Airconditioning Industry asks for maintaining CENVAT at 8% and concession for star-rated products

Refrigeration and Airconditioning Manufacturers’ Association (RAMA) recently submitted its Pre-budget memorandum to the Finance Ministry with its list of issues facing the industry that it wants to get addressed in the forthcoming budget. 

RAMA has strongly represented that CENVAT on airconditioners and key components should be retained at 8%, since the growth and profitability of the airconditioning industry has been adversely affected due to the economic recession and global meltdown.

The other requirements that RAMA have highlighted include varying abatement rates on star-rated products to encourage enhanced sales of higher star-rated products; reduction in the composite rate of service tax on erection, installation and commissioning; and collection of service tax on 70% of any AMC with material and labour components, rather than the full AMC value.

Further, RAMA has also sought an exemption on import duty on raw materials and components for products based on non ODS (Ozone Depleting Substances) technologies. Currently, production costs for the eco-friendly non ODS technologies are high due to the high cost of components such as compressors and raw materials such as refrigerant and copper tubes, and the exemption will encourage the manufacturing of eco-friendly technologies.

In addition, RAMA has sought exemption of customs duty on components and raw materials used in manufacturing airconditioners. While, fully assembled airconditioners attract no duty under the Thailand FTA, components and raw materials attract full duty. RAMA’s contention is that the current structure discourages local manufacturing and value addition since it is cheaper to import the full product. 

RAMA has also sought that the additional customs duty which is currently at 4% to be reduced to the CST figure of 2%. Further it wants the additional customs duty to be allowed as a set-off against payment of CST, when the goods are sold locally, rather than a cumbersome refund process of the same.

In the SEZ arena, only direct suppliers of goods to SEZs enjoy tax exemption, and resellers such as contractors have to incur VAT or CST on the products sold by them. RAMA has requested to amend the current practice so that suppliers don’t pay tax on inter-state purchases of goods meant for resale to SEZ units.

According to Mr S K Sinha, President, RAMA, “We are confident that the Finance Ministry will look into our concerns and address our issues in the forthcoming budget. The industry has been contributing a significant amount to the exchequer and the resolution of these issues will help the industry continue its fast-growth trajectory”

Motorola Foundation Grants $5 Million to Programs That Engage Budding Innovators

--First grantee conference to explore science, technology, engineering and math education and grow network of champions
SCHAUMBURG, Ill., June 25, 2009 /PRNewswire-FirstCall via COMTEX News Network/ -- The Motorola Foundation today announced the recipients of its 2009 Innovation Generation grants, $5 million in funding to promote science, technology, engineering and math (STEM) education for America's youth. Now in its fourth year, the grants create opportunities for students to experience STEM both inside and outside the classroom, equipping them with the skills essential to their lives today and to their success in the future. 

"Science and technology come to life every day at Motorola. With Innovation Generation, we extend that experience to students across the country, so they will be inspired and prepared to embrace - or even create - the inventions of the future," said Eileen Sweeney, director of the Motorola Foundation. "We support programs that make science, math and engineering compelling - whether that is with real-world role models, exciting out-of-school programming or experiences that are completely out of the box." 

Diversity Breeds Inventiveness 

Different points of view are essential to innovation. Through Innovation Generation, the Motorola Foundation aims to reach untapped minds and increase opportunities among diverse populations to support the continuum of invention that will power the future. Among this year's grantees: 

  -- The National Society of Black Engineers' Summer Engineering  Experience for Kids (SEEK) in Alexandria, Va., engages hundreds of   students across the country in grades 3-8 in team-based, interactive   engineering projects. SEEK camps enable students to participate in   hands-on projects designed to increase their aptitude in math and   science and spark their interest in pursuing careers in STEM fields.

  -- Latinitas' Smart Chicas in Austin, Texas, hosts a series of   bilingual workshops at 25 area schools that encourage Hispanic girls in   grades 6-8 to consider careers in STEM fields. The workshops introduce   them to college student mentors and professional role models, connectingthe value of math and science to the real world and promoting classroom achievement.

