Guidance on Interest and Depreciation & Amortisation Expenses

(ASX:OST) Earlier this year, OneSteel confirmed that its earnings guidance for the full year
ending 30 June 2008, would be at the Earnings Before Interest Tax and Depreciation &
Amortisation (EBITDA) line due to uncertainty over the impact on interest, and
depreciation & amortisation from two major growth initiatives, the Smorgon Steel merger
and Project Magnet1.
At the time of providing guidance, the company was in the process of determining the fair
values of the identifiable assets, liabilities and contingent liabilities acquired as part of the
merger with Smorgon Steel Group Limited. This process has now been substantially
completed and depreciation and amortisation charges have been made for the period
commencing the date of the Smorgon merger (20 August 2007).
In addition, the company was also uncertain of the timing of capitalising Project Magnet.
Project Magnet assets were commissioned during the year and associated depreciation of
$9 million has been recorded in the 2008 financial year. For the 2009 financial year,
depreciation on Project Magnet assets is estimated to be approximately $24 million. Total
capitalised interest on Project Magnet was $19.6 million for the 2008 financial year.
In total, OneSteel expects interest expense to be approximately $160 million, and
depreciation & amortisation expense to be approximately $195 million for the financial
year ended 30 June 2008. For the 2009 financial year, amortisation in relation to
intangibles acquired with the Smorgon Steel businesses is estimated to be approximately
$8 million and depreciation on plant and equipment acquired with the Smorgon Steel
business is estimated to be $66 million.
OneSteel’s results for the full-year ended 30 June 2008 will be announced on 19 August
2008.
1 Project Magnet is focussed on the commercialisation of OneSteel’s magnetite ore reserves and the sale of hematite ore.

Austral Coke is attempting to divert public attention from their criminal act and misstatements in prospectus

Gujarat NRE Coke has come out with a hard hitting press release as part of its expose on Austral Coke. Heres the full text of the release : - the editor 

We had issued a press release yesterday (07/08/08) pointing out fraudulent misstatements in the prospectus of Austral Coke and Projects limited and the willful attempt on the part of Austral to use the reputation and goodwill of Gujarat NRE Coke to sell their issue. Various newspapers have covered the same with characteristic false claims from Austral in light of which we would like to make the following clarifications :
 
1. The promoters of Austral Coke Mr Ratan Lal Tamakuwala and Mr Rishi Raj Agarwal were "employees" of Gujarat NRE Coke Limited. They were "Expelled" from the company when they were caught stealing shareholder monies and company funds. The term "family dispute" is not applicable as the case against the father-son duo was not about the division of family properties, but was plain vanilla corruption and theft.
 
2. Public Limited Listed Companies are not family fiefdoms. To even hint that a management complaint about defalcation of corporate funds is a "family dispute" points at the utter disregard to corporate governance ethics, which only goes to strengthen the original case against the father-son duo - that they were using company and shareholder funds for personal gains, treating the shareholder assets as "family owned". 
 
3. Various cases are pending against the duo before the Hon’ble Calcutta High Court. Cases relating to the defalcation of shareholder funds - not family property.

4. Austral Coke has made several misstatements in the prospectus with a criminal intent to defraud investors. While they have only two running chimneys, they have claimed to have four chimneys seeking to pass off two under construction chimneys as running ones. This in itself is a serious offense and warrants immediate investigation.

5. Austral Coke has also claimed a current production capacity of 3.75 lakh tpa which too is a blatant lie. As per technical specifications of ovens, with two chimneys cannot give them a production figure more than 60,000 to 70,000 tons of coke. Even with four chimneys as claimed by Austral, they cannot produce more than 1.40 lakh tpa of coke. The balance is a screaming lie. We will again urge the media to visit the Austral Coke Plant in Lunva, Taluka Bhachau, Gujarat to verify the claims of the company.

6. The Austral Coke Prospectus does not disclose the actual production figures to cover up the fraud.
 

7. Gujarat NRE Coke has already sent and requested SEBI and the Company Law Board to consider the press release issued yesterday as an FIR and initiate appropriate investigation against the promoters of Austral Coke.

8. Gujarat NRE Coke would like to ask the Merchant Bankers and various other "interested parties" who have lent their names to the issue as to whether they are aware to the aforesaid facts and whether they can stand up and verify under oath one simple thing - that Austral Coke had four chimneys that are in operation as mentioned and certified in the prospectus dated 18.07.08.

