15.432 0.970 3.749 41.525 Plus agreement with MAHAGENCO 2011-12 45.399 18.283 18.525 1.072 4.052 41.932

Ropeway in operation – Transporting coal from Pit head to Power house.

41 ANNUAL REPORT 2012-13 DETAILS OF SECTORWISE TARGET & target of 19.05 MT and against last DESPATCHES DURING 2012-13 year’s actual of 18.23 MT. Thus WCL (Fig in Mill Te) %age has achieved 112% of traget & a 2012-13 2011-12 Growth Remarks over Sector AAPTGT ACT % age ACT 2011-12 growth of 16.8% over last year.

Power 31.880 30.008 94.1 29.252 2.6 Less drawal of Coal by including MAHAGENCO from captive 19.3 Sales realization IPP mode Ropeway, MGR & By Road from cost plus Bhatadih OC mine. The Sales Realization during the Middling 0.137 0.122 89.1 0.107 14.0 Source of Washery Grade current fiscal 2012-13 had been & Slurry coal as feed to Washery have reduced which has resulted Rs.8137.05 cr which was 5.61% in less off-take of WG coal. lower than the last year’s Cement 1.830 2.060 112.6 1.843 11.8 Despatch was more since the incl CPP contract quantity as per the realization of Rs.8620.70 cr. Less FSAs was more than the AAP realization by Rs.483.65 cr over the Target. previous year is mainly due to less Steel 0.381 0.281 73.8 0.270 4.1 Raw coal feed to Washery (Raw) reduced due to closure of off take by 0.42 MT and less Damua UG mine and Tandsi generation of additional revenue is not able to produce due to adverse roof condition. through e-Auction.

Sponge 0.360 0.355 98.6 0.336 5.7 Coal Supplied as per FSA Iron 19.4 Spot e-Auction : CPP 2.070 1.635 79.0 1.485 10.1 Despatch was less since the contract quantity as per the FSAs was less than the AAP Quantity offered under Spot e- Target. Auction, quantity allocated and Others 8.709 7.200 82.7 8.773 -17.9 Includes FSA & e-Auction additional revenue generated based Total 45.230 41.539 91.8 41.959 -1.0 on the quantities allocated to the Despatch (Internal bidders during the years 2011-12 and Raw) 2012-13 are given below : C C 0.020 0.007 35.0 0.008 -12.5 Total -1.0 Offtake 45.250 41.546 91.8 41.967 Year Quantity offered Quantity allocated Additional Revenue (lakh tonnes) (lakh tonnes) generated ( Rs. in crs.) Power utilities could source a quantity of 2012-13 60.08 47.26 392.11 1.29 MT on “As is where is basis” during 2011-12 70.47 64.14 713.55 the fiscal 2012-13 to build comfortable As compared to the year 2011-12, stocks at their power plant. This has been helpful in augmenting offtake of coal from realisation during the year 2012-13 WCL. decreased by Rs.321.45 crs. The main reasons for decrease in additional 19.2 Wagon Loading ( in Boxes / Day) revenue generation during 2012-13 are The details of AAP TGT Loading on daily (i) the quantity under e-Auction was Average Basis & quantity despatched for less as per the ceiling prescribed by CIL the year 2012-13 as compared to 2011-12 upto November 2012-13 and (ii) less booking against the offered quantity. Year TGT ACT ACH% Rail Desp in Mill Te 19.4.1Additional Revenue Generated 2012-13 887 885 100 21.374 2011-12 876 761 87 18.283 Aditional revenue of Rs.392.11 cr was generated through e-auction during Remarks: 2012-13 but was less by Rs.321.44 cr WCL has despatched 21.37 MT coal from last year’s level of Rs.713.55 cr. through rail mode as against the AAP 42 WESTERN COALFIELDS LIMITED 19.4.2 Forward e-Auction Gross Calorific value (GCV) of coal supplied to MAHAGENCO was more For the year 2012-13, four Forward e- than the required GCV, as per boiler Auctions have been held covering the parameters. four quarters of the year,performance of which is given below : Power Sector GCV (Kcal/Kg) Required GCV Supplied GCV “Forward e-Auction Quantity Quantity Addl. Revenue MSPGCL 4212 4788 Years” for which offered Allocated generated (as per the auctions were (in lakh tes) offered qty. allocated in (MAHAGENCO) conducted (in lakh tes) e-auctions)(Rs. in crs) April’12 to March’13 2.39 1.38 2.95 20.1.5 The average monthly generation of July’12 to June’13 1.87 1.34 1.90 Oct’12 to Sept’13 1.18 0.92 1.80 Maharashtra State Power Generation Jan’13 to Dec’13 0.79 0.33 1.44 Company Limited (MSPGCL) during fiscal 2012-13 is 2955.513 MU (Less 20. CONSUMER SATISFACTION Generation Due to Scarcity of Water at Power House) as compared to WCL has adopted various measures to 3107.012 MU during 2011-12. ensure supply of quality coal to the consumers, as brought out hereunder : 20.2 Weighment 20.1 Quality of Coal Total 110 Electronic Road 20.1.1The Grade materialization of our Weighbridges and 26 Rail Weigh- Company during the period 2012-13 is bridges are working/ operational and 90.56% as compared to 90.55% Overall weighment percentage during achieved last year. The bonus earned 2012-13 was as under :- per tonne is Rs.0.35/- during 2012-13 against a deduction of Rs.1.30 per tonne YEAR BY RAIL BY OTHER MODES OVERALL during 2011-12.The dispatches covered Target% Actual% Target% Actual% Target% Actual% 2012-13 98.50 99.99 100.00 100.00 99.50 99.99 under Joint Sampling and analysis is 100% in WCL. 20.3 Crushing 20.1.2 Against coal supply to Maharashtra State Power Generation Company The installed annual crushing capacity Limited (MAHAGENCO) from Durgapur for Open Cast mines is 46.20 million Deep Extension, Bhatadi O/C Junad tonnes. Extn, Adasa UG and Kolgaon O/C on 20.4 Quality Dispute Redressal cost plus basis, incentive of Rs111.54 per tonne, Rs.122.24 per tonne, Rs 11.42 per tonne, Rs.8.13 per tonne and a) In 2012-13, total 138 complaints have Rs.60.74 per tonne respectively has been received. The complaints were been earned during the fiscal 2012-13. of lumpy coal, extraneous material and wet and sticky coal. 20.1.3 The grade materialization of coal supplies to Gujarat State Electricity b) Complaints received are registered, Corporation Limited (GSECL) and acknowledged, investigated and Power Corporation Limited corrective remedial measures are (KPCL) are 100% & 99.95% respectively. taken on top most priority for redressal 20.1.4 During 2012-13 the weighted average 43 ANNUAL REPORT 2012-13 c) Regular feedback obtained to ii) During 2012-13, 6 Mbps leased maintain high quality standards. internet service at WCL HQ has been commissioned & is in operation d) Remedial measures : catering the need for various applications such as tender Following measures are taken at Area uploading, e-auctioning, web level to improve the quality of coal browsing etc. supplied to the consumers to minimize the complaints: iii) During 2012-13, supply order has been placed for the supply of 3 nos of 1) Selective mining environmental telemonitoring systems 2) Deployment of sufficient pickers at one each at Mahakali & HLC mines coal faces, Stock and Siding to of Chandrapur and Sasti UG mine of separate extraneous materials Ballarpur Area. It is expected to from coal. complete the installation and commissioning soon. 3) Proper cleaning and maintenance of sidings. iv) During 2012-13, digital TETRA based mobile communication system has 4) The crushing facilities are been established at Gondegaon & provided at the mines/at loading Inder mines of Nagpur Area which points to dispatch sized coal. has contributed to enhance 5) All weighbridges of WCL are operational efficiency of the mines. annually calibrated and stamped by Weights and Measures 22. COMPUTERISATION : Department for proper weighment. 22.1 Status of activities planned for the year 2012-13 21. TELECOMMUNICATION

Sr. Particulars of Activities Status 21.1 Existing Telecommunication Systems No 1 Consolidation of 22 existing database Achieved servers at 10 areas to a Central Database VOICE & DATA Communication for entire WCL

2 Deployment of Biometric attendance Software part is ready to be WCL (HQ) has an efficient voice and System at WCL, integrated with payroll implemented after procurement data communication network connecting system and subsequent action for entire of Bio-metric machine. WCL . Procurement to be done through WCL HQ with Area Hqrs. and Stores MM department. through BSNL leased lines. 3 Finalisation of specification and taking A joint scheme has been necessary actions for deployment of a prepared with E & T department central data base server connected upto and is under process for Surface Communication Mine/Weighbridge level with MPLS/VPN approval. network(to be provided by E & T department). i) During 2012-13 total 7 Nos. of state 4 Development of oracle base pension & PF To be implemented after of art IP EPABX systems have been system establishment of high speed network . procured and commissioned at AHQ, 5 Development of consolidated database Chanda Rayatwari mine, Bhatadi Sub for Gratuity for entire WCL Achieved

Area, Durgapur Sub Area, Hindustan Additional Achievement Lalpeth UG SA (5 nos) at 6 Computerisation of Medical referral Achieved Chandrapur Area, AHQ, Kanhan package at WCL Hq Area & 1 no. at New Majri UG-3 mine 7 Computerisation of Training Database Achieved Majri Area has been ordered and and capturing the same since 2010 at commissioned. HRD. 44 WESTERN COALFIELDS LIMITED

(Fig. Rs. in Lakhs) 22.2 Activities planned for 2013-14 Sr. No. Financial Net Annual Inventory in % age Year Inventory Consumption terms of change in months inventory consumption 1 Implementation of Biometric attendance at WCL HQ and Areas 1 2010-11 7425.74 86519.43 0.03 +01.00 2 Implementation of central data base server (after providing connectivity 2 2011-12 7606.00 92026.00 1.00 +01.02 upto Mine/Weighbridge by E & T department) and taking all application and utility upto unit Level. 3 2012-13 7467.00 99824.00 0.89 -01.82 3 Modified Payroll package interfacing with other application. 4 Implementation of CIL financial code upto unit level transactions and 24.3 To have better control over inventory cash/bank book . and consumption 43 charged off 5 Replacement & installation of 485 personal computers . stores have been computerized. 6 Implementation of PF and Pension central database after networking is established . 24.4 LONG TERM AGREEMENT

23. ROLE PLAYED BY WCL IN 24.4.1 WCL has entered into a Long Term DEVELOPMENT AND SUSTAINING Agreement with M/s IOC Ltd. for SMALL SCALE INDUSTRIAL UNITS supply of HS Diesel w.e.f. 01.04.2009 to 31.03.2012 with 23.1 WCL, a key Public Sector company in provision for extension of the same for further period of two years this region, is making all efforts in i.e. upto 31.03.2014 as per mutual development of Small Scale Industrial agreement. The same has been units in Region. WCL has fully extended upto 31.03.2014. implemented MSE Policy promulgated on 23rd March 2012 by Ministry of MSME. 24.5 Special Agreement All the benefits as per MSME Policy are also available to these Industries. 24.5.1 WCL has entered into a MOU with Materials Management Wing has M/s SAIL for supply of various types showcased important stores and spares of Iron & Steel materials w.e.f. required in WCL in various Vendor 01.04.2012. The validity of MOU Development Programs arranged by was up-to 31.03.2013 for off-take value of Rs.46.68 crores for an MSME Development Institute Nagpur. approximate quantity of 11000 MT. WCL is first amongst CIL 24. MANAGEMENT OF INVENTORIES subsidiaries to have such an Agreement for smooth supply of 24.1 WCL has maintained its position at the Iron and Steel materials. The MOU top (amongst CIL Subsidiaries) in for the year 2013-14 has been respect of Inventory Management. finalised. Online MMS has been introduced in 24.6 E-PROCUREMENT WCL and all the Regional Stores accountal is done online. 24.6.1 WCL has introduced e-tendering with e-price bid with effect from 24.2 Comparative position of net inventory September 2009. During the F/Y 2012- vis-a-vis annual consumption of stores 13, all the procurement cases of and spares in respect of last three years is as under : 45 ANNUAL REPORT 2012-13 material were finalized through e- Supervisory Training Institute (STI), tendering mode. During the current Chhindwara, Workers Training Institute year total 137 nos. of e-tenders have (WTI), Wardha and HEMM Training been floated with estimated amount of Institute (HEMM TI), Durgapur cater Rs.583 Crore CIL concluded a needs of functional, cross-functional contract with National Informatic and other training courses of the Centre New Delhi for providing e- executives, supervisors and workers. tendering services to CIL and its subsidiaries. A) The break-up of number of 24.7 MODEL DEPOT AGREEMENT executives, supervisors and workers trained during 2012-13 in the four 24.7.1 WCL has finalized Model Depot Institutes are as given below: Agreement with M/s Bharat Power Corporation Limited for supply of INSTITUTES EXECUTIVES SUPERVISORS WORKERS TOTAL transmission spares being the lead MDI, NAGPUR 1602 75 166 1843 WTI, WARDHA 0 235 321 556 company nominated by Coal India Ltd. STI, CHHINDWARA 31 666 359 1056 HEMM TI, 64 64 827 955 DURGAPUR 25. HUMAN RESOURCES TOTAL 1697 1040 1673 4410 MANAGEMENT B) Number of persons trained at IICM- 25.1 Manpower Ranchi The Company’s manpower as on 31.03.2013 as compared to that on Total trained - 287 (Executives – 283 31.03.2012 is furnished below :- & Supervisors - 04)

Sl.. Category Manpower as on 25.2.2 Out-Company Training No. 31.03.2013 31.03.2012 1 Executive 2868 2620 2 Supervisor 5321 5288 a) Within Country - HRD department of 3 Clerical 3166 3546 the company takes important initiative 4 Highly Skilled / Skilled 27759 28828 of Out company training, through 5 Semi-skilled / Unskilled 15512 16460 6 Company’s Trainee 334 247 which improvement in efficiency and T O T A L 54960 56989 productivity of employees is sought by sharpening their managerial, 25.2 HUMAN RESOURCE DEVELOPMENT technical and functional skills. For this (HRD) purpose, the employees are nominated to attend training 25.2.1 In-Company training programmes organised by various Educational Institutes such as Indian In-Company training plays a vital role School of Mines University (ISMU), in the skill updation and overall Dhanbad, Indian Institutes of development of Human Resources. Technology(IIT), National Institutes of Four Institutes viz. Management Technology(NIT),various Development Institute (MDI), Nagpur, organisations such as Indian Institute

46 WESTERN COALFIELDS LIMITED

of Industrial Engineering (IIIE), Indian TYPE OF TRAINING NO. OF WORKERS / Institute of Materials Management SUPERVISORS TRAINED 1. INITIAL TRAINING 687 (IIMM), National Productivity Council 2. REFRESHER TRG 8269 (NPC), MGMI, National Institute of 3. SPECIAL TRG 1761 4. AREA BASED TRAINING 5028 Personnel Management (NIPM), 5. CONTRACTORS’ WORKERS TRG Gandhi Labour Foundation Puri etc a) Initial training 2364 b) Refresher training 375 and also Original Equipment c) Area based trg 243 Manufacturers (OEM) such as BEML, 6. TRG. FOR SUPERVISORS L&T etc. (as per 8th / 9th Safety Conf.) a) Mining 398 b) E&M 235 The breakup of executives, c) Excv 33 supervisors and workers sent for Out- 25.2.4 Training Under Apprentice Act Company training is as below :

Executives Supervisors Workers TOTAL This year, 285 apprentices were Out-Company Training engaged in various trades such as (including GLF, Puri) 274 72 45 391 Fitter, Electrician, Materials Handling Equipment Operator b) Foreign Training : Apart from various cum-mechanic (MHEO), Mining typesof Out-company trainings in (Trainee) etc against the quota of India, employees are also sent abroad 281. for different types of study tours, trainings, development courses, 25.2.5 Coaching for Statutory international Exhibitions / Expo etc. In Examination the year 2012-13 : 02 Executives participated in such programmes. To make up shortfall of Statutory Manpower, extensive coaching 25.2.3 Safety Training: Under VT Rules, was conducted for DGMS various trainings such as Initial, examination at MDI, Nagpur for 1st Refresher and Special trainings are Class Mine Managers Certificate imparted to the workers working in of Competency and at STI, mines. This purpose is fulfilled by 12 Chhindwara for 2nd Class Mine VTCs located in different Areas of Manager Certificate of WCL. In addition, the Contractors’ Competency, Mining Sirdar, workers, who play an important role Overman and Surveyor. Following in today’s scenario, are also imparted number of employees qualified in Initial and Refresher training in our statutory examinations. VTCs. As per recommendation of 8th

/9th Safety Conference, the Sr Examination No. of employees supervisors are provided Safety No. passed training in the respective Institutes. 1 1st Class Mine Managers Certificate 36 nd The break-up of various types of 2 2 Class Mine Manager Certificate 18 3 Overman Certificate 21 safety training imparted during 2012- 4 Mining Sirdar Certificate 40 13 are as given below: 5 Surveyor Competency Certificate 2

47 ANNUAL REPORT 2012-13 25.2.6 Training of SC / ST / OBCs 27.2 The periodical meetings of the Steering Committee were held regularly which not Training for upliftment of SC/ST/OBCs only helped in inducing cordial industrial is an important thrust area. relations but also in achieving organizational goal. SC / ST / OBC Training (In-company & Out-company) :- Through the 27.3 Employment to dependants training programmes of the company, SC (3487), ST (2161), OBC (6111) In WCL during 2012-13 employment/ employees were benefited through monetary compensation under the different Skill Improvement courses. provisions of NCWA have been sanctioned as under: 26. SCHEDULED CASTES AND SCHEDULED TRIBES/OBC · Employment : 582 · Monetary compensation : 37 26.1 As on 31/03/2013, the total number of 28. INDUSTRIAL RELATIONS employees including the number of SC/ ST/OBC is tabulated below: 28.1 Industrial Relations scenario in WCL Total No. of employees SC ST OBC during the fiscal 2012-13 has been as on 31/03/2013 peaceful, cordial and harmonious.

54960 11719 4378 16013 28.2 Status of Industrial Relations situation for the last two years is 26.2 The Presidential directives with respect given below:- to SC/ST and OBCs are being implemented in respect of recruitment as well as in promotion. Law & order incidents 2011-2012 2012-2013 Relay Hunger Strike Nil Nil Gherao Nil Nil 27. WORKERS’ PARTICIPATION IN Assault Nil Nil MANAGEMENT Dharna/Morcha/Demonstration 2* 01# Total 2 1 27.1 The Steering Committee at Company Strike/Work Stoppage level comprising of CMD and all No. of strikes 02* 1 ## Mandays lost 50006 42569 Functional Directors and Trade Union Production loss (Te.) 154898.5 194900 representatives of five central trade unions viz. INTUC, BMS, AITUC, HMS, 2011-12 : CITU and representatives of CMOAI and GM(P&IR) is functioning smoothly. * (1) Joint demonstration by the five Central Trade Unions before WCL The broad functional areas of the Hqrs. on 18/07/2011 in support of Steering Committee include: their 3 days strike notice w.e.f. 8th to * Formulation and evaluation of Action 10th August 2011. plans/budgets; * Resources utilization * (2) Demonstration/Dharna by BKKMS * Cost/profitability (BMS) Union on 26/09/2011 in front * Quality of coal of WCL Hqrs., Nagpur. * Safety ** (1) One day joint strike on 10/10/2011 * Employees’ welfare and by INTUC, AITUC, BMS, HMS and * Environmental protection 48 WESTERN COALFIELDS LIMITED CITU Unions in all units of CIL over 29. WELFARE MEASURES AND SOCIAL the issue of PLR/Bonus/ Ex-gratia. AMENITIES : ** (2) One day strike on 28/2/2012 by 29.1 Group Gratuity Scheme : INTUC, AITUC, BMS, HMS and CITU 29.1.1 The Group Gratuity Scheme is in Unions over National level issues. vogue with effect from 10th 2012-13: March,2003. The actuarial liability as on 31/03/2013 is Rs.2270.78 crores # Demonstration/Dharna in front of WCL and unpaid liability will be paid to Life Hqrs., Nagpur on 26/6/2012 by Shri Sudhir Insurance Corporation of India. The Mungantiwar, Hon’ble MLA of BJP, trust has earned an interest amounting Chandrapur Dist. Over the 36 points of to Rs.178.75 crores in the year 2012-13 demands related to Chandrapur Dist. @ 9.60% ## Two days general strike called by all the 5 29.1.2 During the financial year 2012-13 total Central Trade Unions, i.e. INTUC, BMS, number of 3249 superannuation cases AITUC, HMS and CITU on 20th and 21st and 500 death cases were settled February 2013 over 10 points charter of under the WCL Employees Group demands of national level issues. Gratuity Scheme and total amount of Rs.250,94,00,790.00 was paid to the 28.3 Voluntary Retirement Scheme (VRS): employees superannuated and in case of death to their nominees. The scheme was kept under suspension w.e.f. 30/9/2007 due to shortage of 29.2 WELFARE AMENITIES manpower. 29.2.1Following are the details of various 28.4 Recruitment during 2012-13 : amenities for the welfare of our i) Mining Sirdar .. 74 employee:

ii) Staff Nurse .. 50 Sl.No. Details As on 31.03.13 iii) Job provided to land .. 72 1 Houses- Standard -42527 Non-Standard -10086 52613 oustee 2 Water Supply (Population covered) 323855 Notified for recruitment of following 3 Schools (receiving recurring, non recurring grants or infrastructural facilities) 15 posts : 4 Co-operative Stores 24 5 Co-operative Societies 45 6 Bank Branches/ Extension Counters 113 Special recruitment drive for SC/ST/ 7 Ambulances 111 8 Dispensaries 54 OBC - 9 Hospitals 11 • Mining Sirdar : 31 10 Canteens 79 11 Gymnasiums 27 • Mining Sirdar (General) : 215 12 Stadium 13 • Recruitment of Surveyor : 27 29.3 Medical Services : 28.5 Promotions during 2012-13 : As part of career- care of employees, the 29.3.1 WCL incurred total expenditure of following number of non-executives have Rs.51.99 Crores on Medical services been given promotion: (employees on roll and retired Non-Executives employees) during the year 2012-13. a) Excavation personnel 455 The per capita expenditure in 2012- b) Non-excavation personnel 1655 13 was Rs.9122.81 as against the provision of Rs.2,000/- under NCWA-IX. TOTAL 2110 49 ANNUAL REPORT 2012-13 29.4 Family Welfare 30. GAMES & SPORTS

29.4.1 During 2012-13 under Family Welfare Company has secured 1st position in Programmes, total beneficiaries were Table Tennis & 2nd position in Carom 1813 (TT+VT) in 51 camps, out of in CIL Inter Company Tournament. which 22 camps with 588 beneficiaries were organised in collaboration with 31. Corporate Social Responsibility : State Health authorities and 29 camps were conducted by WCL Hospitals 31.1 In pursuance of the directives from Coal with 1225 beneficiaries. India Ltd. Vide no.CIL/C-5/ 55231 dt. 29.6.2010 and CIL/CSR/247A dtd. 29.5 Other Medical camps under C.S.R. 19.12.2012, the CSR Policy of CIL has been implemented in WCL from 2010-11. 29.5.1 221 Medical camps, such as, eye, village check-up etc. (including family 31.2 The main objective of CSR Policy is to planning) under Corporate Social make CSR a key initiative for sustainable Responsibility with 28,647 development for the Society. It aims beneficiaries, were organised during mainly at supplementing the role of Govt. the year. in enhancing welfare measures of the society based on immediate and long 29.5.2 906 camps by Mobile Medical Vans term social & environmental were organised during the year in consequences of their activities. The nearby villages, under Corporate CSR programme also covers the existing social Responsibility with 68,529 components of Special Component Plan beneficiaries. (SCP) and Tribal Sub Plan (TSP) for