Innovation Promotes Environmental Progress, and Vice Versa 

From geo-systems to the "how-to's" of recycling, environmentalism is top-of-mind for today's youth who want to make a difference in the world. The Motorola Foundation selected educational programs that engage children in new solutions to environment sustainability. Examples: 

  -- Sustainable South Bronx in New York introduces underserved minority   middle and high youth to STEM skill sets that are used throughout the   sustainable technologies industry. Participants study land use, energy,   transportation, water and waste policy and education, advancing the   environmental and economic rebirth of the South Bronx and inspiring   solutions in similar areas around the world.

  -- The Long Island Science Center's Boundless Environments in   Riverhead, N.Y., recruits and trains teachers in a curriculum about   environmental citizenship and green entrepreneurial ventures. This   course of study highlights students' roles in environmental change   and encourages them to explore careers in the field.


Summertime is Prime Time for Discovery 

A hallmark of Innovation Generation is exploration of science outside of school, because students understand concepts best when applied in their world. Many of the grantees harness students' curiosity while school is out for the summer. Examples: 

  -- The John G. Shedd Aquarium Society's Underwater Robotics teacher   training and out-of-school club provides students and teachers with the   opportunity to build a functional robot designed to investigate aquatic   environments. Participants apply STEM process skills such as critical   thinking and problem-solving.

  -- WGBH Educational Foundation in Boston engages female and minority   student viewers in engineering through an educational TV show series and   video blog, which features Nate Ball, the host of the PBS reality   competition series DESIGN SQUAD, in the inventor's seat.


"This year, we're proud to add 43 brand-new programs to the Innovation Generation network, including some that might not have been possible without our support," Sweeney adds. "We value the fresh approaches these programs are using to inspire today's students to become tomorrow's innovators." 

The Innovation Generation grants are an integral part of the Motorola Foundation's Innovation Generation program, which emphasizes much more than financial support. It encourages Motorola employee engagement with students and grantees, supports research that furthers understanding of effective practices in STEM education and builds sustaining networks among grantees. 

In July, the Motorola Foundation will convene leaders in STEM education and Innovation Generation grantees for its first-ever Innovation Generation Conference. Attendees will explore best practices in collaborative learning sessions that address teaching innovation and entrepreneurship as well as pre-engineer, out-of-school, girl-centric and sustainability programming. By sharing best practices and convening a community dedicated to engaging students in STEM education, the Motorola Foundation is helping to build capacity for these organizations. 

"The Motorola Foundation provides us connection to people and tools necessary to expand opportunities for our students and our program," said Miquela Craytor, Executive Director of Sustainable South Bronx. "Their Innovation Generation network shares our passion for engaging students through systems-thinking, science and technology, and we all learn from each other to further our work and success in equipping today's young people with the skill sets they need to become the doers and thinkers for the 21st century." 

For a full list of grant recipients or to learn more about the Motorola Foundation's Innovation Generation, please visit www.motorola.com/giving. 

About Motorola Foundation 

The Motorola Foundation is the charitable and philanthropic arm of Motorola. With employees located around the globe, Motorola seeks to benefit the communities where it operates. The company achieves this by making strategic grants, forging strong community partnerships, fostering innovation and engaging stakeholders. The Motorola Foundation focuses its funding on education, especially science, technology, engineering and math programming. For more information, on Motorola Corporate and Foundation giving, visit www.motorola.com/giving. 

About Motorola 

Motorola is known around the world for innovation in communications and is focused on advancing the way the world connects. From broadband communications infrastructure, enterprise mobility and public safety solutions to high-definition video and mobile devices, Motorola is leading the next wave of innovations that enable people, enterprises and governments to be more connected and more mobile. Motorola (NYSE: MOT) had sales of US $30.1 billion in 2008. 