9. A question was raised by the media yesterday as to why we initiated this process on the day of the opening of the Austral Coke public issue. We would like to point out the fact that the Draft Red Herring Prospectus of Austral Coke, which was scanned by us in early July 2008 (www.sebi.gov.in/dp/australcoke.pdf) and is available even today on SEBI’s website (DRHP) had mentioned only two chimneys (Page No.87). Neither Research Reports with reference to Gujarat NRE Coke were in circulation. Only when the current prospectus with glaring misstatements and various research reports referring to us were available to us, and after Gujarat NRE Coke shareholders called us on Wednesday, 06.08.2008 and demanded action that we started initiating appropriate steps to expose the fraud and safeguard our reputation.

10. We are enclosing herewith a photograph taken from the Corporate Presentation of Austral Coke which clearly shows only two chimneys with a third stub under construction. This corporate presentation was there in the austral coke website till the morning of the 7th of August and was removed hastily after the media questioned the management of Austral Coke about the veracity of the claims made in the prospectus. Please note – the Austral Coke Management is still silent about the number of Chimneys and their production capacities, which we are again stating to be false, bogus and intended to defraud investors.

Rio Tinto Announces the Filing of a Registration Statement by Cloud Peak Energy Inc. for a Proposed Initial Public Offering

Rio Tinto announced today that its wholly owned subsidiary, Cloud Peak Energy Inc., has filed a registration statement on Form S-1 with the United States Securities and Exchange Commission (SEC) in connection with Cloud Peak Energy’s proposed initial public offering (IPO) of its common stock. Cloud Peak Energy, comprised of most of the North American coal assets of Rio Tinto Energy America, is the second largest producer of coal in the U.S. and in the Powder River Basin, operating three of the five largest coal mines in the region. 

Rio Tinto expects to make a final decision on whether to pursue a listing of the shares of Cloud Peak Energy or to pursue another form of divestment once these options have been more fully explored. 

The lead underwriter for the offering is Credit Suisse Securities (USA) LLC.  

The offering of common stock will be made only by means of a prospectus. When available, a copy of the preliminary prospectus relating to this offering may be obtained from Credit Suisse Prospectus Department, One Madison Avenue, New York, NY 10010, phone: (800) 221-1037. 

A registration statement relating to these securities has been filed with the SEC but has not yet become effective. These securities may not be sold, nor may offers to buy be accepted, prior to the time the registration statement becomes effective. 

This news release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sales of these securities in any state in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

Statement of Finance Ministry on Inflation

The following is the statement of the Department of Economic Affairs, Ministry of Finance on inflaton issued here today:

“Inflation, on a week-on-week basis, has continued to remain stable. The WPI moved up only marginally from 239.3 in the week ending July 19, 2008 to 239.6 in the week ending July 26, 2008; the rate of inflation for the week ending July 26, 2008 stands at 12.01 per cent, marginally higher than the rate of 11.98 per cent reported last week.

In the ‘primary articles’ group, the annual point-to-point inflation increased to 10.32 per cent, as compared to 10.24 per cent reported last week, but lower than 10.84 per cent reported for the week ending June 28, 2008. Inflation at its current level is also lower than its level of 10.47 per cent, a year back. Out of a total of 98 articles, 18 articles have shown a decline in prices as compared to July 19, 2008. These included among others, arhar, gram, barley, wheat, rice, Bajra, urad, fresh coconut, cardamoms, groundnut seed and iron ore. Another 53 articles have shown no increase in prices. 

Prices of 18 articles (out of a total of 19) in commodity group ‘fuel and power’ have not shown any increase.

In the case of ‘manufactured products’, out of a total 318 commodities, a large number, 299 in all, have shown no increase in prices over the last week. In the case of 4 commodities there is a decline in prices. These commodities include cottonseed oil, groundnut oil, resins and acids of all kinds. Only 15 products, particularly the cotton and woolen yarn, woolen cloth, groundnut cake, white printing paper, ball bearings, caustic soda, cement, newsprint and sugar witnessed an increase in prices

The annual inflation rate for the group of 30 essential commodities at 6.66 per cent was marginally lower than the inflation of 6.67 per cent recorded in previous week. Annual inflation of these commodities has continued to be range bound between 5.7 to 6.7 per cent in 17 weeks of the current fiscal year. Increase in prices of essential commodities which include food grains, pulses, edible oils, vegetables, dairy products and some other commodities including kerosene, soap and safety matches have more or less stabilized.”

