Annexure XIV Continued… - Edelweiss

Other income decreased by ` 197.19 million, or 49.29%, to ` 202.87 million in Fiscal 2010 from ` 400.06
million in Fiscal 2009, primarily due to the fact that we did not receive any proceeds from maturing key man
insurance policies in Fiscal 2010 like we did in Fiscal 2009, as discussed below. We do not have any
outstanding key man insurance policies as of the date of this Draft Red Herring Prospectus.
Expenditure
Total expenditure increased by ` 2,212.03 million, or 37.02%, to ` 8,189.57 million in Fiscal 2010 from `
5,977.54 million in Fiscal 2009. This is primarily attributable to the following factors:
Purchase of coal
Purchase of coal increased by ` 713.06 million, or 47.84%, to ` 2,203.54 million in Fiscal 2010 from
` 1,490.48 million in Fiscal 2009. The quantity of raw coal purchased in e-auction increased to 1.01 million
tons in Fiscal 2010 from 0.62 million tons in Fiscal 2009 and the average price per ton, inclusive of
transportation costs, was ` 1,512.38 during Fiscal 2010 compared to ` 1,455.72 in Fiscal 2009. There was no
significant variation in quantities and average purchase price of coal rejects during Fiscal 2010 compared to
Fiscal 2009. In addition, the purchase of coal increased due to the acquisition of Spectrum Coal. Purchase of
coal as a percentage of total income increased from 15.96% in Fiscal 2009 to 20.63% in Fiscal 2010.
Increase in stock
Our stock increased by ` 153.10 million in Fiscal 2010 as compared to Fiscal 2009, primarily as a result of the
increased cost of purchases of e-auction coal and the increased cost of purchasing and processing coal rejects.
Increase in stock represented 2.51% and 1.43% of our total income in Fiscal 2009 and Fiscal 2010,
respectively.
Direct expenses
Direct expenses increased by ` 752.14 million, or 26.10%, to ` 3,633.53 million in Fiscal 2010 from `
2,881.39 million in Fiscal 2009, primarily due to an increase in our coal operations resulting from the
acquisition of Spectrum Coal. In particular, increased expenses relate to power and fuel costs, which increased
by ` 74.30 million, or 55.84%, to ` 207.35 million in Fiscal 2010 from ` 133.05 million in Fiscal 2009, and
repair and maintenance of plant and machinery, which increased by ` 235.54 million, or 86.17%, to ` 508.89
million in Fiscal 2010 from ` 273.35 million in Fiscal 2009. Increased expenses also relate to materials
consumed, transportation and loading charges and expenses related to the repair, running and maintenance of
building and vehicles. Direct expenses as a percentage of total income increased from 30.86% in Fiscal 2009
to 34.01% in Fiscal 2010.
Personnel cost
Our personnel cost increased by ` 130.66 million, or 30.92%, to ` 553.20 million in Fiscal 2010 from ` 422.54
million in Fiscal 2009, primarily due to an increase in personnel related to the acquisition of Spectrum Coal
and an increase in employee costs due to growth in the number of employees and an annual increase in
salaries. In Fiscal 2010, we incurred salaries, wages and bonus expenses of ` 499.51 million, compared to `
381.41 million in Fiscal 2009. We also incurred contribution to provident and other fund expenses of ` 28.87
million in Fiscal 2010, compared to ` 22.78 million in Fiscal 2009, and staff welfare expenses of ` 24.83
million in Fiscal 2010 compared to ` 18.35 million in Fiscal 2009. Personnel cost as a percentage of total
income increased from 4.53% in Fiscal 2009 to 5.18% in Fiscal 2010.
Administrative and selling expenses
Administrative and selling expenses increased by ` 165.79 million, or 25.88%, to ` 806.34 million in Fiscal
2010 from ` 640.55 million in Fiscal 2009, primarily due to an increase in administrative and selling expenses
related to the acquisition of Spectrum Coal, an increase in rent of ` 37.05 million, an increase in rates, fees and
taxes of ` 24.01 million, a decrease in legal and professional fees of ` 18.15 million, an increase in travelling
and conveyance of ` 5.30 million, a decrease in coal handling charges paid to various agencies of ` 38.73
million, a decrease in bad debts written off of ` 44.88 and an increase in provision for doubtful advances of `
50.06 million. However, there was also an increase in administrative and selling expenses primarily due to an
increase in bank charges of ` 10.46 million and an increase in deductions related to the quality/quantity of our
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