Dr A.P.J. Abdul Kalam, former President of India, releasing the 2008-09 Yearbook of Management Training Institute (MTI) of Steel Authority of India Limited (SAIL) at Ranchi today at MTI’s 47th foundation day celebrations where he was Chief Guest. Seen along with him in the photograph are (from left) Shri G. Ojha, SAIL Director (Personnel), Shri A.K. Basu, Chief Secretary, Jharkhand Govt. who was the Guest of Honour on the occasion, SAIL Chairman Shri S.K. Roongta and Executive Director (HRD-MTI), SAIL Shri S.P. Patnaik. 
In his address on the occasion, Dr Kalam spoke at length on creative and transformational leadership and its need in any organisation’s journey to excellence. He pointed out that it is more important to manage failures than successes. Dr Kalam also spoke on the integration of religion and science and illustrated his point by narrating a number of amazing personal experiences. During his visit, Dr Kalam interacted with MTI employees and visited the various facilities of this premier knowledge institution of the country and planted a sapling in the MTI campus. Speaking on the occasion, Shri AK Basu lauded the role played by SAIL in the development of Jharkhand. Shri Roongta, on his part, informed how SAIL has been nurturing the development of ‘ignited minds’ in its steel townships by providing high quality education, while supplying world-class steel for infrastructure building of the nation. 

World Bank Provides More Support to Rural Poverty Program in Madhya Pradesh, India

WASHINGTON, June 24, 2009 ─ The World Bank today approved a US$100 million IDA credit to India, designed to address rural poverty in Madhya Pradesh, one of the country’s poorest states.

Madhya Pradesh is India’s second largest state in terms of geographical size. More than 60 million people live there - some 16 million of them below the poverty line. The state has the third highest incidence of poverty and the lowest rate of poverty reduction among the major states of the country.

The Second Madhya Pradesh District Poverty Initiatives Project (MPDPIP-II) is designed to empower the poor by organizing them into Self Help Groups (SHGs) and facilitate their federation into cluster-level organizations, to enable them to access higher value markets, formal financial intermediaries, among other things. It will develop the capacity of SHGs to start or enhance their livelihoods activities and strengthen their business operations through producer based federations, companies, and cooperatives.

The project builds on the original MPDPIP, approved by the Bank in 2000, which covered over 2,900 villages spread across 14 districts. It has helped organize some 325,000 poor rural households into over 52,000 Common Interest Groups (CIGs), providing them with financial and technical assistance.

“This project has achieved some very impressive results,” said Roberto Zagha, World Bank Country Director for India. “For example, we have seen an increase in annual household income as well as value of agriculture production covering 300,000 poor rural households. This project will now scale up its activities to 5,000 villages.”

An impact evaluation conducted at the end of the MPDPIP-I showed it has improved livelihoods, reduced vulnerability, and enhanced social empowerment. These results include 65 percent increase in annual household income of project participating families, 149 percent increase in value of agricultural production, and 27 percent increase in irrigated land for project families investing in agricultural activities.

“Women’s participation in household decision making and attendance in Gram Sabha meetings has been enhanced substantially, through this project, and has had profound impact on their overall livelihoods,” said Nathan Belete, World Bank Senior Rural Development Economist and project task team leader. “For example, around 80 percent of Village Development Committees established under the project have all women in their executive committees – this has enabled them to make critical decisions regarding funds allocations among their members in a transparent, productive, and sustainable manner.”

The credit from the International Development Association (IDA), the World Bank’s concessionary lending arm, carries a 0.75 percent service fee, a 10-year grace period, and a maturity of 35 years.

Tata Steel reports consolidated results for the financial year 2008-09

Tata Steel Limited today declared the audited Consolidated Group Financial Results for the year ended March 31 2009.

Key Highlights

· Tata Steel Indian operations increased its deliveries by 9% from 4.78 million tonnes in financial year 2007-08 to 5.23 million tonnes in financial year 2008-09. The Steel deliveries of the Tata
Steel Group for the financial year 2008-09 at 28.54 million tonnes were 10% lower compared to 31.68 million tonnes during the financial year 2007-08. The Group recorded a Turnover of Rs.147,329 Crores (US$ 28,962 mn) for the financial year 2008-09, 12% higher than the turnover of Rs. 131,534 Crores (US$ 25,857 mn) for the financial year 2007-08.
· The EBITDA for the Group at Rs. 18,495 crores (US$ 3,636 mn) for the financial year 2008-09 was 1% higher than the EBITDA of Rs.18,287 Crores (US$ 3,595 mn) recorded during the financial year 2007-08.
· Profit before taxes and exceptional items was Rs.10,838 Crores (US$ 2,130 mn) during the financial year 2008-09 against Rs.10,036 Crores (US$ 1,973 mn) for the financial year 2007-08.
· Exceptional items during the financial year 2008-09 of Rs. 4,095 Crores (US$ 805 mn) represent ‘Restructuring, impairment and disposals’ relating to the disposal/impairment of assets and restructuring arising out of the ‘Fit for the Future’ programme at Tata Steel Europe.

