2.21 Provisions, Contingent Liabilities & Contingent Assets

Provisions are recognized when the Company has a present obligation (legal or constructive) as a
result of a past event, and it is probable that an outflow of economic benefits will be required to settle
the obligation and a reliable estimate of the amount of the obligation can be made. Where the time value
of money is material, provisions are stated at the present value of the expenditure expected to settle the
obligation.

All provisions are reviewed at each balance sheet date and adjusted to reflect the current best estimate.

Where it is not probable that an outflow of economic benefits will be required, or the amount cannot be
estimated reliably, the obligation is disclosed as a contingent liability, unless the probability of outflow
of economic benefits is remote. Possible obligations, whose existence will only be confirmed by the
occurrence or non-occurrence of one or more future uncertain events not wholly within the control of
the Company, are also disclosed as contingent liabilities unless the probability of outflow of economic
benefits is remote.

Contingent assets are possible assets that arise from past events and whose existence will be confirmed
only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the
control of the Company. Contingent assets are disclosed in the financial statements when inflow of
economic benefits is probable on the basis of the judgment of management. These are assessed
continually to ensure that developments are appropriately reflected in the financial statements.

2.22 Earnings per share

Basic earnings per share are calculated by dividing profit or loss attributable to ordinary equity holders
of the entity (the numerator) by the weighted average number of ordinary shares outstanding
(the denominator) during the period. Diluted earnings per shares is calculated by dividing adjusted
profit or loss attributable to ordinary equity holders of the parent entity (the numerator) by the
weighted average number of ordinary shares considered for deriving basic earnings per shares and also
the weighted average number of ordinary shares that could have been issued upon conversion of all
dilutive potential ordinary shares (the denominator).

2.23 Stripping activity provision (Ratio Variance)

Stripping activity provision was recognized or reversed based on the current ratio of Overburden to Coal as
compared to the average Stripping ratio (Standard ratio) of the mine as per the policy followed in earlier years since
inception consistently by the company. This accounting method being substantiated and validated by a multitude
of authoritative bodies and forums, including income tax authorities, the provision created in earlier years have
been continued.

The amount of the provision so carried forward is reversed periodically in systematic manner on extraction of
actual volume of overburden being in excess of the expected volume in terms of the mine specific plan as
approved on mine to mine basis and disclosed as reversal of stripping activity provision under other operating
revenue. Such reversal is specific to the mines at the rate the said provision was originally recognised.

2.24 Judgements, Estimates and Assumptions

The preparation of the financial statements in conformity with Ind AS requires management to make estimates,
judgments, and assumptions that affect the application of accounting policies and the reported amounts of assets
and liabilities, the disclosures of contingent assets and liabilities at the date of financial statements and the amount
of revenue and expenses during the reported period. Application of accounting policies involving complex and
subjective judgements and the use of assumptions in these financial statements have been disclosed. Accounting
estimates could change from period to period. Actual results could differ from those estimates. Estimates and
underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in
the period in which the estimates are revised and, if material, their effects are disclosed in the notes to the
financial statements.

2.24.1 Judgements

In the process of applying the Company’s accounting policies, management has made the following
judgments, which have the most significant effect on the amounts recognised in the financial statements:

2.24.1.1 Formulation of Accounting Policies

Accounting policies are formulated in a manner that results in financial statements containing relevant and
reliable information about the transactions, other events and conditions to which they apply. Those policies
need not be applied when the effect of applying them is immaterial.

In the absence of an Ind AS that specifically applies to a transaction, other event or condition, management
has used its judgment in developing and applying an accounting policy that results in information that is:

a) r e l e vant to the economic decision-making needs of users and

b) r el i able in that financial statements: and

(i) represent faithfully the financial position, financial performance and cash flows of the Company;

(ii) reflect the economic substance of transactions, other events and conditions, and not merely the legal
form; (iii) are neutral, i.e. free from bias; (iv) are prudent; and (v) are complete in all material respects on a
consistent basis

In making the judgment management refers to, and considers the applicability of, the following sources in
descending order:

(a) the requirements in Ind ASs dealing with similar and related issues; and

(b) the definitions, recognition criteria and measurement concepts for assets, liabilities, income, and expenses
in the Framework.

In making the judgment, management considers the most recent pronouncements of the International
Accounting Standards Board and in the absence thereof those of the other standard-setting bodies that use a
similar conceptual framework to develop accounting standards, other accounting literature, and accepted
industry practices, to the extent that these do not conflict with the Indian accounting Standard and
accounting policies and practices as stated in above paragraph.

The Company operates in the mining sector (a sector where the exploration, evaluation, and development
production phases are based on the varied topographical and geo-mining terrain spread over the lease
period running over decades and prone to constant changes), the accounting policies whereof have evolved
based on specific industry practices supported by research committees and approved by the various
regulators owing to its consistent application over the last several decades. In the absence of specific
accounting literature, guidance and standards in certain specific areas which are in the process of evolution,
the Company continues to strive to develop accounting policies in line with the development of accounting
literature and any development therein shall be accounted for prospectively as per the procedure laid down
above more, particularly in Ind AS 8.

2.24.1.2 Materiality

Ind AS applies to items which are material. Management uses judgement in deciding whether individual
items groups of item are material in the financial statements. Materiality is judged by reference to the
nature or magnitude or both of the items. The deciding factor is whether omitting or misstating or
obscuring an information could individually or in combination with other information influence
decisions that primary users make on the basis of the financial statements. Management also uses
judgement of materiality for determining the compliance requirement of the Ind AS. Further, the
Company may also be required to present separately immaterial items when required by law.

With effect from 01.04.2019 Errors/omissions discovered in the current year relating to prior periods
are treated as immaterial and adjusted during the current year, if all such errors and omissions in
aggregate does not exceed 1% of total revenue from Operation (net of statutory levies) as per the last
audited financial statement of the Company.

2.24.1.3 Operating lease

Company has entered into lease agreements. The Company has determined, based on an evaluation of
the terms and conditions of the arrangements, such as the lease term not constituting a major part of the
economic life of the commercial property and the fair value of the asset, that it retains all the significant
risks and rewards of ownership of these properties and accounts for the contracts as operating leases.

2.24.2 Estimates and assumptions

The key assumptions concerning the future and other key sources of estimation uncertainty at the
reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of
assets and liabilities within the next financial year, are described below. The Company based its
assumptions and estimates on parameters available when the financial statements were prepared.
Existing circumstances and assumptions about future developments, however, may change due to market
changes or circumstances arising that are beyond the control of the Company. Such changes are reflected
in the assumptions when they occur.

The estimates, judgements and associated assumptions are based on historical experience and other factors that are
considered to be relevant. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are
recognised in the period in which the estimate is revised and future periods affected.

The application of accounting policies that require critical judgements and accounting estimates involving complex
and subjective judgements and the use of assumptions in these standalone financial statements have been disclosed
here in below.

2.24.2.1 Impairment of lion-financial assets

There is an indication of impairment if, the carrying value of an asset or cash generating unit exceeds its recoverable
amount, which is the higher of its fair value less costs of disposal and its value in use. Company considers individual
mines as separate cash generating units for the purpose of test of impairment. The value in use calculation is based
on a DCF model. The cash flows are derived from the budget for the next five years and do not include restructuring
activities that the Company is not yet committed to or significant future investments that will enhance the asset’s
performance of the CGU being tested. The recoverable amount is sensitive to the discount rate used for the DCF
model as well as the expected future cash-inflows and the growth rate used for extrapolation purposes. These
estimates are most relevant to other mining infrastructures. The key assumptions used to determine the recoverable
amount for the different CGUs, are disclosed and further explained in respective notes.

2.24.2.2 Income Taxes

Deferred tax assets are recognised for unused tax losses to the extent that it is probable that taxable profit will
be available against which the losses can be utilised. Significant management judgement is required to determine
the amount of deferred tax assets that can be recognised, based upon the likely timing and the level of future
taxable profits together with future tax planning strategies.

