FUTURE COALINDIA Auditors Report

We have audited the accompanying standalone financial statements of
Coal India Limited (hereinafter referred to as ''''the Company''''), which
comprise the balance sheet as at 31 March 2016, the statement of profit
and loss and the cash flow statement for the year then ended, and a
summary of significant accounting policies and other explanatory
information.

Management''''s Responsibility for the Standalone Financial Statements

The Company''''s Board of Directors is responsible for the matters stated
in Section 134(5) of the Companies Act, 2013 ("the Act") with respect
to the preparation and presentation of these standalone 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 principles generally accepted in India, including the
Accounting Standards specified under Section 133 of the Act, read with
Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility
also includes maintenance of adequate accounting records in accordance
with the provisions of the Act for safeguarding the assets of the
Company and for preventing and detecting frauds and other
irregularities; selection and application of appropriate accounting
policies; making judgments and estimates that are reasonable and
prudent; and design, implementation and maintenance of adequate
internal financial controls, that were operating effectively for
ensuring the accuracy and completeness of the accounting records,
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

Our responsibility is to express an opinion on these standalone
financial statements based on our audit. We have taken into account the
provisions of the Act, the accounting and auditing standards and
matters which are required to be included in the audit report under the
provisions of the Act and the Rules made thereunder.

We conducted our audit in accordance with the Standards on Auditing
specified under Section 143(10) of the Act. 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 the 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 financial control relevant
to the Company''''s preparation of the financial statements that give a
true and fair view in order to design audit procedures that are
appropriate in the circumstances. An audit also includes evaluating the
appropriateness of the accounting policies used and the reasonableness
of the accounting estimates made by the Company''''s Directors, as well as
evaluating the overall presentation of the financial statements.

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

Opinion

In our opinion and to the best of our information and according to the
explanations given to us, the aforesaid standalone financial statements
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, of the state of affairs of the Company as
at 31 March 2016 and its profit and its cash flows for the year ended
on that date.

Emphasis of Matters

We draw attention to the following notes:- a) Note 10A (Para-1) which
refers to title deeds for freehold land amounting Rs.6.38 Crores and
for leasehold land amounting Rs.1.34 Crores have been verified by us
and the same are held in the name of the company. Title deeds for
freehold land for Rs.5.43 Crores are not available for our
verification. Further, as per the details made available to us, title
deeds for freehold land measuring 1072.97 hectares and leasehold land
measuring 5558.23 hectares, for which no value is recorded in the books
of accounts, are not available.

b) Note 10A (Para-2) regarding non-provision for impairment against
fixed assets written down value of which is Rs.11.76 Crores of Dankuni
Coal Complex let out to South Eastern Coalfields Limited (SECL) for
nominal lease rent of Re.1per annum under cancellable operating lease
agreement. In the opinion of the management, the actual worth of the
assets including land is much higher than the book value and hence no
provision is called for.

c) Note No.11 dealing with an aggregate investment of Rs. 8926.42
Crores in its 100% subsidiary companies namely Bharat Coking Coal
Limited (BCCL) and Eastern Coalfields Limited (ECL) have come out of
Board for Industrial & Financial Reconstruction (BIFR). These
subsidiaries are turning around and have started earning profits. In
the view of changing circumstances, the management is of the opinion
that no provisioning is required against the erosion of Rs.2614.85
Crores (PY: 4243.30 Crores) in the value of Investment as the same is
of temporary nature.

d) Note 34(1) (c) Contingent Liability of the accompanying financial
statements, which describes the uncertainty related to the outcome of
the lawsuits filed and demands raised against the Company by various
parties and Government authorities.

e) Pending write off action of certain old account balances against
which full provision has been made in the books of accounts.

f) Balances under Long-term loans and advances of Rs.157.04 Crores,
Short-term loans and advances Rs.0.39 Crores, Trade receivables of
Rs.0.39Crores, Trade payables of Rs.1.51 Croresand Other current
liabilities of Rs.207.48 Crores, have not been confirmed. Consequential
impact on confirmation/ reconciliation/adjustment of such balances
(which will not be material as per management), if any is not
ascertainable.

g) Required number of Independent Directors has not been appointed in
the Board of the Company as per the provisions of Section 149(1) of the
Companies Act, 2013.

Our opinion is not qualified in respect of above matters.

