MMTC Limited addresses audit qualification related to Anglo Coal case in Q2 2026 results

MMTC Limited addresses audit qualification related to Anglo Coal case in Q2 2026 results​

MMTC Limited has provided a statement regarding the impact of audit qualifications on its unaudited financial results for the quarter ended June 30, 2026. The audit qualification primarily relates to the ongoing litigation concerning the Anglo Coal matter.

The management noted that the qualification pertains to the non-recognition of an additional provision amounting to Rs 82.82 crore in relation to the Anglo Coal/Anglo American matter.

Financial Impact and Comparison​

The unaudited figures, before adjusting for the audit qualification, showed key financial metrics at a certain level. After adjustments based on the qualification, certain items were modified. The following table outlines some of the financial positions reported (Standalone results):

Litigation Background and Liability Determination​

The audit qualification draws attention to the Anglo Coal case, wherein an aggregate amount of Rs 1088.62 crore was deposited with the Hon'ble Delhi High Court. This deposit comprised Rs 1087.76 crore (via Demand Draft dated 20.07.2022) and Rs. 0.86 crore (attached from MMTC’s Bhubaneswar bank account).

Throughout the legal proceedings, the company made several submissions. The Hon'ble Delhi High Court issued an order on May 9, 2025, allowing the decree holder [Anglo] to withdraw the amount along with accrued interest after a two-week period. Subsequently, following the dismissal of a SLP filed by the company before the Hon'ble Supreme Court (dated November 3, 2025), MMTC filed an application admitting a total liability of Rs 1169.14 crore as of January 1, 2026. Pursuant to a court order dated November 10, 2025, Rs 1000 crore was released to Anglo on November 17, 2025.

Management’s calculations estimate the remaining liability towards Anglo coal as of November 17, 2025, at Rs 170.58 crore, including accrued interest up to that date. The company recognized a provision of Rs 87.76 crore against this obligation, resulting in a non-recognition difference of Rs 82.82 crore. This discrepancy led the auditor to note that the provision was understated and contingent liabilities were overstated by Rs 82.82 crores.

Management's Response​

The management stated that it provided comprehensive details and supporting documentation to the Auditors during the course of the audit proceedings.

The company noted that against the original deposit of Rs 1088.62 crore made in July 2022, substantial accrued interest amounting to approximately Rs 259.74 crore had accumulated up to January 1, 2025. The management asserts that the rate of interest payable as decided by the court is less than the Bank interest rate accruing on the deposited amount.

The company assessed that no separate or incremental outflow of resources from MMTC was expected regarding the alleged differential liability of Rs 82.82 crore, considering the accrued interest available with the Court.

In line with AS 37 (Provisions, Contingent Liabilities and Contingent Assets), management holds that a provision is only required when all conditions—a present obligation, probability of outflow, and reliable estimation—are met. The company concluded that the condition of probable outflow for Rs 82.82 crore was not satisfied due to the accrued interest available from the court.

Therefore, the management disagreed with the qualification made by Statutory Auditors regarding the provision of Rs 82.82 crore, stating that it was appropriately disclosed as a contingent liability.

MMTC Stock Price Movement​

On Tuesday, MMTC Limited stock closed higher, edging up 1.41% to settle at ₹64.98. This gain was supported by significant trading volume, as the equity traded 1.72 million shares during the session.