2.24.2.3 Defined benefit plans and long term employee benefits

The cost of the defined benefit plan and other post-employment medical benefits and the present value of the
obligations are determined using actuarial valuations. An actuarial valuation involves making various
assumptions that may differ from actual developments in the future. These include the determination of the
discount rate, future salary increases and mortality rates.

Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly
sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date. The parameter
most subject to change is the discount rate. In determining the appropriate discount rate for plans operated in
India, the management considers the interest rates of government bonds in currencies consistent with the
currencies of the post-employment benefit obligation.

The mortality rate is based on publicly available mortality tables of the country. Those mortality tables tend to
change only at interval in response to demographic changes.

2.24.2.4 Intangible asset under development

The Company capitalises intangible asset under development for a project in accordance with the accounting
policy. Initial capitalisation of costs is based on management’s judgement that technological and economic
feasibility is confirmed, usually when a project report is formulated and approved.

2.24.2.5 Provision for Mine Closure, Site Restoration and Decommissioning Obligation

In determining the fair value of the provision for Mine Closure, Site Restoration and Decommissioning
Obligation, assumptions and estimates are made in relation to discount rates, the expected cost of site
restoration and dismantling and the expected timing of those costs. The estimates provision using the DCF
method considering life of the project/mine based on

Estimated cost per hectare as specified in guidelines issued by Ministry of Coal, Government of India

^ The discount rate (pre-tax rate) that reflect current market assessments of the time value of money and
the risks specific to the liability.

4.3.2 For dues from directors - Refer Note 16(2)

4.3.3 Trade receivables above is net of Coal quality variance of ? 161.80 Crore (P.Y. ? 370.34 Crore)

4.3.4 Trade Receivables- Secured considered good are secured against Bank Guarantee of ? 11.55 Crore (P.Y. ? 7.95 Crore).

4.3.5 The company has used the practical expedient by computing the expected credit loss allowance based on a provision matrix
in determining allowance for credit losses of trade receivables. The provision matrix takes into account historical credit loss
experience and forward looking information. The expected credit loss allowance is based on ageing of receivables that are
due and the rates used in provision matrix.

4.3.6 Trade Receivables: Unsecured considered good includes an amount of ? 196.59 Crore (P/Y ? 187.08 Crore) receivable
from SAIL on account of Bazaar Fee with a corresponding outstanding Statutory Liability.

4.4.1 Includes ? 0.57 Crore (P.Y. ? 0.10 Crore) lying in Axis bank against EMD Pool Account.

4.4.2 ICDs with Primary Dealers are Inter-Corporate Deposits accepted by the Primary Dealers with an original maturity between
7 to 31 days from the date of investment.

4.4.3 Others include Imprest balances.

4.4.4 Cash and cash equivalents comprises cash on hand and at bank, sweep accounts and term deposits held with banks with
original maturities of three months or less.

4.5.1 Deposit for specific purposes are bank deposits held under lien/earmarked as per courts order, e-procurement account/GeM
account, Escrow accounts for MDO contracts and others. It includes ?33.31 Crore (P/Y ? 43.43 Crore) lying in State Bank of
India against GEM Pool Account.

4.5.2 Other Bank Balances comprise Deposits - for specific purposes and bank deposits which are expected to realise in cash within
12 months after the reporting date.

⁴.⁵.³ An amount of ? 1.50 Crores was realised from the explosive suppliers for the period from 01.03.2006 to 30.06.2006 on
account of price differences. In the light of the decision given by the Hon’ble High Court, Kolkata, the amount was
deposited as Fixed Deposit with different Banks at different rates of interest on each maturity. The last Matured value of
? 4.61 crores was further re-deposited at Indian Overseas Bank on November 01, 2025 @ 6.55% interest p.a. The difference
between accrued interest on the said Fixed Deposit and interest @12% p.a. which might be payable in future in view of
Hon'ble High Court order amounting to ?5.49 Crores has been considered as contingent liability as at March 31, 2026.

4.6.2 Deposit with bank under Mine Closure Plan

Following the guidelines from Ministry of Coal, Government of India for preparation of Mine Closure Plan, an Escrow
Account has been opened. As per MCP guidelines dated January 31, 2025 upto 50% of the total amount deposited excluding
interest in the escrow account may be released after every year based on work done towards mine closure and after every five
year up to 50% of the total deposit including interest accrued in the escrow account may be released in line with the periodic
examination of the closure plan as per the Guidelines. However the year in which 5 yearly reimbursement is claimed, the
yearly reimbursement will not be applicable (Refer Note 9.1 for Provision for Site Restoration/Mine Closure).

4.6.3 Deposit in Bank under Shifting and Rehabilitation Fund scheme

Following the direction of the Ministry of Coal the company has setup a fund for implementation of action plan for shifting
and rehabilitation dealing with fire and stabilization of unstable areas of Bharat Coking Coal Limited. The fund is utilized
based on implementation of approved projects in this respect.

The coal producing subsidiaries of CIL are making a contribution of ? 6/- per tonne of their respective coal despatch per
annum to this fund, which remains in the custody of CIL, till they are disbursed/utilised by subsidiaries/agencies
implementing the relevant projects.

4.6.4 Lease
Finance Lease

(i) Amounts recognised in profit and loss account in respect of Lease Receivables:

6.1.2 The above represents concurrent expenditure recognised as per guidelines from Ministry of Coal, Government of India
for preparation of Mine Closure Plan.

Progressive Mine Closure Expense incurred are due to be received from Escrow account maintained for the purposes.
Out of the total Progressive Mine Closure Expenses, ?23.76 Crore (refer Note 6.2) has been audited by the CCO and
for ?527.60 Crore audit is yet to be done by them.

6.2.2 Includes deposit under protest and refund yet to be received for Income tax ?394.07 Crores, Sales tax ? 59.07 Crores,
Service Tax & Excise cases ? 0.44 Crores and others ? 77.38 Crores.

6.2.3 Includes Excess CSR ? 2.70 Crores (P.Y.? 0.00 Crores) (Refer Annexure to Note - 13.8 CSR Expenses)

6.2.4 Pursuant to Notification No. 09/2025 - Central Tax (Rate), the Goods and Services Tax (GST) rate on coal has been
increased from 5% to 18% with effect from September 22, 2025. Consequently, the inverted duty structure no longer
exists, and accumulated Input Tax Credit (ITC) is being utilised against output tax liability. Accordingly, with effect
from April 01, 2025, the Company has revised its accounting treatment by commencing availment of eligible GST ITC
on capital items and discontinuing the capitalization of such GST except on Laptops and Mobile Phones.

7.1.3 The shares of the company are listed in Stock Exchanges on and from January 19, 2026. The listing involved the
issuance of 46.57 crore ordinary shares which is 10 percent of the Paid-up Equity Share Capital. For details, refer
to Note No 16.6.q : Change in Capital Structure.

7.1.4 The Board of Directors of the Company, at its 420th meeting held on April 15, 2025 had approved the sub division
of the existing authorised share capital of the Company from 5,10,00,000 equity shares of ?1000 each into
5,100,000,000 equity shares of ?10 each and also approved the sub division of the existing paid up shares of the
Company from 4,65,70,000 equity shares of ? 1000 each into 4,657,000,000 equity shares of ?10 each, which was
approved by the shareholders in the 18th Extra-ordinary General Meeting held on April 28, 2025. The record date
for the share split was May 19, 2025.

7.1.5 The Company has only one class of equity shares having a face value ? 10/- per share. The holders of the equity
shares are entitled to receive dividends as declared from time to time and are entitled to voting rights proportionate
to their share holding at the meeting of shareholders. The dividend proposed by the Board of Directors is subject to
the approval of the shareholders in the Annual General Meeting. In the event of liquidation, the equity shareholders
are eligible to receive the remaining assets of the company after payment of all preferential amount, in proportionate
to there shareholdings.

Note:

7.2.1

(i) Includes net actuarial gains/(losses) on defined benefit plans (net of tax)

(ii) Retained Earnings are the accumulated profit and loss of the company earned till date, net of appropriations.