Report on Other Legal and Regulatory Requirements

1) As required by the Companies (Auditor''''s Report) Order, 2016 ("the
Order") issued by the Central Government of India in terms of
sub-section (11) of section 143 of the Act, we give in the
"Annexure-A", a statement on the matters specified in the paragraph 3
and 4 of the said order.

2) As required under Section 143(5) of the Companies Act, 2013, we give
in the "Annexure-B", a Statement on the Directions issued by the
Comptroller and Auditor General of India after complying the suggested
methodology of audit, the action taken thereon and its impact on the
accounts and financial statements of the company.

3) As required by Section 143 (3) of the Act, we report that:

a) we have sought and obtained all the information and explanations
which to the best of our knowledge and belief were necessary for the
purposes of our audit.

b) in our opinion proper books of account as required by law have been
kept by the Company so far as it appears from our examination of those
books.

c) the balance sheet, the statement of profit and loss and the cash
flow statement dealt with by this Report are in agreement with the
books of account.

d) in our opinion, the aforesaid standalone financial statements comply
with the Accounting Standards specified under Section 133 of the Act,
read with Rule 7 of the Companies (Accounts) Rules, 2014.

e) in pursuance to the Notification No. G.S.R 463(E) dated 05-06-2015
issued by the Ministry of Corporate affairs, Section 164(2) of the
Companies Act, 2013 pertaining to disqualification of Directors, is not
applicable to the Government Company.

f) with respect to the adequacy of the internal financial controls over
financial reporting of the Company and the operating effectiveness of
such controls, refer to our report in "Annexure C" and

g) with respect to the other matters to be included in the Auditors''''
Report in accordance with Rule 11 of the Companies (Audit and Auditors)
Rules, 2014, in our opinion and to the best of our information and
according to the explanations given to us:

i. the Company has disclosed the impact of pending litigations on its
financial position in its financial statements ? Refer Note 34(1)(c )
to the standalone financial statements;

ii. the Company did not have any long-term contracts including
derivative contracts for which there were any material foreseable
losses;

iii. therewere no amounts which were required to be transferred, to
the Investor Education and Protection Fund by the Company.

"ANNEXURE-A"TO THE INDEPENDENT AUDITOR''''S REPORT

(Referred to in Paragraph 1 of "Other Legal and Regulatory
requirements" of our Audit Report)

(i) In respect of Fixed Assets:

(a) The Company has maintained proper records showing full particulars,
including quantitative details and situation of fixed assets except for
assets at Regional sales offices. Further certain details as regards to
purchase orders reference, date of commissioning, location,
identification and codifications etc. of some movable tangible assets
needs to be updated. Location details and area of freehold and
leasehold land also needs to be updated in the fixed asset register and
need to be reconciled with the revenue records maintained by the local
authority.

(b) The fixed assets located at Head quarter, North Eastern Coalfields,
various Regional sales offices and other offices have been physically
verified periodically as certified by the management. Discrepancies
noticed on such verification were not material as per the management,
pending for reconciliation and adjustment in the books of accounts. The
process should be further improved by having well defined programme of
physical verification to cover all the assets in phased manner.

(c) According to the information and explanations given to us and on
the basis of our examination of the records of the Company, title deeds
for freehold land amounting Rs.6.38 Crores and for leasehold land
amounting Rs.1.34 Crores have been verified by us and the same are held
in the name of the Company. Title deeds for freehold land for Rs.5.43
Crores are not available for our verification. Further, as per the
details made available to us, title deeds for freehold land measuring
1072.97 hectares and leasehold land measuring 5558.23 hectares, for
which no value is recorded in the books of accounts, are not available.

(ii) In respect of Inventories:

(a) The physical verification of inventories at North Eastern
Coalfields has been conducted at reasonable intervals during the year
by the management.

(b) The inventories have been measured on the basis of volumetric
system.

(c) In our opinion, the procedures and frequency of physical
verification of inventories followed by the management are reasonable
and adequate in relation to the size of the Company and nature of its
business.

(iii) According to the information and explanation given to us, the
Company has not granted any loans, secured or unsecured to companies,
firms, Limited Liability Partnerships or other parties covered in the
register maintained under section 189 of the Companies Act, 2013 as
such paragraph 3(iii) of the Order is not applicable.