Index Numbers of Wholesale Prices in India (Base: 1993-94=100) Review for the week ended 26th July 2008

The official Wholesale Price Index for 'All Commodities' (Base: 1993-94 = 100) for the week ended 26th July 2008 rose by 0.1 percent to 239.6 (Provisional) from 239.3 (Provisional) for the previous week.

The annual rate of inflation, calculated on point to point basis, stood at 12.01 percent (Provisional) for the week ended 26/07/2008 (over 28/07/2007) as compared to 11.98 percent (Provisional) for the previous week. The annual rate of inflation stood at 4.70 percent as on 28/07/2007 i.e. a year ago.

The movement of the index for the various commodity groups is summarized below:-

1. PRIMARY ARTICLES (Weight 22.02%)

The index for this major group rose by 0.1 percent to 247.9 (Provisional) from 247.7 (Provisional) for the previous week. The groups and items for which the index showed variations during the week are as follows:-

The index for 'Food Articles' group rose marginally to 236.0 (Provisional) from 235.9 (Provisional) for the previous week due to higher prices of moong (4%), fish-marine (2%) and maize and condiments & spices (1% each). However, the prices of bajra (1%) declined.

The index for 'Non-Food Articles' group rose by 0.4 percent to 246.3 (Provisional) from 245.2 (Provisional) for the previous week due to higher prices of castor seed (6%), raw tobacco (5%) and copra and raw cotton (2%). However, the prices of niger seed (5%) and groundnut seed (1%) declined.

The index for 'Minerals' group declined by 0.6 percent to 648.4 (Provisional) from 652.6 (Provisional) for the previous week due to lower prices of barytes (23%), steatite (15%) and iron ore and fireclay (1% each). However, the prices of gypsum (48%), phosphorite (27%), fluorite (21%) and silica sand (9%) moved up.

The annual rate of inflation, calculated on point to point basis, for ‘Primary Articles’ stood at 10.32 percent (Provisional) for the week ended 26/07/2008. It was 10.47 percent as on 28/07/2007 i.e. a year ago.

The annual rate of inflation for ‘Food Articles’ stood at 5.78 percent (Provisional) for the week ended 26/07/2008. It was 9.74 percent as on 28/07/2007 i.e. a year ago.

2. FUEL, POWER, LIGHT & LUBRICANTS (Weight 14.23%)

The index for this major group rose by 0.2 percent to 377.0 (Provisional) from 376.3 (Provisional) for the previous week due to higher prices of furnace oil (3%). 

3. MANUFACTURED PRODUCTS (Weight 63.75%)

The index for this major group rose by 0.1 percent to 206.1 (Provisional) from 205.9 (Provisional) for the previous week. The groups and items for which the index showed variations during the week are as follows:-

The index for 'Food Products' group rose by 0.1 percent to 212.8 (Provisional) from 212.6 (Provisional) for the previous week due to higher prices of gingelly oil (3%) and gur (1%). However, the prices of cotton seed oil (3%) and groundnut oil (2%) declined.

The index for 'Textiles' group rose by 0.4 percent to 141.5 (Provisional) from 140.9 (Provisional) for the previous week due to higher prices of woollen yarn (8%), woollen cloth (6%), hessian & sacking bags (2%) and cotton yarn-'hanks (1%).

The index for 'Paper & Paper Products' group rose by 0.2 percent to 200.2 (Provisional) from 199.8 (Provisional) for the previous week due to higher prices of printing paper white (1%).

The index for 'Chemicals & Chemical Products' group declined by 0.05 percent to 222.0 (Provisional) from 222.1 (Provisional) for the previous week due to lower prices of resins (all kinds) and acid (all kinds) (1% each). However, the prices of caustic soda (sodium hydroxide) (1%) moved up.

The index for 'Non-Metallic Mineral Products' group rose marginally to 215.5 (Provisional) from 215.4 (Provisional) for the previous week due to marginal increase in the prices of cement. 

The index for 'Machinery & Machine Tools' group rose by 0.1 percent to 175.4 (Provisional) from 175.2 (Provisional) for the previous week due to higher prices of batteries (7%) and ball bearings (1%).

