Annexure XIV Continuedâ¦ - Edelweiss

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Sponge iron manufacturing business Income from our sponge iron manufacturing business refers to income generated through the sale of sponge iron related goods. As described above, we disposed of our sponge iron business on April 9, 2011. Sale of equipment Our income from the sale of equipment is primarily from equipment sold to our associates. Other income Our other income consists primarily of interest income on fixed deposits and interest accruing on intercompany deposits. Expenditures The principal components of our expenditures are purchases of coal; direct expenses; personnel cost; administrative and selling expenses; depreciation and finance cost. Purchases of coal Purchase of coal comprises the purchase of coal rejects as well as purchases of raw coal sold in the e-auction conducted by Coal India Limited and its subsidiaries. It also includes the related loading and transportation costs at or to our coal beneficiation plants. As per most of our beneficiation contracts, we adjust the beneficiation charges due from our customers in exchange for the coal rejects generated from the beneficiation of raw coal on their behalf. These credits are treated as a purchase of coal. Decrease/(increase) in stock Decrease/(increase) in stock represents the difference between our stock of coal at the beginning of the period and our stock of coal at the end of the period. Direct expenses In our coal beneficiation, power generation and sponge iron businesses, direct expenses primarily consist of transportation and loading expenses, expenses related to the purchase of power and fuel, raw materials, chemicals and labour and the repair and maintenance of our plants and stores. Personnel cost Personnel cost refers to costs related to salaries, wages and bonuses to our employees, our contributions to provident and other funds and staff welfare expenses. Administrative and selling expenses Administrative and selling expenses relate to expenses incurred in connection with our income generating operations, such as land leases, legal and professional fees, travelling and conveyance charges, deductions related to the quality/quantity of our products, handling charges, provisions for doubtful advances and bad debts written off. Depreciation Depreciation consists of depreciation on fixed assets, assets used for coal beneficiation and the manufacturing of equipment, assets used for power generation and sponge iron production and amortization related to leasehold land leases. We book depreciation in accordance with the Companies Act. The rates derived from these depreciation schedules may be, on average, higher than the depreciation rates provided by electricity regulatory commissions under tariff regulations, which set forth the amounts that we are allowed to recover under applicable tariffs on certain projects. This increase in non-cash depreciation charges may have an adverse impact on our future profits. 287
Finance cost Finance costs include interest on term loans, interest on cash credits/working capital loans and interest paid on inter-corporate deposits. Recent Developments On April 9, 2011, we sold our sponge iron business, which we do not regard as core to our strategy going forward, which is to focus on our coal beneficiation and power generation businesses. The sale was consummated through our divestment of 81.20% of the equity share capital of Aryan Ispat and Power Private Limited, through which we operated our sponge iron business. The assets of Aryan Ispat and Power Private Limited also include an 18 MW power project and a coal beneficiation plant with a designed capacity of 0.70 million tons per annum. For further details, please see the section titled "Our Business — Coal Beneficiation Plants" on page 144 of this Draft Red Herring Prospectus. In April 2011, we also commissioned a coal beneficiation plant with a designed capacity of 5.00 million tons per annum in Himgir. For further details, please see the section titled "History and Certain Corporate Matters" on page 196 of this Draft Red Herring Prospectus. Results of Operations Our restated consolidated financial information are included in this Draft Red Herring Prospectus under the section titled "Financial Statements." The following table sets forth selected data with respect to our results of operations for the periods indicated. Particulars Income Fiscal 2006 Fiscal 2007 Fiscal 2008 Fiscal 2009 (` in millions) Fiscal 2010 Nine months ended December 31, 2010 Coal beneficiation and allied receipts .................. 2,308.74 2,169.01 2,324.22 3,027.43 3,580.04 2,910.62 - Sale of coal .................... 341.93 651.00 1,940.54 4,780.38 5,701.61 4,806.69 - Sale of power ................. 10.41 130.10 569.80 635.77 707.30 670.57 - Sale of sponge iron ....... - 250.42 545.34 439.17 479.76 828.13 - Sale of equipment ......... 0.43 15.57 24.68 54.08 11.94 13.48 Other income ................... 23.24 171.22 174.59 400.06 202.87 128.30 Total income ................... 2,684.75 3,387.32 5,579.17 9,336.89 10,683.52 9,357.79 Expenditure Purchases of coal ............. 72.09 347.67 779.25 1,490.48 2,203.54 2,644.94 Decrease/ (increase) in stock ................................. (76.67) (142.56) 31.58 (233.99) (153.10) (410.56) Direct expenses ................ 1,117.30 1,441.85 2,180.28 2,881.39 3,633.53 3,372.48 Personnel cost .................. 149.15 163.08 285.75 422.54 553.20 499.21 Administrative and selling expenses ........................... 260.69 323.04 537.44 640.55 806.34 536.27 Depreciation ..................... 224.29 314.85 401.87 486.12 718.04 534.95 Finance cost ..................... 106.65 163.86 245.34 290.45 428.02 509.67 Total expenditure ........... 1,852.90 2,611.79 4,461.51 5,977.54 8,189.57 7,686.96 Profit before tax and adjustments .................... 831.85 775.53 1,117.66 3,359.35 2,493.95 1,670.83 Total tax expense/(credit) ... 109.58 178.30 555.07 1,105.39 940.93 661.48 288
Page 1 and 2: e) Enterprises over which key manag
Page 3 and 4: Annexure XIV continued... (Amount i
Page 5 and 6: For the year ended 31 March 2008 Pa
Page 7 and 8: Annexure XIV continued... For the y
Page 9 and 10: Statement of segment reporting, as
Page 11 and 12: FINANCIAL INDEBTEDNESS Set forth be
Page 13 and 14: Sr. No. Name of Lender Facility (in
Page 17 and 18: Sr. No. Bank Guarantees Name of Len
Page 21 and 22: MANAGEMENT’S DISCUSSION AND ANALY
Page 23 and 24: (2) Capacity refers to the normativ
Page 25 and 26: Availability and price of raw coal