· The Board of Directors has recommended a dividend of Rs.2 per share (US$ 0.04) on Cumulative Convertible Preference Shares and Rs. 16 per share (US$ 0.31) on Ordinary shares for the financial year 2008-09.

1. Financial Performance Analysis:

Consolidated Financial results summary (under Indian GAAP) for the year ended March 2009
For the purposes of this note the Indian rupee has been converted to US$ at Rs.50.87 per US$.

During the financial year 2008-09, sales volume of the Group was lower by 3.14 million tonnes compared to financial year 2007-08, reflecting sluggish market conditions in the second half of the financial year especially in Europe where there has been a severe demand contraction. Turnover, however, was higher than the previous financial year primarily on account of higherprices. In spite of the lower sales volume and write down in the value of inventories, EBITDA during financial year 2008-09 was Rs. 208 Crores (US$ 41 mn) higher than in financial year 2007-08.

Profit before exceptional items and taxes during the financial year 2008-09 at Rs.10,838 Crores (US$ 2,130 mn) were higher by 8% over financial year 2007-08 (Rs. 10,036 Crores, US$ 1,973mn) . In line with prudent accounting norms, the Company has taken an exceptional charge of Rs. 4,095 crores (US$ 805 mn) during the financial year 2008-09 representing restructuring,
disposal & impairment costs undertaken at Tata Steel Europe. Profit after taxes, minority interest and share of profit of associates for the year registered a drop of 29% compared to the previous year primarily due to a very weak economic environment in Europe .

Tata Steel India

Turnover at Tata Steel India increased by 23% to Rs. 24,316 crores (US$ 4,780 mn) during the financial year 2008-09 compared to financial year 2007-08. EBITDA increased by 14% to Rs 9,442 crores (US$ 1,856 mn) during financial year 2008-09.

Finished steel production at Tata Steel India for financial year 2008-09 stood at 5.37 million tonnes, 11% higher than the previous year. In financial year 2008-09 steel deliveries at 5.23 million tonnes were 9% higher than in the previous year.

Corus (Tata Steel Europe)

Turnover at Corus increased by 9% to Rs. 109,570 crores (US$ 21,439 mn) and EBITDA decreased by 2% to Rs. 8,906 crores (US$ 1,751 mn) in financial year 2008-09 compared to financial year 2007-08. Steel deliveries and liquid steel production fell by 14% and 20% to 19.69 million tonnes and 16.21 million tonnes respectively in financial year 2008-09 reflecting a weak
second half of the year.

Tata Steel Europe has undertaken two major cost-saving initiatives, ‘ Weathering the Storm’ and ‘Fit for the Future’, in the second half of financial year 2008-09.

‘Weathering the Storm’ includes a series of actions undertaken to mitigate the negative impact of the market deterioration, specifically the alignment of production with the prevailing market demand (in particular by idling blast furnaces at Port Talbot, IJmuiden and Scunthorpe,) and also an operational cash savings plan. During the year, this initiative generated cash savings of Rs.5,587 Crores (£ 712 million).

‘Fit for the Future’ is a set of strategic measures undertaken to improve the long-term competitiveness of Tata Steel’s European operations. These measures include: (i) completion of the sale of the aluminum smelter operations at Voerde (Germany) and Delfzijl (Netherlands); (ii)
reconfiguration of the Strip Products UK business, including mothballing of the hot strip mill and pickle line 1 at Llanwern, and closure of the aluminised products business at Pontardulais; (iii) introduction of a new business model for the Engineering Steels business, including closure of
the Primary Mill and Large Bloom Caster and finishing operations at Aldwarke, as well as closure of certain satellite sites, and (iv) streamlining of downstream facilities in distribution, building systems and tubes.