(iii) The dividend on erstwhile 5% Non-Convertible Cumulative Redeemable Preference Shares of ?44.4325 crores was
recommended by the Board and paid on August 05, 2024 after the approval of the shareholders in the Annual General
Meeting for the Financial Year 2023-24 held on August 01, 2024.

The remaining dividend of ? 844.2175 crores, was approved by the shareholders of the company in the Annual General
Meeting for the Financial Year 2024-25 held on July 25, 2025. The amount was paid on July 28, 2025.

(f) Other comprehensive income that will be reclassified to profit or loss

Note: Above assets included in Property, Plant and Equipment (Note 3.1).

Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. Each lease
generally imposes a restriction that, unless there is a contractual right for the Company to sublet the asset to another party,
the right-of-use asset can only be used by the Company.

With the exception of short-term leases and leases of low-value underlying assets, each lease is reflected on the balance
sheet as a right of- use asset and a lease liability. Payments made for short-term leases and leases of low value are
expensed on a straight-line basis over the lease term.

The company's significant leasing arrangements include assets dedicated for use under long-term arrangements as given in
the above table of Right of Use Assets.

Note:

8.4.1 Others above includes unspent CSR expenses (Refer Annexure to Note - 13.8 CSR Expenses)

8.4.2 Refer note 16 (3) for classification

8.4.3 Pursuant to the order of the Hon’ble High Court of Jabalpur dated January 07, 2026, the Board of Directors of CIL
approved the upgradation of pay scales of executives (up to mid-level) across the Coal India Limited Group payable
with effect from August 23, 2023. A provision of ? 129.99 Crores has been recognised towards this revision for the
period from August 23, 2023 to December 31, 2025. The revised salary structure has been implemented since January
01, 2026 and payment are being disbursed accordingly. Also refer Note no. 13.3

9.1.2 Stripping activity provision (Ratio Variance): Stripping activity provision recognized earlier is based on the policy
followed consistently by CIL since its inception. Stripping activity provision (net) was recognized or reversed based
on the current ratio of OB to Coal as compared to the average Stripping ratio (Standard ratio) of the mine.
This accounting method has been substantiated and validated by a multitude of authoritative bodies and forums,
including income tax authorities.

The carrying amount of the stripping activity provision is reversed systematically whenever the situation of reversal
arises on extraction of actual volume of overburden over expected volume thereof. Such reversal is specific to mines
at the rate the said provision has been recognized.

In the case of a mine, where the stripping activity provision has resulted in an excess volume of overburden over the
volume of overburden expected, the corresponding provision as determined with respect to, multiplied by the opening
average rate of stripping activity being no longer required has been recognised as reversal of stripping activity
provision under other operating revenue in the statement of profit and loss.

Amount of stripping activity provision representing the credit balance of the stripping activity created till March 31,
2022 is reversed and credited to the profit and loss accounts in systematic manner. Accordingly ?0.00 crore (including
?195.90 crore for the year ended March 31, 2025) (?200.52 crore for the year ended March 31, 2024) has been written
back from the provision, leaving a balance of ?192.98 crore as on March 31, 2026 to be so adjusted over the years as
per the policy followed in this respect (refer note 2.24).

The company has adopted a systematic reversal policy for Stripping Activity Provisions, leaving the requirements of
IND AS 37 “Provisions, Contingent Liabilities and Contingent Assets”. This approach, however, is consistent with
IND AS 1 “Presentation of Financial Statements”, considering the nature of the company’s business and the objective
of financial statements as set out in terms of the Conceptual Framework for Financial Reporting under Indian
Accounting Standards. Accordingly, a provision of ?192.98 crores (P.Y.: ?192.98 crores) is presented under Non¬
current Provisions as ""Stripping Activity Provision"" instead of under Other Equity in the Balance Sheet.
Consequently, the systematic reversal of this provision with consequent impact on net profit is recognised under Other
Operating Revenue at ?0.00 crores for the period (P.Y.: ?(195.90) crores) (refer note 12.1.3).

9.1.3 Provision for Site Restoration/Mine Closure

The Company's obligation for land reclamation and decommissioning of structures consists of spending at both
surface and underground mines in accordance with the guidelines from Ministry of Coal, Government of India. The
estimate of obligation for Mine Closure, Site Restoration and Decommissioning based upon detailed calculation and
technical assessment of the amount and timing of the future cash spending to perform the required work. Mine
Closure expenditure is provided as per approved Mine Closure Plan. The estimates of expenses are escalated for

inflation, and then discounted at a discount rate (@8%) that reflects current market assessment of the time value of
money and the risks, so that the amount of provision reflects the present value of the expenditures expected to be
required to settle the obligation. The value of the provision is progressively increased over time as the effect of
discounting unwinds; creating an expense recognised as financial expenses. In reference to above guidelines for
preparation of mine closure plan, an escrow account has been opened. (Refer Note - 9)

Reconciliation of Reclamation of Land/ Site restoration /Mine Closure :

9.1.4 The liability of Gratuity (net of plan assets) is inclusive of amount recoverable from the gratuity trust for benefit paid.

9.1.5 The assumptions made for provisions relating to current period are consistent with those in the earlier years. The
assumptions and estimates used for recognition of such provisions are qualitative in nature and their likelihood could
alter in next financial year. It is impracticable for the Company to compute the possible effect of changes in
assumptions and estimates used in recognizing these provisions.

Note:

10.1.1 Capital Assistance of ? 1.37 crores received from MOC through CIL against Construction of Railway Siding at EJ
Area. The Railway Siding has been capitalised during FY 2021-22. During the current year, proportionate amount of
? 0.09 crore (PY ? 0.09 crore) against Railway Sidings has been amortised through Other Income.

10.1.2 Deferred income includes capital assistance of ? 750.73 crores received from CIL against the expenditure incurred
on account of Rehabilitation under Jharia Master Plan. The same has been amortized in line with the depreciation
charged on the assets created under the Rehabilitation Plan. During the current period the amount amortized through
other income is ? 8.80 crores (P.Y. ?6.51 crores)

Note:

13.3.1 Including allowances, bonus, incentives, performance related pay, overtime pay, pay upgradation arrear etc.

13.3.2 Refer note no 8.4.3 for upgradation of pay scales of executives (up to mid-level).

13.3.3 Expenses recognized during the year for Provident Fund ?495.80 crores (P.Y. ? 501.70 crores), Pension Fund
?291.72 crores (P.Y. ?284.52 crores) and CIL Executive Defined Contribution Pension Scheme (NPS) ?21.80
crores (P.Y. ? 21.60 crores).

13.3.4 Disclosures as per Ind AS 19 ‘Employee Benefits’ in respect of provision made towards various employee benefits
except those covered under actuarial valuation, are provided in Note 9.1.1.

13.3.5 Disclosures as per Ind AS 19 ‘Employee Benefits’ in respect of defined benefit plans and other long term employee
benefit plans which are covered under actuarial valuation are disclosed in Note 16.

13.3.6 The Company has evaluated the impact of the Code on Wages, 2019 and related labour codes. Based on the
assessment, no material impact is expected on the financial statements.

No interest is expected in the settlement of cases under contingent liabilities, except where management has an adverse
view.

The company's pending litigation comprises of claims against the company and proceedings pending tax/statutory/
Government authorities. The company has reviewed all its pending litigations and proceedings and has made adequate
provisions, and disclosed the contingent liabilities, where applicable, in its Financial Statements. The company does
not expect the outcome of these proceedings to have a material impact on its financial position. Future cash outflows in
respect of above are dependent upon the outcome of judgements/decisions.

Other Disclosures on Contingent Liabilities:

(i) Penalty pursuant to Supreme Court Judgment in WP (Civil) 114 of 2014- Common Cause Case: Demand notices
amounting to ?17335.76 Crore have been issued in respect of 47 Projects/Mines/Collieries of the Company by
State Government in pursuance of the judgment dated 02.08.2017 of Hon’ble Supreme Court of India vide W.P.
(C) No. 114 of 2014 in Common Cause vs. Union of India & Ors. It has been alleged that Coal Production have
been undertaken either without Environmental Clearance, Forest Clearance, Consent to operate and/or NOC/

Consent to Establish or beyond the approved limits of production given under such clearances. The demand
notices were later set aside.