Sports Activities : Lawn Tennis Match in progress during Inter Area Lawn Tennis Tournament 2012-13 50 WESTERN COALFIELDS LIMITED

development of the SC/ST population year subject to minimum of Rs. 5/- per besides development component for the tonne of coal production of previous year. entire population. 31.5 The CSR Budget of WCL for the year 31.3 The Action Plan includes the Scope of 2012-13 was Rs. 21.556 crore and works under Education, Water Supply, expenditure incurred is to the tune of Health Care, Infrastructure of villages, Rs.20.960 crore. Sports & Culture, Generation of employment, Infrastructure support, 31.6 Highlights of the activities undertaken Grant/Donation/ Financial Assistance, during the year are as under : Empowerment of Women, Relief to victims of Natural Calamities, Disaster Sr.No. Activities No./Distance covered Management, distribution clothes to poor villagers with the help of Mahila Mandals 1 No. of Village Medical Camps 221 etc. The CSR works are executed through No. of beneficiaries 28647 the CSR Committees at Area/ Hq. Level. 2 No. of Medical Camps through Mobile Medical Vans 906 The Action Plan is prepared in No. of beneficiaries 68529 consultation with the District Authorities/ 3 Construction/Repairing of Roads 43565 Mtrs. Govt. Official/Local body/Village 4 Construction of School Class Rooms 35 Panchayat/Sarpanch etc. 5 Construction/Repairing of Community Centre 30 6 No. of Borewells/Hand pumps provided 43 31.4 The allocation of fund for CSR is based 7 No. of village Sports/Coaching Camps 16 on 5% of the retained earning of previous

A HELPING HAND - Smt. Shashi Garg, First Lady and President, Jhankar Mahila Mandal, WCL donating Sewing Machines to Viraja Apang Utthan Sanstha, Nagpur for the welfare of disable persons. 51 ANNUAL REPORT 2012-13

32 . PENSION NO OF EMPLOYEES NO. OF CLAIMS BALANCE SUPERANNUATED FROM/ SUBMITTED TO CMPFO’ 32.1 Processing and sanction of pension 01.04.2012TO 31.03.2013 OUT OF ‘A' cases A B C 2317 2314 03 (Disputed) 32.1.1WCL is trail blazer among subsidiaries of CIL with respect to implementation of 32.4 the provision of CMPS-1998. Up to the Pension Help line is in operation for year ending 3/2013 Total 46042 claims solving the problems being faced by have been processed and sent to the Pensioners, if any. During the CMPFO for release of Pension out of current financial year total number of 46133 claims received comprising 388 calls of individual grievances and letters received, out of which 382 99.80% of the claims received. cases have been replied and cleared and balance cases have been 32.1.2 During the current Financial Year 3642 persuaded with CMPF Office and Pension claims completed and sent to concerned Nationalized Bank. The CMPF-Office, Nagpur & Chhindwara Pensioners have been encouraged to for the release of pension. make maximum use of Pension Helpline, and sincere & dedicated efforts have 32.1.3 Up to 31/03/2013, 45993 pension been made to sort out the problems of claims in respect of WCL have been Pensioners over Helpline. settled by CMPF Office, Nagpur & Chhindwara . During the year 2012-13, 32.5 Submission of Annual VV Statement 3642 claims have been settled by for the year 2012-2013 CMPF Office, Nagpur & Chhindwara. The Annual VV Statement for the year 32.2 Computerization Of Process of PF 2011-12 has been submitted by All The and Pension Claims Units/Area to concerned Regional Commissioner, CMPF Nagpur & Complete computerization has been Chhindwara. Instruction to all Area of achieved in respect of processing of WCL has been given in advance current pension claims by WCL and all regarding submission of Annual VV the pensioner are being given pension Statement for the year 2012-13 in calculation sheet, the pension data is respect of all the Units to concerned saved in computer for future reference CMPF-Office within scheduled time. for all the claims forwarded to CMPF- Office by WCL. 33. PROGRESSIVE USE OF 2012-13

32.3 Settlement of “PF” & Pension in the 33.1 In accordance with Official Language month of superannuation under policy of Government of India, under the “MISSION BISWAS” efforts made during 2012-13 for enhancing impetus to the use of Hindi in The status of settlement of PF & the official working and progressive use Pension claims under MISSION– of Hindi in the Company, 8 Rajbhasha BISWAS during the year 2012-2013 is Workshops were organized, in which, 191 officers/employees participated. In as under: these Workshops, they were acquainted 52 WESTERN COALFIELDS LIMITED with Official Languages Act and Rules felicitated. Besides this, 60 prizes were and Rajbhasha targets and they were provided during “Prashna Manch”. During also imparted practical sessions for Hindi the concluding function of Rajbhasha noting, drafting and Hindi Week, 12 departments of WCL HQ and correspondence etc. 2 Areas of WCL were given away Rajbhasha Shield/Rajbhasha Cup for 33.2 In the year 2012-13, the meetings of doing outstanding work in Hindi during Official Language Implementation the year. Committee was held in each quarter regularly. Total 20 meetings of the 33.7 At present, 6768 Hindi Books on various Committee were held during the year, subjects are available in Dinkar Hindi during which, Hindi progress and steps Library which are being used by the taken to achieve Rajbhasha targets were employees. 5 Hindi monthly magazines reviewed. were also made available during the year.

33.3 During the year, 57 offices and units of 33.8 During the year 67 employees were WCL were inspected, during which the trained at Central Hindi Training Institute, progressive use of Hindi and compliance New Delhi. of Official Language Act and Rules were reviewed. 33.9 Rajbhasha Anuwad Prashikshan Workshop was organised by HRD in 33.4 During the year, “Aaj Ke Shabd” were WCL HQ from 23rd to 27th July, 2012 continuously displayed near entrance of during which Shri Vijay Ram Nautiyal and the office building and this is continuing. Shri Rajesh Singh, both Assistant The same is also being displayed in the Directors from Central Translation Areas of WCL. Bureau, New Delhi gave Training to 25 participants from different offices of 33.5 During the year, 2 issues of “Khanan Central and Public Sector Undertakings. Bharti”, CIL’s representative Hindi magazine published from WCL, were 33.10 Shri Dinesh Chandra Garg, CMD, WCL brought out, in which, articles etc. of the was awarded Rajbhasha Shree Samman employees of the Company published. 4 by the Bhartiya Rajbhasha Vikas issues of bi-lingual magazine “Pragati” Sansthan Dehradun at a concluding were published. 14 issues of Hindi fort- function of All India Rajbhasha Seminar nightly “Wall Poster” were published, in held at Shimla from 10th to 12th October, which, activities and achievements of 2012 for doing excellent guidance and WCL were highlighted. work in Hindi in WCL. 33.6 On the occasion of “Hindi Diwas”, 33.11 Shri Balkishan Chandora, Rajbhasha Rajbhasha Week was observed from Pramukh, WCL was awarded Rajbhasha 10th to 15th September, 2012 in WCL Kriti Sanman by Rashtriya Hindi HQ, during which, various programmes/ Acadamy Rupambara Kolkata at a competitions, such as, Cross word concluding function of All India Rajbhasha competition, self general knowledge, Seminar held at Puri from 2nd to 4th Story writing competition by seeing October, 2012 for Excellent picture, Hindi Signature including implementation work in Official Language “Prashna Manch” were organised. 25 in WCL. winners of these competitions were 53 ANNUAL REPORT 2012-13 34. ENVIRONMENT AND ECOLOGY EMPs were submitted to Ministry of Environment & Forests (MOEF), 34.1 Your Company is aware of its Govt. of India for obtaining responsibilities towards the environment Environmental Clearance namely and ecology aspects of project Chincholi OC, Inder UG to OC Expn., management and is taking due care for Tawa- II UG Expn, Tawa- III UG and Environmental Protection and Pollution Juna Kunada OC Expn. In addition, mitigative measures in all operating two alternate proposals excluding the mines. Status of the different activities forest land viz. Jamuniya UG and under environment management as on Bhakra UG were also submitted to 31-03-2013 is as under: MoEF during 2012-13.

34.1.1 Environmental Impact Assessment ii) The company has received (EIA)/Environmental Management Environmental Clearance for 6(six) Plans (EMPs) for new Projects/ projects/mines namely Telwasa OC Existing Projects – Status of Expn (2.00 MTPA), Dhorwasa OC Environmental Clearance Expn (2.00 MTPA), Jamuniya UG (Alternate proposal)(0.828MTPA), i) During the year 2012-13, a total of 5 Dhuptala OC (1.70 MTPA)., (five) nos. EIA/EMPs were prepared Penganga OC (4.50 MTPA) and Inder as per Terms of Reference (TOR) UG to OC Expn (1.20 MTPA) during granted by MOEF and after the year 2012-13 as per EIA completion of Public Hearing. These Notification, 2006.

ENVIRONMENT CONCERN – Tree Plantation on OB Dump

54 WESTERN COALFIELDS LIMITED 34.1.2 Public Hearing numbers of tree saplings have been planted in the mining and adjoining The company has conducted Public areas through these agencies. Hearings through State Pollution Control Board for 6 (Six)) nos. of projects given 34.3 Other Environmental Mitigation hereunder during the year 2012-13. Measures completed in 2012-13

i) Inder UG to OC Expn. Land Reclamation monitoring through ii) Chincholi OC Remote Sensing Technique – iii) Sakari Irawati OC Following10 major OCPs producing iv) Kamptee Deep OC more than 5 million cubic meter (Coal v) Juna Kunada OC Expn. + OB) have been completed during vi) Junad Extn.OC 2012-13 and are being monitored by CMPDIL every year. 34.1.3 Terms of Reference (TOR) - Sasti OC The company has received Terms of - Durgapur OC Reference (TOR) in respect of Niljai - Padmapur OC Expansion (Deep) OC project as per - Niljai OC EIA Notification, 2006 during the year - Mugoli OC 2012–13 from Ministry of Environment - New – Majri OC & Forests, Govt. of India. - Umrer OC - Ukni OC 34.1.4 Implementation of EMPs approved - Pimpalgaon OC by MOEF - Ghughus OC

The projects having EMPs approved 34.4 Environmental Awareness by MOEF are implemented and the reports on compliance of MOEF Environment Week (June 1 – 7, 2012) and stipulations as given in the respective World Environment Day on 5th June, 2012 Environmental Clearances (ECs) are were observed in your Company at HQ, submitted every six months to IA Area Levels and Project Levels. Division, MOEF, New – Delhi and Regional Office, Western Region, The activities undertaken during the Bhopal. week–long celebration were as follows :- i) Pledge on Environment Protection as 34.2 Afforestation per UN-theme “ GREEN ECONOMY: Does it include you?” taken by all Five year Plantation Contract finalized employees both at Corporate (HQ) and and awarded to State Forest at all Areas. Corporations namely Forest Development Corporation of ii) Organizing various competitions Maharashtra (FDCM) and Madhya among wards of employees viz. Pradesh Rajya Van Vikas Drawing, Slogan, Prasna Manch (Quiz Nigam(MPRVVN) for planting 12.40 on Environment) etc. lakhs saplings from 2009–10 to 2013– iii) Organising talk on Environment by 14 covering about 500 ha of land. In Outside Experts the Year 2012-13, a total of 1,60,625 55 ANNUAL REPORT 2012-13 iv)Plantation & distribution of plants 35.2 Punitive Vigilance :

v) Awareness on environment As punitive vigilance 351 investigations were taken up out of which, 247 have 34.5 Award been disposed of. The vigilance activities WCL has received the Golden Peacock have resulted into a total 55 Regular (Special Commendation) Award in 2012. Departmental Actions (RDA) excluding the opening balance of 82 Regular 35. ACTIVITIES OF VIGILANCE DIVISION Departmental Actions. Inquiry Reports DURING 2012-13 have been submitted in 59 cases resultng into 07 numbers of major 35.1 Preventive Vigilance : penalty have been imposed in addition to forfeiture of a part of Gratuity amount In order to increase transparency in in one case and 12 other minor penalty dealing with Public matters, online has been imposed. In addition, 10 officers complaint handling system has been have been cautioned/warned to remain introduced in the last financial year. Now careful in future. complaint can be made online from any place and the complaint is also being 35.3 Other activities like observance of processed online. It has three users Vigilance Awareness Week, preparation interfaces where a complaint and top most of “Agreed List” and “Officer of Doubtful official of the company can directly look Integrity list” and rotation of employees into the compaint. The complaint is rest on sensitive posts have been carried out. with the dealing officer till he submits Close liaison with Central Bureau of report to CVO. All tenders irrespective to Investigation (CBI) and Central Vigilance its value are being uploaded on the Commission (CVC) have been company’s website. Three compendiums maintained. In addition, 12974 numbers covering all circulars from CVC, of vigilance clearance to Executives and consolidated documentation of CTEO Non-executives were issued. activities and technical error prone 36. DIRECTORS : activities were published last year in 2012 and distributed for the benefit of the 36.1 The following persons continued to be officers dealing with similar tasks. This the Directors of your Company during the year one consolidated compendium year under report : consisting of further Circulars of CVC, DOPT, CIL and WCL between Sept., 1. Shri D.C. Garg, 2011 to October, 2012 have been Chairman-cum-Managing Director compiled and published.29 Surprise 2. Shri A.K. Bhalla, Director Inspections by the Vigilance department 3. Shri R. Mohan Das, Director on its own. 03 CTE type inspection had 4. Dr. Ahindra Chakrabarti, Director been carried out and as its outcome, A 5. Ms. Lalitha Kumar, Director circular has been issued in the initiative 6. Shri Vinod Somani, Director of Vigilance Department to improve upon 7. Shri Arun Balakrishnan, Director the system of loading, unloading, 8. Dr. D. Chandrashekharam, Director stacking and shifting of store materials 9. Shri Om Prakash, Director (Tech.) P&P and suggested improvement in practices 10. Shri Sushil Behl, Director (Finance) and procedures. 11.Shri Rupak Dayal, Director (Personnel) 56 WESTERN COALFIELDS LIMITED 36.2 Shri S.S. Malhi was appointed as 37.2 Board of Directors : Director (Technical) of your Company w.e.f. 03/03/2013, during the year under 37.2.1 Size of the Board : report. In terms of Articles of Association of the Company, strength of our Board 36.3 Shri B.K. Saxena, Director (Tech.) OP shall not be less than three Directors ceased to be Director of your Company and more than fifteen Directors. w.e.f. 24.06.2012, during the year under These Directors may be either whole report. time Functional Director or Part-time Directors. 36.4 After 31st March, 2013, Dr. M.R. Anand has been appointed as Part Time Director 37.2.2 Composition of the Board : of your Company w.e.f. 03/04/2013. 36.5 After 31st March, 2013, following As on 31st March, 2013, the Board persons ceased to be Directors of your comprised of twelve Directors, out of Company : which five are whole time Functional Directors including the Chairman- 1 Shri A.K. Bhalla - w.e.f. 03/04/2013 cum-Managing Director. Two 2. Dr. Ahindra Chakarbarti - w.e.f. 27/04/2013 Directors are nominees of the Government of India. The Board also 37. Corporate Governance in WCL : has five Independent Directors who have been appointed by the Govt. of 37.1 Company’s Philosophy : India through a Search Committee constituted for the purpose. In 37.1.1 Corporate Governance is a addition to this, Government has commitment backed by transparency in nominated two representatives each functioning, value and mutual trust from Govt. of Madhya Pradesh and among all the constituents of an Central Railway as Permanent organization. It is a self-imposed Invitees on the Board of WCL. The discipline which guides the Directors bring to the Board wide management and employees to range of experience and skill. function towards the goal of the organization. It involves essentially a 37.3 Board Meeting : creative, generative and positive thinking activity that adds value to the The meeting of the Board of stakeholders. Directors are normally held at the Company’s registered office at 37.1.2 In your Company, Corporate Nagpur. The Company has defined Governance philosophy stems from our belienf that Corporate Governance procedure for meeting of the Board is a key element in improving of Directors and Committees thereof efficiency and growth as well as so as to facilitate decision making enhancing outsiders confidence. We in an informed and efficient manner. are making continuous efforts to adopt 8 (eight) Board meetings were held the best practice in Corporate during the financial year 2012-13 on Governance and we believe that the 19.05.2012,27.07.2012, practice we are putting into place for 25.08.2012,11.10.2012, the company shall go beyond 31.10.2012, 05.12.2012, 28.01.2013 adherence to regulatory framework. and 20.03.2013 respectively. Details 57 ANNUAL REPORT 2012-13 of number of Board meetings - Operational highlights. attended by Directors are tabulated - Award of large contracts. below:- - Major investment, joint venture etc. - Sl. Directors Meetings No. of Number of Disclosure of interest by Directors No. held during Board Committee about Directorship and position respective Meetings membership tenure of attended in theCompany occupied by them in other companies. Directors in 2012-13 - Non-compliance of any regulatory, As As Chairman Member statutory requirement. Functional Directors : - Utilization of equipment. 1. Shri D.C. Garg, 8 8 -- - Other materially important Chairman-cum-Mg. Director 2. Shri B.K. Saxena, 1 1 -- information. Director (Tech.) Operations 3. Shri Om Prakash, 8 8 1 5 37.5 Audit Committee : Director (Tech.) Planning & Projects 4. Shri Sushil Behl, 8 8 - 2 37.5.1 The scope, constitution etc. of the Director (Finance) Audit Committee is in line with the 5 Shri Rupak Dayal, 8 8 2 1 guidelines of Corporate Governance. Director (Personnel) 6. Shri S.S. Malhi, 1 1 1 1 Director (Tech.) Planning & Projects 37.5.1.1 Scope of Audit Committee : Government Directors : 7. Shri A.K. Bhalla, 8 6 -- Jt. Secretary, Ministry of Coal. a) Ensure compliance of internal control 8. Shri R. Mohan Das, 8 6 - 1 system. Director (P&IR), Coal India Limited. Independent Directors : b) Reviewing the financial statements 9. Dr. Ahindra Chakrabarti, 8 7 - 2 Professor, IMI, N. Delhi. with the management before 10. Ms. Lalitha Kumar, 8 7 - 1 submission to the Board for approval. Former IAS Officer 11. Shri Vinod Somani, 8 5 1 - Chartered Accountant. c) Reviewing the adequacy of internal 12. Shri Arun Balakrishnan, 8 7 1 1 audit function. Former CMD, HPCL. 13. Dr. D. Chandrasekharam, 8 6 1 1 Professor, IIT, Mumbai. d) Discussions with internal auditors any significant findings and follow up 37.4 Information placed before the thereon. Board of Directors : e) Discussions with Statutory Auditors. Board has complete access to any information within the Company. The 37.5.1.2 Constitution : information regularly supplied to Board includes :- The Audit Committee has been constituted with the membership of - - Annual operating plans and budgets and any update. i) Five Independent Directors, one being - Capital budget and any update. the Chairman of the Audit Committee - Quarterly result of the Company. and - Annual Report, Directors’ Report etc. - Minutes of the meetings of all Board ii) Director (P&IR), Coal India Limited, Sub-committees. nominated on the Board of WCL. - Fatal or serious accidents, dangerous occurrence etc. iii) Director (Technical) OP 58 WESTERN COALFIELDS LIMITED 37.5.1.3 Composition : 37.6 Remuneration Committee / Remuneration of Directors : During the year, Audit Committee of the Company comprised of seven Directors, 37.6.1 Your Company, being a Central Public five of which were Independent Sector Undertaking, the appointment, Directors, one Govt. Director and one tenure and remuneration of Directors Functional Director. are decided by the President of India. During the year, the Audit Committee Hence, the Board does not decide comprised the following :- remuneration of the Directors. Independent Directors are paid only Shri Vinod Somani sitting fees at the rate fixed by the Board Non-official Director - Chairman within the ceiling fixed under the Shri R. Mohan Das Companies Act, 1956 for attending the Govt. Director - Member Board Meetings as well as Committee Dr. Ahindra Chakrabarti Non-official Director - Member Meetings. Details of remuneration of Ms. Lalitha Kumar, Functional Directors of the Company Non-official Director - Member are as under :- Shri Arun .Balakrishnan (Figs. in Rs.) Non-official Director - Member Name Designation 2012-13 Total Dr. D. Chandrasekharam Salary Perquisites* Non-official Director - Member Shri D.C. Garg CMD 2418665 278243 2696908

Shri B.K. Saxena Shri B.K. Saxena Director (Tech) 430779 45045 475824 Director (Technical) OP (upto 24.06.2012) - Member Shri Om Prakash Director (Tech) 2017515 219642 2237157 Shri Om Prapash Shri Sushil Behl Director (Fin) 2080519 259848 2340367 Director (Technical) Shri Rupak Dayal Director (Pers) 1754253 178613 1932866 OP(w.e.f. 28.06.2012) - Member Total 8701731 981391 9683122 Director (Finance) also attended the * Includes PF and Medical reimbursement. meetings of the Audit Committee as invitee. 37.6.2 Details of payment made towards sitting 37.5.1.4 Meeting and Attendance : fees to Non-official Directors during the year 2012-13 are given below :- During the year 2012-13 only 7 (seven) meetings of the Committee were held. Sl. Name of the Sitting Fees paid for Total The details of Audit Committee meetings No. Independent attending amount Directors Board Committee attended by members are as under :- Meeting Meeting

Member of Audit Meetings held 1. Dr. Ahindra Chakrabarti 105000 105000 210000 Committee during his/her tenureMeetings attended Shri Vinod Somani 7 4 2. Ms. Lalitha Kumar 105000 60000 165000 Shri R. Mohan Das 7 3 3. Shri Vinod Somani 75000 60000 135000 Dr. Ahindra Chakrabarti 7 7 MS. Lalitha Kumar 7 4 4. Shri Arun Balakrishnan 105000 90000 195000 Shri Arun Balakrishnan 7 5 5. Dr. D. Chandrasekharam 90000 60000 150000 Dr. D. Chandrasekharam 7 4 Dr. B. K. Saxena 1 1 TOTAL 480000 375000 855000 Shri Om Praskash 6 6

59 ANNUAL REPORT 2012-13 37.7 General Body Meetings / Annual Company has an independent Vigilance General Meetings : Branch, headed by a Chief Vigilance Date, time and locations where the last Officer.The Vigilance Branch, functioning three Annual General Meetings were under the overall guidance of Central held are as under:- Vigilance Commission, mainly lay stresses on preventive vigilance. Drop Date : May 27, 2011 May 25, 2012 May 27, 2013 Box has been kept, where employees Time : 01.00 P.M. 01.00 P.M. 10.00 A.M. Venue : Coal Estate, Coal Estate, Coal Estate, and others can report to the Vigilance Civil Lines, Civil Lines, Civil Lines, Branch, concerns about unethical Nagpur. Nagpur. Nagpur behaviour, actual or suspected fraud Special Resolut- - etc. and the complaints so lodged are ions : reviewed by the Vigilance Branch and 37.8 Disclosure : necessary action, as deemed fit, is taken while protecting the identity of the As per the disclosure given by the complainants. Directors of the Company, there were no material related party transactions that 38. AUDITORS : have potential conflicts with the interest of the Company. The financial statements In exercise of the powers conferred by are prepared in accordance with the Company at the Extra-ordinary applicable mandatory Accounting General Meeting held on 30th August, Standards and relevant presentational 2001, pursuant to provisions of section requirement of the Companies Act, 1956. 224(8) of the Companies Act, 1956, the Board of Directors in its 241st meeting 37.9 Audit Qualifications : held on 11th October 2012, fixed the remuneration of Statutory and Branch It is always the Company’s endeavour to Auditors appointed by the Comptroller present unqualified financial statement. and Auditor General of India, under Management reply to the Statutory section 619(2) of the Companies Act, Auditors’ observations on the Accounts 1956 for the financial year 2012-13. The of the Company for the year ended March, annual audit fees approved, has 2013 are furnished as an Annexure to subsequently revised by Board through the Directors’ Report. Comments of the Circular Resolution no.CR-1/2013-14. Comptroller and Auditor General of India under Sec. 619(4) of the Companies Act, In addition to annual audit, the auditors 1956 on the Accounts of Western are appointed for carrying out review of Coalfields Limited for the year ended 31st 1st Quarter Accounts ended on 30th June March, 2013 is also enclosed. 2012, 2nd Quarter Accounts ended on 30.09.2012 & 3rd Quarter Accounts 37.10Whistle Blower Policy : ended on 31.12.2012 with a fees for each quarter @ 25% of the annual audit Your Company is a fully owned fees of previous year. subsidiary of Coal India Limited. Coal India has prepared and adopted Whistle The details of Auditors appointed , their Blower Policy which is also applicable fees and other expenses approved for to all its subsidiaries.Apart from that, your Annual Audit, 1st Quarter Review, 2nd 60 WESTERN COALFIELDS LIMITED Quarter Review and 3rd Quarter Review 39. MEMORANDUM OF UNDERSTANDING are as under :- BETWEEN WCL & CIL FOR THE YEAR 2012-13 :