Page 27: Impairment The carrying amounts of
Page 31 and 32: Sale of Power \Sale of power income
Page 33 and 34: Spectrum Coal became our wholly-own
Page 35 and 36: products as charged by the customer
Page 37 and 38: Fiscal 2009 compared to Fiscal 2008
Page 39 and 40: Coal beneficiation and allied recei
Page 41 and 42: Provision for Tax The provision for
Page 43 and 44: For Fiscal 2008, our cash flow from
Page 45 and 46: Other contractual obligations The f
Page 47 and 48: Future Relationship Between Cost an
Page 49 and 50: conditions prescribed in clause 4.1
Page 51 and 52: duty. Further, the original land ow
Page 53 and 54: Section 73A of the Finance Act alon
Page 55 and 56: E/DL/28679/7AC-IV3622, dated Februa
Page 57 and 58: disputed his retirement claiming th
Page 59 and 60: Outstanding litigation and proceedi
Page 61 and 62: Civil Writ Petition No. 4982 of 201
Page 63 and 64: SCPL has filed an appeal no. 1880/M
Page 65 and 66: SFIL has filed 11 cases under secti
Page 67 and 68: Consequent to this merger, BCFL has
Page 69 and 70: 1. SHL v. Deputy Commissioner of In
Page 71 and 72: 3. Show cause notice dated April 20
Page 73 and 74: SMASL has filed a writ petition no.
Page 75 and 76: 8. Sindhu Realtors Private Limited
Page 77 and 78: Appeal, Bharatpur who disallowed th
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efore Commissioner of Central Excis
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GOVERNMENT AND OTHER APPROVALS In v
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Sr. No. Issuing Authority 10. Comme
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Sr. No. Issuing Authority State Ele
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Sr. No. Issuing Authority 1. Inspec
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Sr. No. Issuing Authority Organisat
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Sr. No. Issuing Authority 5. Office
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Sr. No. Issuing Authority 3. Chhatt
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Sr. No. Issuing Authority 8. Office
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S. No . Issuing Authority License N
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S. No . Issuing Authority License N
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Sr. No. Issuing Authority assistanc
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2. Ministry of Environment, GoI Ter
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KEY PROVISIONS OF CERTAIN AGREEMENT
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5. Coal Supply Agreement dated Sept
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3. Agreement dated June 28, 2006 be
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not remedied by SWSL within 90 days
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Company can also terminate the IA,
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5. Fuel Supply Agreement between Re
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costs related to such rehabilitatio
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2. Power purchase agreement dated J
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• Mr. Rudra Sen Sindhu and Mr. Vi
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(b) Our Company has applied to the
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AGREEMENT ENTERED INTO BETWEEN THE
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observe, any such restrictions. Any
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form and context in which they appe
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Except as stated in the sections ti
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For further details please refer to
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• right to receive offers for rig
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ISSUE STRUCTURE This public issue o
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@ In case of ASBA Bidders, the SCSB
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ISSUE PROCEDURE This section applie
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electronic form, the ASBA Bidder sh
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documents to hold and invest in equ
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Bids by Non Residents including Eli
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• Eligible Employees who bid for
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The maximum and minimum Bid size ap
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the Floor Price and at the Cap Pric
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1. The members of the Syndicate and
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finalization of the Basis of Allotm
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the Anchor Investors, the Anchor In
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2. Ensure that you use the ASBA Bid
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should be signed by the ASBA Accoun
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The Bidders should note that the es
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the Bids clearly indicate the schem
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• Bids at Cut-off Price by Non-In
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Bidders can contact the Compliance
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BASIS OF ALLOTMENT A. For Retail In
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Method of Proportionate Basis of Al
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Please note: 1. The illustration pr
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• They shall not have recourse to
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RESTRICTIONS ON FOREIGN OWNERSHIP O
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MAIN PROVISIONS OF OUR ARTICLES OF
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fulfillment or discharge of such de
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notarially certified copy thereof h
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(a) (b) (c) (d) (e) the power to ma
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Proposed Issuance is first offered
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OTHER INFORMATION MATERIAL CONTRACT
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through its investment manager, ICI
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Annexure XIV Continuedâ¦ - Edelweiss