In FY 2025-26, DMO Dhanbad issued demand notice(s) amounting to ?17644.33 Crore, to the Project Officers
of concerned Collieries of BCCL for deposition of amount towards compensation in terms of the judgment
passed by the Hon’ble Supreme Court of India on 02.08.2017 in WP(C) 114 of 2014 (Common Cause vs Union
of India & Ors. read with W.P(C) 194 of 2014 (Prafull Samantra & Anr. Vs Union of India & Ors.) and the
provisions contained in section 21(5) of the MM(D&R)Act, 1957. The Project Officers of concerned collieries
of BCCL have filed Revision Applications under Section 30 of MM(D&R)Act, 1957 before the Hon’ble Coal
Tribunal, Ministry of Coal challenging demand notice(s) issued by the District Mining Officer, Dhanbad.

(ii) There are 47 nos. of stock shortage cases amounting to of different areas of BCCL pertaining to different years,
out of which BCCL has filed Writ Petition (C) in 21 nos. cases in Hon’ble High Court, Ranchi. The relevant
extract of the order passed by the Hon’ble court is as follows:

a. The core issue in these cases involves the demand for royalty based on a perceived difference between
tentative volumetric assessments and the final, firm statements of coal stock. BCCL had filed objections
under Section 9 of the Bihar and Orissa Public Demands Recovery Act, 1914.

b. The Hon'ble High Court observed that these cases involved disputed questions of fact that needed to be
determined at the original authority level.

c. Based on the concession from all parties, the High Court set aside the demand and directed that these matters
be relegated before the Certificate Officer for adjudication of the issue afresh hearing notice on the basis of
the objections already filed under Section 9 of the PDR Act.

In compliance with the order of the Hon’ble High Court, a petition has been filed before the Certificate Court,
Dhanbad on August 25, 2025 seeking review of all 47 certificate cases relating to coal stock shortage and for
issuance of necessary directions. In the last hearing, DDM instructed to remand back the cases to the District Mining
Officer (DMO), Dhanbad for fresh initiation in compliance with the order of the Hon’ble High Court. However, as
on date no communication/direction has been received from the DMO, Dhanbad for submission of fresh
representation.

(iii) Disputed Receivable / Payable a/c DLF - As per the terms of Agreement, there are Receivables from DLF against
cost of supply of (i) rejects and (ii) startup/back up / emergency power by Madhuban Coal Washery (MCW) to DLF
and Payables to DLF for Energy received by MCW from Captive Power Plant (CPP) installed by DLF. The matter is
sub-judice-one on account of disputes over price/quality of rejects vis-a-vis below guaranteed performance of CPP.
Accordingly, Interest receivable/payable on net outstanding has not been accounted for at this stage. However, the
net interest @ 18% p.a. simple up to March 31, 2026 comes to ? 40.40 crore, payable to DLF and has so been
considered as Contingent Liability.

II. Contingent Assets

A contingent asset is a possible asset that arises from past events and whose existence will be confirmed only by the
occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the entity.
During the normal course of business, several unresolved claims are currently outstanding. The inflow of economic
benefits, in respect of such claims cannot be measured due to uncertainties that surround the related events and
circumstances.

f) No Trade or other receivables are due from directors or other officers of the company either severally or jointly
with any other person. Nor any trade or other receivable are due from firms or private companies respectively
in which any director is a partner, a director or member. Further there are no loans to related parties (Directors,
Key Managerial Persons and others).

g) Related Party Transactions within Group

Coal India Limited has entered into transactions with its subsidiaries which include Apex charges, Rehabilitation
charges, Lease rent, Interest on Funds parked by subsidiaries, IICM charges and other expenditure incurred by
or on behalf of other subsidiaries through current account.

i) Transactions with Related Parties during the For the Year Ended March 31, 2026b) Fair value hierarchy

Table below shows Judgments and estimates made in determining the fair values of the financial instruments that
are (a) recognized and measured at fair value and (b) measured at amortized cost and for which fair values are
disclosed in the financial statements. To provide an indication about the reliability of the inputs used in
determining fair value, the Company has classified its financial instruments into the three levels prescribed under
the accounting standard. An explanation of each level follows underneath the table.

* Allowance for Coal Quality Variance deducted from Trade Receivable.

A brief of each level is given below:

Level I: Level I hierarchy includes financial instruments measured using quoted prices. This includes Mutual fund
which is valued using closing Net Asset Value (NAV) as at the reporting date.

Level II: The fair value of financial instruments that are not traded in an active market is determined using valuation
techniques which maximize the use of observable market data and rely as little as possible on entity-specific estimates.
If all significant inputs required to fair value an instrument are observable, the instrument is included in level II.

Level III: If one or more of the significant inputs is not based on observable market data, the instrument is
included in level III. This is the case for investments , security deposits and other liabilities included in level III.

(c) Valuation technique used in determining fair value

Valuation techniques used to value financial instruments include the use of quoted market prices (NAV) of instruments
in respect of investment in Mutual Funds.

d) Fair value measurements using significant unobservable inputs

At present there are no fair value measurements using significant unobservable inputs.

e) Fair values of financial assets and liabilities measured at amortized cost

The carrying amounts of trade receivables, short term deposits, cash and cash equivalents, trade payables are considered
to be the same as their fair values, due to their short-term nature.

The company considers that the Security Deposits does not include a significant financing component. Security deposits
coincide with the company’s performance and the contract requires amounts to be retained for reasons other than the
provision of finance. The withholding of a specified percentage of each milestone payment is intended to protect the
interest of the company, from the contractor failing to adequately complete its obligations under the contract.
Accordingly, transaction cost of Security deposit is considered as fair value at initial recognition and subsequently
measured at amortised cost.

Significant estimates:

The fair value of financial instruments that are not traded in an active market is determined using valuation techniques.
The company uses its judgment to select a method and makes suitable assumptions at the end of each reporting period.

4 Financial Risk Management

a) Financial risk management objectives and policies

The Company’s principal financial liabilities comprise loans and borrowings, trade and other payables. The main
purpose of these financial liabilities is to finance the Company’s operations and to provide guarantees to support its
operations. The Company’s principal financial assets include loans, trade and other receivables, and cash and cash
equivalents that is derived directly from its operations.

The Company is exposed to market risk, credit risk and liquidity risk. The Company’s senior management oversees
the management of these risks. The Company’s senior management is supported by a risk committee that advises, inter
alia, on financial risks and the appropriate financial risk governance framework for the Company. The risk committee
provides assurance to the Board of Directors that the Company’s financial risk activities are governed by appropriate
policies and procedures and that financial risks are identified, measured and managed in accordance with the
Company’s policies and risk objectives. The Board of Directors reviews and agrees policies for managing each of
these risks, which are summarized below.

b) The Company risk management is carried out by the board of directors as per DPE guidelines issued by
Government of India. The board provides written principals for overall risk management as well as policies
covering investment of excess liquidity.

c) Credit Risk:

(i) Credit Risk Management: Receivables arise mainly out of sale of Coal. Sale of Coal is broadly
categorized as sale through fuel supply agreements (FSAs) and e-auction. Macro - economic information
(such as regulatory changes) is incorporated as part of the fuel supply agreements (FSAs) and e-auction terms.

(ii) Fuel Supply Agreements (FSAs)

The company enters into legally enforceable FSAs with customers or with State Nominated Agencies that in
turn enters into appropriate distribution arrangements with end customers. FSAs can be broadly categorized
into:

• FSAs with customers in the power utilities sector, including State power utilities, private power utilities
(“PPUs”) and independent power producers (“IPPs”) under various clauses of Scheme to Harness and
Allocate Koyla (Coal) Transparently in India (SHAKTI);

• FSAs with customers in non-power industries (including captive power plants (“CPPs”)) as per Non¬
Regulated Sector (NRS) Linkage Policy; and

• FSAs with State Nominated Agencies.

