Annexure XIV Continued… - Edelweiss

Spectrum Coal became our wholly-owned subsidiary on March 30, 2009, contributing ` 787.07 million to our
coal beneficiation and allied receipts income, ` 1,499.04 million to our sale of coal income and ` 39.18 million
to our other income in Fiscal 2010. This also resulted in additional expenditures of ` 152.84 million for the
purchase of coal and decrease/(increase) in stock of coal, ` 805.08 million for direct expenses, ` 74.13 million
for personnel cost, ` 207.72 million for administrative and selling expenses, ` 240.90 million for depreciation
charge and ` 87.09 million for finance cost.
Coal beneficiation and allied receipts
Coal beneficiation and allied receipts income increased by ` 522.61 million, or 18.25%, to ` 3,580.04 million
in Fiscal 2010 from ` 3,027.43 million in Fiscal 2009, primarily due to the acquisition of Spectrum Coal. In
addition, during Fiscal 2010, our contract for supplying beneficiated coal to Karnataka Power Corporation
Limited from our Pandarpauni and Gauri plant expired, resulting in a decline in the volume of coal
beneficiated. Karnataka Power Corporation Limited no longer uses beneficiated coal in its operations. Coal
beneficiation and allied receipts income represented 32.42% and 33.51% of our total income in Fiscal 2009
and Fiscal 2010, respectively.
Sale of Coal
Sale of coal income increased by ` 921.23 million, or 19.27%, to ` 5,701.61 million in Fiscal 2010 from `
4,780.38 million in Fiscal 2009, primarily due to the acquisition of Spectrum Coal. In addition, the sale of coal
rejects during Fiscal 2010 increased by ` 158.87 million compared to Fiscal 2009 and the sale of beneficiated
coal (after processing raw coal purchased in e-auction) and raw coal during Fiscal 2010 decreased by ` 736.69
million compared to Fiscal 2009. We sold less raw coal in Fiscal 2010 than in Fiscal 2009, partially due to our
increased use of raw coal purchased in e-auction for blending with coal rejects and partially due to the
decreased availability of raw coal resulting from the increased interest in, and demand for, raw coal sold
through the e-auction scheme conducted by Coal India and its subsidiaries, as discussed above. Sale of coal
income represented 51.20% and 53.37% of our total income in Fiscal 2009 and Fiscal 2010, respectively.
Sale of Power
Sale of power income increased by ` 71.53 million, or 11.25%, to ` 707.30 million in Fiscal 2010 from `
635.77 million in Fiscal 2009, primarily due to the commencement of operations at our 18 MW Jharsuguda
Power Project in Sambalpur in September 2009 resulting in additional revenue of ` 98.27 million. We sold this
power project along with our sponge iron business on April 9, 2011. In addition, the revenue from our 15 MW
Sangli Wind Power Project increased by ` 17.72 million; these increases were, however, offset in part by a
decline in revenue of ` 44.46 million from our 30 MW Chakabura Power Plant. This decrease in revenue at
our 30 MW Chakabura Power Plant was primarily due to a one-month maintenance shutdown during Fiscal
2010. Sale of power income represented 6.81% and 6.62% of our total income in Fiscal 2009 and Fiscal 2010,
respectively.
Sale of Sponge Iron
Sale of sponge iron income increased by ` 40.59 million, or 9.24%, to ` 479.76 million in Fiscal 2010 from `
439.17 million in Fiscal 2009, primarily due to an increase in the quantity of sponge iron sold. The quantity
sold during Fiscal 2010 increased by 35.54% over the quantity sold during Fiscal 2009 but the average price
realized per ton during Fiscal 2010 declined by 19.40% compared to the average price realized per ton during
Fiscal 2009. Sale of sponge iron income represented 4.70% and 4.49% of our total income in Fiscal 2009 and
Fiscal 2010, respectively. We sold our sponge iron business on April 9, 2011.
Sale of Equipment
Sale of equipment income decreased by ` 42.14 million, or 77.92%, to ` 11.94 million in Fiscal 2010 from `
54.08 million in Fiscal 2009, primarily due to our acquisition of Spectrum Coal on March 30, 2009; in prior
periods, Spectrum Coal had been one of our major customers. Sale of equipment income represented 0.58%
and 0.11% of our total income in Fiscal 2009 and Fiscal 2010, respectively.
Other income
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