Re: {LONGTERMINVESTORS} Re: Coal India
RAJESH DESAI
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CA. Rajesh Desai
RAJESH DESAI
The Children's Investment Fund Management (TCI) says
-Strong parallels between coal block allocation and coal fuel supply agreements (FSAs)
-Comptroller and Auditor General (CAG) report on block allocation highlights coal ministry negligence
-CAG highlights lack of objectivity by Coal Ministry
-Lower FSA coal prices benefits not passed on to end users
-Non-power companies receive FSA coal at discount to market prices
-Huge profits to privileged companies awarded under-priced FSAs
-Risk of corruption high as demand far greater than supply
-Massive subsidies do result in higher profits
-Large industrial companies pushed PMO to impose new FSAs
-New FSAs at substantial discount to market prices on Coal India (CIL)
-Government of India used power to improperly control CIL
-Only solution is to raise FSA coal prices to market levels
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CA. Rajesh Desai
RAJESH DESAI
Coal India will seek approval of shareholders at its upcoming annual general meeting (AGM) on 18 September 2012 to amend its Articles of Association in order to facilitate the proposed buyback.
"Resolved that pursuant to section 31 and other applicable provisions, if any, of the Companies Act 1956, the Articles of Association of the company be altered to include clause 18A after clause 18 to provide for buyback of shares," the company said in the notice for the resolution to be placed before its shareholders at the AGM.
CA. Rajesh Desai
RAJESH DESAI
Shobha Roy
Kolkata, Sept 18:
The Rs 5/litre diesel price hike should hit the bottomline of Coal India Ltd by Rs 600 crore.
"The impact (of diesel price hike) will be Rs 120 crore for every rupee increase for a litre of diesel. If the hike is Rs 5, then the impact would be Rs 600 crore a year," CIL Chairman, S. Narsing Rao, told newspersons on the sidelines of the annual general meeting here today.
Asked if the hike in cost of production would be passed on to its customers, Rao said, "We will review it. Not every increase in input cost will lead to price increase."
Considering that it posted a Rs 14,788 crore profit in 2011-12, the impact of fuel hike is limited to four per cent of the profit after tax. CIL spent a little over Rs 2,000 crore on fuel and power in the last fiscal.
Earlier responding to shareholders' queries on the possibility of getting more coal reserves, he said, "If at any time, the Government of India de-allocates any block, then they might give some or most of it to us."
Though he preferred to refer to it as his "assumption," Rao clearly expects CIL to make the most out of the 'coalgate' controversy and the recent spate of de-allocation of blocks from private users.
In 2011, the company sought allocation of 116 blocks, which is still under consideration of the Government.
Briefing newspersons after the board meeting, Rao said the company had sought suggestions from consumers and private power producers on pooling price of imported coal with domestic produce.
On August 31, the board asked the company to enter fuel pacts with generation utilities commissioned after March 2009, with provision to supply 15 per cent (aggregate) imported coal on cost-plus basis, till a 'viable 'business model' for pooling is approved.
"Price pooling is in the process. But, as of now somebody who comes in, will have to go for cost-plus basis, until the price pooling mechanism is in place," he said adding that the company's legal and financial interests would not be jeopardised on the FSA issue.
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CA. Rajesh Desai
Rajesh Desai
State-run Coal India (CIL) has entered into fuel supply agreements (FSAs) with 56 power plants so far. The deadline set by the Prime Minister’s Office for signing of FSAs between CIL and power producers expired in January. But, CIL had again extended the deadline for supply of coal to power producers under the MoU route till March-end.
Earlier, the deadline was expired on December 31, 2012 and Coal firm extended it by another one month till January 31, 2013 for supply of coal to power firms. The government had already directed coal companies to supply fuel to power plants that have been commissioned till 2012 through the MoU route till FSA issues are resolved.
The world’s largest coal miner, achieved a production of 42.62 million tonnes (MT) of coal which is 96% of target achieved compared to allotted target of 44.37 MT. For the first 11 month period of the current financial year, the company achieved coal production of 398 MT as compared to 413.7 MT, 96% of target achieved.
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CA. Rajesh Desai