(iii) E-Auction Scheme

The E-Auction scheme of coal has been introduced to provide access to coal for customers who were not able
to source their coal requirement through the available institutional mechanisms under the NCDP for various
reasons, for example, due to a less than full allocation of their normative requirement under NCDP, seasonality
of their coal requirement and limited requirement of coal that does not warrant a long-term linkage. The
quantity of coal to be offered under E-Auction is reviewed from time to time by the Ministry of Coal.

Credit risk arises when a counterparty defaults on contractual obligations resulting in financial loss to the company.
Counterparty defaults risk of trade receivables is managed by financial assurances like Security Deposits, Advances,
Bank Guarantee, etc

(iv) Provision for Expected credit loss

The Company provides for expected credit risk loss for doubtful/ credit impaired assets, by lifetime expected credit
losses (Simplified approach). Refer Note-4.3: Trade Receivables.

(v) Significant estimates and judgment- Impairment of Financial Assets

Impairment of Financial Assets: The impairment provisions for financial assets disclosed above are based on
assumptions about risk of default and expected loss rates. The Company uses judgment in making these
assumptions and selecting the inputs to the impairment calculation, based on the Company’s past history,
existing market conditions as well as forward looking estimates at the end of each reporting period.

d) Liquidity Risk

Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the
availability of funding through an adequate amount of committed credit facilities to meet obligations when due.
Due to the dynamic nature of the underlying businesses, Company treasury maintains flexibility in funding by
maintaining availability under committed credit lines.

Management monitors forecasts of the Company’s liquidity position (comprising the undrawn borrowing
facilities) and cash and cash equivalents on the basis of expected cash flows. This is generally carried out at
local level in accordance with practice and limits set by the Company.

The bank borrowings of Coal India Ltd. have been secured by creating charge against stock of coal, stores and
spare parts and book debts of CIL and its Subsidiary Companies within consortium of banks. The total working
capital credit limit available to CIL is ?420.00 Crore, of which fund based limit is ?135.00 Crore and non-fund
based limit is ?285.00 crore. Further, ? 10,590.00 crore(P.Y.? 7,850.00 Crore) was set up working capital limit
outside consortium of which fund based limit is ?5250.00 Crores and non-fund based limit is ?5340.00 crores.
Coal India Limited is contingently liable to the extent such facility is actually utilised by the Subsidiary
Companies.

BCCL directly has a sanctioned working capital loan limit (unsecured) of ?200.00 crore. BCCL Board has
conferred borrowing power of ?2,000.00 crore in the form of unsecured working capital loan to the company.
Moreover, sanctioned limit of overdraft facility secured against fixed deposits is ?568.60 crore.

e) Market riski. Foreign currency risk

Foreign currency risk arises from future commercial transactions and recognized assets or liabilities
denominated in a currency that is not the Company’s functional currency (INR). The Company is exposed to
foreign exchange risk arising from foreign currency transactions. Foreign exchange risk in respect of foreign
operation is considered to be insignificant. The Company also imports and risk is managed by regular follow
up. Company has a policy which is implemented when foreign currency risk becomes significant.

ii. Cash flow and fair value interest rate risk

The Company’s main interest rate risk arises from bank deposits with change in interest rate exposes the
Company to cash flow interest rate risk. Company policy is to maintain most of its deposits at fixed rate.

Company manages the risk using guidelines from Department of Public Enterprises (DPE), diversification of
bank deposits credit limits and other securities.

f) Capital management

The company being a government entity manages its capital as per the guidelines of Department of
Investment and Public Asset Management under Ministry of Finance.

Capital Structure of the company is as follows:

5. Employee Benefits: Recognition and Measurement (Ind AS-19)Defined Benefit Plans:a. Gratuity:

The Company provides for gratuity, a post-employment defined benefit plan ("the Gratuity Scheme")
covering the eligible employees. Gratuity payment is made as per policy of the company subject to
maximum of ? 0.25 Crores (? 0.20 Crores prior to October 01, 2025) in case of executives and ?0.20 Crores
in case of non executives at the time of separation from the company considering the provisions of the
Payment of Gratuity Act 1972 as amended. The liability or asset recognised in the balance sheet in respect
of the Gratuity Scheme is the present value of the defined benefit obligation at the end of the reporting year
less the fair value of plan assets. The defined benefit obligation is calculated at each reporting date by
actuaries using the projected unit credit method. Re-measurement gains and losses arising from experience
adjustments and changes in actuarial assumptions are recognised in the year in which they occur, directly in
other comprehensive income (OCI).

The Gratuity Scheme is funded through trust maintained with Life Insurance Corporation of India. LIC also
provides an insurance coverage (Life Cover Sum Assured- “LCSA”) in case of death of a member during
service, to compensate the shortfall in gratuity amount from estimated payable at normal retirement date
based on last drawn salary subject to ceiling of maximum limit.

b. Post-Retirement Medical Benefit - Executive (CPRMSE)

Company has post-retirement medical benefit scheme known as Contributory Post Retirement Medicare
Scheme for Executive of CIL and its Subsidiaries (CPRMSE), to provide Medicare to the executives,
their spouses and fully financially dependent Divyang child(ren) suffering from not less than 40% of
any disability in Company hospital/empanelled hospitals or outpatient/Domiciliary only in India
subject to ceiling limit, on account of retirement on attaining the age of superannuation or are
separated by the Company on medical ground or retirement under Voluntary Retirement Scheme under
common coal cadre or Voluntary Retirement Scheme formulated and made applicable from time to time.
Membership is not extended to the executives who resigns from the services of the CIL and its
subsidiaries. The maximum amount reimbursable during the entire life for the retired executives,
spouse and dependent Divyang child (ren) taken together jointly or severally is ?0.25 crores except for
specified diseases with no upper limit. The Scheme is funded through trust for group, maintained with
Life Insurance Corporation of India. The liability for the scheme is recognised based on actuarial
valuation done at each reporting date.

c. Post-Retirement Medical Benefit - Non- Executive (CPRMSE-NE)

As a part of social security scheme under wage agreement, Company is providing Contributory Post¬
Retirement Medicare Scheme for non-executives (CPRMSE-NE) to provide medical care to the non¬
executives and their spouses and Divyang Child(ren) in Company hospital/empanelled hospitals or
outpatient/Domiciliary only in India subject to ceiling limit, on account of retirement on attaining
the age of superannuation or are separated by the Company on medical ground or retirement under
Voluntary Retirement Scheme formulated and made applicable from time to time or resigns from the
company at the age of 57 Years or above or on death to the spouse and Divyang Child(ren). The
maximum amount reimbursable during the entire life for the retired non-executives and spouse taken
together jointly or severally is ? 0.08 crores except for specified diseases with no upper limit. The
maximum amount reimbursable during the entire life of Divyang child would be ?0.025 crores. The
Scheme is funded through trust for group, maintained with Life Insurance Corporation of India . The
liability for the scheme is recognised based on actuarial valuation done at each reporting date.

Defined Contribution Plansa) Provident Fund and Pension

Company pays fixed contribution towards Provident Fund and Pension Fund at pre-determined rates based
on a fixed percentage of the eligible employee's salary i.e. 12% and 7% of Basic salary and Dearness
Allowance towards Provident Fund and Pension Fund respectively. These funds are governed by a separate
statutory body under the control of Ministry of Coal, Government of India, named Coal Mines Provident
Fund Organisation (CMPFO).The contribution towards the fund for the period is recognized in the Statement
of Profit & Loss.

b) CIL Executive Defined Contribution Pension Scheme (NPS)

The company provides a post-employment contributory pension scheme to the executives of the
Company known as “CIL Executive Defined Contribution Pension Scheme -2007” (NPS). The Scheme
is funded through trust for group, maintained with Life Insurance Corporation of India. The obligation
of the Company is to contribute to the trust to the extent of amount not exceeding 30% of basic pay and
dearness allowance less employer’s contribution towards provident fund, gratuity, post-retirement
medical benefits -Executive i.e. CPRMSE or any other retirement benefits. The current employer
contribution of 6.99% of basic and Dearness Allowance is being charged to statement of profit and loss.