Statutory/Branch TA/DA and out-of- Audit Fee Auditors pocket expenses As per the extant guidelines of DPE, Memorandum of Understanding (MoU) 1 Statutory Rs.1,05,156/- for 1st At actuals , subject Auditors:M/s Quarter Review plus to maximum of between WCL & CIL for the year 2012-13 C.R.Sagdeo & applicable taxes actual fare plus DA was signed on 31st March 2012. Co.Chartered for Partners / Accountants,Nagpur. qualified assistants Performance of MoU 2012-13 (both @ Rs.140/- per day 2 M/s Jodh Joshi & financial & Non-financial parameters) Rs.5,25,780/- for Annual and for audit Co.,Chartered Audit,plus applicable taxes assistants @ during the year has been verified and duly Accountants, nd Rs.1,05,156/-for 2 Rs.120/- per day for Nagpur. authenticated by the independent auditor quarter Review plus the actual man days applicable taxes engaged for audit of appointed for the purpose. Parameter- rd Rs.1,05,156/- for 3 Areas/ offices wise performance vis-à-vis MoU target quarter Review plus situated outside applicable taxes Nagpur city. is enclosed as Performance Evaluation B Branch Auditors : Report (Annexure III) M/s Jodh Joshi & Co., Rs.56,250/- for 1st Chartered Accountants, Quarter Review plus Nagpur. applicable taxes - do - 40. FIXED DEPOSITS :

Chandak Khanzode Rs.43,750/- for 1st Quarter ShenwaiChartered Review plus applicable taxes Your Company has not accepted any Accountants,Nagpur. fixed deposits from public during the year M/S B Chhawchharia Rs.2,18,750/- for Annual 2012-13, as defined under section 58-A & Co. Audit,plus applicable taxes - do - Chartered Accountants Rs.43,750/-for 2nd Quarter of the Companies Act, 1956 and the rules Nagpur. Review plus applicable taxes made thereunder. Rs.43,750/-for 3rd Quarter Review plus applicable taxes 41. DIRECTORS’ RESPONSIBILITY M/S. A . S . Dani & Co., Rs.2,81,250/- for Annual STATEMENT : Chartered Accountants, Audit, plus applicable - do - Nagpur. taxesRs.56,250/- for 1st Quarter Review plus Pursuant to the requirement under applicable taxesRs.56,250/- for 2nd Quarter Review plus section 217(2AA) of the Companies Act, applicable taxesRs.56,250/- 1956, with respect to Directors’ for 3rd Quarter Review plus applicable taxes Responsibility Statement, it is hereby confirmed : M/S KPRK & Rs.2,81,250/- for Annual AssociatesChartered Audit,plus applicable taxes AccountantsNagpur Rs.56,250/-for 2nd Quarter i) That in the preparation of the Annual Review plus applicable taxes Rs.56,250/-for 3rd Quarter Accounts for the financial year ended Review plus applicable taxes 31st March, 2013; the applicable Rs. 13,07,030/- for Annual Actual TA/DA, limited Accounting Standards have been Audit plus applicableTaxes Total to total Rs.1,50,000/- Rs.2,61,406/-for 1st Quarter for Annual Audit. followed along with proper Review plus applicableTaxes Actual TA/DA limited explanations relating to material Rs.2,61,406/- for 2nd Quarter to total Rs.50,000/- Review plus applicableTaxes departures; for 1st Quarter Rs.2,61,406/- for 3rd Quarter Review. Review plus applicable taxes. ii) That the Directors have selected such Actual TA/DA,limited Accounting Policies and applied them to total Rs.75,000/- for 2nd Quarter consistently and made judgments Review. and estimates that were reasonable Actual TA/DA,limited to total Rs.75,000/- and prudent so as to give a true and for 3rd Quarter fair view of the state of affairs of the Review. Company at the end of the financial 61 ANNUAL REPORT 2012-13 year and of the profit or loss of the Steering Committee Members, Officers Company for the year under review; of Ministry of Labour and the team spirit shown by the employees at all levels iii) That the Directors have taken proper towards the achievement of the and sufficient care for the maintenance objectives of the Company. of adequate accounting records in accordance with the provisions of the 42.5 The Directors record the appreciation of Companies Act, 1956 for safeguarding services rendered by Statutory and the assets of the Company and for Branch Auditors and the Officers and preventing and detecting fraud and Staff of Comptroller & Auditor General other irregularities; of India, Department of Company Affairs, iv) That the Directors have prepared the Company Law Board and Registrar of accounts for the financial year ended Companies, Maharashtra. 31st March, 2013 on a ‘Going 42.6 Concern’ basis. The Directors also extend their thanks to various important citizens of Nagpur, The accounts of your company would Maharashtra and Madhya Pradesh be available at the Headquarter of the States, stationed in the Coalfields for Company for providing information to their co-operation from time to time and the shareholders of the CIL on also to the Steering Committee of WCL demand if any. comprising of Trade Union representatives and Management. 42. ACKNOWLEDGEMENTS : 43. ADDENDA : 42.1 Your Directors express their gratitude to 43.1 the Ministry of Coal, Government of India The following papers are annexed : and Coal India Limited, for their valuable 43.2 assistance, support and guidance from In pursuance to the provisions of section time to time. 217(1)(e) of the Companies Act, 1956, read with Companies (Disclosure of 42.2 The Directors thank various Ministries of Particulars in the Report of Board of the Central Government and the State Directors) Rules, 1988, information in Governments of Maharashtra and regard to the Conservation of Energy, Madhya Pradesh for their valuable Technology Absorption and Foreign support. Exchange Earning & Outgo is given in Annexure-I to this report. 42.3 The Directors also take this opportunity 43.3 to acknowledge with thanks the A statement showing names and other assistance rendered by the sister particulars of those employees of the organisations and Directorate General of Company who were in receipt of Mines Safety. remuneration of not less than Rs.60,00,000/- during the financial year 42.4 Industrial Relations in the Company 2012-13 or Rs.5,00,000/- per month in continued to be cordial. The Directors compliance of the provisions of section place on record their appreciation for the 217 (2-A) of the Companies Act, 1956 co-operation extended by the Trade and Companies (Particulars of Unions and Officers Association and all Employees) Rules, 1975 is furnished in Annexure-II to this report. 62 WESTERN COALFIELDS LIMITED

43.4 Corpoate Governance Certificate, in 43.6 Comments of the Comptroller & Auditor compliance of conditions of Corporate General (C&AG) of India under section Governance, from Practising Company 619 (4) of the Companies Act, 1956. Secretary.

43.5 Addendum to the Directors’ Report under section 217 (3) of the Companies Act, 1956.

For and on behalf of Board of Directors

NAGPUR ( D.C. Garg ) DATED : 27th May, 2013 CHAIRMAN-CUM-MANAGING DIRECTOR

63 ANNUAL REPORT 2012-13 ANNEXURE - I

A. Conservation of Energy :

There was 0.2% increase of Energy Consumption in 2012-13 due to 13.2% more rain fall against previous year.

(a) However several measures were taken for Energy Conservation, which are given as under :-

1. ADDITION OF CAPACITORS TO IMPROVE AND MAINTAIN THE POWER FACTOR ABOVE 0.95.

2. STAGGERING OF PUMPING OPERATIONS.

3. ELIMINATION OF STAGE PUMPING / RE-ORGANISATION OF PUMPING.

4. USE OF ENERGY EFFICIENT TUBES/ CFL IN PLACE OF HIGH WATT LUMINAIRES/ CONVENTIONAL FITTINGS.

5. USE OF TIMERS IN STREET LIGHT CIRCUITS.

6. INSTALLATION OF UG BUNKER.

7. REPLACEMENT OF OVER RATED MOTOR.

8. LOAD SHEDDING ON DOMESTIC FEEDERS.

9. REDUCTION IN IDLE RUNNING OF CHP.

10. REORGANISATION OF LT OH LINE BY CABLE AND SMALLER SIZE DISTRIBUTION TRANSFORMERS.

11. OLD COLONIES OF WCL IN PENCH AREA WERE HANDED OVER TO MPPKVVCL TO AVOIDELECTRICITY PILFERAGE.

(b) Additional investments and proposals if any being implemented for reduction of consumption of energy for electrical energy :

An amount of Rs 21.12 lakhs was invested towards the purchase of capacitors for improving and maintaining power factor.

However, Specific Energy Consumption per cubic metre of composite production has increased by 6.86% due to reason mentioned above and in spite of action taken at (a) & (b), which is reflected as under :-

64 WESTERN COALFIELDS LIMITED

Particulars 2012-13 2011-12 % increase/ Impact on cost of production decrease Consumption of energy Power cost per ton increased from per ton of coal production Rs 92.25 to Rs 107.75 mainly due to upward revision in tariff by power KWH/TON 14.52 14.22 2.11 supply agencies of M.P. And (Increase) Maharashtra and increased KWH/CUM 4.36 4.08 6.86 pumping due to more rain fall (Coal+O.B) (Increase) compared to previous year. Av. Rain fall in 2011-12 – 1826.60 mm and 2012-13 – 2067.60 mm.

B. Form 'B' is enclosed.

C. Foreign Exchange Earning & Outgo :

(i) Activities relating to exports , initiatives taken to increase exports , development of new export markets for products and services and export plans :

Company is not engaged in export activities .

(ii) Total Foreign Exchange used and earned :

Particulars Current Previous year year (A) Foreign Exchange earned 0.00 0.00 (B) Foreign Exchange used : i) C.I.F Value of Imports a) Raw materials 0.00 0.00 b) Components , Stores & Spare Parts 3.00 7.14 c) Capital Goods 0.00 0.00

ii) Repayment of JBIC Loan 9.62 9.03 iii) Repayment of IBRD Loan 7.09 5.88 iv) Effect of Exchange fluctuation -0.34 14.32 v) Travelling Expenses 0.07 0.04 vi) Interest/Commitment/Agency charges etc. 2.87 3.20 of IBRD/JEXIM (including swap cost)

65 ANNUAL REPORT 2012-13 Form ‘B’

Disclosure of Particulars with respect to Technology Absorption

A. TECHNOLOGY ABSORPTION, ADAPTATION AND INNOVATION

Efforts, in brief, made towards technology absorption, adaptation and innovation :

Concerted efforts are being made for technology absorption, adaptation and innovation and various scientific studies in the sphere of mining with due emphasis on safety, environment control, conservation and quality improvement. details of which are furnished below:

B. MINING TECHNOLOGY

1. CONTINUOUS MINER TECHNOLOGY

Continuous Miner technology is under operation at Tandsi UG mines of WCL.

After introduction of Continuous Miner Technology at Tandsi Mine on risk and gain sharing basis & Kumbherkhani on partial hiring basis, it is envisaged that said technology shall be introduced with minimum guaranteed production on partial hiring basis (paid on Rs/ tonne), in the following Mines:-

Saoner-I u/g Expansion Mine (Operating Mine) Tawa-II u/g (Operating Mine) Jamunia Dhankasa

In view of above, in 1st phase Tawa-II Expn. and Saoner-I shall be taken up and subsequently in 2nd phase, the future projects viz, Jamunia u/g and Dhankasa u/g shall be taken up for introduction of continuous cutting technology after development of infrastructure, etc.

2. LONGWALL MINING/ MASS PRODUCTION TECHNOLOGY

Your company plans to introduce mass production technology by development, construction and operation on turn-key basis (MDO concept) through Global tender with the aim of improving production and productivity for operation in u/g mines.

In this context, two underground blocks namely Murpar and Borda Blocks were identified for development, construction and operation on turn-key basis (MDO concept) having capacity as 2 MTY, in the command Area of WCL.

3. UNIVERSAL DRILLING MACHINES

Your Company has played a leading role in mechanizing face drilling as well as drilling for roof support. In this regard, 31 Nos. UDMs have been put in operation. 66 WESTERN COALFIELDS LIMITED

After introduction of UDM, there is significant increase in blasting efficiency of the mine, thereby increasing Coal availability and also there is significant improvement in green zone support with added Safety.

4. APPLICATION OF MAN RIDING SYSTEM IN UG MINES

During 2012-13, Chairlift Man riding system has been successfully installed and commissioned in Tawa mine.

In all 5 UG mines, where in the workings are deep and far from the surface have been provided with Man Riding System in WCL.The system reduces traveling time and fatigue of workers to work with increased efficiency & renewed vigor.

Further, the consignment for Man riding System has been received and is under installation in following UG mines:

1. Kumbherkhani - Rail Car Man riding system. 2. Chattarpur- I - Chairlift Man riding system 3. Sobhapur - Rail Car Man riding system

Introduction of Man-riding system in Saoner-II has been approved by WCL Board.

5. NON-COKING COAL WASHERY

One 5 Mty capacity Non-Coking Coal washery was being planned to be set up in WCL in Wardha Valley Coalfields.

A feasibility study has been conducted in all the areas under command area of WCL, wherein all other tentative sites were eliminated due to lack of sustainable supply of raw coal feed throughout the life of the proposed washery. Nakoda site was identified as best probable site with linked mine as Mungoli O/C (reserve as on 01. 04.12 as 12.93MT), Kolgaon O/C (reserve as on 01.04.12 as 3.323MT) & approved Penganga OC (Reserve as 44.06MT), however CMPDIL (HQ) have communicated that alternate site may be looked into as the proposed site lies below HFL of the area. · In view of above, a committee has been constituted to re-visit and site finalization which is under process.

67

WESTERN COALFIELDS LIMITED

77 ANNUAL REPORT 2012-13

78 WESTERN COALFIELDS LIMITED

79 ANNUAL REPORT 2012-13

ADDENDUM TO DIRECTORS’ REPORT UNDER SECTION 217(3) AND 227(2) OF THE COMPANIES ACT 1956

AUDIT OBSERVATION MANAGEMENT REPLY We have audited the accompanying financial statements of No Comments WESTERN COALFIELDS LIMITED, which compromise the Balance Sheet as at 31st March, 2013, the Statement of Profit and Loss, Cash Flow Statement for the year ended on that date annexed thereto and a summary of significant accounting policies and other explanatory information. The financial statements audited by us incorporate the accounts of:- a) 5 Areas / Units audited by us and b) 11 Areas / Units audited by Branch Auditors The reports of Branch Auditors have been furnished to us and have been appropriately dealt with by us in preparing this report.

Management’s Responsibility for the Financial Statement No Comments Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility No Comments Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. 80 WESTERN COALFIELDS LIMITED

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Report on Other Legal and Regulatory Requirements· As required by the Companies (Auditor’s Report) Order, 2003 No comments issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act, we give in the Annexure “A” a statement on the matters specified in paragraphs 4 and5 of the said Order. · As required by section 227(3) of the Act and subject to our comments in Annexure “B”, we report that: ii) We have obtained all the information and explanations which No comments to the best of our knowledge and belief were necessary for the purpose of our audit.

iii) In our opinion, proper books of account as required by law No Comments have been kept by the Company so far as appears from our examination of those books. iv) The Balance Sheet and Statement of Profit and Loss and No Comments Cash Flow Statement dealt with by this report are in agreement with the books of account. v) In our opinion, the Balance Sheet and Statement of Profit and Loss comply with the Accounting Standards referred to in sub-section 3C of Section 211 of the Companies Act, 1956 subject to the following: 1 Accrual basis of accounting as required by provisions Disclosure is given in of section 209(3) (b) of Companies Act, 1956 has not additional Notes on been followed in respect of : Accounts, point no.8.a.As per v Liquidated damages, interest on delayed payments and escalation claims from customers are accounted for on the basis of final settlement. v Insurance / Railway claims are accounted for on admission / final settlement. v Sale of scrap is accounted on realisation. v Refund / adjustment of tax from tax authorities except Input Tax Credit claim on VAT are accounted for on cash basis. Additional demand for Income Tax, Royalty, Cess, Sales Tax, Entry Tax, etc., are accounted for after final orders in appeals are received. Pending such appeals, payments made against additional demands are treated as advance / claims receivables.

81 ANNUAL REPORT 2012-13

v Land under Coal Bearing Area [CBA (A&D)] Act is accounted for on payment basis.

(ii) As per the policy of the Company only such individual prior- Accounting Policy. period items which exceed Rs. 10 lacs each are accounted as Prior-period items and rest of the items are taken as current year’s expenditure/income. Such policy is contrary to AS-5 which requires a separate disclosure of all prior- period items irrespective of their value. For financial year 2012-13 prior period items amounting to ` 0.02 crores have been treated as current year’s expenses due to which Profit for the year is understated to the tune of `. 0.02 crores. (iii) As stated in footnote no. (a), (b) and (c) to Note No. 10A, No Comments finalization of purchase consideration of certain fixed assets is still pending, ‘Assets taken over on Nationalization’ are not classified into proper sub-head within fixed assets. These have impact on reported figures of Gross Block of Fixed Assets, Accumulated Depreciation and Reserves & Surplus and also on the presentation of fixed assets. The impact however is not ascertainable. (iv) As stated in Note No. 3 (a) of Notes - 34 ‘Additional Notes Land is accounted on on Accounts,’ certain Lands acquired are accounted for on payment and payment basis only. The likely payment for the Lands in possession. future, if any, are not accounted for until paid (even though the liability is accrued). This may result in understatement of Fixed Assets and corresponding liability. vi) Clause (g) of sub-section 1 of section 274 of the Companies Act, 1956 is not applicable to the Company being a No Comments Government Company.

vii) Since the Central Government has not issued any No Comments notification as to the rate at which the cess is to be paid under section 441A of the Companies Act, 1956 nor has it issued any Rules under the said section, prescribing the manner in which such cess is to be paid, no cess is due and payable by the Company.

82 WESTERN COALFIELDS LIMITED

Opinion

In our opinion and to the best of our information and No Comments according to the explanations given to us, the financial statements, read together with Additional Notes to Accounts and Accounting Policies give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:· v in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2013;· v in the case of the Statement of Profit and Loss, of the Profit for the year ended on that date; and· v in case of Cash Flow Statement, of the cash flows of the company for the year ended on that date.

FOR JODH JOSHI AND CO. CHARTERED ACCOUNTANTS FRN : 104317W

CA. M. Y. SHASTRI (PARTNER) Membership No. 039763

Place : NAGPUR Date : 20st May 2011

83 ANNUAL REPORT 2012-13 ANNEXURE ‘A’ TO AUDITORS’ REPORT Referred to in Paragraph (3) of our report of even date in respect of Western Coalfield Limited , Nagpur as on 31st March 2013. AUDIT OBSERVATION MANAGEMENT REPLY i) In respect of its Fixed Assets :

[a] The Company has maintained proper records showing No Comments full particulars including quantitative details and situation of Fixed Assets, except for assets taken over from Coal Mines Authority on Nationalisation and those taken from Coal Mines Rescue Station and Coal Mines Labour Welfare Organisation, which have not been recorded. Some of the title deeds / lease deeds for land building and moving rights continue to be held in name of Coal India Limited.

[b] As explained to us, all the assets as on 31.03.2003, have Reconciliation is under been physically verified by firms of Chartered Accountant / progress . Outside Agencies for all areas except Head Quarters, Domestic Fuel Development (DFD) Plant and Commercial Blast Explosives (CBE) Plant. Their reports have been received, showing items of fixed assets found short / excess during physical verification. The management has appointed an outside agency to carry out detailed study and reconciliation of the discrepancies pointed out. At some of the area, report is submitted by outside agency on reconciliation of shortages / excesses of assets and the same still shows many un-reconciled items. However, pending final reconciliation of items of fixed assets found short / excess and pending HQ approval, no adjustment has been made in the accounts of the Company for the year 2012 – 13.

The discarded / surveyed off assets lying Noted in stores which are valued at 5% residual value and capital Work in Progress (WIP) have not been physically verified.

In respect of CBE Plant Bhandara, major items of fixed assets No Comments are stated to have been physically verified by the management of Ordinance Factory, Bhandara at reasonable intervals. No material discrepancy is reported to have been noticed on such verification.

In respect of DFD Plant, Hinganghat, no physical verification No Comments of assets has been conducted during the year.

84 WESTERN COALFIELDS LIMITED

As per information and explanation given to us, all fixed Reconciliation is under assetsof the value exceeding Rs. One lakh are physically process. verified departmentally at Area level during the year. Wherever the reports have been received the reconciliation is in progress and no adjustment has been made in accounts of the Company. [c] There was no substantial disposal of fixed assets during the No comments year. ii) In respect of Inventory:

[a] The management, at regular intervals, has conducted the NoComments physical verification of coal by adopting volumetric measures. The physical verification of stock of coal as on 31.03.2013 has been done by a team deputed by Coal India Limited. Physical verification of stores and spares of the Company has been conducted by the firm of Chartered Accountants and / or Cost Accountants appointed for the purpose.

Physical verification of Units stores and stores in Inventory at unit stores transit has not been conducted. have been physically verified by management

[b] In our opinion and according to the information and Every year end, explanation given to us, the procedures followed by the physical verification of management for physical verification of stock are reasonable stores and spares are and adequate in relation to the size of the company and carried out by Outside nature of its business. However, procedures of physical Agency. verification of stores and spares, needs to be strengthened, especially the procedure for identification of slow / non moving and obsolete items of inventory requires improvement.

[c] The company is maintaining proper records of inventory. In No Comments accordance with Company’s policy as set out in Para 6 of Accounting Policies (Note 33), no adjustment is made in the books of accounts in case the difference between books stock of coal and volumetrically measured physical stock of coal is within (+/-) 5%, due to approximate nature of the method of measurement.

In case of Shivpuri Mines, since the difference between measured stock and book stock is beyond +/- 5%, the Company has taken measured stock for the purpose of valuation of coal.

85 ANNUAL REPORT 2012-13

In the case of other inventories, discrepancies noticed on No Comments physical verification as compared to the book records were not material in relation to the operation of the company and have been duly dealt with. iii) [a] The company has not granted any loans to companies, firms No comments or other parties listed in the Register maintained under section 301 of the Companies Act, 1956.

[b] There is no overdue amount in respect of principal amount No Comments of loans and interest thereon.

[c] The company had taken unsecured loans in foreign currency No Comments standing to ‘43.18 Crores and ‘ 41.74 crores as on 31.03.2013 from IBRD and JBIC respectively, through Coal India Ltd. and guaranteed by the Government of India, for purchase of HEMMs & spares. It is observed that the above balance of Loan outstanding as on March 31st 2013 is after an adjustment of ‘ 0.35 Crores (Credit) net for giving effect of exchange fluctuation in both US $ and Japanese Yen.

[d] The rate of interest and other terms and conditions of the No Comments above loans taken by the company are prima facie not prejudicial to the interest of the company.

[e] The company is regular in repayment of principal amount of above loans and interest thereon.

11. In our opinion the Company has adequate Internal Control No Comments procedure commensurate with the size of the Company and the nature of its business with regard to Purchase of inventory, fixed assets and with regard to the Sale of goods, except that insurance cover of most of the fixed assets, excluding motor cars and on stock of stores and spares has not been taken by the company. Further, in under-mentioned cases, the internal control needs to be strengthened:

a) Follow-up of old advances to suppliers, adjustment of certain Monthly follow up of advances against corresponding liability after receipts of advances are done items in few areas, transfer of stores to other areas and its regularly and advances accountal. has been reduced to a minimum possible level. However very small old advances are pending adjustments for which necessary provisions exists.

86 WESTERN COALFIELDS LIMITED

b) Non receipt of confirmations of outstanding balances from Regularly periodical customers, suppliers and contractors and timely reconciliation is being reconciliation of balances in case of difference. done with major power houses (customers). Obtaining confirmation from Creditors have been taken up.

c) Follow-up and adjustment of stale cheques. Noted for further necessary action . v) In respect of transaction covered under section 301 of the Companies Act, 1956.

a) In our opinion and according to the information and explanation No Comments given to us, there are no transactions in pursuance of contract or arrangements entered in the register maintained under section 301 of the Companies Act, 1956 aggregating during the financial year to ‘ 5 lakhs (‘ Five Lakhs only) or more in respect of any party.

b) As there is no transaction with parties mentioned in register No Comments maintained under section 301 of the Companies Act, 1956, this clause is not applicable to the Company. vi) The company has not accepted any deposits from the Public, No Comments hence the directives issued by Reserve Bank of India and the provision of Section 58 A, 58AA or any other relevant provision of the Companies Act, 1956 and rules made there under are not applicable for the year under audit. vii) The Internal Audit System of the Company consists of Stores Audit and Internal Audit (including Wage Audit) which were conducted by the independent firms of Chartered Accountants / Cost Accountants. Observations in this regard are as under.

a) In few areas the branch auditors have reported that Internal Adequate internal audit Audit System needs to be strengthened as to coverage and system exist. follow up.

b) Further the Internal Audit Report of Chandrapur Area for the No Comments. month of March 2013 has not been received till the date of our audit.On an overall view, we are of the opinion that the internal audit system should be further strengthened by the company as to coverage and follow-up to make it commensurate with the size and nature of its business.