(iv) In our opinion and according to the information and explanations
given to us, the Company has complied with the provisions of section
185 and 186 of the Act, with respect to the loans and investments made.

(v) The Company has not accepted any deposits from the public.

(vi) The maintenance of Cost records has been prescribed by the Central
Government under section 148(1) of the Companies Act, 2013 in respect
of Mining activities of the Company. We have broadly reviewed the
records and are of the opinion that prima facie, the prescribed
accounts and records have been made and maintained. However, we have
not made any detailed examination of the records.

(vii) (a) According to the information and explanations given to us and
on the basis of our examination of books of accounts, the Company is
generally regular in depositing the undisputed statutory dues including
provident fund, income tax, sale tax, wealth Tax, duty of customs, duty
of excise, value added tax, cess and any other statutory dues with the
appropriate authorities except few cases of delay noticed in deposit of
service tax. As informed to us, Employee''''s state insurance is not
applicable to the company.

According to the information and explanations given to us, except dues
of additional royalty of Rs.28,51,836/-as on March 31,2016 which have
not been deposited for reason stated in Note- 34(17) of the
accompanying financial statements , no other undisputed amounts payable
in respect of provident fund, income tax, sales tax, wealth tax, duty
of customs, duty of excise, service tax, value added tax, cess and
other material statutory dues were in arrears as at 31 March 2016, for
a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us, and as
per the records of the Company examined by us, there are no dues of
income tax, duty of customs, duty of excise, cess and other statutory
dues except following sales tax, which have not been deposited on
account of any dispute are as under:

Name of the statute Nature of Amount Period to which
dues (in Rs.) the amount
relates

Provincial Sales Tax Act Sales Tax 3,86,234.13 FY:1989-90

Provincial Sales Tax Act Sales Tax 1,79,762.00 FY:1990-91

Provincial Sales Tax Act Sales Tax 48,441.00 FY:1990-91

Provincial Sales Tax Act Sales Tax 2,75,819.00 FY:1991-92

Provincial Sales Tax Act Trade Tax 9040.00 FY:1993-94

Name of the Statute Forum where dispute is pending

Provincial Sales Tax Act Assessing officer

Provincial Sales Tax Act Additional Commissioner (Appeals)-3

Provincial Sales Tax Act Additional Commissioner (Appeals)-3

Provincial Sales Tax Act Additional Commissioner (Appeals)-3

Provincial Sales Tax Act Assessing officer

(viii) The Company does not have any loans or borrowings from any
financial institution, banks, government or debenture holders during
the year as such paragraph 3(viii) of the Order is not applicable.

(ix) The Company did not raise any money by way of initial public offer
or further public offer (including debt instruments) and term loans
during the year.

(x) According to the information and explanations given to us, no
material fraud by the Company or on the company by its officers or
employees has been noticed or reported during the course of our audit.

(xi) According to the information and explanations given to us and
based on our examination of the records of the Company, the Company has
paid/provided for managerial remuneration in accordance with the
requisite approvals mandated by the provisions of section 197 read with
Schedule V to the Act.

(xii) In our opinion and according to the information and explanations
given to us, the Company is not a nidhi Company as such paragraph
3(xii) of the Order is not applicable.

(xiii) According to the information and explanations given to us and
based on our examination of the records of the company, transactions
with the related parties are in compliance with sections 177 and
Section 188 of the Act where applicable and details of such
transactions have been disclosed in the financial statements as
required by the applicable accounting standards.

(xiv) According to the information and explanations given to us and
based on our examination of the records of the Company, the Company has
not made any preferential allotment or private placement of shares or
fully or partly convertible debentures during the year.

(xv) According to the information and explanations given to us and
based on our examination of the records of the Company, the Company has
not entered into non-cash transactions with directors or persons
connected with them as such paragraph 3(xv) of the Order is not
applicable.

(xvi) The Company is not required to be registered under section 45-IA
of the Reserve Bank of India Act 1934.


For CHATURVEDI & CO.

Chartered Accountants

Firm Regn. No.302137E

S.C.Chaturvedi

Partner

Mem.No.012705

Place:Kolkata

Dated:May 28, 2016

CIN: U67190WB2003PTC096617. Trading in Commodities is done through our Group Company Dynamic Commodities Pvt. Ltd. The company is also engaged in Proprietory Trading apart from Client Business.
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