Other Long Term Employee Benefitsa) Leave encashment

The company provides benefit of total Earned Leave (EL) of 30 days and Half Paid Leave (HPL) of 20
days to the executives of the company, accrued and credited proportionately on half yearly basis on the
first day of January and July of every year. During the service, 75% EL credited balance is one time
encashable in each calendar year subject to ceiling of maximum 60 days EL encashment. Accumulated
HPL is not permitted for encashment during the period of service. On superannuation, EL and HPL
together is considered for encashment subject to the overall limit of 300 days without commutation of
HPL. In case of non-executives, Leave encashment is governed by the National Coal Wage Agreement
(NCWA) and at present the workmen are entitled to get encashment of earned leave at the rate of 15 days
per year and on discontinuation of service due to death, retirement, superannuation and VRS, the balance
leave or 150 days whichever is less, is allowed for encashment. Therefore, the liabilities for earned leave
are expected to be settled during the service as well as after the retirement of employee. They are
therefore measured as the present value of expected future payments to be made in respect of services
provided by employees up to the end of the reporting period using the projected unit credit method. The
benefits are discounted using the market yields at the end of the reporting period that have terms
approximating to the terms of the related obligation. The scheme is funded by qualifying insurance
policies from Life Insurance Corporation of India. The liability under the scheme is borne by the
Company as per actuarial valuation at each reporting date.

b) Life Cover Scheme (LCS)

As a part of the social security scheme, the Group has a Life Cover Scheme known as “Life Cover Scheme
of Coal India Limited” (LCS) which covers all the executive and non-executive cadre employees. In case of
death in service, an amount of ? 0.015625 crores is paid to the nominees under the scheme w.e.f June 01,
2023. The expected cost of the benefits is recognized when an event occurs that causes the benefit payable
under the scheme.

c) Settlement Allowances

As part of the wage agreement, a lump sum amount is payable as a settling-in allowance to all non-executive
employees covered under NCWA upon their superannuation on or after October 31, 2010. The Board of
Directors of Coal India Limited in its 481st meeting held on July 31, 2025 approved the enhanced amount
of ?0.002 Crore from the existing ?0.0012 Crore. The liability under this scheme is borne by the Company
based on actuarial valuation at each reporting date.

d) Group Personal Accident Insurance (GPAIS)

Coal India Limited (CIL) has taken group insurance scheme from United India Insurance Company
Limited to cover the executives of the CIL Group against personal accident known as “Coal India
Executives Group Personal Accident Insurance Scheme” (GPAIS). GPAIS covers all types of accident
on 24 hour basis worldwide. Premium for the scheme is borne by the CIL.

e) Travel Allowance Scheme

As a part of wage agreement, Non-executive employees are entitled to travel assistance for visiting their home
town and for “Bharat Bhraman” once in a block of 4 years. A lump sum amount of ? 0.0010 crore and ? 0.0015
crore is paid for visiting Home town and “Bharat Bhraman”, respectively. The liability for the scheme is
recognised based on actuarial valuation at each reporting date.

f) Workmen's Compensation Benefits in Mine Accident

As a part of social security scheme, the company provide the benefits admissible under The Employee’s
Compensation Act, 1923 to the next of kin of an employee in case of a fatal mine accident w.e.f
November 07, 2019. The Board of Directors of Coal India Limited in its 480th meeting held on June 26,
2025 approved the enhanced amount of ?25 lacs from the existing ?15 lacs to all employees (executive,
non executives and contract workers). In addition, w.e.f June 01, 2023 an exgratia amount of ? 90,000/-
is also paid in case of death or permanent total disablement. The expected cost of the benefits is
recognised when an event occurs that causes the benefit payable under the scheme.

The Gratuity scheme is a final salary Defined Benefit Plan that provides for a lump sum payment made on exit either
by way of retirement, death, disability or voluntary withdrawal. The benefits are defined on the basis of final salary
and the period of service and paid as lump sum at exit. The Plan design means the risks commonly affecting the
liabilities and the financial results are expected to be:

1. Interest rate risk:

The defined benefit obligation calculated uses a discount rate based on government bonds. If bond yields fall, the
defined benefit obligation will tend to increase.

2. Salary Inflation risk:

Higher than expected increases in salary will increase the defined benefit obligation.

3 Demographic risk:

This is the risk of variability of results due to unsystematic nature of decrements that include mortality, withdrawal,
disability and retirement. The effect of these decrements on the defined benefit obligation is not straight forward and
depends upon the combination of salary increase, discount rate and vesting criteria. It is important not to overstate
withdrawals because in the financial analysis the retirement benefit of a short career employee typically costs less
per year as compared to a long service employee."

There are no Statutory minimum funding requirements for such plans mandated in India. However a company can
fund the benefits by way of a separate irrevocable Trust to take advantage of tax exemptions and also to ensure
security of benefits.

The scheme is funded by way of a separate irrevocable Trust and the company is expected to make regular
contributions to the Trust. The fund is managed by an insurance company and the assets are invested in their
conventional group gratuity product. The fund provides a capital guarantee of the balance accumulated and declares
interest periodically that is credited to the fund account. Although we know that the fund manager invests the funds
as per products approved by IRDA and investment guidelines as stipulated under section 101 of IT Act, the exact
asset mix is unknown and not publicly available.

The Trust assets managed by the fund manager are highly liquid in nature and we do not expect any significant
liquidity risks.

The Trustees are responsible for the investment of the assets of the Trust as well as the day to day administration of
the scheme. Administrative expenses of the trust are met by the company. The Trustees are required to conduct
necessary business e.g. Approval of Trust's Financial Statements, Review Investment performance.

The Leave scheme is a final salary Defined Benefit Plan that provides for a lump sum payment made on exit either
by way of retirement, death, disability or voluntary withdrawal. The benefits are defined on the basis of final salary
and the accumulated leave balances and paid as lump sum at exit. The Plan design means the risks commonly
affecting the liabilities and the financial results are expected to be:

1. Interest rate risk:

The defined benefit obligation calculated uses a discount rate based on government bonds. If bond yields fall, the
defined. benefit obligation will tend to increase

2. Salary Inflation risk:

Higher than expected increases in salary will increase the defined benefit obligation

3. Demographic risk:

This is the risk of variability of results due to unsystematic nature of decrements that include mortality, withdrawal,
disability and retirement. The effect of these decrements on the defined benefit obligation is not straight forward and
depends upon the combination of salary increase, discount rate and vesting criteria. It is important not to overstate
withdrawals because in the financial analysis the retirement benefit of a short career employee typically costs less
per year as compared to a long service employee.

4. Change in Leave Balances:

This is the risk of variability of results due to a significant variation from expected accumulation of leave balances.
All other aspects remaining same, higher than expected increase in the leave balances will increase the defined benefit
obligation.

There are no Statutory minimum funding requirements for such plans mandated in India. However a company can
fund the benefits by way of a separate irrevocable Trust or Qualifying Insurance Plan (QIP) to ensure security of
benefits.

The scheme is funded by way of a qualifying insurance plan and the company is expected to make regular
contributions to the plan. The plan is managed by an insurance company and the assets are invested in their
conventional product. The plan provides a capital guarantee of the balance accumulated and declares interest
periodically that is credited to the plan account. Although we know that the fund manager invests the funds
contributed under the plan as per products approved by IRDA and investment guidelines as stipulated under section
101 of IT Act, the exact asset mix is unknown and not publicly available.

The plan assets managed by the fund manager are highly liquid in nature and we do not expect any significant
liquidity risks.

Employees of Master Policyholders are considered memeber for receipt of benefits of the plan. Insurance Company
reimburse the master policyholder, the appropritae benefit in respect of the members on proof to the complete
satisfaction of it of the benefit having become payable or paid.

The PRMB scheme is a fixed monetary amount Defined Benefit Plan that provides for a lump sum payment made
after retirement when a retiree claims medical benefits. The benefits are defined on the basis of amount claimed
under medical expenses (valued as a premium paid by the company to the insurance company) upto a maximum
limit after Retirement.

