Annexure XIV Continued… - Edelweiss

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
You should read the following discussion of our financial condition and results of operations together with our
restated consolidated financial information for the nine months ended December 31, 2010 and each of Fiscal
2006, 2007, 2008, 2009 and 2010, including the notes thereto and the report thereon, which appear elsewhere
in this Draft Red Herring Prospectus. These financial statements have been prepared in accordance with
Indian GAAP and the Companies Act and restated in accordance with the ICDR Regulations and as described
in the report of our auditors dated May 26, 2011, which is included in this Draft Red Herring Prospectus
under "Financial Statements". The restated consolidated financial information has been prepared on a basis
that differs in certain material respects from generally accepted accounting principles in other jurisdictions,
including US GAAP and IFRS. Accordingly, the degree to which the Indian GAAP financial statements
included in this Draft Red Herring Prospectus will provide meaningful information is entirely dependent on
the reader's level of familiarity with Indian GAAP, the Companies Act and the ICDR Regulations.
Our fiscal year ends on March 31 of each year; all references to a particular fiscal year are to the twelvemonth
period ended March 31 of that year.
This discussion contains forward-looking statements and reflects our current views with respect to future
events and financial performance. Actual results may differ materially from those anticipated in these forwardlooking
statements as a result of certain factors such as those set forth in the sections "Risk Factors" and
"Presentation of Financial, Industry and Market Data" beginning on page 18 and page 13, respectively, of this
Draft Red Herring Prospectus, respectively.
In this section, a reference to the "Company" means ACB (India) Limited. Unless the context otherwise
requires, references to "we," "us," "our" or "ACBL" refers to ACB (India) Limited, its Subsidiaries, Associate
and Joint Venture.
Overview
As of April 2011, we are the largest coal beneficiation company in India, with an aggregate designed
beneficiation capacity, on a proportional basis, of 57.86 million tons per annum (Source: CRISIL Research
Review and Outlook on Power and Coal, April 2011). Our beneficiation operations are spread over 15
locations in India in the major coal bearing states of Chhattisgarh, Orissa, Maharashtra and Andhra Pradesh
(Source: CRISIL Research Review and Outlook on Power and Coal, April 2011), and include the largest coal
beneficiation plant in India in Dipka, Chhattisgarh, with a designed capacity of 12.00 million tons per annum
(Source: CRISIL Research Review and Outlook on Power and Coal, April 2011). In connection with our coal
beneficiation operations, we also offer logistics services to our customers to manage their supply chain and
delivery of raw coal from the mines to our beneficiation plants and from our plants to their sites. Our
beneficiation plants generate coal rejects as a by-product that we began converting into electrical power in
February 2007 with the construction and commissioning of a 30 MW thermal power plant in Chhattisgarh
fueled by reprocessed coal rejects. We also have a wind power facility with a designed capacity of 15 MW in
Maharashtra. We source all the coal rejects we need for our existing power plant from our own coal
beneficiation business. We also sell coal rejects, reprocessed coal rejects, coal rejects blended with raw coal
and sales of coal (both processed and unprocessed) purchased through the e-auction scheme conducted by Coal
India Limited and its subsidiaries. We consider our coal beneficiation operations, power generation operations
and sale of coal to be an integrated business.
Our plan is to increase our aggregate designed beneficiation capacity, on a proportional basis, to 82.40 million
tons per annum by the end of Fiscal 2015. Our strategy going forward is also to increase the percentage of our
total income that will be generated from our thermal power operations. In furtherance of this, we have two
power projects with an aggregate designed capacity of 320 MW in the construction phase which we expect to
commission in Fiscal 2012. Both will be fueled with a blend of coal rejects from our beneficiation operations
and raw coal. We also have four projects under implementation with an aggregate designed capacity of 1,880
MW (one of the plants in the implementation phase is owned in part by third parties; consequently, our
proportional capacity is expected to be 1,586 MW) which we expect to commission at various points before
the end of Fiscal 2015 as well as one project under development with an aggregate designed capacity of 1,200
MW which we expect to commission by March 2016. Two of these five projects, with an expected aggregate
designed capacity of 80 MW, will also be fueled with a blend of coal rejects from our beneficiation operations
and raw coal and the other three, with an expected aggregate designed capacity, on a proportional basis, of
2,706 MW, will be fueled with raw coal. Our power projects are strategically located in areas that we believe
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