ANNUAL REPORT & ACCOUNTS 2011-12 ering ow In p d m ia E EASTERN COALFIELDS LIMITED ( A Subsidiary of Coal India Limited ) SANCTORIA , P.O. DISHERGARH, DIST. BURDWAN CONTENTS Page No. 1. Management/Bankers/Auditors 1 2. Bankers / Auditors / Vision / Missiom Statement 2 3. Notice of Annual General Meeting 3 4. Chairman's Statement 4 5. Directors' Report 6 6. Comments of the Comptroller and Auditor General of India 98 7. Auditors' Report and Management's Reply 99 8. Balance Sheet as on 31st March, 2012 113 9. Profit & Loss Accounts for the year ended 31st March, 2012 115 10. Cash Flow Statement for the year ended 31st March, 2012 117 11. Notes forming part of Balance Sheet 119 12. Notes forming part of Profit & Loss Accoint 146 13. Significant Accounting Policies 159 14. Notes on Accounts 164 EASTERN COALFIELDS LIMITED MANAGEMENT DURING 2011-12 MANAGEMENT AS ON 21st MAY, 2012 FUNCTIONAL DIRECTORS: FUNCTIONAL DIRECTORS: Shri Rakesh Sinha Shri Rakesh Sinha Chairman-cum-Mg. Director Chairman-cum-Mg. Director Shri S.K. Srivastava Shri S.K. Srivastava Director (Personnel) Director (Personnel) Shri S. Chakravarty Shri S. Chakravarty Director (Technical) Opn. Director (Technical) Opn. Shri N. Kumar Shri A.K. Soni Director (Technical) P&P Director (Finance) (Upto 31.01.2012) Shri A.K. Soni PART-TIME OFFICIAL DIRECTORS: Director (Finance) Shri A.K. Sinha Director (Finance), CIL PART-TIME OFFICIAL DIRECTORS: Shri D.N. Prasad Shri A.K. Sinha Director (Technical), Ministry of Coal Director (Finance), CIL Shri D.N. Prasad SPECIAL DIRECTOR APPOINTED BY BIFR: Director (Technical) Shri K.K. Gautam Ministry of Coal (From 31.05.2011) NON-OFFICIAL PART-TIME DIRECTORS: SPECIAL DIRECTOR APPOINTED BY BIFR: Shri Subrata Chaudhuri Shri K. K. Gautam Shri S.K. Mohanty Prof. (Dr.) M.K. Srivastava NON-OFFICIAL PART-TIME DIRECTORS: Shri S.M. Lodha Shri Subrata Chaudhuri Shri S.M. Sharma (From 24.06.2011) Shri S.K. Mohanty (From 24.06.2011) Prof. (Dr.) M.K. Srivastava (From 24.06.2011) Shri S.M. Lodha (From 24.06.2011) Shri S.M. Sharma (From 09.09.2011) 1 ANNUAL REPORT 2011-12 BANKERS DURING 2011-12 State Bank of India Canara Bank United Bank of India United Commercial Bank STATUTORY AUDITOR DURING 2011-12 M/s. Dutta Sarkar & Co., 7A, Kiran Sankar Roy Road, 2nd Floor, Kolkata - 700001 BRANCH AUDITORS DURING 2011-12 M/s. Lodha & Co., 14 Government Place East, Kolkata-700069 M/s. Roy Ghosh & Associates, 39, Kalna Road, Badamtala, Burdwan-713401 M/s. L B Jha & Co., GF-1, Gillander House, 8, Netaji Subhas Road, Kolkata-700001 M/s. U S Saha & Co., 35, Bahir Sarbamangla Road, Burdwan-713101 M/s. D.P. Sen & Co., 22, Ashutosh Chowdhury Avenue, 2nd Floor, Flat No 22, Migma Apartment, Kolkata-700 019 REGISTERED OFFICE OF THE COMPANY CMD's Office, Sanctoria, Post - Dishergarh, District - Burdwan, Pin - 713333 VISION STATEMENT To emerge from the position of domestic leader to leading global player in the energy sector by adopting best practices from mine to market with due care to environmental and social sustenance. MISSION STATEMENT Produce the planned quantity of coal efficiently and economically with due regard to safety, conservation & quality. 2 EASTERN COALFIELDS LIMITED ering ow In p d m ia E Eastern Coalfields Limited ( A Subsidiary of Coal India Limited ) Office of the Chairman-cum-Managing Director Sanctoria, P.O. Disergarh- 713333, Distt. Burdwan ( W.B.) Company Secretariat Ref. No: ECL : CS:15(2012)/9884 May 18, 2012 NOTICE Notice is hereby given that the Thirty-seventh Annual General Meeting of the Shareholders of Eastern Coalfields Limited will be held on Monday, the 21st May, 2012 at the Registered Office of the Company at Sanctoria, P.O. Disergarh-713333, Distt. Burdwan (West Bengal) at 04.00 P.M. to transact the following business:- ORDINARY BUSINESS: 1. To receive, consider and adopt the Audited Balance Sheet as on 31st March, 2012 and Profit & Loss Account for the year ended 31st March, 2012 together with the Report of the Auditors and Directors thereon. 2. To appoint a Director in place of Shri A. K. Sinha, Director, who retires in terms of Articles 33(i) (e) (iii) of the Articles of Association of the Company and is eligible for reappointment. 3. To appoint a Director in place of Shri D.N. Prasad, Director, who retires in terms of Articles 33(i) (e) (iii) of the Articles of Association of the Company and is eligible for reappointment. By order of the Board Dated : May 18, 2012 Registered Office : Eastern Coalfields Limited Sanctoria, P.O. Disergarh, (V. R. Reddy) Distt. Burdwan (West Bengal) Chief Manager (Finance) PIN : 713333. Company Secretariat Notes : (i) A member entitled to attend and vote at the meeting is entitled to appoint a Proxy to attend and vote instead of himself and the proxy need not be a member of the Company. The instrument appointing the proxy should be deposited at the Registered Office of the Company not less than forty-eight hours before the commencement of the meeting. (ii) Members are also requested to accord their consent for convening the meeting at a shorter Notice under Sec. 171(2) (i) of the Companies Act, 1956. 