The Plan design means the risks commonly affecting the liabilities and the financial results are expected to be:

1. Interest rate risk:

The defined benefit obligation calculated uses a discount rate based on govemment bonds. If bond yields fall, the
defined benefit obligation will tend to increase

2. Medical Inflation risk:

Higher than expected increase in premium can lead to increase in defined benefit obligation. Although, this risk is
mitigated by capping the benefit paid by the insurance company (limiting the premium amount for the company).

3. Demographic risk:

This is the risk of variability of results due to unsystematic nature of decrements that include mortality, withdrawal,
disability and retirement. The effect of these decrements on the defined benefit obligation is not straight forward
and depends upon the combination of salary increase, discount rate and vesting criteria. It is important not to
overstate withdrawals because in the financial analysis the retirement benefit of a short career employee typically
costs less per year as compared to a long service employee.

Description of Funding Arrangements and Policies

There are no Statutory minimum funding requirements for such plans mandated in India. However a company can
fund the benefits by way of a separate irrevocable Trust to take advantage of tax exemptions and also to ensure
security of benefits.

The scheme is funded by way of a separate irrevocable Trust and the Group is expected to make regular contributions
to the Trust. The fund is managed by an insurance company and the assets are invested in their conventional group
gratuity product. The fund provides a capital guarantee of the balance accumulated and declares interest periodically
that is credited to the fund account. Although we know that the fund manager invests the funds as per products
approved by IRDA and investment guidelines as stipulated under section 101 of IT Act, the exact asset mix is unknown
and not publicly available.

The Trust assets managed by the fund manager are highly liquid in nature and we do not expect any significant liquidity
risks.

The Trustees are responsible for the investment of the assets of the Trust as well as the day to day administration of
the scheme. Administrative expenses of the trust are met by the Group. The Trustees are required to conduct necessary
business e.g. Approval of Trust's Financial Statements, Review Investment performance.

c) Insurance and escalation claims

Insurance and escalation claims are accounted for on the basis of admission/final settlement.

d) Current Assets, Loans and Advances etc.

The value on realisation on current assets, loans and advances in the ordinary course of business would not
be less than the amount at which they are stated in the Balance sheet.

e) Current Liabilities

Estimated liability has been provided where actual liability could not be measured.

f) Balance Confirmation

The Company has a procedure for obtaining periodic confirmation of balances from banks. There are no
unconfirmed balances in respect of bank accounts and borrowings from banks & financial institutions. With
regard to other parties, reconciliations are made and the balance confirmation letters/emails are also sent on
a periodic basis.

g) Other Securities received by the Company

The Company is in possession of following fund based/non-fund-based security received from suppliers/
contractors/customers, etc. which has not been accounted for:

h) A Contract was awarded to M/s AMR-BBB Consortium for “Development of Kapuria Block and extraction
of coal from Kapuria Block by mass production technology package for a minimum guaranteed production
of 2.0 MTY on turnkey basis” in April 2012. The said contract was cancelled on January 21, 2021 and two
Performance Bank Guarantees valuing ?34.79 crore of M/s AMR BBB Consortium has been encashed by
BCCL. The Company had an outstanding Capital Advance of ?37.76 crore which has been adjusted against
these encashed Bank Guarantees and balance of ? 2.97 crore has been shown as Deposit with Courts in the
books of accounts. An Arbitration Tribunal has been constituted by the order of High Court, where the
proceedings of the case are presently being carried out. As per the direction of Delhi High Court vide its
order dated January 27, 2021, the remaining two Bank Guarantees amounting to ? 19.19 crore were
encashed by the Bank and was deposited with the Registrar of Delhi High Court. Amount paid for DPR
? 6.50 crore as appearing under the head “Development” (CWIP Note - 3.2) of WJ Area will be adjusted
after the final verdict of the arbitration proceedings.

i) The Company (BCCL, Kolkata Office) has filed a civil suit in the High Court at Kolkata (G.A. No. 2797 of
2013/ C.S. No. 11 of 2013) against M/s Turner Morrison Limited, Kolkata for (i) a declaration that the
Company is the lawful owner of the its present office premises at 6, Lyons Range, Kolkata-700001, (ii) a
declaration that there was no relationship as the landlord and the tenant between them and (iii) a decree of
?187.74 Crore with interest against the Rent etc. already paid by the Company to M/s Turner Morrison
Limited, Kolkata. Further, as per the direction of Hon'ble High Court, an amount of ? 10.77 crores (P/Y
? 9.96 crores) has been deposited with the court.

j) Balances of Erstwhile Kustore Area

Liabilities of erstwhile Kustore Area, appearing in the audited financial statements of PB Area, are under
examination/investigation. Similarly, ‘Advances, Deposits & Claims etc.’ of erstwhile Kustore Area are also
under verification/scrutiny. Based on the outcome of the examination / investigation / verification / scrutiny,
‘Liabilities’ will be written back or paid and similarly Advances etc. will be adjusted or written off.

k) Physical Verification of Assets of Erstwhile Kustore Area merged with P.B. Area

In view of the observation of the Audit and assurance given thereon by the Management, the job of Physical
verification of Assets of collieries / units of erstwhile Kustore Area merged with PB Area and their
reconciliation with Asset Register / Plant Card etc. was assigned to a firm of Chartered Accountant during
2015-16. The firm reported based on physical verification that the Gross Block has been overstated by ?9.63
crore and provision for depreciation is under-charged by ?16.06 crore in financial statements as on date of
merger. But it has been recommended by the firm that ‘under the reported limitations, having influence on
the gross value, depreciation and net value of physically existing Assets (derived), there is no option but to
consider the audited figures of gross value, depreciation and net value appearing in financial statements as
assets physically existing. Management has accepted the aforesaid recommendation.

l) Possession of Parbatpur (Central) Coal Mine

Allocation of Parbatpur (Central) Coal Mine (Bokaro) in 2006 by Government of India (GOI) to Electro
steel Casting Limited stood de-allocated w.e.f. March 31, 2015 and thereafter Govt. of India (GOI) assigned
the said mine to the designated Custodian i.e. ‘Chairman, CIL’ in terms of the provisions of the Coal Mines
(Special Provisions) Second Ordinance, 2014 (DO No. 13016/36/2015-CA-III dated March 31, 2015 issued
by the Joint Secretary MOC). Chairman CIL, in turn, authorized ‘CMD, BCCL’ to act on his behalf (CIL/
CH/CUSTODIAN/27/1608dated March 31, 2015). Accordingly, Parbatpur (Central) Coal Mine was placed
under the administrative control of Eastern Jharia Area (Dhanbad) of the Company (Office Order No. the
Company: CS: F-17(A):138 dated April 03, 2015 issued by Company Secretary the Company).

Now, vide Office Memorandum No.13016/77/2015-CA-III dated October 06, 2015 of GOI, MOC, Parbatpur
(Central) Coal Mine has been reallotted to M/s SAIL and the Designated Custodian ie Chairman, CIL has
been advised to hand over possession of the mine to SAIL. Accordingly, it has been handed over to SAIL as
confirmed by GM, Eastern Jharia Area vide his Letter No. BCCL/GM/EJA/2016/1429 dated July 28, 2016
enclosing there with charge hand-over and take-over report. Further, the Company has spent ? 5.08 Crore
upto July 28, 2016 (Power bill ?4.04 Crore, Repair & Maintenance and others ? 1.04 Crore) on maintaining
the possession of the mine as custodian which has been booked as ‘Receivable’ in the Financial Statements.
The amount is adjustable from the sale proceeds from the coal stock lying at the mine.

It is updated that as against BCCL claim of ? 5.08 Crore, SAIL has also claimed ? 17.00 Crore towards
de-watering of mine, etc. which was not reasonably accepted by BCCL Management.

