What was the rationale behind announcing bonus shares carrying differential voting rights?

What is the promoters' shareholding at the moment?

Promoters currently own 215,014,701 equity shares (44.71% of the current paid-up capital i.e., 480,921,778 shares) as on 1st Oct., 2009.

Are you planning any fund raising through the equity route? If yes, how much will you raise? What will be the impact on promoters' stake?

No, we have no present plans of raising fund via the equity route. We have proposed a FCCB issue of around US$60mn which could be done in future at an appropriate time. We have also proposed to issue 25mn convertible warrants to promoter & promoter group companies to allow them to maintain their stake.

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How do you see the business environment right now? What is the outlook for the next 1-2 years and longer term (5 years)?

India has a severe shortfall of good quality hard coking coal. It is estimated that by 2013, as per the current projections, India would need more than 75 million tons of coking coal. With China closing some of its coal mines and becoming a net importer of coking coal, it has become a commodity which is globally in short supply. Hence, there is increased demand for coke in the market. We are the only independent company listed in Australia having a pure focus on hard coking coal while all other hard coking reserves are owned by global resource companies. Our coal mines in Australia are increasing production at one end while our domestic coke production capacity is strengthening our value chain. Is insulates us from the external effects of adverse price swings and transforms us from a coke manufacturer into an integrated coking coal & coke company. This would inevitably increase our valuation to that of an integrated mining company higher than those obtained today as a converter. We expect that the combination of the three factors - increased capacity and sales, widened sales and enhanced valuation will grow the value of our stakeholders over the coming years.

What is the current output level for met coke at various facilities in India?

Low Ash Metallurgical Coke (LAMC) production in the year ended March, 2009 was 676,445 MT. Our production target for current FY is around 950,000 MT.

Brief us about your expansion plans for India? What is the company's long-term target for met coke production?

The company is gearing up to take advantage of the increased demand for coke, in the face of the existing acute short supply in India. We plan to invest in two additional over one million tons coke facilities in Andhra Pradesh and Gujarat, taking our total capacity to around 4 million tons in the rest 3-5 years. This would be further supplemented by increased production of coking coal in our Australian mines which is slated to touch around 6 million tons per annum by 2014-15.

Could you tell us about the in-place and recoverable reserves of coking coal in your captive mines?

We have more than 500 Million Tons of premium quality hard coking coal in the Southern Coal fields of NSW which is renowned for its premium quality hard coking coals. These coals occur mainly in the Wongawilli seam and are mined by underground methods at depths of over 400 m. Smaller quantities of similar quality coal are present in the Bulli seam that is currently mined near the coast. Both seams produce a medium ash, low volatile product. The increased coking characteristics of the Wongawilli seam are ideal for blending and supplementing the coking characteristics of the Bulli seam. The Southern Coalfields is the only source of hard coking coal in the NSW.

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Is the current mining output at your captive mines enough to meet your raw material needs?

Yes, the current mining output at our captive mines is enough to supplement our raw material needs.

When will you become self-sufficient in coking coal needs? What impact it will have on your margins and profitability when you achieve full integration?

We are currently self-sufficient in coking coal needs.

With the ramping up of production in our coal-mines in Australia, and simultaneous augmentation of our capacity in India we will be able to maintain the synergies between the two operations.

The transactions between Gujarat NRE Coke Ltd. (GNCL) & Gujarat NRE Minerals Ltd. (GNML), both of whom are listed entities are carried out in an arms length basis. As such there will no impact on the margins and profitability of each other.

However, with the longwall being commissioned, the mining costs per ton will be significantly reduced for GNML while GNCL would have an assured supply of a commodity which is persistently in demand.

Where do you see mining output in Australia by end-March and in FY11?

We are projecting output of 1.1-1.2 million tons by the end of March 2010 and 2.1 million tons by the end of March 2011 from NRE No. 1 colliery & NRE Wongawilli Colliery.

Are you looking at expanding your global footprint in any other part of the world?

No. presently we don’t have any plans of further expanding our global footprint in any other part of the world.

How do you see coke prices over the short-term, medium-term and long-term? What impact will China's government policy have on coke prices?

The coke prices over the short term period seems to be stable but over the medium term and long term period no prediction could be made as the coking prices keeps fluctuating at a regular basis. However, demand continues to grow while supply is becoming scarce particularly because of global shortage of hard coking coal.

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What are the biggest challenges facing your company?

The biggest challenge which we face is the extreme volatility in the coke prices which has no logical movement. This volatility ensures that there always remain a natural entry barrier for small, marginal players on one hand and on the other, provides the company with a unique opportunity to use the down turns to invest in capacities as per the company’s long term vision and prepare the ground to reap the benefits of the inevitable upturn that follows.

Give us a break up of your revenue in terms of domestic sales and exports?

In the financial year ended March 2009, we had accounted approximately 61% of our revenue through domestic sales while the remainder 39% was achieved through exports. There have been no export sales from March 2009 till date.

What is the debt-equity ratio?

The Debt Equity Ratio as on 31st March 2009 is 0.80.

Any fresh inorganic growth plans in the offing?

There is nothing concrete at the moment but we are always open to good opportunities that arise.

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What is your message to the shareholders?

Though the year that has gone by was one of the tough ones for enterprises across the globe, we had our focus on growth and expansion, and needless to say, the progress made has been as per plan and satisfactory. Coke prices, like that of all other commodities are cyclical in nature. While many try to ride the cycle, no one can claim complete knowledge over it which continues to burn & baffle with impunity. At Gujarat NRE, we having faith in ourselves & our long term commitment to the business, ensure that every time the prices go down, we use the downturn to invest in the capacities, to create and enhance our production facilities so that when the inevitable upturn comes, we are able to produce and create more wealth.

In a nutshell, while today the review of the entire year’s performance, it has been an eventful and challenging one, but we have been able to take up the challenges in our stride, seize the opportunities that have opened up, invested in future, to reap the benefits in multiples when they mature.