87 ANNUAL REPORT 2012-13 viii)Maintenance of Cost records has been made mandatory by the Adequate internal audit Central Government under clause (d) of sub-section (1) of section system exists. The 209 of the Companies Act, 1956 in respect of Coal Mining scope/areas of internal Industry vide Notification No. GSR/429E dated 03.06.2011. As audit is decided by CIL. per information and explanation provided to us, the required accounts and records are being maintained at respective Area offices. ix) In respect of Statutory Dues.

(a) According to the records of the Company produced before No Comments us, the Company is generally regular in depositing undisputed statutory dues including Provident Fund, Income Tax, Wealth Tax, Sales Tax, Custom Duty, Excise Duty, Cess and other statutory dues applicable to the Company with appropriate authorities. There are no undisputed statutory dues pending for a period of more than six months from the date of becoming payable.

(b) We enclose in Annexure “I”, the details of disputed statutory No Comments dues such as taxes / Cess not deposited due to dispute and the forum where the dispute is pending. x) The Company neither has accumulated losses and nor it has No Comments incurred any cash losses during the financial year covered by our audit or in the immediately preceding financial year. xi) To the best of our knowledge and explanation given to us, the No Comments Company has not defaulted in repayment of dues to financial institutions or banks. xii) To the best of our knowledge and explanation given to us, the No Comments Company has not granted any Loans and Advances on the basis of security by way of pledge of shares, debentures and other securities. xiii) The Company is not a chit fund, nidhi or mutual benefit fund / No Comments society. Therefore, the provisions of clause 4 (xiii) of the Companies (Auditor’s Report) Order, 2003, are not applicable to the Company. xiv) The Company is not dealing or trading in shares, debentures No Comments and other investments. However during the year the company has invested in mutual funds, which are held in the name of the Company.

88 WESTERN COALFIELDS LIMITED xv) As informed to us Company has not given any guarantee for No Comments loans taken by others from Banks or Financial Institutions. xvi) According to the information and explanations given to us, the No Comments Company has not borrowed any term loan during the year. xvii)On the basis of an overall examination of the Balance Sheet of No Comments the Company, in our opinion and according to the information and explanations given to us, there are no funds raised on a short-term basis which have been used for long-term investment. xviii)During the year, the Company has not made any preferential No Comments allotment of shares to Parties and Companies covered in the Register maintained under Section 301 of the Companies Act, 1956. - According to the information and explanation given to us, the Company has not created securities by issuing any debentures during the period under audit. xx) The Company has not raised any money by public issues during No Comments the year. xxi) According to the information and explanations given to us by the No Comments Company, no fraud on or by the Company has been noticed or reported during the course of our audit.

FOR JOIDH JOSHI AND CO. CHARTERED ACCOUNTANTS F.R.N.: 104317W

CA. M.Y.SHASTRI PARTNER Membership No. 039763

Place : NAGPUR Date : 23rd May, 2013

89 ANNUAL REPORT 2012-13 ANNEXURE B TO STATUTORY AUDIT REPORT

(As referred to in Paragraph 2 of our report of even date)

Without qualifying our opinion, attention is invited in5y6 respect of following foot notes given in various Note numbers of final accounts and also Additional Notes (Note No. 34) forming part of final accounts -

i) Note No. 10B foot-note no.(a) regarding amount equivalent to No Comments depreciation provided on Plant & Machinery lying in stores for more than 3 years, pending capitalization.

ii) Note No. 12 foot note (a) regarding advances to suppliers / No Comments contractors & for capital works / mobilization advances lying unadjusted since long amounting to Rs.1.58 crores against which provision of equivalent amount is made.

iii) Note No. 24 foot-note no. (a) regarding provision for Post No Comments Superannuation Medical Benefit for executives amounting to Rs.56.37 crores made during the year for the period from January 2007 to March 2013, out of which, Rs. 32.14 crores pertains to the period from 1st January, 2007 to 31st March, 2012, resulting in understatement of profit for the current year by Rs. 32.14 crores.

iv) Note No. 24 foot note no. (b) regarding provision made during No Comments the year for Pension and Superannuation Benefits to the Employees amounting to Rs. 23.03 crores with cumulative amount of Rs. 104.21 crs. as on 31/3/2013.

v) Note No. 24 foot note no. (c) regarding provision made during the current year for Performance Linked Reward Scheme for No Comments non-executives amounting to Rs 139.88 crores.

vi) Note No. 24 foot-note no.(d) regarding provision made during No Comments the current year for Performance Related Pay for Executives for the year amounting to Rs 75.30 crores.

vii) Additional Note No. 3 (c) regarding physical verification of No Comments fixed assets as on 31.03.2003 and subsequent reconciliation done by an outside agency. However, the inter area adjustments are still under process.

90 WESTERN COALFIELDS LIMITED viii) Additional Note No. 4 (a) regarding Capital Work in Progress No Comments amounting to Rs 17.52 crores, pending since more than 3 years. ix) Additional Note No. 4 (c) regarding Discarded / Surveyed off No Comments assets amounting to Rs. 22.29 crores valued at residual 5% have not been physically verified. x) Additional Note No. 6(a) regarding Madhya Pradesh No Comments GraminAvsanrachnaTathaSadakAdhiniyam 2005 (MP GATSV Act, 2005) tax collected from customers and fixed deposits made against that amount as per Court Order and also treatment of interest on such fixed deposits which has been treated as liability. xi) Additional Note No. 6(n) regarding deviation in permissible No Comments norms beyond +/- 5% in Shivpuri Mine resulting in reduction of stock by Rs. 2.81 crores. xii) Additional Note No. 7 (ix) regarding net provision made during No Comments the year for mine closure amounting to Rs 77.69 crores. xiii) Additional Note No. 8 (i& j) regarding non-receipt of confir No Comments mations for sundry debtors, sundry creditors, advances from customer and other accounts payable. xiv) Additional Note No. 10 (b) regarding Excise duty calculated No Comments on Royalty and Stowing Excise Duty(SED) from March, 2011 onwards as per directives dated 5/3/2013 received from Coal India Limited (CIL). Hence, the opening stock of coal does not include Excise Duty on above two items. xv) The company has shown liability towards stalecheques Noted amounting to Rs. 12.12 crores. The same should be credited to respective natural heads. xvi) Impact on profit due to changes in accounting policy/ No Comments estimates–

(a) Additional Note no. 6(l) regarding change in No Comments rate of depreciation on photocopier machine ; resulting impact is understatement of profit by Rs. 0.07 crores

91 ANNUAL REPORT 2012-13

(b) Additional Note No. 6(o) regarding revision of Standard No Comments Ratio in the case of open cast mines and subsequent calculation of OBR; resulting impact is overstatement of profit by Rs. 337.31crores;

(c) Additional Note No.9(a) regarding Prior Period Expenses/ As per Accounting Policy income which do not exceed Rs 0.10 crores in each case and are treated as expenditure/ income of current year; resulting impact is understatement of profit by Rs.0.02 crores;

(d) Additional Note No.9(b) regarding prepaid expenditure As per Accounting which do not exceed Rs 0.10 crores in each case and Policy treated as expenditure of current year; resulting impact is understatement of profit by Rs 0.95 crores.

FOR JOIDH JOSHI AND CO. CHARTERED ACCOUNTANTS F.R.N.: 104317W

CA. M.Y.SHASTRI PARTNER Membership No. 039763

Place : NAGPUR Date : 23rd May, 2013

92 WESTERN COALFIELDS LIMITED Annexure – 1

Statement of Disputed Statutory Dues ( Ref. Para IX B of Annexure ‘ A ’ to our report dated 23.05.2013) in respect of Western Coalfields Ltd., Nagpur

Details of disputed liabilities are given below:-

Name Name of Statute Nature of dues Amount (‘) Period to Forum where of Area which the dispute is amount pending relates PENCH MP Entry Tax Act, 1978 Entry Tax 7,72,782.00 2000-01 H. Court, Jabalpur MP Entry Tax Act, 1978 Entry Tax 1,31,190.00 2005-06 D.C. Chhindwara MP Entry Tax Act, 1978 Entry Tax 23,60,968.00 2006-07 Appellate Board, Bhopal MP Entry Tax Act, 1978 Entry Tax 1,07,99,314.002008-09 Appellate Board, Bhopal Central Sales Tax Act, 1956 Central Sales Tax 5,39,034.00 1998-99 A.C, Jabalpur Central Sales Tax Act, 1956 Central Sales Tax 4,28,160.00 2004-05 A.C, Jabalpur Central Sales Tax Act, 1956 Central Sales Tax 7,46,280.00 2005-06 D.C., Chhindwara Central Sales Tax Act, 1956 Central Sales Tax 26,93,148.00 2006-07 Appellate Board, Bhopal Central Sales Tax Act, 1956 Central Sales Tax 8,55,190.00 2008-09 A.C./CTO, Jabalpur Central Sales Tax Act, 1956 Central Sales Tax 17,30,658.00 2009-10 Addl. Comm., Jabalpur MP Commercial Tax Act, 1994 Commercial Tax 11,12,764.00 2000-01 H. Court, Jabalpur MP Commercial Tax Act, 1994 Commercial Tax 23,568.00 2002-03 Appellate Board, Bhopal MP Commercial Tax Act, 1994 Commercial Tax 2,02,265.00 2004-05 Addl. Comm. Jabalpur MP Commercial Tax Act, 1994 Commercial Tax 73,14,591.00 2005-06 D.C. Chhindwara MP Commercial Tax Act, 1994 Commercial Tax 19,09,474.00 2006-07 Appellate Board, Bhopal MP Commercial Tax Act, 1994 Commercial Tax 82,51,105.00 2008-09 Appellate Board, Bhopal MP Commercial Tax Act, 1994 Commercial Tax 31,41,073.00 2009-10 Addl. Comm. Jabalpur MP Commercial Tax Act, 1994 Commercial Tax 16,83,955.00 2010-11 Addl. Comm. Jabalpur Minerals (Validation) Act, 1992 Cess on Royalty 58,40,276.00 1982-83 SLP, Supreme Court

BALLARPUR Mineral Concession Rules, Cess on Royalty 6,04,133.23 1991-92 SLP pending with 1960 of Coal Supreme Court

CHANDR- Minerals (Validation) Act, 1992 Cess on Royalty 6,62,667.29 1991-92 SLP pending with APUR Supreme Court Minerals (Validation) Act, 1992 MSEB MAD Cess 4,30,449.42 1991-92 SLP pending with Supreme Court

93 ANNUAL REPORT 2012-13

UMRER Minerals (Validation) Act, 1992 Cess on Royalty 28,40,857.54 1991-92 SLP pending with Supreme Court Minerals (Validation) Act, 1992 MSEB MAD Cess 2,62,799.08 1991-92 SLP pending with Supreme Court MAJRI Minerals (Validation) Act, 1992 MSEB MAD Cess 1,52,127.81 1991-92 SLP pending with Supreme Court CENTRAL Tax on Perks u/s 17(2) of Tax on Perquisites 44,88,000.00 2004-05 ITAT , Nagpur WORKSHO Income Tax Act 1961 to 2006-07 P TADALI

PATHAR- M.P.State Govt. Sales Tax Dept. Central Sales Tax 5,391.00 2000-01 For revision With Dy KHEDA Comm. Bhopal M.P.State Govt. Sales Tax Dept. State Sales Tax 13,87,152.00 2000-01 Appellate board , Bhopal , MP. M.P.State Govt. Sales Tax Dept. Entry Tax 1,79,496.00 2001-02 Appeal Dy. Comm. Bhopal M.P.State Govt. Sales Tax Dept. State Sales Tax 14,45,793.00 2001-02 Appeal Dy. Comm. Bhopal M.P.State Govt. Sales Tax Dept. State Sales Tax 7,77,446.00 2003-04 Appeal Dy. Comm. Bhopal M.P.State Govt. Sales Tax Dept. State Sales Tax 3,94,359.00 2004-05 Appellate Board , Bhopal , MP M.P.State Govt. Sales Tax Dept. Entry Tax 19,02,271.00 2004-05 Appellate Board , Bhopal , MP. M.P.State Govt. Sales Tax Dept. VAT 11,50,704.00 2005-06 Appeal Dy. Comm. Bhopal M.P.State Govt. Sales Tax Dept. Entry Tax 87,362.00 2005-06 Appeal Dy. Comm. Bhopal M.P.State Govt. Sales Tax Dept. State Sales Tax 35,499.00 1998-99 Appeal Dy. Comm. Bhopal M.P.State Govt. Sales Tax Dept. Entry Tax 4,201.00 1998-99 Appeal Dy. Comm. Bhopal M.P.State Govt. Sales Tax Dept. State Sales Tax 64,547.00 1986-87 Appeal Dy. Comm. Bhopal M.P.State Govt. Sales Tax Dept. State Sales Tax 65,28,030.00 2006-07 Appeal Dy. Comm. Bhopal M.P.State Govt. Sales Tax Dept. State Sales Tax VAT 57,14,516.00 2007-08 Appeal Dy. Comm. Bhopal M.P.State Govt. Sales Tax Dept. VAT 71,29,048.00 2008-09 Appeal Dy. Comm. Bhopal

94 WESTERN COALFIELDS LIMITED

M.P.State Govt. Sales Tax Dept. VAT 76,36,583.00 2009-10 Appeal Dy. Comm. Bhopal M.P.State Govt. Sales Tax Dept. VAT ON MPGATSVA 67,28,795.00 2010-11 M.P. Govt. M.P.State Govt. Sales Tax Dept. VAT ON MPGATSVA 82,46,779.00 2011-12 M.P. Govt. M.P.State Govt. Sales Tax Dept. VAT ON MPGATSVA 91,34,154.00 2012-13 M.P. Govt. Minerals(Validation) Act, 1992 Cess on Storage 21,67,294.52 1991-92 SLP pending with Coal Supreme Court KANHAN Minerals (Validation) Act, 1992 Cess on Royalty 38,64,874.00 1982-83 SLP pending with and Cess on to 1989-90 Hon’ble Supreme storage of coal Court MP State Govt. Sales Tax, 2002 VAT 39,03,341.00 2006-07 Commissioner ( Appeals) MP State Govt. Sales Tax, 2002 VAT 30,30,194.00 2007-08 Commissioner (Appeals) MP State Govt. Sales Tax, 2002 VAT 15,13,032.00 2008-09 Dy. Commissioner MP Entry Tax Act, 1976 Entry Tax 1,67,850.00 2005-06 Dy. Commissioner MP Entry Tax Act, 1976 Entry Tax 90,949.00 2007-08 Commissioner ( Appeals) MP Entry Tax Act, 1976 Entry Tax 4,78,753.00 2008-09 Dy. Commissioner Central Sales Tax Act, 1956 CST 88,10,414,.00 2005-06 Appellate Board Central Sales Tax Act, 1956 CST 48,15,900.00 2006-07 Dy. Commissioner Central Sales Tax Act, 1956 CST 48,11,455.00 2007-08 Commissioner ( Appeals) Central Sales Tax Act, 1956 CST 30,59,154.00 2008-09 Dy. Commissioner Central Sales Tax Act, 1956 CST 77,27,896.00 2009-10 Dy. Commissioner

NANDAN Mineral Validation Act.1992 Cess on Royalty 73,62,824.42 1991-92 SLP pending before WASHERY supreme Court

SALES Mineral Validation Act.1992 Cess on Royalty 29,11,374.92 1991-92 SLP pending before ACCOUNTS supreme Court

WANI Land Revenue Surface Rent 3,13,62,000.001972-73 District Collector to 2005-06 Chandrapur. Land Revenue Enhancement 3,96,36,000.00 2004-05 District Collector Land Comp. Yavatmal. Land Revenue NAA. Tax 17,89,91,000.00 1972-73 District Collector to 2003-04 Yavatmal. Bombay Sales Tax Act,1959 Entry Tax 59,000.00 March-2004 Sales Tax Tribunal, on Vehicle Nagpur

95 ANNUAL REPORT 2012-13

Mineral Validation Act.1992 Cess on Royalty 5,80,967.93 1991-92 SLP pending before supreme Court Mineral Validation Act.1992 MSEB MAD Cess 3,82,553.60 1991-92 SLP pending with Supreme Court CESTAT Service Tax 15,59,04,000.00 2007-08 Appellate Tribunal, to 2011-12 Mumbai

NAGPUR Income Tax Act,1961 TDS on payment 13,08,000.00 2008-09 ITAT , Nagpur to Doctors / Hospitals Income Tax Act,1961 TDS on payment 24,82,000.00 2009-10 ITAT , Nagpur to Doctors / Hospitals BST Act Sales Tax 93,09,000.00 1994-95 S T Tribunal , Mumbai BST Act Sales Tax 1,17,41,000.00 1993-94 S T Tribunal , Mumbai CST Act. Sales Tax 2,48,000.00 1997-98 S T Tribunal , Mumbai CST Act. Sales Tax 14,92,000.00 1989-90 S T Tribunal , Mumbai CST Act. Sales Tax 75,96,000.00 1994-95 S T Tribunal , Mumbai Maharashtra Land Non Agricultural 1,12,89,000.00 2009 High Court , Nagpur Revenue Code Tax Rent Act Surface Rent 1,81,000.00 2001 District Court ,Nagpur Rent Act Surface Rent 8,91,00,000.00 2005 High Court , Nagpur Mineral Validation Act, 1992 Cess on Royalty 36,75,950.03 SLP pending with Supreme Court Minerals (Validation) Act, 1992 MSEB MAD Cess 1,74,447.04 SLP pending with Supreme Court Finance Act 1994 Service Tax on 7,29,28,000.00 CESTAT, Mumbai Crushing Charges HEAD Income Tax Act Corporate Tax 15,21,86,000.00 2002-03 High Court , Nagpur QUARTERS Income Tax Act Corporate Tax 14,73,30,000.00 2003-04 High Court , Nagpur Income Tax Act Corporate Tax 3,24,000.00 2003-04 High Court , Nagpur Income Tax Act Corporate Tax 4,07,11,000.00 2004-05 High Court , Nagpur Income Tax Act Corporate Tax 6,74,61,000.00 2004-05 ITAT , Nagpur Income Tax Act Corporate Tax 65,24,000.00 2005-06 ITAT , Nagpur Income Tax Act Corporate Tax 3,20,97,000.00 2005-06 Income Tax Appellate Tribunal Income Tax Act Corporate Tax 3,03,15,000.00 2005-06 CIT (Appeal), Nagpur Income Tax Act Corporate Tax 5,79,89,000.00 2006-07 CIT (Appeal), Nagpur Income Tax Act Corporate Tax 2,78,76,000.00 2006-07 Income Tax Appellate Tribunal Income Tax Act Corporate Tax 3,06,18,000.00 2006-07 CIT (Appeal), Nagpur

96 WESTERN COALFIELDS LIMITED

Income Tax Act Corporate Tax 8,09,04,000.00 2007-08 ITAT, Nagpur Income Tax Act Corporate Tax 4,66,05,000.00 2007-08 ITAT, Nagpur Income Tax Act Corporate Tax 2,94,82,000.00 2007-08 Income Tax Appellate Tribunal Income Tax Act Corporate Tax 14,63,49,000.00 2008-09 Income Tax Appellate Tribunal Income Tax Act Corporate Tax 2,32,17,000.00 2008-09 CIT (Appeal), Nagpur Income Tax Act Corporate Tax 87,06,52,000.00 2008-09 Income Tax Appellate Tribunal Income Tax Act Corporate Tax 5,32,17,000.00 2009-10 Income Tax Appellate Tribunal Income Tax Act Corporate Tax 139,54,67,000.00 2010-11 CIT (Appeal), Nagpur Income Tax Act TDS 13,58,000.00 2007-08 ITAT, Nagpur Income Tax Act TDS 25,82,000.00 2008-09 ITAT, Nagpur Income Tax Act TDS 1,31,000.00 2009-10 ITAT, Nagpur Income Tax Act TDS 6,82,000.00 2009-10 ITAT, Nagpur Income Tax Act TDS 2,72,000.00 2009-10 ITAT, Nagpur Income Tax Act TDS 21,90,000.00 2010-11 ITAT, Nagpur Income Tax Act TDS 1,61,000.00 2010-11 ITAT, Nagpur Maharashtra Entry Tax Act Entry Tax on HEMM 96,36,56,000.00 1.4.1988 High Court , Nagpur to 31.10.1996 Bombay Sales Tax Act Sales Tax 21,24,000.00 2001-02 MSTT, Mumbai Bombay Sales Tax Act Sales Tax 31,58,48,000.00 2002-03 Appellate Authority, Nagpur Central Sales Tax Act Sales Tax 25,18,65,000.00 2002-03 Appellate Authority, Nagpur Bombay Sales Tax Act Sales Tax 8,86,61,000.00 2003-04 Appellate Authority, Nagpur Central Sales Tax Act Sales Tax 48,75,000.00 2003-04 Appellate Authority, Nagpur Bombay Sales Tax Act Sales Tax 72,15,000.00 2004-05 MSTT, Mumbai Central Sales Tax Act Sales Tax 1,27,85,000.00 2004-05 MSTT, Mumbai Central Excise Department Central Excise 2182,93,00,000.00 2012-13 Appellate Tribunal, Mumbai & New Delhi.

