MMTC auditors seek Rs 82.82 crore Anglo Coal provision

MMTC Limited’s auditors said an additional Rs 82.82 crore Anglo Coal provision should be recognised at 30 September 2026, which would reduce other equity by the same amount and lower consolidated half-year profit to Rs 46.59 crore from Rs 129.41 crore. MMTC says accrued interest on its court deposit should meet any incremental liability.

What did MMTC’s auditors qualify in the Anglo Coal case?

MMTC’s auditors qualified the results because Rs 82.82 crore was disclosed as a contingent liability rather than recognised as a provision. The auditors said the decree in favour of Anglo Coal had attained finality, while MMTC’s provisional calculation put the estimated remaining liability at Rs 170.58 crore as at 17 November 2025, including interest calculated to that date.

Only Rs 87.76 crore of that estimated Rs 170.58 crore obligation was available as a provision in the accounts, according to the audit annexure. The remaining Rs 82.82 crore was not recognised, and the auditors said that treatment departed from Indian Accounting Standard 37, or Ind AS 37, which covers provisions, contingent liabilities and contingent assets.

The filing classifies the opinion as qualified and the frequency of the qualification as repetitive for the half year ended 30 September 2026. The auditors’ position is that the obligation itself is established by the decree, even though its final calculation remains unresolved, so the disputed Rs 82.82 crore should move from contingent-liability disclosure into provisions.

How would the Rs 82.82 crore provision alter MMTC’s results?

Recognising the Rs 82.82 crore would increase expenditure and provisions by that amount, while reducing consolidated net profit, net worth and other equity by the same amount. Total income would remain Rs 184.04 crore for the half year ended 30 September 2026, indicating that the audit adjustment concerns liability and expense recognition rather than revenue.

The consolidated impact statement shows reported profit of Rs 129.41 crore falling to Rs 46.59 crore after the qualification adjustment. Earnings per share would decline to Rs 0.31 from Rs 0.86, while net worth would decrease to Rs 2,181.70 crore from Rs 2,264.52 crore.

The standalone impact statement for the financial year ended 31 March 2026 presents the same Rs 82.82 crore quantified adjustment. Standalone net profit was shown at Rs 103.20 crore before adjustment and Rs 20.38 crore after adjustment, with earnings per share changing from Rs 0.69 to Rs 0.14.

Why does MMTC reject the additional Anglo Coal provision?

MMTC rejects the additional provision because management says interest accrued on the amount held by the Delhi High Court is available to adjust against any eventual differential payment. Management cited approximately Rs 259.74 crore of interest accrued up to 1 November 2025 on the original court deposit and assessed that no separate or incremental resource outflow was probable.

MMTC deposited Rs 1,088.62 crore in July 2022 under Delhi High Court orders, comprising Rs 1,087.76 crore deposited through a demand draft and Rs 86 lakh attached from its Bhubaneswar bank account. The company said this full amount was already recognised and provided for in its accounts before the audit qualification.

Of the original deposit, Rs 1,000 crore was released to Anglo Coal on 17 November 2025, and Rs 86 lakh was also released under court directions, according to the filing. MMTC said both sums were reduced from its provision and from the court deposit, leaving the question of any further amount tied to court determination and available accrued interest.

Management described its Rs 1,170 crore calculation, submitted with interest up to 1 November 2025, as provisional and without prejudice. It said the calculation was prepared for court proceedings and cannot be treated as an unconditional admission because the applicable United States dollar exchange rate and final methodology remain subject to adjudication.

What has the Delhi High Court decided and what remains pending?

The Delhi High Court permitted Anglo Coal to withdraw the Rs 1,088.62 crore court deposit together with accrued interest in its order dated 9 May 2025. MMTC’s Special Leave Petition was dismissed by the Supreme Court on 3 November 2025, a development the auditors cited in saying the decree in Anglo Coal’s favour had attained finality.

The High Court’s order dated 9 January 2026 left two issues pending: whether tax must be deducted at source on the awarded amount, and which date should apply for the exchange rate on the award and related interest. Those matters affect the final payable amount, while the auditors maintain that they do not remove the need to recognise the Rs 82.82 crore provision.

MMTC also disclosed that it had filed an application seeking clarification on the final amount payable and withholding tax. The company’s notes said the hearing on the balance amount, arising from differing calculations on foreign-exchange rate and withholding tax, was scheduled for 3 December 2026.

A separate High Court order dated 7 October 2026 allowed MMTC to lease specified properties at prevailing market rates to government, semi-government, public-sector or other credible entities, with preference for government and public-sector entities. Any lease or licence receipts, excluding security deposits and net of tax deducted at source, must be deposited with the Registrar General within seven days of receipt.

What other disclosures accompany MMTC’s qualified results?

MMTC’s consolidated cash flow from operating activities was an outflow of Rs 179.12 crore for the half year ended 30 September 2026, compared with an outflow of Rs 145.02 crore in the corresponding 2025 period. Cash and cash equivalents closed at Rs 2.10 crore, down from Rs 18.17 crore a year earlier.

Investing activities generated Rs 178.68 crore in the 2026 half year, up from Rs 101.56 crore in the 2025 period. The 2026 figure included Rs 111.48 crore of dividends received and Rs 67.26 crore of interest received, while financing activities recorded an outflow of Rs 16 lakh compared with an inflow of Rs 31.86 crore a year earlier.

MMTC introduced a voluntary retirement scheme on 9 September 2026 and accepted applications from 38 employees. Of those, 23 employees were relieved on 30 October 2026, and management estimated an expense of Rs 20 crore, to be recorded in the subsequent quarter because the applications were accepted in October 2026.

The filing also said consolidated results did not include MTPL, Singapore, which is under liquidation, because MMTC had no financial inputs for the half year ended 30 September 2026. MMTC stated that its Rs 3.14 crore investment in MTPL had already been fully provided for, while the liquidation process continued under Singapore law.

Conclusion

The audit qualification centres on a clear accounting difference of Rs 82.82 crore. Auditors say the amount should be recognised because the Anglo Coal obligation is established, which would reduce consolidated half-year profit to Rs 46.59 crore and net worth to Rs 2,181.70 crore. MMTC maintains that accrued court-deposit interest means an additional cash outflow is not probable.

The key next development is the Delhi High Court’s determination of the exchange-rate and withholding-tax issues that were scheduled for hearing on 3 December 2026. MMTC’s accounting treatment depends on whether accrued interest on the Rs 1,088.62 crore original deposit can ultimately be adjusted against any balance payable.