Again, Government of India has appointed the Chairman, CIL to manage and operate Parbatpur-Central
Coal mine vide notification in the Gazette of India (F. No. CBA2-13016/1/2018-CBA2 dated February 13,
2020). Chairman, CIL authorized the CMD, BCCL to take appropriate action as per relevant provisions of
Coal Mines (Special Provisions) Act, 2015 as amended by Mineral Laws (Amendment) Ordinance 2020 and
the rules made thereunder, to manage and operate the said mine.

Accordingly, Parbatpur (Central) Coal Mine was placed under the administrative control of Eastern Jharia
Area (Dhanbad) of the Company and GM (EJ Area), BCCL is authorized to take over the possession of the
Parbatpur-Central Coal Mine and to manage and operate with immediate effect. (Authorization letter No:
BCCL/D(T)P&P/F-83(B)/2020/45 dated March 03, 2020 issued by director (tech.) P&P of the Company).

From the date of second time take over possession of the mine as custodian, the Company has spent ? 35.05
Crore (Total ? 40.13 crore since July 28, 2016) on maintaining the mine as custodian which has been booked
as ‘Receivable’ in the Financial Statements. The Parbatpur-Central Coal Mine has been handed over to M/s
JSW Steel w.e.f. July 31, 2023.

m) Fund under Master Plan

The Company receives fund from Coal India Limited against Master Plan for dealing with fire and
rehabilitation of persons dwelling in coal bearing / fire affected area of the Company. The Company is the
implementing agency for fire projects and rehabilitation of persons dwelling in the Company houses. Jharia
Rehabilitation & Development Authority (JRDA) is the implementing agency for rehabilitation of persons
dwelling in non-BCCL houses, for which the Company acts as a nodal agency. Fund received as nodal
agency is advanced to JRDA and such Advance (shown under Other Financial Assets in Note-4.6) as well as
the relevant Fund, both are adjusted on the basis of utilization statement submitted by JRDA. There is an
Advance of ? 317.61 Crore as at March 31, 2026 (as at March 31, 2025 ? 67.61 Crore) to JRDA awaiting
utilization certificate for their adjustment.

n) Revenue from Contracts with Customers (Ind AS-115)

i. Other claims are accounted for when there is certainty of realization. Accordingly, in the matter of Rent
receivable from the tenants, revenue is accounted for on cash basis.

ii. Refund / Adjustment together with interest thereon from Tax Authorities are accounted for on the basis of
final assessment / refund.

iii. Recovery of the liquidated damages and penalties are accounted for on the basis of final settlement.

iv. Disaggregated Revenue information:

The table below presents disaggregated revenues from contract with customers’ information as per requirement
of Ind AS 115, Revenue from Contract with Customer for revenue from sale of coal & others:

p) Events Occurring after the Reporting Period (Ind AS 10)

No adjusting events occurred after the reporting period.

q) Change in Capital Structure

The shares of the company are listed in Stock Exchanges on and from January 19, 2026. The listing involved
the issuance of 46.57 crore ordinary shares, which is 10% of the Paid-up Equity Share Capital. As on the
reporting date, Coal India Limited (CIL) holds 90% of the share capital of the company.

The dividend on erstwhile 5% Non-Convertible Cumulative Redeemable Preference Shares of ?44.4325
crores was recommended by the Board and paid on August 05, 2024 after the approval of the shareholders in
the Annual General Meeting for the Financial Year 2023-24 held on August 01, 2024.

The remaining dividend of ? 844.2175 crores, was approved by the shareholders of the company in the
Annual General Meeting for the Financial Year 2024-25 held on July 25, 2025. The amount was paid on July
28, 2025.

r) The Jharkhand Highways Fee (Determination of Rates and Collection) Amendment Rules, 2021 notified vide
gazette notification dated 26 October, 2021 states that the State may provide for a scheme for payment of
composition user fee payable by all such mechanical vehicles, for use of any state roads or part there of or
commuting in mining areas as the case may be. The composition user fee (CUF) may be based on the “to and fro”
basis. Such user fee shall be ? 600/- for each way. Till date, no such scheme has been notified in the gazette.
However, Director Mines vide its letter No. 2089 dated 28 December, 2021 has communicated payment of CUF
through JIMS Portal. The prime responsibility towards the payment of said CUF is on the transporter. The
Hon'ble High Court of Jharkhand has stuck down the levy of Composition User Fees vide its order dated
September 24, 2025. An amount of ? 649.14 crore as at March 31, 2026 (P.Y. ? 610.92 crore) has been shown as
Other Financial Liability (Current) and ?10.27 crore paid to the state exchequer has been shown as advance.

s) Benami Property :

No proceedings have been initiated or pending against the Company under the Benami Transactions (Prohibition)
Act,1988.

t) Returns or statements filled with banks or financial institutions : The quarterly returns / statement of current
assets filed by the Company with banks / financial institutions are generally in agreement with the books of
accounts.

u) Wilful Defaulter :

Company has not been declared as a wilful defaulter by any bank or financial institution or any other lender.

v) Relationship with Struck off Companies :

Company has not undertaken any material transactions with struck-off companies.

w) Registration of charges or satisfaction with Registrar of Companies :

No charges or satisfaction is pending for registration with Registrar of Companies beyond the statutory period by
the Company.

x) Compliance with number of layers of companies :

The provisions of clause (87) of section 2 of the Act read with the Companies (Restriction on number of Layers)
Rules, 2017 are not applicable to the Company as per Section 2(45) of the Companies Act, 2013.

y) Compliance with approved Scheme(s) of Arrangements :

There were no scheme of Arrangements approved by the competent authority during the year in terms of sections
230 to 237 of the Companies Act,2013.

z) Utilisation of Borrowed funds and share premium :

(A) Company has not advanced or loaned or invested any fund to any entity (Intermediaries) with the
understanding that the Intermediary shall lend or invest in party identified by or on behalf of the Company
(Ultimate Beneficiaries). (B) Company has not received any fund from any party with the understanding that the
Company shall whether, directly or indirectly lend or invest in other entities identified by or on behalf of the
Company (“Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of the Ultimate
Beneficiaries.

aa) Crypto Currency or Virtual Currency :

Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.

ab) Undisclosed Income :

Company does not have any transaction which is not recorded in the books of accounts that has been surrendered
or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961.

ac) Historically, the company treated levies on coal production and sales imposed by Central, State and Local
Authorities as amounts collected in an agency capacity. Pursuant to observations of the C&AG, the company
reassessed the accounting treatment of such levies based on their underlying nature, relevant accounting
standards, legal provisions and opinions obtained from accounting experts. Based on this assessment, the
company concluded that for certain levies it acts as a principal. Accordingly, the Revenue from operations is
disclosed in Note 12.1 is inclusive of such levies on sales.

In the state of West Bengal, cess on coal is computed based on average production of preceding years and notified
prices, whereas recoveries from customers are based on actual dispatches, resulting in timing differences. Such
differences were historically adjusted through an “Equalisation Fund” as Liability in Balance Sheet, which is no
longer required as per the above assessment.

7 Miscellaneous Information

a) Recent Accounting pronouncements applicable in Financial Year 2025-26:

The Ministry of Corporate Affairs (MCA) has issued several amendments during the year to the Companies
(Indian Accounting Standards) Rules, 2015, introducing changes to various Indian Accounting Standards
(Ind AS) applicable from the date of publication in the Official Gazette. These amendments issued on May
07, 2025 and August 13, 2025 cover amendments or consequential amendments to Ind AS 1,7,10, 12, 21, 28,
32, 101, 107, 108, 109, 115 and 116. The company has evaluated these amendment and found no material
impact on its financial statements.

b) Figures for previous year have been regrouped, wherever necessary, in order to make them comparable
with current year figures.

c) The Material Accounting Policy Information have been updated to enhance clarity for users of the financial statements.
These updates do not carry any financial implication.

d) Note-1 and 2 represents Corporate Information and Material Accounting Policy Information respectively. Note 3 to 11
form part of the Balance Sheet as at March 31, 2026 and Note 12 to 15 form part of Statement of Profit & Loss for the
year ended March 31, 2026. Note-16 represents Additional Notes to the Financial Statements.