97 ANNUAL REPORT 2012-13

98 WESTERN COALFIELDS LIMITED WESTERN COALFIELDS LIMITED (A MINI RATNA COMPANY) (A Subsidiary of Coal India Limited) BALANCE SHEET AS AT 31ST MARCH 2013 Note No As at As at 3/31/2013 3/31/2012 I EQUITY AND LIABILITIES (1) Shareholders’ Fund a) Share Capital 1 297.10 297.10 b) Reserves & Surplus 2 3,162.92 3,066.29 c) Money Received against Share warrants - - 3,460.02 3,363.39 (2) Share Application money pending allotment - - (3) Non-Current Liabilities a) Long Term Borrowings 3 68.31 85.91 b)Deferred Tax Liabilities (Net) - - c)Other Long Term Liabilities 4 1.70 0.25 d)Long Term Provisions 5 3,444.90 3,272.79 3,514.91 3,358.95 (4) Minority Interest - - (5) Current Liabilities a) Short Term Borrowing 6 - - b) Trade Payables 7 82.01 91.32 c) Other Current Liabilities 8 1,734.51 2,106.58 d) Short Term Provisions 9 1,139.88 897.70 2,956.40 3,095.60 Total 9,931.33 9,817.94 II ASSETS (1) Non-Current Assets (a) Fixed Assets i) Tangible Assets - Gross Block 10A 3,950.81 3,798.98 Less : Depreciation, Impairment & Provisions 2,526.01 2,427.45 Net Carrying Value 1,424.80 1,371.53 ii) Intangible Assets - Gross Block 10A 542.23 691.41 Less : Depreciation, Impairment & Provisions 429.40 560.80 Net Carrying Value 112.83 130.61 iii) Capital Work-in-Progress 10B 61.71 74.56 iv) Intangible Assets under Development 10C 252.61 214.44 (b) Non-Current Investments 11 80.23 96.27 (c)Deferred Tax Assets (Net) 578.44 455.72 (d ) Long Term Loans & Advances 12 56.12 59.32 (e) Other Non-Current Assets 13 - - (2) Current Assets (a) Current Investments 14 450.14 32.09 (b) Inventories 15 667.33 570.60 (c ) Trade Receivables 16 471.27 13.97 (d) Cash & Bank Balance 17 4,243.83 5,503.40 (e) Short Term Loans & Advances 18 1,104.50 864.83 (f) Other Current Assets 19 427.52 430.60 7,364.59 7,415.49 Total 9,931.33 9,817.94 Note : ontingent Liabilities and Commitments (to the extent not provided for) 34 A 3518.20 1050.51 Significant Accounting Policies 33 Additional Notes on Accounts 34 The Notes referred to above form an integral part of Balance Sheet

PROBAL DAS RAMEHER SUSHIL BEHL D.C. GARG General Manager (Finance) Company Secretary Director (Finance) Chairman-cum-Managing Director (DIN-02841938) (DIN-00267658) As per our report of even date FOR JODH JOSHI AND CO. Chartered Accountants (FRN 104317W) Place : Nagpur M.Y. SHASHTRI PARTNER Date : 23/05/2013 (M.No. 039763) 99 ANNUAL REPORT 2012-13 WESTERN COALFIELDS LIMITED (A MINI RATNA COMPANY) (A Subsidiary of Coal India Limited) PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED ON 31ST MARCH, 2013

INCOME Notes For the Year For the Year ended 31.03.13 ended 31.03.12 Revenue From Operations 20 Sale of Coal, coke etc. 8,703.97 8,357.48 Less:- Excise Duty 500.36 373.01 Other Levies 1,498.46 1,234.46 I. Net Revenue From Operations 6,705.15 6,750.01 II. Other Income 21 717.78 680.69 III. Total Revenue (I+II) 7,422.93 7,430.70 IV. EXPENSES Cost of Material Consumed 22 998.24 920.45 Purchase of Stock-in-trade - - Change in inventories of finished goods work in progress 23 (89.31) (128.96) and Stock in trade Employee benefit expenses 24 4,296.43 4,213.01 Power & Fuel 330.20 281.94 Welfare Expenses 25 82.54 32.20 Repairs & Maintenance 26 68.05 67.45 Contractual Expenses 27 537.90 497.65 Finance Costs 28 2.87 3.20 Depreciation/amortization/Impairment 188.53 195.65 Provisions 29 34.15 220.62 Write off 30 - - Overburden Removal Adjustment 279.96 458.95 Other Expenses 31 252.94 236.81 Total Expenses 6,982.50 6,998.97 V. Profit/(Loss) before Prior Period, exceptional 440.43 431.73 and extraordinary items and tax (III-IV) VI. Prior Period Adjustment { charges/ (Incomes) } 32 11.56 (8.77) VII. Exceptional Items - - VIII. Profit/(Loss) before extraordinary items and tax (V-VI-VII) 428.87 440.50 IX. Extraordinary Items { charges/ (Incomes) } - -

X. Profit/(Loss) before Tax (VIII-IX) 428.87 440.50

XI. Less : Tax Expense - Current year 247.05 262.14 - Deferred Tax (122.73) (105.59) - Earlier years (19.76) (22.77) XII. Profit/(Loss) for the period from continuing operations ( X-XI) 324.31 306.72 XIII. Profit/(Loss) from discontinuing operations (0.01) (0.01) XIV. Tax expenses of discontinuing operations - - XV. Profit/(Loss) from discontinuing operations (after tax) ( XIII-XIV) (0.01) (0.01) XVI. Profit/(Loss) for the period ( XII+XV) 324.30 306.71 XVII.Earning per equity share (in Rs. ) (Face Value of Rs.1000/- per share) (1) Basic 1,091.55 1,032.35 (2) Diluted 1,091.55 1,032.35 Significant Accounting Policies 33 Additional Notes on Accounts 34 The Notes referred to above form an integral part of Statement of Profit and Loss PROBAL DAS RAMEHER SUSHIL BEHL D.C. GARG General Manager (Finance) Company Secretary Director (Finance) Chairman-cum-Managing Director (DIN-02841938) (DIN-00267658) As per our report of even date FOR JODH JOSHI AND CO. Chartered Accountants (FRN 104317W) Place : Nagpur M.Y. SHASHTRI PARTNER Date : 23/05/2013 (M.No. 039763) 100 WESTERN COALFIELDS LIMITED WESTERN COALFIELDS LIMITED (A MINI RATNA COMPANY) (A Subsidiary of Coal India Limited) CASH FLOW STATEMENT FOR YEAR ENDED ON 31ST MARCH, 2013 3/31/2013 3/31/2012

A) CASH FLOWS FROM OPERATING ACTIVITIES Net Profit before taxation and extraordinary items 428.87 440.50 Adjustments for: Depreciation 199.22 195.78 Foreign Exchange Fluctuation (0.34) 14.32 Interest Income (516.21) (459.64) Dividend Received from Mutual Fund (8.05) - OBR Adjustment 279.96 458.96 Finance Cost 2.87 3.20 Provision for Doubtful Debts/Advances/Claims (43.54) (2.23) Other Provisions 77.69 223.66 (Profit)/Loss on Sale of Assets (0.57) (0.60) Operating profit before working capital changes 419.90 873.95

(Increase)/Decrease in Trade Receivables (418.61) 14.32 (Increase)/Decrease in Inventories (89.25) (133.51) (Increase)/Decrease in Loans & Advances (209.14) (221.38) Increase/(Decrease) in Trade & Other Payable (337.60) 1338.48 Cash generated from operations (634.70) 1871.86

Direct Taxes paid (Net) (251.62) (260.05) Loss from Discontinued Operations (0.01) (0.01) Cash flow before Extraordinary Items (886.33) 1611.80 Extraordinary Items -- Net cash flow from Operating Activities (886.33) (886.33) 1611.80

B) CASH FLOWS FROM INVESTING ACTIVITIES Purchase of Fixed Assets (264.05) (272.55) Proceeds from Sale of Assets 2.04 2.43 Change in Non-Current Investments 16.04 32.09 Investment in Mutual Fund (418.05) - Interest Received 516.21 459.64 Dividend Received from Mutual Fund 8.05 0.00 Change in Other Bank Balance (Fixed Deposits) 99.85 (1510.46) Net cash flow from investing activities (39.91) (1288.85)

C ) CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from Long Term Borrowings - - Repayment of Long Term Borrowings (16.71) (14.91) Finance Cost (2.87) (3.20) Dividend Paid (including Dividend Distribution Tax) (213.90) (375.68) Net cash used in Financing Activities (233.48) (393.79)

NET INCREASE/(DECREASE) IN CASH & CASH EQUIVALENTS (1159.72) (70.84) CASH & CASH EQUIVALENTS AT BEGINNING OF PERIOD 1962.89 2033.73 CASH & CASH EQUIVALENTS AT END OF PERIOD 803.17 1962.89 Note: 1. Cash & Cash Equivalents ( Maturity upto 3 Months) 803.17 1962.89 Other Bank Balances (considered in investing activities) 3440.66 3540.51 Total (Refer Note 17) 4243.83 5503.40

2. Purchase of Fixed Assets includes movements of Capital Work-in-progress between the beginning and the end of the year.

PROBAL DAS RAMEHER SUSHIL BEHL D.C. GARG General Manager (Finance) Company Secretary Director (Finance) Chairman-cum-Managing Director (DIN-02841938) (DIN-00267658) As per our report of even date FOR JODH JOSHI AND CO. Chartered Accountants (FRN 104317W) Place : Nagpur M.Y. SHASHTRI PARTNER Date : 23/05/2013 (M.No. 039763) 101 ANNUAL REPORT 2012-13 NOTES TO BALANCE SHEET NOTE - 1 As at As at SHARE CAPITAL 31/3/2013 31/3/2012

Authorised share capital (i) 8000000 Equity Shares of ` 1000/- each 800.00 800.00 800.00 800.00 Issued, Subscribed and fully Paid-up

(i) 1800019 Equity Shares of ` 1000/- each fully paid up in cash 180.00 180.00 (ii) 1170981 Equity Shares of ` 1000/- each allotted as fully paid up 117.10 117.10 for funds adjusted against purchase consideration other than cash 297.10 297.10 1 Shares in the company held by each shareholder holding more than 5% Shares Name of Shareholder No. of Shares Held % of Total Shares ( Face value of ```1000 each) Coal India Ltd 2971000 100 2 During the year there is no change in the number of shares issued. NOTE - 2 As at As at 31-03-13 31-03-12 RESERVES : Capital Reserve As per last Balance Sheet 0.00 0.00 Add: Addition during the year - - Less: Adjustment During the year - - 0.00 0.00 Capital Redemption Reserve As per last Balance Sheet - - Add: Addition during the year - - Less: Adjustment During the year - - - - Reserve for Foreign Exchange Transactions As per last Balance Sheet - - Add: Addition during the year - - Less: Adjustment During the year - - - - CSR Reserve As per last Balance Sheet 48.17 33.99 Add: Addition during the year 21.55 21.83 Less: Transfer to General Reserve 20.96 7.65 48.76 48.17 Sustainable Development Reserve As per last Balance Sheet - - Add: Addition during the year 0.71 - Less: Transfer to General Reserve 0.36 - 0.35 - General Reserve As per last Balance Sheet 1,004.35 950.69 Add: Transfer from Profit & Loss Account 48.64 46.01 Add: Adjustment During the year 21.32 7.65 1,074.31 1,004.35 Surplus in Statement of Profit & Loss As per last Balance Sheet 2,013.77 1,988.80 Profit/(Loss) after Tax During the Year 324.30 306.71 Profit/(Loss) available for Appropriation 2,338.07 2,295.51 APPROPRIATION Reserve for Foreign Exchange Transaction - - Transfer to General Reserve 48.64 46.01 Transfer to CSR Reserve 21.55 21.83 Transfer to SD Reserve 0.71 - Interim Dividend - - Proposed Dividend on Equity Shares (@ ` 655 Per share) 194.60 184.04 Corporate Dividend Tax 33.07 29.86 2,039.50 2,013.77 Miscellaneous Expenditure (to the extent not written off) Preliminary Expenses - - Pre-Operational Expenses - - - - Total : 3162.92 3,066.29 CSR Reserve : As per CIL’s policy on Corporate Social Responsibility (CSR), fund is to be allocated for CSR activities during the year based on 5% of retained earnings of previous year subject to a minimum of ‘ 5/- per tonne of coal production of previous year. Accordingly, during current year ` 21.55 crores is earmarked and credited to CSR Reserve and an amount of `20.96 crores being the expenditure upto 31st March 2013, is transferred from CSR Reserve to General Reserve. Sustainable Development Reserve : Reserve for Sustainable Development is created based on Guidelines on Sustainable Development for CPSEs issued by Department of Public Enterprises, Ministry of Heavy Industries & Public Enterprises vide its memorandum dated 23rd September, 2011.Accordingly, during current year ` 0.71 crores is earmarked and credited to SD Reserve and an amount of `0.36 crores being the expenditure upto 31st March 2013, is transferred from SD Reserve to General Reserve. General Reserve : An amount of ` 48.64 crores (P Y 46.01 crores) is transferred to General Reserve 102 WESTERN COALFIELDS LIMITED NOTES TO BALANCE SHEET (CONTD.) NOTE - 3

LONG TERM BORROWING As at As at (Refer additional Note No- 3 ) 31-03-13 31-03-12

Term Loan International Bank for Reconstruction and Development (IBRD)- Through CIL 35.54 40.80 Japan Bank of International Co-operation (JBIC) - Through CIL 32.77 45.11 Export Development Corp., Canada Liebherr France S.A., France

From Coal India Limited - - Total 68.31 85.91

CLASSIFICATION 1 Secured - - Unsecured 68.31 85.91

CLASSIFICATION 2 Loan Guaranteed by directors & others Particulars of Loan Amount in n ssn s Nature of Guarantee

1 Amount outstanding in foreign currency as at 31.03.2013 31.03.2012

IBRD US $ 6,485,575.31 7,878,962.27

JBIC JPY ¥ 560,523,822.57 713,872,230.55

2 There is no default in repayment of loans and interest.

3 Term loan is being repaid in 30 semi annual instalments starting from May 15, 2003 and February 15, 2003 for IBRD and JBIC respectively

4 The total outstanding amount in Long Term Borrowing is ` 84.92 crore, out of this `16.61 crore is Repayable within one year which is shown in Note 8 under the head current maturities.

103 ANNUAL REPORT 2012-13

NOTES TO BALANCE SHEET (CONTD.) NOTE - 4

OTHER LONG TERM LIABILITIES

As at As at 31/3/2013 31/3/2012

Shifting & Rehabilitation Fund

Opening Balance - - Add: Interest from Investment of the fund - - Add: Contribution Received - - Less : Amount utilised - - - -

Trade Payable - -

Security Deposits 1.70 0.25 Others ( Specify Nature) - -

Total 1.70 0.25

104 WESTERN COALFIELDS LIMITED

NOTES TO BALANCE SHEET (CONTD.) NOTE - 5

LONG TERM PROVISIONS

As at As at 31/3/2013 31/3/2012

For Employee Benefits - Gratuity - 258.77 - Leave Encashment 369.61 320.72 - Other Employee Benefits 244.51 220.17

For Foreign Exchange Transactions (Marked to Market) - - OBR Adjustment Account 2,266.33 1,986.37 Mine Closure 564.45 486.76 For Others - -

TOTAL 3,444.90 3,272.79

Note: Details of OBR ADJUSTMENT ACCOUNT as above

A OBR Advance stripping as per last accounts 1,436.82 1,213.90 Add: expenditure during the year 1,368.69 1,227.84 Written off/adjusted 1,332.38 1,004.92 TOTAL (A) 1,473.13 1,436.82

B Ratio Variance as per last accounts 3,423.19 2,741.32 Written off/adjusted 316.27 681.87 TOTAL (B) 3,739.46 3,423.19

C Total (A-B) 2,266.33 1,986.37

a) Gratuity Liability under payment of Gratuity Act is based on actuarial valuation by certified Actuary. The liability as on 31st March 2013 has been certified by Actuary at ` 2270.78 crores. After considering the fund available with the trustees of the Gratuity fund, an additional liability as on 31st March 2013 is ` 208.69 crores. As certified by Actuary expected payment within next 12 months is more than ` 208.69 crores as such the liability is shown under Note 9 b) Acturial valuation for Leave Encashment has been made and liability assessed by actuary is ` 401.38 crores as on 31/03/ 2013. As a result an amount of ` 55.83 crore has been debited to statement of Profit & Loss during the year. As certified by Actuary expected payment within next 12 months is ` 31.77 crores, the same is shown under Note 9 c) Actuarial valuation of LLTC/LTA, Settlement Allowance, Accidental insurance cover, Life cover and Fatal Mine Accident has been made by the Actuary for an amount of `140.30 crores. Accordingly incremental amount of ` 8.65 crores has been debited to the statement of Profit and Loss

105 ANNUAL REPORT 2012-13 NOTES TO BALANCE SHEET (CONTD.)

NOTE - 6

SHORT TERM BORROWING ( ` Crores ) As at As at 3/31/2013 3/31/2012 Loan From Bank -- Loans Repayable on Demand Balance with Coal India Limited & other Subsidiaries of Coal India Limited -- Overdraft against Pledge of Term Deposit - - Other Loans and Advances Deferred Credits - - Total : - - CLASSIFICATION 1 Secured - - Unsecured - -

CLASSIFICATION 2

Loan Guaranteed by directors & others Particulars of Loan Amount in ` crores Nature of Guarantee

NOTE - 7 TRADE PAYABLES As at As at ( Refer additional Note WD - 4) 31-03-13 31-03-12

Sundry Creditors For Revenue Stores 82.01 91.32

TOTAL 82.01 91.32

a) Amount due to Small Scale Industries amounting to more than ` 1 lakh and outstanding for more than 30 days is ` 0.17 crores (P. Y ` 0.32 crores)

b) The applicability of Micro, Small and Medium Enterprises Development Act, 2006 (MSMEDA, 2006) to the company for the purpose of disclosure and other requirements, could not be ascertained pending information from the suppliers.

c) Sundry Creditors to the tune of ` 7.93 Crores (Previous year `1.45 Crores) remain unadjusted for more than three years pending reconciliation.

106 WESTERN COALFIELDS LIMITED NOTES TO BALANCE SHEET (CONTD.) NOTE - 8

OTHER CURRENT LIABILITIES As at As at (Refer additional Note No- 5 ) 31-03-13 31-03-12 Current Maturities of Long Term Borrowings Term Loan From IBRD- Through CIL (Holding Company) 7.64 6.56 Term Loan From JBIC- Through CIL (Holding Company) 8.97 9.50 Term Loan From Export Development Corp., Canada - - Term Loan From Liebherr France S.A., France - - Loan From Coal India Limited - - Surplus Fund from Coal India - - Current Account with Subsidiaries - -

For Capital (including Stores) 32.03 28.58

FOR EXPENSES :

Salary Wages & Allowances 385.38 670.56 Power & Fuel 38.99 23.36 Others 208.25 171.51 632.62 865.43

STATUTORY DUES :

Central Sales Tax 5.08 2.92 Sales Tax/VAT 22.28 15.86 Provident Fund & Pension Fund 63.32 49.49 Central Excise Duty (7.21) (15.89) Royalty & Cess on Coal 95.08 60.57 Stowing Excise Duty 11.80 11.45 Clean Energy Cess 39.43 37.20 Other Statutory Levies 29.55 70.13 259.33 231.73

Income Tax Deducted at Source 26.03 6.74 Security Deposit 50.47 45.18 Earnest Money 30.71 26.87 Advance & Deposit from customers / others 523.42 765.94 Interest Accrued and due on Borrowings - - Interest Accrued but not due on Borrowings - - Cess Equilisation Account - - Current Account with IICM - - Unpaid Dividend - - Ex-Owner Account - - Advance Deposit other Pre-Nationalisation - - Others Liabilities 163.29 120.05

TOTAL 1,734.51 2,106.58

Amount outstanding in foreign currency as at 31.03.2013 31.03.2012 IBRD US $ 1,393,386.96 1,312,789.62

JBIC JPY ¥ 153,348,407.98 150,423,537.09

2 Sales Tax/VAT, Central Excise Duty are shown above is Net of Credit Receivables 3 During the year recovery of electricity charges @ 1% of basic pay has been made from the salary/wages of non-executive employees. This recovery has been challenged by the employees before the Calcutta High Court and as per the directives of the Court, the amount so recovered has been deposited with the State Bank of India, Nagpur. As per directives of CIL and pending settlement with the employees the same has been kept separately under FC 470120 to the tune of ` 28.51 Crores. During the year, this deposit has earned an interest of ` 2.48 crores (P Y `1.14 crores) and the same is treated as liability. There is a contingent liability against the company to the extent of interest, it any, awarded by the Court on final disposal of the case. 4 Outstanding capital liability for civil works / Plant & Machinery completed in different Areas include an amount of `1.76 Crores (Previous year `1.06 Crore) outstanding for more than three years. 5 Deductions made from employees’ remuneration in 1996-97 towards Union Fund (` 0.78 Crores) and Relief Fund (` 0.39 Crores) continue to be kept in separate deposit accounts as the matter is sub-judice. The interest earned on these deposits upto 31st March, 2013 is `1.78 Crores (C.Y ` 0.23 Crores) and ` 0.93 Crores (C.Y.` 0.16 Crores) respectively. The deduction together with the interest is appearing under the head Other Liability. 107 ANNUAL REPORT 2012-13

NOTES TO BALANCE SHEET (CONTD.) NOTE - 9

SHORT TERM PROVISIONS As at As at 31/3/2013 31/3/2012

For Employee Benefits - Gratuity 208.69 226.01 - Leave Encashment 31.77 24.83 - PPLB 139.88 108.96 - PRP 356.52 280.80 - Other Employee Benefits 107.80 -

For Proposed Dividend 194.60 184.04 For Corporate Dividend Tax 33.07 29.86 Provision for Income Tax - - Less : Advance Income Tax / Tax Deducted at Source - - - - For Excise Duty on Closing Stock of Coal 67.55 43.20 For Others - -

TOTAL 1,139.88 897.70 a) Actuarial valuation of Post Retirement Medical Benefit as certified by the Actuary as on 31st March 2013 amounts to ` 107.80 crores (for employees retired prior to 01.01.2007 `16.54 crores, for employees retired after 01.01.2007 ` 34.89 crores and for existing employees- ` 56.37 crores. Accordingly incremental amount of `100.45 crores has been debited to the statement of Profit & Loss. (In Note 24 - Employee benefits ` 56.37 crores and ` 44.08 crores in Note 25 - Welfare Expenses)

108 WESTERN COALFIELDS LIMITED

109 ANNUAL REPORT 2012-13

110 WESTERN COALFIELDS LIMITED

111 ANNUAL REPORT 2012-13 NOTES TO BALANCE SHEET (CONTD.) NOTE - 11 NON - CURRENT INVESTMENTS - Unquoted at Cost (Refer additional Note No- 9 )

Number of Face value per shares/bonds/ shares/bonds/ securities current security year/ current year/ As at As at (previous year) (previous year) Rs. 31-03-13 31-03-12

TRADE INVESTMENTS

Investments in Govt. Securities

8.5% Tax Free Special Bonds (Fully Paid up) : (on securitisation of Sundry Debtors) Major State-wise Break-up

UP ----

Haryana -- - -

Maharashtra 492,600 1,000.00 49.26 59.10 (590,970)

Madhya Pradesh 309,700 1,000.00 30.97 37.17 (371,730)

Gujarat - - - -

West Bengal -- - -

Others - - - -

Equity Shares in Joint Venture Companies - - - - ( with name of joint ventures)

Equity Shares in Subsidiaries Companies - --- ( with name of Subsidiaries)

Others (in Co-operative Shares) - ---

NON-TRADE ----

Rs. 7.55% Non Convertible IRFC Tax Free Bonds 2021 Series- ----

Total : 80.23 96.27

Aggregate of Unquoted Investment 80.23 96.27 Investments: The Bonds received on Securitization of dues from State Electricity Boards, from the State Governments of Maharashtra & Madhya Pradesh with a lock-in-period of five years are treated as long term investments and are valued at cost unless there is a permanent diminution in the value of investment. The year end balance as on 31.3.2013 is ` 112.32 crores. Out of this the amount maturing within 12 months ` 32.09 crores is shown as current investment (Note- 14).

112 WESTERN COALFIELDS LIMITED NOTES TO BALANCE SHEET (CONTD.) NOTE - 12 LONG TERM LOANS & ADVANCES As at As at 31/3/2013 31/3/2012 LOANS ADVANCES For Capital - Secured considered Good - - - Unsecured considered Good - 4.05 - Doubtful 1.58 1.58 1.58 5.63 Less : Provision for Doubtful Loans and Advances 1.58 1.58 - 4.05 For Revenue - Secured considered Good - - - Unsecured considered Good - - - Doubtful - - - - Less : Provision for Doubtful Loans and Advances - - - - Security Deposits - Secured considered Good - - - Unsecured considered Good - - - Doubtful - - - - Less : Provision for Doubtful Loans and Advances - - - - Deposit for P&T, Electricity etc. - Secured considered Good - - - Unsecured considered Good 45.43 42.26 - Doubtful 1.09 1.09 46.52 43.35 Less : Provision for Doubtful Loans and Advances 1.09 1.09 45.43 42.26 LOAN TO EMPLOYEES & OTHERS For House Building - Secured Considered Good 10.42 12.58 - Unsecured Considered Good - - Doubtful - - 10.42 12.58 For Motor Car and Other Conveyance - Secured Considered Good 0.27 0.43 - Unsecured Considered Good - - - Doubtful - - 0.27 0.43 For Others - Secured considered Good - - - Unsecured considered Good - - - Doubtful - - - - Less : Provision for Doubtful Loans and Advances ------Loan To Subsidiaries - Secured considered Good - - - Unsecured considered Good - - - Doubtful - - - - TOTAL 56.12 59.32

CLOSING BALANCE MAXIMUM AMOUNT DUE AT ANY TIME DURING CURRENT CURRENT CURRENT PREVIOUS PERIOD PERIOD PERIOD PERIOD

Due by the Companies in which directors of the company NIL NIL NIL NIL is also a director/member ( With name of the Companies) Due by the parties in which the Director(s) of NIL NIL NIL NIL company is /are interested The advances to suppliers/contractors and for capital works/mobilisation advances lying unadjusted since long are ` 1.58 Crores (Previous year ` 1.93 Crores). Necessary provisions are appearing in the books of accounts for the same amount. 113 ANNUAL REPORT 2012-13

NOTES TO BALANCE SHEET (CONTD.) NOTE - 13

OTHER NON-CURRENT ASSETS As at As at 31/3//2013 31/3/2012

Long Term Trade Receivable - Secured considered good - - - Unsecured considered good - - - Doubtful - - - - Less Provision for bad and doubtful Trade Receivable - - - - Exploratory Drilling Work

- Secured considered good - - - Unsecured considered good - - - Doubtful - - - - Less Provision for bad and doubtful - - Other Receivables - Secured considered good - - - Unsecured considered good - - - Doubtful - - - - Less Provision for bad and doubtful Receivables - - - -

TOTAL - -

CLOSING BALANCE MAXIMUM AMOUNT DUE AT ANY TIME DURING CURRENT CURRENT CURRENT PREVIOUS PERIOD PERIOD PERIOD PERIOD Due by the Companies in which directors of the company is also a director/member NIL NIL NIL NIL ( With name of the Companies) Due by the parties in which the Director(s) of NIL NIL NIL NIL company is /are interested

114 WESTERN COALFIELDS LIMITED

NOTE - 14 (` Crores)

Face value per CURRENT INVESTMENTS - Quoted / Number of shares/ Market Value/NAV shares/bonds/ As at As at Unquoted at Cost bonds/securities per shares/bonds/ security current year security current year/ 31-03-13 31-03-12 (Refer additional Note No- 9 ) current year/ (previous year) /(previous year) (`) (previous year)

NON-TRADE

Mutual Fund Investment SBI Mutual Fund 1,284,093 1,003.25 1,003.25 128.83 - (NIL) UTI Mutual Fund 770,053 1,019.45 1,019.45 78.50 - (NIL) Canara Rebeco Mutual Fund 1,281,406 1,005.50 1,005.50 128.84 - (NIL) LIC Nomura Mutual Fund 745,714 1,098.00 1,098.00 81.88 - 7.55% Non Convertible IRFC Tax Free Bonds 2021 Series --

TRADE

Investments in Govt. Securities 8.5% Tax Free Special Bonds (Fully Paid up) : (on securitisation of Sundry Debtors) Major State-wise Break-up Maharashtra 196,890 1,000.00 19.70 19.70 (196,890) (1,000.00) Madhya Pradesh 123,910 1,000.00 12.39 12.39 (123,910) (1,000.00) (`) Total : 450.14 32.09

Aggregate of Unquoted Investment 450.14 32.09

Mutual Fund: During the year Investment in Mutual Fund has been made for an amount of ` 410.00 crores, which has earned a dividend of ` 8.05 crores and the same has been reinvested.