3 ANNUAL REPORT 2011-12 CHAIRMAN’S STATEMENT Friends, I have great pleasure in welcoming you to the 37th Annual General Meeting of Eastern Coalfields Limited. The Directors’ Report, audited accounts for the financial year 2011-12 together with the report of Statutory Auditors and the report and review of the Comptroller and Auditor General of India, are already with you. 1. Today, India is among the fastest growing economies in the world. Energy is among one of the major inputs for economic development of any country. Coal dominates the energy mix in India, contributing over 52% of the total primary energy production. Our company produces one of the best qualities of Non-Coking Coal which caters to the needs of various power plants, steel plants, cement factories etc. 2. The strategic vision of our company is to place itself on a path of accelerated growth with enhancement in productivity, competitiveness and profitability while meeting the growing demand of coal in the country in an environmentally and socially sustainable manner. 3. The financial year 2011-12 was particularly challenging to us. We started the year with a positive production growth but our production was severely affected by heavy rains in the second quarter of the year. The production again accelerated from October, 2011 onwards. This year the coal production was 30.559 MT. During the year, we have set milestones in the history of the company in recording highest ever turnover of ` 10695.11 crores, highest ever profit of ` 962.13 crores, highest ever OBR of 60.467 M CuM. and highest ever coal off-take of 30.83 MT. 4. During the year 2011-12, 2 (two) projects namely Shankarpur (UG+OC) and Kottadih OC were approved by the Board. 5. Continuous efforts are being made to enhance the coal production from underground mines. 113 nos of SDLs and 24 nos of LHDs has been procured in order to mechanize our underground mines. 4 EASTERN COALFIELDS LIMITED 6. The impact on the environment due to extraction of coal is being monitored constantly by our Company and adequate measures are undertaken for control of Air, Water & Noise Pollution, Land degradation, Deforestation etc. These measures are being undertaken in accordance with the provisions of all statutory norms, Acts and Rules on a regular basis. During 2011-12 we planted 195000 nos of trees covering an area of 78 Ha with an expenditure of ` 0.59 crores as compared to 62500 nos of trees planted covering an area of 25.00 Ha with an expenditure of ` 0.21 crores. 7. We have also committed for sustainable development and CSR activities in villages around ECL command area. 8. We have always given the highest priority towards safety, which in ECL is considered as a part of core production process. To improve the safety standards, ECL has vigorously pursued several measures during the year. 9. Our Company has complied with the conditions of corporate governance as stipulated in the Guidelines on Corporate Governance for Central Public Sector Enterprises (CPSEs) issued by the Department of Public Enterprises, Government of India. As required under the said guidelines a separate section on Corporate Governance has been added in the Directors’ Report and a Compliance Certificate has been obtained from the statutory auditors. 10. We are committed to produce more than 33 MT coal during 2012-13 and confident that ECL will march ahead in the times to come and with co-operation of all and our tireless efforts, the company will come out of BIFR in days to come. I express my sincere thanks to Coal India Limited, Ministry of Coal, other Central Government Ministries and Departments, State Governments, all employees, Trade Unions, consumers, and suppliers for their unstinted support and relentless co-operation. (Rakesh Sinha) Chairman Place: Sanctoria Date: 21st May, 2012 5 ANNUAL REPORT 2011-12 DIRECTORS' REPORT To The Shareholders, Eastern Coalfields Limited Gentlemen, I, on behalf of the Board of Directors, have pleasure in presenting the 37th Annual Report on the working of your Company together with audited accounts for the year ended 31st March, 2012, report of the Statutory Auditors and Management’s reply thereon as well as the comments of the Comptroller and Auditor General of India on the audited accounts. Special Achievements: a) The OC coal production of the company for the year 2011-12 has registered a growth of 1.25% over previous year.