Since these initiatives were announced in January, some European operations have continued to experience deteriorating market conditions. As a result Corus is today announcing additional measures to align production and manning levels in those areas with existing and anticipated demand levels.
These measures involve opening consultations on a series of further job reductions, which have become necessary because of the worldwide economic downturn and, in particular, the decline in steel demand in Europe and America.

The consultation process identifies 2,045 jobs as being at risk. Some 1,500 of these are in the company’s production facilities: about 800 at the engineering steels sites, mainly Rotherham and Stocksbridge; about 370 in Corus Tubes in the UK and the Netherlands, and about 375 at downstream rolling and finishing plants in Teesside and Scotland. The company is also opening consultations on 500 white-collar jobs throughout the Corus Long Products division, the majority at Scunthorpe. The company will make every effort to ensure as many of the job losses as possible are voluntary, though the potential for compulsory redundancies cannot be ruled out. The company will at the same time seek to retain critical skills. Redundancy packages and outplacement support services will be available to those leaving the company. There will be full consultations with employees and their representatives throughout the process.

2. Financing and Capital Raising Initiatives:

· Covenant reset in TSUK

Tata Steel UK was successful in receiving lenders’ approval to reset the covenants in its £3.7 billion acquisition-related senior debt facility. The Lenders demonstrated their strong relationship with the Tata Steel Group and voted unanimously in favour of the Company’s proposal.

As part of the agreement reached with the banks, testing of the facility’s earnings-related covenants will largely be suspended till March 2010 and will then resume with significantly higher flexibility than in the case of the original covenants. Further, there will be no increase in the current level of interest costs for the remaining life of the loan. The revised covenant package does not involve any additional finance from the Lenders or rescheduling of its debt-servicing commitments.

As part of the package, Tata Steel Limited will inject £425 million into Tata Steel UK in a phased manner, of which around £200 million will be used to prepay debt and de-leverage the European Balance Sheet. The Strategic rationale for the acquisition of Corus continues to be strong with a robust operating model for the Tata Steel Group.

· Raised long-term debt of ~ US$ 1 bn

During the current quarter of FY’10, Tata Steel Limited has raised long-term debt of around US 1,040 mn through a mix of term loans and Non-Convertible Rupee Debentures (NCDs). These facilities have a tenor ranging from five and a half years to ten years and the Company intends to
deploy the proceeds for its various expansion plans and general corporate purposes. 

· Liquidity Management

Tata Steel Group continues to have strong liquidity and has no material repayment obligations or refinancing requirements in the next 12 months. As on 20th June 2009 Tata Steel Group’s cash and cash equivalent stood at about US$ 2.1 bn and the Group had an undrawn bank facility of about US$ 1.3 bn.

3. Mergers and Acquisitions:

· Signing of MOU with Tata Power for IJmuiden Power Plant

A Memorandum of Understanding (MoU) was signed between Tata Steel Limited and Corus Staal BV with The Tata Power Company Limited for the construction of a 525 MW combined heat & power plant at Corus’ IJmuiden works in the Netherlands. Under this MoU, Tata Steel and Tata Power will set up a Joint Venture company to build, own and operate the power plant. The new plant, estimated to be commissioned by 2013 (subject to obtaining the required
permits), will replace part of the existing power supply arrangement. The plant will utilise most of the steelworks’ excess process gases, enabling Corus in IJmuiden to secure its own long-term energy needs.

In keeping with its sustainability approach, this plant will bring a significant decline in the carbon footprint of the Tata Steel Group and bring greater environmental benefits to the IJmuiden area through a reduction in off-gas flaring at the site.