115 ANNUAL REPORT 2012-13

NOTES TO BALANCE SHEET (CONTD.) NOTE - 15

INVENTORIES (Valuation as per Accounting Policy No 6) As at As at 31-03-13 31-03-12 Stock of Coal - Revenue Mines 579.11 488.15

Development Mines 5.44 -

584.55 488.15

Less : Provision 0.01 0.01

A Stock of Coal (Net) 584.54 488.14

Stock of Stores & Spares (at cost) 74.67 76.06

Stores -in -transit 3.06 7.17

Less : Provision 12.97 12.85

B Net Stock of Stores & Spares (at cost) 64.76 70.38

C Workshop Jobs : Work-in-progress and Finished Goods 7.80 9.45

Less : Provision 1.45 1.45

Net Stock of Workshop Jobs 6.35 8.00

D Press :

Work-in-Progress and Finished Goods - -

E Stock of Medicine at Central Hospital - -

F Prospecting & Boring/ Development Exp./Coal Blocks meant for Sale 11.68 4.08

Total ( A to F ) 667.33 570.60

1 Provision - Stores :

Provision for Non-Moving Stores & Spares, not moved for 5 years is made, as per company’s accounting policy, @ of 50% and provision is made @ 100% for unserviceable, damaged and obsolete stores. During the year an additional provision to the tune of ` 0.12 Crores (previous year withdrawal of ` 0.79 Crores) has been made. Thus the closing provision as on date stands at ` 12.97 Crores (P Y ` 12.85 Crores).

2 Coal Blocks Meant for Sale :

During the year Ministry of Coal vide its notification no.13016/47/2008-CA-1 dated 30th May 2012 has identified nine coal blocks as Captive coal blocks meant for sale. Accordingly, as per the accounting policy of the company, an amount of ` 7.60 crores is transferred from CWIP Prospecting & Boring and Development expenditure to Inventory.

116 WESTERN COALFIELDS LIMITED

NOTES TO BALANCE SHEET (CONTD.) ANNEXURE TO NOTE - 15 (Qty in '000 tonnes) ( value in crores) Table:A Reconciliation of closing stock adopted in Account with Book stock as at the end of the year: 31/03/2013

OVERALL STOCK NON-VENDABLE STOCK VENDABLE STOCK Qty. Value Qty. Value Qty. Value

1. (A) Opening stock as on 01.04.12 5,192.69 488.14 5,192.69 488.14 ( B) Adjustment in Opening Stock ------

2. Production for the year 42,567.66 7,338.11 - - 42,567.66 7,338.11

3. Sub-Total ( 1+2) 47,760.35 7,338.11 - - 47,760.35 7,338.11

4. Off- Take for the year :

(A) Outside Despatch 41,525.22 6,705.15 - - 41,525.22 6,705.15 (B) Coal feed to Washeries 281.40 44.31 - - 281.40 44.31 (C) Own Consumption 6.94 1.29 - - 6.94 1.29 TOTAL(A) 41,813.56 6,750.75 - - 41,813.56 6,750.75

5. Derived Stock 5,946.79 587.36 - - 5,946.79 587.36

6. Measured Stock 5,917.92 580.59 - - 5,917.92 580.59

7. Difference (5-6) 28.87 6.77 - - 28.87 6.77

8. Break-up of Difference: (A) Excess within 5% 51.94 3.29 - - 51.94 3.29 (B) Shortage within 5% 63.21 7.25 - - 63.21 7.25 (C ) Excess beyond 5% ------(D ) Shortage beyond 5% 17.60 2.81 - - 17.60 2.81

9. Closing stock adopted 5,929.19 584.55 - - 5,929.19 584.55 in A/c.( 6-8A+8B)

* offtake includes outside despatch, Coal feed to washeries & own consumption. ** Excluding non-vendable Stock 117 ANNUAL REPORT 2012-13 NOTES TO BALANCE SHEET (CONTD.) NOTE - 16 TRADE RECEIVABLE : As at As at 31/3/2013 31/3/2012

Debts outstanding for a period exceeding six months from the due date - Secured considered good - - - Unsecured considered good 13.11 - - Doubtful 72.54 72.54 85.65 72.54 Less Provision for bad and doubtful trade receivables 72.54 119.08 13.11 (46.54)

Other Debts - Secured considered good - - - Unsecured considered good 458.16 60.51 - Doubtful 7.85 - 466.01 60.51 Less Provision for bad and doubtful trade receivables 7.85 - 458.16 60.51

Total 471.27 13.97

CLOSING BALANCE DUE AT ANY TIME DURING CURRENT PREVIOUS CURRENT PREVIOUS PERIOD PERIOD PERIOD PERIOD Due by the Companies in which directors of the NIL NIL NIL NIL company is also a director/member

Due by the parties in which the Director(s) of NIL NIL NIL NIL company is /are interested

b) During the year an amount of Rs.38.69 Crores has been withdrawn from provision for Doubtful Debts. Total Provision for Doubtful Debts as at 31st March 2013 stands at Rs.80.39 Crores (P.Y. Rs.119.08 Crores). c) Ministry of Power, Government of India had advised Madhya Pradesh Power Generation Corporation Ltd. (MPPGCL) to securitise outstanding principal and interest up-to 30.09.2001 of Rs.171.94 crores and Rs.21.99 crores respectively. MPPGCL had securitised Rs.123.91 cores in 2003. The balance of Rs.70.02 crores is still lying unsecuritised .

118 WESTERN COALFIELDS LIMITED NOTES TO BALANCE SHEET (CONTD.) NOTE - 17

CASH & BANK BALANCE As at As at 31-03-13 31-03-12

Cash & Cash Equivalents

Cash & Cash Equivalents

Balances with Scheduled Banks - SBI Dividend Account (unpaid/unclaimed dividend account) - - - In Deposit Accounts with maturity upto 3 months 650.00 1,708.37 - In Current Accounts 148.60 250.32 - In Cash Credit Accounts --

Balances with Non - Scheduled Banks --

In Account with Banks outside India --

Remittance - in transit 4.36 3.86 Cheques, Drafts and Stamps on hand - 0.04 Cash in hand 0.21 0.30

Deposit with Scheduled Banks under Shifting and Rehabilitation Fund Scheme with maturity upto 3 months - -

Other Bank Balances

Balances with Scheduled Banks - In Deposit Accounts with maturity more than 3 months 3,440.66 3,540.51

- In Deposit accounts under Shifting and Rehabilitation Fund Scheme with maturity more than 3 months - -

Deposit with Scheduled Banks under Mine Closure Plan Scheme - -

Total 4,243.83 5,503.40

Cash & Cash Equivalents ( Maturity upto 3 Months) 803.17 1,962.89 Other Bank Balances (Maturity more than 3 Months) 3,440.66 3,540.51 Total 4,243.83 5,503.40

1 Balance in Deposit Accounts includes deposits of ` NIL (P Y ` NIL) having maturity of more than 12 months from the date of acquisition 2 Balance in Deposits Accounts includes an amount of ` 2.81 crores (P Y ` 1.18 crores) held as Bank Guarantee.

3 Balance with Scheduled Banks, In Deposit Account includes deposit for: a) Undisburded Wages 2.04 2.04 b) 1% Electricity charges recovered from Non-Executives 33.08 22.60 c) Court cases for Union Fund, Relief Fund & 5% MPGATSVA 81.99 112.33

119 ANNUAL REPORT 2012-13 NOTES TO BALANCE SHEET (CONTD.) NOTE - 18 SHORT TERM LOANS & ADVANCES As at As at 31/3/2013 31/3/2012 LOANS ADVANCE ( Recoverable in cash or in kind or for value to be received)

ADVANCE TO SUPPLIERS For Revenue

- Secured considered good - - - Unsecured considered good 2.76 5.01 - Doubtful 2.21 2.21 4.97 7.22 Less Provision for bad and doubtful Advance 2.21 2.21 2.76 5.01 ADV PAYMENT OF STATUTORY DUES

SalesTax - Secured considered good - - - Unsecured considered good - - - Doubtful - - - - Less Provision for bad and doubtful Advance - - - - Advance Income Tax / Tax Deducted at Source 1,749.91 1,725.58 Less : Provision for Income Tax 920.34 1,101.03 829.57 624.55 Others - Secured considered good - - - Unsecured considered good - - - Doubtful - - - - Less Provision for bad and doubtful Advance ------Advance to Employees

- Secured considered good - - - Unsecured considered good 106.45 102.41 - Doubtful 0.09 0.09 106.54 102.50 Less Provision for bad and doubtful Advance 0.09 0.09 106.45 102.41 Current Account with Coal India Limited & other Subsidiaries of Coal India Limited 61.48 47.97 Loan Account with Subsidiaries

- Secured considered good - - - Unsecured considered good - - - Doubtful - - - - Less Provision for bad and doubtful Loan - - - - Claims Receivables - Secured considered good - - - Unsecured considered good 91.63 72.18 - Doubtful 6.06 5.98 97.69 78.16 Less Provision for bad and doubtful claim receivables 6.06 5.98 91.63 72.18 Prepaid Expenses 12.61 12.71 TOTAL 1,104.50 864.83

CLOSING BALANCE AT ANY TIME DURING CURRENT PREVIOUS CURRENT PREVIOUS PERIOD PERIOD PERIOD PERIOD

Due by the Companies in which directors of the company is also a NIL NIL NIL NIL director/member Due by the parties in which the Director(s) of NIL NIL NIL company is /are interested NIL b) Provision for Income Tax: Provision for Income Tax for the year ended on 31st March 2013, ` 247.05 Crores (Previous Year : ` 262.14 Crores) has been worked out as per the provisions of the Income Tax Act 1961 and on the basis of completed assessments of the Company. An amount of ` 19.76 crores is withdrawn against earlier year provision. 120 WESTERN COALFIELDS LIMITED NOTES TO BALANCE SHEET (CONTD.) NOTE - 19

OTHER CURRENT ASSETS As at As at 31/3/2013 31/3/2012 Interest Accrued

- Investment 4.77 6.14 - Deposit with Banks 117.34 192.44 - Others - -

Ex Owner’s Account - -

Other Advances 7.27 6.89 Less: Provision 1.32 1.32

DEPOSITS

Deposit for Customs Duty, Port Charges etc. - - Deposit with Coal India Limited 248.92 201.15 Deposit for Royalty, Cess & Sales Tax 4.92 4.34 Less: Provision - - Others 0.45 0.45 Less: Provision - -

Amount Receivable from Govt of India for transactions on behalf of Ex-Coal Board - - Less: Provision - - Other Receivables 45.31 20.65 Less: Provision 0.14 0.14

TOTAL 427.52 430.60

NOTES TO STATEMENT OF PROFIT & LOSS NOTE - 20

Revenue From Operations For the Year Ended on 31/3/2013 31/3/2012

Sales of Coal, coke etc 8,703.97 8,357.48 Less: Excise Duty 500.36 373.01

Less : Other Levies

Royalty 871.23 622.35 Cess on Coal - - Stowing Excise Duty 41.28 41.66 Central Sales Tax 41.03 43.43 Clean Energy Cess 206.92 209.34 State Sales Tax/VAT 338.00 317.68 Other Levies - -

TOTAL LEVIES 1,498.46 1,234.46

Revenue From Operations (NET SALES) 6,705.15 6,750.01 a) Gross sales as shown above is net of levies like entry tax, transit fees, MPGATSVA Tax, etc. levied in the state of Madhya Pradesh amounting to `56.83 Crores (P Y ` 45.73 crores) b) Net Revenue from operations includes ` 81.18 Crores , Performance Incentive Bills raised as per Fuel Supply Agreements (FSA). This includes ` 69.50 crores for the supplies made in current year and ` 11.68 crores for balance supplies for the year 2011-12, lifted during 2012-13. c) As per the Coal Supply Agreement on Cost Plus basis between the Company and MAHAGENCO for supplies from Adasa UG mines of Nagpur Area, Clause 7.4 provides for a discount in price of 30% of the contracted price if the coal supply exceeds the contracted quantity. Accordingly, during the year Nagpur Area has made a provision of ` 11.99 Crores (P.Y. ` 8.49 crores). d) In respect of mines having cost plus agreement with MSPGCL for supply of coal, coal sales bills are initially raised only for 90% value of coal plus 100% Duties and Taxes. Final bills (for balance value) are raised after receipt of acceptable quality analysis reports of sampling at loading and unloading ends. For the current year final bills consisting of 10% portion amounting to ` 18.30 Crores (previous year ` 35.90 crores)have been accounted for. 121 ANNUAL REPORT 2012-13

NOTES TO STATEMENT OF PROFIT & LOSS NOTE - 21

OTHER INCOME For the Year For the Year 31-03-13 31-03-12

Income From Long Term Investments Dividend from Joint Ventures - - Dividend from Subsidiaries - - Interest from - - Government Securities ( 8.5% Tax Free Special Bonds) ( Trade ) 7.50 10.23 7.55% Non Convertible IRFC Tax Free Bonds 2021 Series (Non-Trade) - -

Income From Current Investments

Dividend from Mutual Fund Investments 8.05 - Interest from Government Securities ( 8.5% Tax Free Special Bonds) ( Trade ) 2.73 2.73 7.55% Non Convertible IRFC Tax Free Bonds 2021 Series (Non-Trade) - -

Income From Others

Interest (Gross) From Deposit with Banks 434.91 422.40 From Loans and Advances to Employees 0.16 0.39 From Income Tax Refunds 35.72 63.20 From Coal India 27.76 22.24 Others 7.43 1.72

Apex Charges - - Subsidy for Sand Stowing & Protective Works 24.27 21.59 Profit on Sale of Assets 0.66 0.63 Recovery of Transportation & Loading Cost 98.58 104.91 Gain on Foreign exchange Transactions 0.34 - Exchange Rate Variance - - Lease Rent 0.02 0.01 Liability Write Backs - - Guarantee Fees from Subsidiaries - - Other non-operating Income 69.65 30.64

TOTAL 717.78 680.69

NOTE - 22 COST OF MATERIAL CONSUMED For the Year Ended on 31-3-2013 31-3-2012

Explosives 148.42 136.31 Timber 15.18 15.95 P O L 476.27 411.88 HEMM Spares 183.10 182.61 Other Consumable Stores & Spares 175.27 173.70

TOTAL 998.24 920.45

122 WESTERN COALFIELDS LIMITED

NOTES TO STATEMENT OF PROFIT & LOSS (CONTD.) NOTE - 23 CHANGE IN INVENTORIES OF FINISHED GOODS, WORK IN PROGRESS AND STOCK IN TRADE

For the Year For the Year 31-03-13 31-03-12

Opening Stock of Coal 488.15 360.38 Add: Adjustment of opening stock Less: Deterioration of Coal 0.01 0.01 488.14 360.37 Less: Closing Stock of Coal 579.11 488.15 Less: Deterioration of Coal 0.01 0.01 579.10 488.14 A. Change in Inventory of Coal (90.96) (127.77) Opening Stock of Workshop made finished goods and WIP 9.45 8.26 Less: Provision 1.45 1.45 8.00 6.81 Less: Closing Stock of Workshop made finished goods and WIP 7.80 9.45 Less: Provision 1.45 1.45 6.35 8.00 B. Change in Inventory of workshop 1.65 (1.19) Press Opening Job i)Finished Goods - - ii)Work in Progress - - - - Less: Press Closing Job i)Finished Goods - - ii)Work in Progress - - - - C. Change in Inventory of Closing Stock of Press Job made finished goods and WIP - - Change in Inventory of Stock in Trade (A+B+C) (89.31) (128.96) Deccretion / (Accretion)}

123 ANNUAL REPORT 2012-13 NOTE - 24

EMPLOYEE BENEFIT EXPENSES For the Year For the Year (Refer additional Note No- 15 ) 31-03-13 31-03-12

Salary, Wages, Allowances & Benefits 3,018.11 2,641.32 Exgratia 164.90 133.56 PRP 75.30 60.89 Contribution to P.F. & Other Funds 338.26 268.18 Gratuity 209.47 629.01 Leave Encashment 108.30 130.85 VRS - 0.35 Workman Compensation 1.84 1.41 Employee Welfare Expenses: Medical Expenses 51.99 43.92 Grants to Schools & Institutions 8.51 7.93 Sports & Recreation 1.97 1.57 Canteen & Creche 0.54 0.52 Power - Township 139.55 127.47 Hire charges of Bus, Ambulance etc. 10.69 5.93 Other Employee Benefits 167.00 160.10 TOTAL 4,296.43 4,213.01

a) In terms CIL’s office Memorandum bearing no. CIL/C-5A(vi)/005/35/1210 dated 2/7th May 2009 under para 13 against superannuation benefit, it was stated that the said benefit will be limited to 30% of basic pay + DA. Out of which 4% of fund was allocated against Post Superannuation Medical Benefit.Accordingly w.e.f.1.1.2007 a provision/charge equivalent to 4% of basic plus DA for all executives (both Board level & below Board level) on it’s roll, till their superannuation be made by CIL & its subsidiaries.In view of the above, as per directive from CIL vide letter no. CIL/C-5A(PC)/pay revision/171, dated 10th October 2012, an amount equivalent to 4% of Basic + DA of executives amounting to Rs.32.14 Crores is provided in the books of accounts for the period 1.1.2007 to 31.3.2012 and an amount of Rs.10.23 Crores is provided for the current year. Further an amount of Rs.14.00 crores is provided, being the differential amount between Actuarial valuation (Rs.56.37 crores) and actual charged (Rs.42.37 crores) to Statement of Profit & Loss.

b) As per instructions from CIL, provision has been created for Pension payable to employees @ 3% of pay (Basic+DA) and @ 6.84% of pay for other Superannuation Benefits amounting to Rs.23.03 Crores (P.Y. Rs.20.58 crores).

c) The provision for Performance Linked Reward Scheme / Productivity Linked Bonus Scheme for non-executives for the year 2011-12 was made @ Rs.20000/- per employees. The said amount has increased to Rs.26500/-. As a result an additional amount Rs.25.02 crores has been debited to Statement of Profit & Loss. Provision for the current year @ Rs.26500/- per employee amounting to Rs.139.88 Crores has been made.

d) As per instructions from CIL, the provision for Performance Related Pay for Executives has been made at Rs.75.30 Crores (previous year Rs.60.89 Crores)

124 WESTERN COALFIELDS LIMITED NOTES TO STATEMENT OF PROFIT & LOSS (CONTD.)

NOTE - 25

WELFARE EXPENSES For the Year For the Year 31-03-13 31-03-12

Medical Expenses for retired employees 45.95 4.19 CSR Expenses 20.95 7.65 Environmental Expenses 12.99 14.37 Tree Plantation 2.29 5.99 Sustainable Development 0.36 - Other Welfare Expenses - -

TOTAL 82.54 32.20

Medical expenses for retired employees includes ` 44.08 crores towards incremental actuarial liability.

NOTE - 26

REPAIRS For the Year For the Year 31-03-13 31-03-12

Building 15.34 17.80

Plant & Machinery 41.66 40.35

Others 11.05 9.30

TOTAL 68.05 67.45

NOTE - 27

CONTRACTUAL EXPENSES For the Year For the Year 31-03-13 31-03-12

Transportation Charges : - Sand 13.38 11.88 - Coal & Coke 138.05 135.64 - Stores & Others etc. 0.58 0.43

Wagon Loading 9.09 6.23 Hiring of P&M 306.36 284.98 Other Contractual Work 70.44 58.49 TOTAL 537.90 497.65

125 ANNUAL REPORT 2012-13 NOTES TO STATEMENT OF PROFIT & LOSS (CONTD.) NOTE - 28

FINANCE COSTS For the Year For the Year 31-03-13 31-03-12 INTEREST EXPENSE

Deferred Payments -- Bank Overdraft / Cash Credit - - Interest on IBRD & JBIC Loan 1.52 1.51 CIL Fund Loan Interest - - Interest to Subsidiaries - - Others - -

TOTAL(A) 1.52 1.51

OTHER BORROWING COSTS

Guarantee Fees on (IBRD & JBIC) Loan 1.35 1.69 Other Expenses / Bank Charges - -

TOTAL(B) 1.35 1.69

TOTAL (A+B) 2.87 3.20

NOTE - 29 PROVISIONS For the Year For the Year 31-03-13 31-03-12 (A) PROVISION MADE FOR Doubtful debts -- Doubtful advances & Claims 0.08 0.86 Foreign exchange Transaction - - Stores & Spares 0.12 - Reclamation of Land/Mine Closure Expenses 77.69 223.66 Surveyed off Fixed Assets/Capital WIP 0.06 0.11 Others - - TOTAL (A) 77.95 224.63 (B) PROVISION WRITTEN BACK Doubtful debts 38.69 3.09 Doubtful advances & Claims - - Foreign exchange Transaction - - Stores & Spares - 0.79 Reclamation of Land/Mine Closure Expenses - - Surveyed off Fixed Assets/Capital WIP 5.11 - Others - 0.13 TOTAL (B) 43.80 4.01

TOTAL ( A-B ) 34.15 220.62

NOTE - 30

WRITE OFF For the Year For the Year 31-03-13 31-03-12

Doubtful debts - - Doubtful advances - - Others - -

TOTAL - -

126 WESTERN COALFIELDS LIMITED

NOTES TO STATEMENT OF PROFIT & LOSS (CONTD.) NOTE - 31

OTHER EXPENSES For the Year Ended on 31/3/2013 31/3/2012 Travelling expenses

- Domestic 20.73 19.36 - Foreign 0.07 0.27 Training Expenses 3.06 3.03 Telephone & Postage 2.23 2.30 Advertisement & Publicity 4.23 3.48 Freight Charges 0.29 0.34 Demurrage 2.93 3.37 Donation/Subscription 0.41 0.43 Security Expenses 26.25 24.17 Service Charges of CIL 18.80 23.78 Hire Charges 24.12 22.08 CMPDI Expenses 5.16 3.71 Legal Expenses 1.30 1.29 Bank Charges 0.18 0.18 Guest House Expenses - - Consultancy Charges 8.77 11.80 Under Loading Charges 18.58 9.25 Loss on Sale/Discard/Surveyed of Assets 0.09 0.03 Auditor’s Remuneration & Expenses - For Audit Fees 0.15 0.12 - For Taxation Matters - - For Company Law Matters - - For Management Services - - For Other Services 0.29 0.21 - For Reimbursement of Expenses 0.10 0.03 Internal Audit expenses etc 1.19 0.60 Rehabilitation Charges 24.93 25.18 Royalty & Cess 8.46 8.97 Central Excise Duty 24.13 15.94 Rent 3.14 3.23 Rates & Taxes 14.91 7.24 Insurance 0.95 0.61 Loss on Exchange Rate Variance - 2.10 Lease Rent - - Rescue/Safety Expenses 1.11 0.91 Dead Rent/Surface Rent (0.85) 1.34 Siding Maintenance Charges 2.57 1.43 Land/Crops Compensation 2.48 1.79 Misceleneous Expenses 32.18 38.24

TOTAL 252.94 236.81

127 ANNUAL REPORT 2012-13

NOTES TO STATEMENT OF PROFIT & LOSS (CONTD.)