4. FINAL INDEX FOR THE WEEK ENDED 31st May 2008.

For the week ended 31/05/2008, the final wholesale price index for 'All Commodities’ (Base: 1993-94=100) stood at 232.3 as compared to 231.1 (Provisional) and annual rate of inflation based on final index, calculated on point to point basis, stood at 9.32 percent as compared to 8.75 percent (Provisional) reported earlier vide press note dated 13/06/2008.

Fraudulent Misstatements in the Prospectus of Austral Coke & Projects Limited

Gujarat NRE Coke wishes to condemn in the strongest words the manner in which Austral Coke and Projects Limited, whose public issue has opened on August 7th 2008 has used half truths and downright lies in its prospectus and other public documents.

Austral has not only made a series of mis-statements in its prospectus fraudulently, but has also dragged in the Gujarat NRE Coke name as a “peer” seeking to cash in on our reputation and goodwill in the industry and the investing fraternity. 

1.Austral has claimed a current production capacity of 3.75 lakh TPA – this statement is completely baseless considering the fact that the very basis on which the company’s projections are made is wrong and misleading. The company has only two chimneys which can give it a produce of 60,000 – 70,000 tons of coke which cannot justify the claimed figures by any stretch of engineering excellence.
Gujarat NRE Coke, the largest independent producer has 20 chimneys with a current capacity of 6.82 lakh tpa in Gujarat.

Austral has claimed in the prospectus that it has four chimneys which are completed and installed whereas the fact is that it has only two chimneys while two others are under construction. Media personnel are requested to kindly visit their plant at Lunva, Taluka Bhachau, Gujarat and see this blatant lie with their own eyes to verify this fraud. 
Even the website of Austral in their corporate video as well as the corporate presentation shows only two chimneys while the other two “stubs” are in various stages of construction. 
Even with 4 chimneys, Austral’s production can only reach about 1.20 lakh tons to 1.40 lakh tons per annum leaving a huge gap between the actual truth and the fraudulent claims.
The actual production figures have not been disclosed by Austral in its prospectus to cover up the “window dressing”.
The financial comparison by Austral with Gujarat NRE Coke, which is based on such engineered and doctored data is made with the twin intent to cheat and defraud investors on the one hand and defame Gujarat NRE Coke on the other.  

2.The promoters of Austral have claimed that they were the original promoters of Gujarat NRE Coke, conveniently forgetting to mention that they were forcefully “expelled” in 1997 from Gujarat NRE Coke Limited by the shareholders because of fraudulent practice including defalcation of shareholder monies. Several cases against Mr. Ratanlal Tamakuwala and Mr Rishi Raj Agarwal are still pending in the Calcutta High Court for investigation and recovery of public investor funds defalcated by them.

POWERGRID forms JV to evacuate 1200MW power from Sikkim

Power Grid Corporation of India Ltd. (POWERGRID) has entered into a Shareholder’s Agreement with Teesta Urja Ltd to form a Joint Venture Company named “Teestavalley Power Transmission Limited”. The Company will develop associated transmission system for evacuation of power from 1200 MW Teesta-III Hydro Electric Project (HEP) being developed in Sikkim by Teesta Urja Ltd. The project, to be built at an estimated cost of Rs. 708 crore, comprises of construction of (i) 400 kV D/C Teesta – Mangan Transmission line (Approx. length 10 kms) and (ii) 400 kV D/C Mangan-Kishanganj Transmission Line (Approx. length 180 kms). The project is scheduled for completion by September, 2011. POWERGRID and Teesta Urja will have 26% and 74% stake respectively in the Joint Venture Company. 

The agreement was signed by Shri V.M. Kaul, Executive Director (PI & BDD) on behalf of POWERGRID and by Shri Y.N. Apparao, Managing Director on behalf of Teesta Urja Ltd. in the presence of Shri S. K. Chaturvedi, CMD, POWERGRID and other senior officers of POWERGRID, Teesta Urja Ltd. and Teestavalley Power Transmission Ltd. The JV Board will be chaired by CMD, POWERGRID. 

The project would be built up on Build, Own & Operate (BOO) basis and will also provide transmission capacity upto Kishanganj S/S of POWERGRID to various private HEPs being developed in North Sikkim. The project would be built on 70:30 Debt Equity Ratio. This Project will be an important part of the common transmission system for evacuation of more than 3000 MW generation from large number of upcoming HEPs in Sikkim to supply the power to the beneficiaries of Northern and Western regions.