· Joint Venture Agreement for the DSO project in NML

Tata Steel, along with its partner New Millennium Capital Corp. (“NML”), has announced the commencement of the Direct Shipping Ore (“DSO”) Feasibility Study (“Study”) and the formation of a Joint Steering Committee to monitor Study progress. Tata Steel holds 19.9% equity interest in NML, a listed Canadian entity and also has option to participate in the
DSO project and Labmag taconite project. While DSO properties have estimated reserves of around 100 million tons of historical resources, Labmag contains 3.5 billion tons of proven and probable reserves, 1 billion tons of measured and indicated resources and 1.2 billion tons of inferred resources.

NML is on track to complete the Study in Q3, 2009. NML, working closely with Tata Steel, has completed optimization studies that were designed to maximize the commercially desirable characteristics of the product. The Steering Committee comprising of three members each of
NML and Tata Steel has been formed. The Committee has been given the mandate to monitor the progress of the Study and provide the necessary direction to ensure its timely completion. NML’s technical team will work closely with engineers from Tata Steel’s Global Mineral Resources Group and Research & Development (R&D) Centre.

Tata Steel believes that these deposits once developed can supply a large part of its requirement for pellet feed in Europe.

· Signing of Share Purchase Agreement with Ryerson on purchase of 50% stake in Tata Ryerson

Tata Steel has signed a share purchase agreement with Ryerson Holding (India) Pte Ltd. to acquire the entire equity interest of Ryerson in Tata Ryerson Limited (“Tata Ryerson”).

Tata Ryerson, a 50:50 joint venture between Tata Steel and Ryerson (a 100% subsidiary of Ryerson Inc, USA), was formed in 1997. Tata Ryerson is India’s leading material management services company performing all interface activities, starting from processing of steel and other metals and extending up to the distribution in India.

The transaction, subject to necessary clearances, is expected to be completed by July 2009. On completion, Tata Steel will hold 100% equity stake in Tata Ryerson. Tata Ryerson will continue to service its customers as before.

XSTRATA’S PROPOSED MERGER OF EQUALS WITH ANGLO AMERICAN

Zug, 24 June 2009

Xstrata plc (“Xstrata”) notes the response by Anglo American plc (“Anglo American”) on 22 June 2009.

Xstrata today publishes the letter sent to the Board of Anglo American on Wednesday 17 June 2009, which sets out the highly compelling rationale for an all-share merger of equals, in which both sets of shareholders would share equally in the substantial benefits of a combination (see Appendix I).

Additional points to note:

· The proposed transaction is a merger of two companies of equal size where both sets of shareholders will share equally in the benefits which flow from that combination. The proposal bears none of the characteristics of a takeover, in which a premium would typically be payable.

· The combined group would have a Board and a management team sourced from both companies to bring together the team best capable of delivering the synergies and other benefits of the merger.

· This merger is the natural combination of two highly complementary companies in the mining industry to realise significant value for both companies’ shareholders. Both companies have very similar market values1, financial positions, asset qualities, reserve and resource lives and aggregate earnings estimates.  

· The strategic rationale for a merger is very compelling, based on the two companies’:

o contiguous or proximate assets in Australia, South Africa and South America; 

o shared ownership of Collahuasi copper and Cerrejón coal operations;

o broad geographic distribution of operations and projects; 

o complementary portfolios of commodities; and

o ability to optimise each company’s significant portfolios of organic growth options to enhance returns equally to shareholders of both companies.  

· Significant pre-tax synergies have been quantified of over US$1 billion per annum by the third full year following completion of the proposed merger. Gross one-off realisation costs of not more than US$500 million in total will be incurred in full in the first two years following completion2. Xstrata’s estimate of these core synergies has been reported on under the City Code on Takeovers and Mergers by Ernst & Young LLP and Xstrata’s financial advisors, Deutsche Bank and J.P. Morgan Cazenove. Copies of their letters are included in Appendix III. 

· Xstrata’s synergy estimate does not assume nor envisage any workforce retrenchments at the combined group’s South African operations and Xstrata believes that South Africa would be a net beneficiary of the transaction. 

· In addition to these core synergies, Xstrata has identified further longer term, potential tax, financial and project synergies.

· The quantified synergies accrue from both companies and as such, should be shared by Xstrata and Anglo American shareholders through equal participation in the combined group. A joint review by both companies is expected to result in further synergies being identified. 