NOTE - 32

PRIOR PERIOD ADJUSTMENT For the Year For the Year 31-03-13 31-03-12 (A) Expenditure

Sale of Coal & Coke - - Other Income - - Consumption of Stores & Spares - 0.22 Employees Remuneration & Benefits 1.52 - Power & Fuel - - Welfare Expenses - - Repairs 0.18 Contractual Expenses - - Other Expenditure 0.24 - Interest and other financial charges - - Depreciation 10.69 0.13

TOTAL (A) 12.45 0.53

(B) Income

Sale of Coal & Coke - - Other Income 0.89 - Consumption of Stores & Spares - - Employees Remuneration & Benefits 7.53 Power & Fuel - - Welfare Expenses - - Repairs - - Contractual Expenses - - Other Expenditure 1.45 Interest and other financial charges - 0.32 Depreciation - -

TOTAL (B) 0.89 9.30

TOTAL ( A-B ) 11.56 (8.77)

128 WESTERN COALFIELDS LIMITED WESTERN COALFIELDS LIMITED

NOTE - 33

A. SIGNIFICANT ACCOUNTING POLICIES

1.0 Accounting Convention:

Financial statements are prepared under the historical cost convention and on accrual basis of accounting and going concern concept, in accordance with the generally accepted accounting principles in India and the relevant provisions of the Companies Act, 1956 including accounting standards notified there under , except otherwise stated.

2.0 Subsidies / Grants from Government:

2.1 Subsidies / Grants on capital account are deducted from the cost of respective assets to which they relate. The unspent amount at the Balance Sheet date, if any, is shown as current liabilities.

2.2 Subsidies / Grants on revenue account are credited to Statement of Profit & Loss under the head- Other Income and the relevant expenses are debited to the respective heads. The unspent amount at the Balance Sheet date, if any, is shown as current liabilities.

3.0 Fixed Assets:

3.1 Land:

Value of land includes cost of acquisition and cash rehabilitation expenses and resettlement cost incurred for concerned displaced persons. Other expenditure incurred on acquisition of land viz. compensation in lieu of employment etc. are, however, treated as revenue expenditure.

3.2 Plant & Machinery:

Plant & Machinery includes cost and expenses incurred for erection / installation and other attributable costs of bringing those assets to working conditions for their intended use.

3.3 Railway Siding:

Pending commissioning, payments made to the railway authorities for construction of railway sidings are shown in Note 12 – “Long Term Loans & Advances” under Advances for Capital.

3.4 Development:

Expenses net of income of the projects / mines under development are booked to Development Account and grouped under Capital Work-in-Progress till the 129 ANNUAL REPORT 2012-13 projects mines are brought to revenue account. Except otherwise specifically stated in the project report to determine the commercial readiness of the project to yield production on a sustainable basis and completion of required development activity during the period of constructions, projects and mines under development are brought to revenue considering the following criteria:

(a) From beginning of the financial year immediately after the year in which the project achieves physical output of 25% of rated capacity as per approved project report, or

(b) 2 years of touching of coal, or

(c) From the beginning of the financial year in which the value of production is more than total expenses,

- Whichever event occurs first.

4.0 Prospecting & Boring and other Development Expenditure:

The cost of exploration and other development expenditure incurred in one “Five year” plan period will be kept in Capital work-in-progress till the end of subsequent two “Five year” plan periods for formulation of projects, before it is written-off, except in the case of Blocks identified for sale or proposed to be sold to outside agency which will be kept in inventory till finalisation of sale.

5.0 Investments:

Current investments are valued at the lower of cost and fair value as at the Balance Sheet date.Investments in mutual fund are considered as current investments. Non- Current investments are valued at cost.

6.0 Inventories:

6.1 Book stock of coal / coke is considered in the accounts where the variance between book stock and measured stock is upto +/- 5% and in cases where the variance is beyond +/- 5% the measured stock is considered. Such stock are valued at net realisable value or cost whichever is lower.

6.1.1 Coal & coke fines are valued at lower of cost or net realisable value.

6.1.2 Slurry (coking/semi-coking), middling of washeries and by products are valued at net realisable value.

6.2 Stores & Spares:

6.2.1 The closing stock of stores and spare parts has been considered in the accounts as per balances appearing in priced stores ledger of the Central Stores and as per physically verified stores lying at the collieries/units. 130 WESTERN COALFIELDS LIMITED

6.2.2 Stock of stores & spare parts at central & area stores are valued at cost calculated on the basis of weighted average method. The year-end inventory of stores & spare parts lying at collieries / sub-stores / drilling camps/ consuming centres, initially charged off, are valued at issue price of Area Stores, Cost / estimated cost. Workshop jobs including work-in- progress are valued at cost.

6.2.3 Stores & spare parts include loose tools.

6.2.4 Provisions are made at the rate of 100% for unserviceable, damaged and obsolete stores and at the rate of 50% for stores & spares not moved for 5 years.

6.3 Stock of stationery (other than lying at printing press), bricks, sand, medicine (except at Central Hospitals), aircraft spares and scraps are not considered in inventory.

7.0 Depreciation:

7.1. Depreciation on fixed assets is provided on straight line method at the rates and manner specified in Schedule XIV of the Companies Act, 1956 (as amended) except for telecommunication equipment and photocopying machine, which are charged at higher rates on the basis of their technically estimated life, as follows :- Telecommunication equipment : - 15.83% p.a. and 10.55% p.a. Photocopying machine : - 10.55% p.a.

Depreciation on Earth Science Museum and high volume samplers and respiratory dust are charged @5.15% and 33.33% respectively on the basis of their technically estimated life.

Further, depreciation on certain equipments /HEMM is charged over the technically estimated life at higher rates viz. 11.88%; 13.57% and 15.83% as applicable.

Depreciation on SDL and LHD (equipments) are charged @19% p.a. and @15.83% p.a. respectively on the basis of technical estimation.

Depreciation on the assets added / disposed off during the year is provided on pro-rata basis with reference to the month of addition / disposal, except on those assets attracting 100% depreciation p.a. (SLM basis), which are fully depreciated in the year of their addition. Assets attracting 100% depreciation are taken out from the Assets after expiry of two years following the year in which these are fully depreciated.

7.2 Value of land acquired under Coal Bearing Area (Acquisition & Development) Act, 1957 is amortised on the basis of the balance life of the project. Value of

131 ANNUAL REPORT 2012-13 leasehold land is amortised on the basis of lease period or balance life of the project whichever is earlier.

7.3 Prospecting, Boring and Development expenditure are amortised from the year when the mine is brought under revenue in 20 years or working life of the project whichever is less.

8.0 Impairment of Asset:

Impairment loss is recognised wherever the carrying amount of an asset is in excess of its recoverable amount and the same is recognized as an expense in the statement of profit and loss and carrying amount of the asset is reduced to its recoverable amount.

Reversal of impairment losses recognised in prior years is recorded when there is an indication that the impairment losses recognised for the asset no longer exist or have decreased.

9.0 Foreign Currency Transactions:

9.1 Balance of foreign currency transactions is translated at the rates prevailing on the Balance Sheet date and the corresponding effect is given in the respective accounts. Transactions completed during the period are adjusted on actual basis.

9.2 Transactions covered by cross currency swap options contracts to be settled on future dates are recognised at the rates prevailing on the Balance Sheet date, of the underlying foreign currency. Effects arising out of such contracts are taken into accounts on the date of settlement.

10.0 Retirement Benefits / Other Employee Benefits:

a) Define contribution Plan

The company has defined contribution plans for payment of Provident Fund and Pension Fund benefits to its employees. Such Provident Fund and Pension Fund are maintained and operated by the Coal Mines Provident Fund (CMPF) Authorities. As per the rules of these schemes, the company is required to contribute a specified percentage of pay roll cost to the CMPF Authorities to fund the benefits.

b) Defined benefits plans:

The liability on the Balance Sheet date on account of gratuity and leave encashment is provided for on actuarial valuation basis by applying projected unit credit method. Further the company has created a Trust with respect to establishment of Funded Group Gratuity (cash accumulation) Scheme through Life Insurance Corporation of India. Contribution is made to the said fund based on the actuarial valuation.

132 WESTERN COALFIELDS LIMITED

c) Other employee benefits:

Further liability on the Balance Sheet date of certain other employee benefits viz. benefits on account of LTA/ LTC; Life Cover Scheme, Group Personal Accident Insurance Scheme, Settlement Allowance, Retired Executive Medical Benefit Scheme and compensation to dependants of deceased in mines accidents etc. are also valued on actuarial basis by applying projected unit credit method.

11.0 Recognition of Income and Expenditure:

Income and Expenditure are generally recognised on accrual basis and provision is made for all known liabilities.

11.1 Sales:

a) Revenue in respect of sales is recognised when the property in the goods with the risks and rewards of ownership are transferred to the buyer.

b) Sale of coal are net of statutory dues and accepted deduction made by customer on account of quality of coal.

c) The revenue recognition is done where there is reasonable certainty of collection. On the other hand, revenue recognition is postponed in case of uncertainty as assessed by management.

11.2 Dividend:

Dividend income is recognised when right to receive is established.

12.0 Borrowing Costs:

Borrowing Cost directly attributable to the acquisition or construction of qualifying assets is capitalised. Other borrowing costs are recognised as expenses in the period in which they are incurred.

13.0 Taxation:

Provision of current income tax is made in accordance with the Income Tax Act., 1961. Deferred tax liabilities and assets are recognised at substantively enacted tax rates, subject to the consideration of prudence, on timing difference, being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent period.

14.0 Provision:

A provision is recognised when an enterprise has a present obligation as a result of past event; it is probable that an outflow of resources embodying economic benefit will 133 ANNUAL REPORT 2012-13 be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to present value and are determined based on best estimate required to settle the obligation at the balance sheet date.

15.0 Contingent Liability:

Contingent liability is a possible obligation that arises from past events and the existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the enterprise or a present obligation that arises from past events but is not recognised because it is not probable that an outflow of resources embodying economic benefit will be required to settle the obligations or reliable estimate of the amount of the obligations can not be made.

Contingent liabilities are not provided for in the accounts and are disclosed by way of Notes.

16.0 Overburden Removal (OBR) Expenses :

In open cast mines with rated capacity of one million tonnes per annum and above, cost of OBR is charged on technically evaluated average ratio (COAL:OB) at each mine with due adjustment for advance stripping and ratio-variance account after the mines are brought to revenue. Net of balances of advance stripping and ratio variance at the Balance Sheet date is shown as cost of removal of OB under the head Non - Current Assets/ Long Term Provisions as the case may be.

The reported quantity of overburden as per record is considered in calculating the ratio for OBR accounting where the variance between reported quantity and measured quantity is within the lower of the two alternative permissible limits, as detailed hereunder:-

Annual Quantum Permissible limits of variance of OBR Of the Mine I II

% Quantum (in Mill.Cu. Mtr.)

Less than 1 Mill. CUM +/- 5% 0.03 Between 1 and 5 Mill. CUM +/- 3% 0.20 More than 5 Mill. CUM +/- 2% Nil

However, where the variance is beyond the permissible limits as above, the measured quantity is considered.

17.0 Prior Period Adjustments and Prepaid Expenses: Income / expenditures relating to prior period and prepaid expenses, which do not exceed ` 0.10 Crore in each case, are treated as income / expenditure of current year.

134 WESTERN COALFIELDS LIMITED WESTERN COALFIELDS LIMITED NOTE-34 ADDITIONAL NOTES ON ACCOUNTS

1. BACKGROUND: Western Coalfields Limited came into existence after Nationalization of Coal Mines and was incorporated on 29th October, 1975 upon take-over of assets and liabilities as at 1st November, 1975 vested with the Western Division of Coal Mines Authority Limited. The Company is 100% subsidiary of Coal India Ltd.

2. LONG TERM BORROWING:(Refer Note No-3)

SECURED Nil. However, a charge has been created for ` 165 crores on current assets for securing working capital facility from CIL’s Consortium Banks as per modified Joint Deed of Hypothecation dated 01.09.2008. This loan has, however, not been availed so far.

UNSECURED LOANS : (` Crores) NAME OF BALANCE EXCHANGE REPAYMENT Balance Repayable Balance FINANCIAL AS ON FLUCTUATION DURING as on within one year (Shown in INSTITUTION 1.4.2012 DURING THE YEAR 31.03.13 (Shown in Note -3) (Note 3+8) THE YEAR Note - 8) (1) (2) (3) (4) (5) (6) (7)

International Bank 47.36 2.91 7.09 43.18 7.64 35.54 for Reconstruction and Development (IBRD)

Japan Bank of 54.61 -3.25 9.62 41.74 8.97 32.77 International Co- operation (JBIC) TOTAL 101.97 -0.34 16.71 84.92 16.61 68.31

3. FIXED ASSETS: (Refer Note No-10A)

a) since physical possession of land is obtained only after making payment to the land owners, Land acquired under Land Acquisition Act, CBA (A&D) Act, and on private negotiations, amounting to ` 14.06 Crores (Previous year ` 33.84 Crores) on the basis of payments/compensation made as per approval of Competent Authorities pending final settlement are, included in Fixed Assets.

b) DFD Plant and CBE Plant continue to remain inoperative during the year. CBE Plant stands closed since 2003 and DFD Plant since 1994. Leasehold Land of DFD Plant is being amortized over the lease period of 30 years. Plant & Machinery of

CBE Plant, excepting Hospital Equipments, has been disposed off by auction through MSTC. All the other assets of both these plants are carried in the books at a residual value of 5% of their cost.

c) Physical verification of Fixed Assets as on 31.03.2003 was done in all the Areas 135 ANNUAL REPORT 2012-13 by firms of Chartered/Cost Accountants and their reports were received. An outside agency has done the reconciliation for inter-area and intra-area transfers and their report has been received during 2006-07. Some intra-area and inter- area discrepancies were accounted in cases where items were physically identified. The balance inter-area adjustment is under process. However, physical verification of P&M and vehicles valued at ` 1 lakh and above is done by local Area management every year.

4. CAPITAL WORK IN PROGRESS (CWIP) :(Refer Note No-10B)

a) CWIP pending since more than 3 years is `17.52 Crores (Previous year `14.63 Crores).

b) Provision for Non-Moving Capital Stores & Spares, not moved for 5 years is made, as per company’s accounting policy, @ of 50% and provision is made @ 100% for unserviceable, damaged and obsolete stores. During the year there has been a withdrawal of provision to the tune of ` 0.02 Crores (previous year ` 0.13 Crores). Thus the year-end closing provision stands at ` 0.07Crores (Previous year ‘ 0.09 Crores).

c) Cost of Asset as well as provision for depreciation on Surveyed off Assets are taken out of the Gross Block and provision for depreciation respectively and the residual value at 5% of Book Value are shown as a separate line item as Surveyed off assets under Capital Work-in-Progress (Note 10B). In case of premature surveyed off assets the difference between the WDV and residual value of 5% is charged to Statement of Profit and Loss, as loss on surveyed off assets.

Surveyed off assets lying in Stores, amounting to ` 22.29Crores (previous year ` 20.66 Crores) valued at 5% residual value, have not been physically verified. Since in the opinion of management, expected realisable value is more than the book value, the existing provision of `1.16 Crores is maintained and no further provision has been made.

5. LONG TERM LOANS AND ADVANCES (Ref. Note no. 12)

The advances unadjusted since long to suppliers/contractors are ` 2.21 Crores (P.Y. 2.21Crores) ref. Note no.18 and for capital works/mobilisation advances are ` 1.58 crores (Previous year ` 1.58 Crores), ref. Note no. 12. Necessary Provisions are appearing in the books of accounts for the same.

6. OTHERS

a) The government of Madhya Pradesh by Gazette Notification dated 30/09/2005 has imposed a new tax named “Madhya Pradesh Gramin Avsanrachana Tatha Sadak Vikas Adhiniyam, 2005 (MPGATSVA 2005), with effect from 30/09/2005. This Adhiniyam provides for charging of tax @ 5% on annual value w.e.f. 30.09.2005. Some consumers as well as WCL moved the Hon’ble High Court of Madhya Pradesh, Jabalpur and obtained interim relief. As per the interim order dated 15/02/2006 the Hon’ble High Court, Jabalpur had directed the Company not to deposit this tax to the State Government but to keep in a fixed deposit. The matter was later dismissed by the Jabalpur High Court in favour of

136 WESTERN COALFIELDS LIMITED MP Government. WCL has filed an SLP before the Hon’ble Supreme Court and the matter is still sub judice. The Hon’ble Supreme Court of India vide its order dated 02- 08-2010 directed the Company to file its returns for all the years under protest as per MPGATSVA (2005). The Hon’ble Supreme Court directed the assessing officer under the Act to complete the assessments of returns filed by the Company. In compliance with the Supreme Court directions the assessing officers raised total demand of ` 321.00 Crores against the Company upto 31/03/2013. As per legal advice full amount of demand amounting to ` 321.00 crores has been paid up to 31.03.2013 and has preferred Appeals against the assessment orders with Competent Appellate Authority, Jabalpur and Bhopal.

An amount of ` 357.08 Crores. has been received from customers on this account upto 31/03/2013 . Term Deposit, against this receipt upto 31st March 2013 (after adjusting ` 321.00 Crores paid for appeal), for ` 36.08 Crores has been made upto 31st March 2013. The matter is now pending before the Hon’ble Supreme Court and Appellate Authority Jabalpur . The interest on fixed deposits made on this account is treated as liability. b) Pending decision of Hon’ble Supreme Court of India ` 4.52 Crores being interest on delayed payments on account of enhancement of rate of royalty on coal, collected from customers in the earlier years, continued to appear in account ‘Advance & Deposits from Customers under the head ‘Current Liabilities (Previous year `4.52 Crores). c) By virtue of enactment of Cess and Other Taxes on Mineral Validation Act, 1992, the Company raised supplementary bills on customers’ upto 4.4.1991. An amount of ` 2.96 Crores (Previous Year ` 2.96 Crores) has been shown as liability for Cess on Royalty under the head Current Liabilities & Provisions. In view of the judgment of Hon’ble High Court, Patna, Ranchi Bench in writ petition no.CWJC/1280 of 1992, the said Cess is not payable. However a Special Leave Petition is pending in Supreme Court against it. d) As per interim orders dated 20.06.2005 and 29.06.2005 of Nagpur Bench of Hon’ble Bombay High Court, WCL has made Fixed Deposit in Nationalised Banks for the amount of difference between weighted average of e-auction price and notified price for coal supplied to the petitioners during the period 01.07.2005 to 31.12.2005. On 12.12.2005, Hon’ble Supreme Court directed to supply coal to petitioners on payment of notified price plus 33.33% of enhanced price and by furnishing security for the balance amount of 66.67% of enhanced price with an undertaking to the Hon’ble Supreme Court that the said part will also be paid within 6 weeks of the decision of the apex court in the Writ Petitions in case the Writ Petitions are decided against the Petitioners. However, the petitioners voluntarily deposited with WCL the full value of coal, i.e., notified price plus full difference between weighted average price and notified price along with a letter of undertaking. The total amount so deposited by the Customers till 31.03.2007 was ` 39.78 crores, which was shown under “Advances and Deposits from Customers”. An equivalent amount of ` 39.78 Crores was deposited with Nationalised Banks in Fixed Deposit a/c by the Company. The interest earned on the Fixed Deposits was treated as a current liability to be adjusted against the actual interest as and when paid to the customers. As per the directive of Supreme Court an amount of ` 4.04 crores was to be deposited with the Court and the Company has paid this amount to Coal India Ltd. for depositing with the Court. This amount is shown as advance deposit inour books. 137 ANNUAL REPORT 2012-13 As per the Supreme Court order dated 9th May, 2008, refund claims of the customers are to be verified by a Committee at WCL HQ level and the money is to be refunded to the claimants directly. Accordingly an amount of ` 22.97 crores together with interest of ` 4.11 crores has been refunded to the claimants. The total refunds and interest paid till 31.3.2013 (including the above refund and interest) are ` 39.29 crores and ` 7.60 crores respectively.

Considering the refunds made to the customers and the amount paid to CIL, there is no Fixed Deposit on this account as on 31st March 2013

e) The Company had approached MSRDC to construct a bridge over near Nakoda in Wani Area to reduce the lead for coal transportation between the mines of Wani Area and Railway Siding at Wani. An agreement was entered into with MSRDC on 23.12.1997 for construction of the bridge and a loan of ` 2.35 Crores was agreed to be given by WCL to MSRDC, against which a loan of `1.13 Crores, carrying a simple interest @ 9% p.a. was given to MSRDC in 1997-98. The bridge is currently being used to transport coal across Wardha River. The loan is to be repaid by MSRDC after repayment of its other loans. However, till date no amount is repaid by MSRDC. The remaining amount of loan of `1.22 Crores has not been released as WCL wants to establish a time bound schedule for repayment of the loan and interest thereon. Negotiations have been initiated with MSRDC for this purpose.

Since the principal amount of advance is doubtful, necessary provision for `2.14 Crores (including interest accounted for as income up to 31.3.2010 of `1.01Crores) exists as on 31.03.2013. In view of this, since the year 2010-11, the interest amounting to ` 0.10 Crores per year on this advance has not been recognised as income and also no further provision was necessary during the year.

f) Report of the Tripartite Committee, comprising of Subsidiary/Mine Management, CMPDIL and Explosive Manufacturers, set up to finalise the benchmark powder factor of each mine for the period 2005-06 and April’06 to July’06, is still awaited. It has been decided by CIL that Subsidiary Management shall review the impact of considering the powder factor of 2003-04 and 2004-05, whichever is higher vis-à-vis actual achieved during 2005-06 and submit the Company’s view through CMD to CIL. This review is yet to be finalized. As such no recovery has been made from bills for supply of explosives during that period. Pending finalization of the issue, the Bank Guarantees submitted by the suppliers is not released by CIL. Subsequent supplies are covered by new rate contracts which specify that recovery on account of powder factor is to be adjusted after final powder factor reports are received from the Areas on quarterly basis. Pending receipt of final reports for quarter ending March 2013 the deduction of ` 2.23 Crores during current year is appearing as a liability (P.Y. 1.01 Crores). Accordingly, the expenditure on account of explosive consumption has not been adjusted since the amount is not ascertainable.

g) During the year 1993-94 a suspected fraud case was detected at Nandgaon Incline of Chandrapur Area, quantified by the Internal Audit Department to the tune of ` 0.12 Crores and the same is under CBI investigation. An amount of ` 0.02 Crores has been recovered from the party and credited to income. For the balance of ` 0.10 Crores the recoverable figure is matched with a similar provision.

138 WESTERN COALFIELDS LIMITED h) During the year 1995-96, a theft case at CWS Stores was suspected and police complaint was lodged. A department enquiry is also under progress. During the course of such enquiry many kardex were seized/taken out of investigation. Pending final outcome of the enquiry, the workshop continues to maintain a provision of ` 0.14 Crores. i) In case of land in Chandrapur/Ballarpur/Wani/Nagpur Areas , a common judgement was pronounced on 05.01.2009 by Hon’ble Bombay High Court in Non-Agricultural assessment cases. Accordingly, there is a contingent demand of land revenue, ZP/GP Taxes and additional taxes for the period from 1980 to 2009 to the tune of ` 62.04 crores. However, the Company has filed a Leave Petition before the Divisional Bench of Bombay High Court, on behalf of the Areas on the ground that such taxes are not payable on lands acquired under Coal Bearing Area Act. j) The Company had preferred appeals in cases of Income Tax and Sales Tax assessments completed. Pending decision, no provision has been considered necessary and the amount paid/recoverable is being continued to be kept under Loans and Advances/ Claims Receivables. k) The Rate Contracts (RC) for supply of explosives by different suppliers expired on 28th February, 2006 and pending renewal of the RCs the suppliers were asked to continue the supplies at the same rates as prevalent in the expired RC, subject to the condition that such extended period supplies would be governed by the rates as fixed in the new RC. This continued upto 28th July, 2006.

The new RC was finalised and came into effect from 29th July, 2006 with a reduced price of the explosives. As a result, the supplies during the extended period of the earlier RC was found to be supplied at a higher price than actually applicable. Hence recovery of excess amount paid was made from the suppliers.

Against the above recoveries, some of the suppliers, (six parties) filed a Civil Suit before Hon’ble Calcutta High Court. The Hon’ble High Court of Calcutta granted stay in December 2006 for recovery and directed CIL to stop such recovery of excess payments. Accordingly CIL directed WCL to refund the amount deducted from the six suppliers. The Hon’ble High Court of Calcutta asked these suppliers to deposit the disputed amount in question in an account with the Joint Receiver appointed by the Hon’ble High Court. As the suppliers having failed to do so, the Hon’ble Calcutta High Court in July 2008 vacated the stay of recovery of excess payment made to such suppliers. Hence, CIL directed WCL to restart the recovery of such amount from the running bills of the suppliers as per directives of Court, an amount of ` 2.58 crores is recovered and kept in the books under a separate account (Liability Code 480199) since 2008-09, pending final disposal of the case by the Court.

l) During the year the life of Photocopier Machine has been considered 9 years as against 20 years as advised by CIL vide letter no.CIL/C-3(A)/31073/1128, dated 21.03.2013. Due to this change an additional amount of `‘0.07 crores has been charged to the Statement of Profit and Loss during the year.

139 ANNUAL REPORT 2012-13 m) Prospecting Boring and Development expenses amounting to ` 183.51 crores along with provision for depreciation have been taken out from accounts during the year after expiery of two years, following the year in which these are fully amortised.

n) As on 31st March 2013, a difference in book stock and measured stock has been reported for Shivdpuri Mines which is beyond the permissible norms of +/-5%. The details of the variation is as below:

Name of Mine Book Stock(M.T.) Measured Stock (M.T) Difference (M.T.) Percentage Financial Impact ( `in Crores) Shivpuri OC 53,380.340 35,777.455 -17,602.885 -32.98% 2.81 As per Accounting policy of the Company the measured stock of Shivpuri OC is considered for valuation of closing stock of Coal as on 31.3.2013.

o) The Board of Directors of WCL in it’s 245th meeting held on 2 0th March 2013 approved the revision of Standard Ratio of following Opencast Mines. Due to this revision the profit of the Company has increased by ` 337.54 Crores. The minewise details are as under: S.no. Name of Mines Old Standard Revised Standar Increase in Profit (Coal:OB) Ratio (Coal:OB )Ratio ( ` In Crores)

1 Sasti OC 4.68 5.03 (-) 15.92 2 Gauri OC 4.60 2.46 58.92 3 Durgapur OC 6.51 4.50 171.49 4 Padmapur OC 3.73 3.01 23.66 5 Mungoli OC 4.01 0.35 179.11 6 Ghugus OC 3.54 2.00 16.46 7 Naigaon OC 5.56 6.48 (-) 16.07 8 Neeljai OC 3.18 3.83 (-) 35.11 9 Ukni OC 2.82 4.57 (-) 68.85 10 Kolarpimpri OC 7.15 7.56 (-) 2.47 11 Gondegaon OC 5.26 4.56 26.09 TOTAL 337.31

p) Impact of e-auction for the year 2012-13 and price revision w.e.f 21.06.2012 are as follows: ` in Crores Impact of Price Revision E-auction w.e.f 21.06.2012

Net Sales 446.43 256.11 Taxes / levies 125.29 69.51 Gross Sales 571.72 325.62

140 WESTERN COALFIELDS LIMITED

q) The position of major provisions as on 31st March 2013 are given below: (` Crores)

Sl. no. Provisions Opening Addition Payment/Wr Closing balance as during ite back balance as on the /adj. during on 01.04.12 period the period 31.03.13 ended ended 31.03.13 31.03.13 i For proposed Dividend 184.04 194.60 184.04 194.60 ii For Corporate dividend tax 29.86 33.07 29.86 33.07 iii For Gratuity (as per actuarial 484.78 208.69 484.78 208.69 value) iv For Leave encashment 345.54 55.84 - 401.38 v For post retirement medical 7.35 100.45 - 107.80 benefits vi For other Employee benefits 212.82 31.69 - 244.51 vii For Income Tax 1101.03 247.05 427.74 920.34 viii OBR Adjustment Account 1986.37 279.96 - 2266.33 ix Provision for Mine closure 486.76 244.94 167.25 564.45 x Bad & Doubtful Debts 119.08 0.34 39.03 80.39 xi Provision for doubtful advances 12.41 0.08 0.01 12.48 and claims xii CWIP 13.93 0.07 5.11 8.89 xiii Other Provisions- Impairment 104.01 12.62 14.86 101.77 of Fixed Assets

7. COMPLIANCE WITH MANDATORY ACCOUNTING STANDARDS: i. Prior period adjustments (AS-5) :

The Income/expenditures pertaining to previous years which do not exceed `0.10 Crores in each case are treated as income /expenditure of current year. The impact of this on the profit of the Company for the year is reduction in profit to the tune of ` 0.02 Crores (P.Y. ` 0.12 Crores for P.P Income/expenditure less than ` 0.05 crores in each case). ii. Employee Benefits under AS-15 :

The Company has adopted AS 15 (Revised) - Employee benefits with effect from 1st April, 2007. Pursuant to the same, the Company has adjusted the additional liability arising on adoption of AS-15 (Revised), net of related deferred tax assets arising out of such adoption as on 1st April, 2007 against the General Reserves.

141

WESTERN COALFIELDS LIMITED ` 0.19 crores in the name of Sri B.K.Saxena, Director(Tech.), is transferred to CIL on his transfer to CIL during the year. However, the gross salary does not include the provisions for contribution to Gratuity, Leave encashment and other employee benefits, which are made on the basis of actuarial valuation, done on an overall Company basis. 3. In view of the exemption granted to State controlled enterprises as regards related party relationship with other State controlled enterprises and there being no transaction with other related enterprises & parties, no disclosure under the Accounting Standard (AS-18) on Related Party Disclosures is made, being not applicable for the Company. v. Disclosure of Earning per Share as required under AS-20 : (` Crores)

Particulars Current Year Previous Year i) Profit After Tax ( `( `Crores) Crores) 324.30 306.71 Less : Preference Dividend 0.00 0.00 ii) Profit attributable to Ordinary Shareholders (( `` Crores)Crores) 324.30 306.71 iii) No. of Ordinary Shares (in Nos.) for basic and diluted 29,71,000 29,71,000 EPS iv) Nominal value of Ordinary Shares ` 1000.00 ` 1000.00 v) Basic & Diluted Earning per Ordinary Share `1091.55 ` 1032.35

vi. Accounting for Taxes on Income under AS-22 The deferred tax asset as required under AS-22 comprises of the following: (` Crores) DEFERRED TAX ASSETS/LIABILITY Deferred Tax Deferred Tax Asset/Liability Asset/Liability as on 31.03.2013 as on 31.03.2012 A Deferred Tax Liabilities - Depreciation 60.86 56.45

B Deferred Tax Assets VRS 0.41 0.65 Statutory Dues 2.55 2.34 Provision for Doubtful Debts 27.32 38.63 Provision for Doubtful Advances 2.18 2.09 Provision for Leave Encashment 136.43 112.11 Provision for Obsolescence/ workshop WIP 7.80 4.55 Provision for Claims 2.06 1.94 Provision for Shortage of Stores 0.52 0.49 Land Reclamation Provision 191.86 157.93 Disallowance u/s 40(a) of I.Tax Act 6.33 4.23 PLRS / PLBS & PRP 132.79 93.65 MP Gramin Tax 9.30 22.11 Actuarial provision for other employee benefits 119.75 71.45 TOTAL 639.30 512.17 Deferred Tax Assets (net) (B -A) 578.44 455.72

145 ANNUAL REPORT 2012-13

vii. Consequent to mandatory provisions of AS-24 relating to Discontinuing Operations w.e.f. 01.04.2004, the following disclosures are made: a) Commercial Blast Explosive (CBE) Plant, Bhandara : The Plant used to manufacture Nitro- Glycerine based Permitted Explosives used in the underground mines of the Company till its closure on 28.04.2003. Consequent upon decision of the Government of India to discontinue/ban production of NG-based explosives in the country and its adoption by the Board of Ordnance Factories of India, the Jt. Venture partner of the Plant, the Plant was closed on and from 28.04.2003. CIL had given its approval for disposal of the Plant and the Company in its 197thBoard Meeting held on 19.04.2006 had approved the disposal of P&M by tendering / e- auction and accordingly the P&M along with related stores & spares have been disposed of during 2006-07 by auction through MSTC. The Net Block of assets pending disposal is `0.08 Crores.The liability towards Overheads after closure of the Plant till 31.03.2013 for maintenance and upkeep of the Plant is ` 0.40 Crores.

The revenue expenses incurred during the current year is ` NIL Crores (Previous Year ` NIL) Since the Plant works on No-Profit-No-Loss basis, all expenses are passed on to the Areas. Hence there is no question of profit/loss. There is a ` NIL Crores cash outflow attributable to operating, investing and financing of discontinuance (Previous Year ` NIL)

b) Domestic Fuel Development (DFD) Plant, Hinganghat : The Plant used to manufacture Coal Briquettes from raw coal for domestic fuel purposes till its closure in 1994. Consequent upon non-viability of the Plant as per the decision of the Board of the Company, the Plant was closed in 1994.

The disposal of the Plant is under process and the exact date of completion of discontinuance is not determinable as of now. The Net Block of assets pending disposal is ` 0.03 Crores and the liability towards Municipal Taxes is ` 0.04 Crores . The Company has applied to the Hinganghat Nagar Palika for waiver of the Municipal Taxes for the past four years on the ground that the Plant is no more in operation. The revenue expenses incurred during the current year is ` 0.01Crores (Previous Year ` 0.01 Crores). Since the Plant is in-operative for the past ten years and the final disposal of the Plant is yet to be done. There is no cash outflow attributable to operating, investing and financing of discontinuance.

viii. Impairment of Assets : AS-28 :

The Company regularly assesses, at each balance sheet date the impairment of assets if there is existence of any of the six external and internal indications prescribed, on each Balance Sheet date.

In case of Land and Building, there is universally upward trend in Valuation. Unless,there is damage to building, the company does not make any provision for land and building. Similarly, in case of Plant and Machinery and HEMM there is no downward trend, hence no impairment is recongnised unless Asset is obsolete or damaged.

In respect of prospecting & Boring and Development Expenses in continuous loss making mines, have been considered for impairment, provided there is no clear indication for its revival in near future. 146 WESTERN COALFIELDS LIMITED During the Current Year an amount of ` 7.51 Crores has been charged to Statement of Profit and Loss as impairment loss against P & B, Development Expenditure (DE) and Plant & Machinery in the current year (P.Y. ` 5.00 Crores)

ix. Provisions, Contingent Liabilities and Contingent Assets AS-29

As per directives of Coal India Ltd. provision for Mine Closure in the books is made from the year 2010-11 on the basis of guidelines of Ministry of Coal circulated vide letter no. 55011/1/ 2009 - CPAM dated 27.08.09.

During the year, Mine closure plan(MCP) for 63 Mines have been submitted by CMPDIL and approved by WCL Board. As per such approved MCP's cumulative provision of Rs. 401.00 crores is required as on 31.03.2013, against this an amount of Rs.325.58 crores is apperaing in provision for MCP in the books of company as on 31.03.2012. Consequently balance provision of ` 75.42 crores is made during the year for the said mines.

For rest of the Mines, where no approved Mine closure plan is available, an amount of Rs. 2.27 crores has been charged. Net debit to the Statement of Profit and Loss ofthe current year is ` 77.69 Crores. Necessary differential provision, if any require, will be made/adjusted on approval of MCP by WCL Board.

8. CONSISTENT METHOD OF ACCOUNTING :

As per consistent policy of the Company, the following methods of accounting continue to be in vogue:

a) Accrual basis of accounting has been followed except in the following cases:

i. Liquidated damages, interest on delayed payment and escalation claims from Customers on the basis of final settlement.

ii. Insurance/Railway claims on admission/final settlement.

iii. Scraps are accounted for on realisation.

iv. Refund/adjustment consequent to assessment of tax from Tax authorities excepting Input Tax Credit claim of VAT are accounted for on cash basis. Additional demand of Income Tax, Royalty, Cess, Sales Tax, Entry Tax, etc. are accounted for after final order in appeals, pending such appeal payment made against additional demand are treated as Advance/ Claims.

b) Subsequent expenditure on Prospecting & Boring and Development in respect of revenue mines which has come to revenue are amortised over 20 years or balance life of the Project whichever is earlier.

c) Revenue Recognition: Sales

Bonus claims on customers, as a result of Joint Sampling are accounted for in sales in the year of settlement irrespective of period of dispatch. Credit Sales are recognised based on date of D-Note (Forwarding Note to Railways) and Cash Sales are recognised upto despatches as of 24:00 hrs. on 31st March. 147 ANNUAL REPORT 2012-13 d) Foreign Currency Transactions:

i. Foreign exchange differences arising on accrual/repayment of liabilities incurred for the purpose of acquisition of fixed assets are adjusted in the reported currencies by applying the closing rates.

ii. Foreign exchange fluctuations are accounted in the reported currencies by applying the closing rates. The effects of changes in foreign exchange rate are charged to the Statement of Profit and Loss.

e) Balance with Coal India Limited ( Holding Company ).

Amount due to Coal India Limited on account of loan after adjustment for conversion to equity or vice-versa from time to time is shown as Unsecured Loan. Amount due / receivable for revenue nature transaction in Current Account is shown under current liabilities / current assets.

f) Apex Office Charges and Interest to Holding Company.

i. Apex office charges as charged by Holding Company is allocated to revenue mines on the basis of coal production.

ii. Interest on loans from CIL is accounted for as per terms of loan agreement. Interest is allocated to the units on the basis of Gross Fixed Assets ( excluding the Assets procured against specific loan) at the beginning of the year.

g) Own consumption of coal is valued at basic price of declared grade of coal of the related mines.

h) Production of Coal is derived from records of dispatches billed, internal consumption,opening and closing stock and are further certified by CIL Team.

i) Joint reconciliation with major Sundry Debtors (Power Houses and SAIL) have been completed up to 31st December 2012. j) Confirmation from major Sundry Creditors are under process.

9. CHANGES IN ACCOUNTING PILICY:

The following changes have been made in the Accounting policy of the Company inthe current year as advised by CIL, Kolkata vide letter no. CIL/C-3(A)/31073/1128, dated 21.03.2013:

a) The income/expenditure relating to prior period which do not exceed ` 0.10 Crores in each case (up to 31.3.2012 the amount was ` 0.05 Crores in each case) are treated as income/ expenditure of current year. As a result an a dditional amount of ` 0.02 Crores is debited to the Statement of Profit and Loss which resulted in decrease in profit to that extent.

b) Prepaid expenses which do not exceed ` 0.10 Crores in each case are treated as expenditure of current year. The profit for the current year is reduced by ` 0.95 Crores.

148 WESTERN COALFIELDS LIMITED

10. OTHERS:

a) CIL has been levying additional Apex Charges @ ` 6.00 per ton of coal dispatch to meet the rehabilitation & fire fighting expenses of Jharia and Raniganj areas of BCCL/ECL. An amount of ` 24.93Crores (Previous year ` 25.18 Crores) has been charged to P&L A/c on this account.

b) As advised by CIL vide letter dated 5.03.2013, assessable value for the purpose of computing Central Excise Duty (C.E.D.) should also include Royalty and Stowing Excise Duty w.e.f. 1.03.2011. In view of this, supplementary billing for C.E.D. w.e.f 1.03.2011 to 28.02.2013 was raised and the payment was made to the Department , under protest. The regular billing w.e.f. 01.03.2013 is being done. The details of payment made are as under:

March 2011 April 2011 to April 2012 to Total amount March 2012 February 2013 (`` inCrores Crores )) 3. 03 34.60 50.68 88.31

The liability for Central Excise Duty (CED) on closing stock of coal has been calculated considering Royalty and S.E.D in assessable value. However value of opening stock does not include the C.E.D. on Royalty and S.E.D.

c) Figures of previous year have been regrouped/rearranged wherever necessary.

d) Notes 1 to 32, Significant Accounting Policies and Additional Notes on Accounts in Notes 33 & 34 form integral part of these Accounts.

PROBAL DAS RAMEHER SUSHIL BEHL D.C. GARG General Manager (Finance) Company Secretary Director (Finance) Chairman-cum-Managing Director (DIN-02841938) (DIN-00267658)

As per our report of even date Place : Nagpur FOR JODH JOSHI AND CO. Date : Chartered Accountants (FRN 104317W) M.Y. SHASHTRI PARTNER (M.No. 039763)

149 ANNUAL REPORT 2012-13

NOTE 34 (A)

NOTES PROVIDING STATUTORY INFORMATION

1. CONTINGENT LIABILITIES Claims against the Company not acknowledged as debts as on 31st March 2013, amounting to ` 3141.84 Crores (Previous Year ` 968.32 Crores), include:

a) Claims under Income Tax, Sales Tax, Service Tax and other Acts:

i. Demand notices from Income Tax authorities for ` 323.93 Crores towards Corporate Tax and ` 3.13 Crores towards Tax on perquisites to employees. ii. Demand notices from Income Tax authorities for ` 0.74 Crores under section 194 J rws 201(1)of the Income Tax Act. 1961. iii. Demand raised by District Revenue Authorities on account of Surface Rent ` 9.01 Crores and Non-Agricultural Assessment Tax of ` 61.14 Crores, Cess on Royalty `0.58 crores, Central Excise Duty Demand A/C Royalty/SED ` 2182.93 Cr. and Gram Panchayat Tax ` 0.86 crores. iv. Demands raised by Sales Tax Authorities on account of Sales Tax amounting to ` 82.62 Crores. v. Demands raised by Sales Tax Authorities on account of Entry Tax amounting to ` 96.37 Crores on HEMM and `1.39 Crores on coal. vi. Demands raised by Service Tax Authorities on account of Service Tax amounting to `130.50 Crores. b) Claims other than those under Income Tax, Sales Tax, Service Tax and other Acts:

i. Claims for enhanced compensation by land owners amounting to `102.33 Crores. ii. Claims by employees towards remuneration related cases amounting to ` 5.72 Crores. iii. Claims by Contractors & others pending decision by Arbitration/ Courts `127.93 Crores. iv. Claims by customers `11.63 Crores. v. Claims by Railways for Siding maintenance Charges `1.03 Crores vi. There are claims by employees and others where the amounts are not specified. In some cases interest has been claimed. However as the amounts are not specified, the contingent liability is not ascertainable.

c) Letters of Credit and Bank Guarantees:

i. Letters of Credit outstanding as on 31st March, 2013 amounting to ` 9.45 Crores. ii. The Company has issued Bank Guarantees amounting to ` 2.81 Crores (Previous Year `1.18 Crores) in favour of Maharashtra Pollution Control Board.

2. CAPITAL COMMITMENT

The estimated amount of contracts remaining to be executed on Capital and Revenue Account and not provided for in the Accounts are ` 376.36 Crores (Previous Year ` 82.19 Crores) and ` 639.13 Crores (Previous Year ` 822.50 Crores) respectively. . 150 WESTERN COALFIELDS LIMITED 3. Details of Opening Stock, Production, Turnover and Closing Stock.

( A ) COAL : OPENING STOCK :

2012-13 Previous Year (2011 -12) Qty '000 MT Value ` Crores Qty '000 MT Value ` Crores Raw Coal (Revenue Projects) 5093.42 476.1688 3856.30 340.6033 Raw Coal Stock brought to Revenue 0.0 0.00 94.47 11.1636 Washed Coal 0.85 0.3641 0.47 0.1658 Middling 0.42 0.0597 1.81 0.2359 Slurry 98.00 11.5508 70.35 8.2115 5192.69 488.1434 4023.40 360.3801

PRODUCTION : 2012-13 Previous Year (2011 -12) Qty '000 MT Value ` Crores Qty '000 MT Value ` Crores Raw Coal (Revenue Projects) 42264.14 43109.93 Raw Coal (Development Projects) 22.80 0.00 Washed Coal 144.54 136.48 Middling 102.05 96.65 Slurry 34.12 36.14 42567.65 43379.20

TURNOVER : 2012-13 Previous Year (2011 -12) Qty '000 MT Value ` Crores Qty '000 MT Value ` Crores Raw Coal(Revenue Projects) 41257.95 6611.5872 41689.52 6660.7401 Raw Coal (Development Projects) - - - - Washed Coal 144.96 74.8328 136.10 73.9342 Middlings 101.46 15.2792 98.04 14.1417 Slurry Coal 20.84 3.4500 8.49 1.1974 41525.21 6705.1492 41932.15 6750.0134 Internal Consumption 6.94 1.2937 7.76 1.9128 Issued for Process in Washery 281.40 44.3137 270.00 40.6751 288.34 45.6074 277.76 42.5879

151 ANNUAL REPORT 2012-13

CLOSING STOCK : (` Crores ) 2012-13 Previous Year (2011-12) Qty '000 MT Value(`) ` Crores Qty '000 MT Value ` Crores Raw Coal (Revenue Projects) 5811.27 568.3339 5093.42 476.1688 Raw Coal (Dev. Projects) 22.80 5.4451 0.00 0.00 Raw Coal Shortage (Shivpuri OC) 17.60 2.8064 0.00 0.00 Net Raw Coal (Revenue Projects) 5793.67 565.5275 5093.42 476.1688 Washed Coal 0.43 0.2053 0.85 0.3641 Middling 1.0 1 0.1469 0.42 0.0597 Slurry 111.28 13.2295 98.00 11.5508 5929.19 584.5543 5192.69 488.1434

Notes: 1) Production figures are derived from records of dispatches, internal consumption etc., and adjustments for opening and closing stock of Coal.

2) Opening and Closing stock of Raw Coal includes coal stock of 216.210 etrictonne of DFDP, Hinganghat.

(B) BRIQUETTE AT DOMESTIC FUEL PLANT(`)(`)(`), HINGANGHAT : 2012-13 Previous Year (2011-12 Qty MT Value ` Crores Qty MT Value ` Crores Opening Stock 58.00 0.0032 58.00 0.0032 Production 0.00 0.0000 0.00 0.0000 Turnover 0.00 0.0000 0.00 0.0000 Internal Consumption 0.00 0.0000 0.00 0.0000 Closing Stock 58.00 0.0032 58.00 0.0032

4. INSTALLED/LICENSED CAPACITY:

(a) COAL : Not Applicable.

(b) BRIQUETTE: At Domestic Fuel Plant, Hinganghat : Not applicable since plant closed in 1994

152 WESTERN COALFIELDS LIMITED

5. C.I.F. VALUE OF IMPORTS :

2012 -13 Previous Year (2011 -12) ( (` `in Crores) Crores ) ( (` ` Crores)in Crores ) Components, Stores & Spare Parts 3.00 7.14 Expenditure incurred through Holding Company,Coal India 0.84 1.88 Limited TOTAL 3.84 9.02

6. VALUE OF THE IMPORTED & INDIGENOUS STORES AND SPARE PARTS CONSUMED:

2012-13 Previous Year (2011-12)

( ` in (Crores)` Crores) % ( ` in(` Crores) Crores) % Imported 3.58 0.36 6.94 0.75 Indegenous 994.66 99.64 913.32 99.25 Total 998.24 100.00 920.26 100.00

153 ANNUAL REPORT 2012-13

154 WESTERN COALFIELDS LIMITED

155 ANNUAL REPORT 2012-13

PROBAL DAS RAMEHER SUSHIL BEHL D.C. GARG General Manager (Finance) Company Secretary Director (Finance) Chairman-cum-Managing Director (DIN-02841938) (DIN-00267658) As per our report of even date FOR JODH JOSHI AND CO. Chartered Accountants (FRN 104317W) Place : Nagpur M.Y. SHASHTRI PARTNER Date : (M.No. 039763)

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