· There are several material assumptions underlying the synergies estimate which might therefore be materially greater or less than those estimated. For further details, see Appendix II and the letters from Ernst & Young LLP and Xstrata’s financial advisors in Appendix III.

· Anglo American first announced targeted savings from its asset optimisation and procurement initiatives in 2008 and its share price should already fully reflect the investment market’s view of the probability and value of the announced savings. A merger therefore represents no dilution in value to Anglo American shareholders from these savings. Xstrata believes the synergies it has quantified are in addition to any savings under these initiatives.

· Xstrata’s operational management has a strong track record of best-in-class cost performance, delivering year-on-year average real cost savings of 1% per annum from 2003 to 2008, compared to an average real cost increase at its FTSE100 mining sector peers of 2% per annum over the same time period. A combined management team would more rapidly and effectively realise sustainable reductions in operating costs across the combined portfolio.

· A further significant uplift in value and in returns will be delivered through the combination and prioritisation of Xstrata’s and Anglo American’s organic growth pipelines.

Through acquisitions and a continuous programme of asset improvement initiatives, Xstrata has built a portfolio of assets which generate similar earnings to the Anglo American portfolio and which enjoy a similar reserve/resource life. A comparative analysis is presented in Appendix 4 to the Letter to Anglo American. It is evident that Xstrata’s base metals businesses enjoy similar C1 costs to the equivalent Anglo American businesses. Xstrata’s coal business also has a similar C1 cost but substantially higher margins than Anglo Coal, given that Xstrata sells a greater portion of its thermal coal into the export market. 
Xstrata would contribute world-class coal and copper assets to the enlarged group, creating a premier suite of base metals and coal operations to the benefit of Anglo American’s shareholders. 
· The combined group’s enhanced diversification and cash generative base metals and coal portfolio would provide greater support for businesses such as platinum and diamonds, which currently do not generate significant EBITDA and may well require significant capital at a time when their industry fundamentals are not robust.

· Geographically, Xstrata’s shareholders will take on greater emerging country exposure, while Anglo American’s shareholders will benefit from increased diversification with approximately equal contributions to the combined group’s earnings from Africa, South America and Australia.

· The combined group would benefit from enhanced access to capital and improved financial flexibility to resume dividend payments and support further growth whilst maintaining an investment grade rating.

Mick Davis, Xstrata Chief Executive, commented: 

“It is well recognised that the combination of Xstrata and Anglo American is a natural fit and the most compelling major transaction available in our industry. We have already quantified substantial synergies that can only be achieved by combining our portfolios to increase scale and realise logistics, product flow, procurement and operational efficiencies. In my experience, we have always found that, when effectively led, a joint team is able to review identified synergies and unlock incremental value from the combination, ultimately resulting in savings in excess of initial estimates. 

“In addition, the substantial synergies we have delivered in previous transactions have not come from redundancies at the operations but rather from improved productivity and efficiencies from economies of scale. In general, Xstrata’s approach has been to augment our operations’ capacity by putting management and resources back at the operational level, almost universally leading to improved safety performance and operational efficiency.

“We remain convinced of the undeniable logic for a merger of equals between Anglo American and Xstrata. Xstrata’s proposal is about unlocking the significant shareholder value inherent in the combination of our companies and is not dependent on any pre-determined concept of management positions or structure. It is regrettable that Anglo American’s Board rejected this proposal without any engagement with Xstrata, just days after receiving our approach.  

“It must surely be in the interests of both companies’ shareholders for Xstrata and Anglo American to work together to test in more detail the attractive proposition we have put to the Anglo American Board. We will continue to seek to engage with Anglo American’s Board and management to investigate the value that would accrue to their shareholders and to ours from a combination. I feel sure that, in time, Anglo American’s Board will want to examine comprehensively the merits of this transaction for its shareholders.”

Index Numbers of Wholesale Prices in India (Base: 1993-94=100)Review for the week ended 13th June 2009

The official Wholesale Price Index for 'All Commodities' (Base: 1993-94 = 100) for the week ended 13th June 2009 rose by 0.6 percent to 234.2 (Provisional) from 232.7 (Provisional) for the previous week. 

The annual rate of inflation, calculated on point to point basis, stood at -1.14 percent (Provisional) for the week ended 13/06/2009 (over 14/06/2008) as compared to -1.61 percent (Provisional) for the previous week (ended 06/06/2009) and 11.80 percent during the corresponding week (ended14/06/2008) of the previous year. 

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 256.3 (Provisional) from 256.0 (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 by 0.2 percent to 251.2 (Provisional) from 250.8 (Provisional) for the previous week due to higher prices of tea and jowar (2% each) and arhar (1%). However, the prices of bajra (4%) and eggs (2%) declined. 

The index for 'Non-Food Articles' group rose marginally to 236.0 (Provisional) from 235.9 (Provisional) for the previous week due to higher prices of raw jute (2%) and raw silk and rape & mustard seed (1% each). However, the prices of copra (1%) declined. 

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

The index for this major group rose by 0.4 percent to 327.5 (Provisional) from 326.2 (Provisional) for the previous week due to higher prices of aviation turbine fuel (12%), light diesel oil (10%), furnace oil (3%) and naphtha (1%). However, the prices of bitumen (2%) declined. 

3. MANUFACTURED PRODUCTS (Weight 63.75%) 

The index for this major group rose by 1.0 percent to 205.8 (Provisional) from 203.8 (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 declined by 0.3 percent to 233.2 (Provisional) from 233.8 (Provisional) for the previous week due to lower prices of rice bran oil (5%) and oil cakes and imported edible oil (1% each). However, the prices of gur and coconut oil (1% each) moved up. 

The index for 'Beverages Tobacco & Tobacco Products' group declined by 0.3 percent to 301.6 (Provisional) from 302.4 (Provisional) for the previous week due to lower prices of Indian made foreign spirit (2%). 

The index for 'Textiles' group rose by 0.7 percent to 142.7 (Provisional) from 141.7 (Provisional) for the previous week due to higher prices of other cotton yarn and cotton yarn-'hanks (2% each) and cotton yarn-cones and synthetic yarn (1% each). 

The index for 'Rubber & Plastic Products' group rose by 0.2 percent to 168.3 (Provisional) from 167.9 (Provisional) for the previous week due to higher prices of cycle tubes (8%). However, the prices of suitcases (16%) declined. 

The index for 'Chemicals & Chemical Products' group rose by 4.8 percent to 228.2 (Provisional) from 217.7 (Provisional) for the previous week due to higher prices of capsules other than vitamin & antibiotics (58%) and liquid chlorine (1%). However, the prices of acid (all kinds) (5%) and caustic soda (1%) declined. 

The index for 'Non-Metallic Mineral Products' group declined by 0.05 percent to 220.9 (Provisional) from 221.0 (Provisional) for the previous week due to marginal decline in the prices of cement. 

The index for 'Basic Metals Alloys & Metal Products' group declined by 0.1 percent to 255.2 (Provisional) from 255.4 (Provisional) for the previous week due to lower prices of lead ingots (8%), steel ingots and zinc ingots (6% each), alloy stainless steel (2%) and nickel alloy and alloy steel casting (1% each). However, the prices of zinc (3%) moved up. 

The index for 'Machinery & Machine Tools' group declined by 0.1 percent to 171.8 (Provisional) from 171.9 (Provisional) for the previous week due to lower prices of electronic IC (2%). 

The index for 'Transport Equipment & Parts' group rose by 0.5 percent to 175.4 (Provisional) from 174.6 (Provisional) for the previous week due to higher prices of motorcycles and other automobile spare parts (4% each). 

4. FINAL INDEX FOR THE WEEK ENDED 18th April 2009 

For the week ended 18/04/2009, the final wholesale price index for 'All Commodities’ (Base:1993-94=100) stood at 232.6 as compared to 230.2 (Provisional) and annual rate of inflation based on final index, calculated on point to point basis, stood at 1.62 percent as compared to 0.57 percent (Provisional) reported earlier vide press note dated 30/04/2009.