Q. 1. How do you review the performance of the company in 2008-09?
 
 A. Gujarat NRE Coke operates in a unique industry segment, where it
 neither has peers, nor is the industry and its dy- namics easily
 understood. Suffice to say, the fortunes of the industry, which is
 closely interlinked with the com- modity cycles of coke and steel, is
 highly volatile. This volatility ensures that there always remain a
 natural en- try barrier for small, marginal players on one hand and on
 the other, provides the company with a unique oppor- tunity 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.  That is the reason why, at any given point of
 time, the figures do not reflect the complete picture of the company,
 as the actual benefits of the huge expansion and integra- tion work
 that is in progress will be available in near future. In the longer
 term, on a point to point basis, the picture that emerges of the
 company’s growth, is tell tale and quite satisfactory, especially in
 the face of global re- cession. 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. In a nutshell, while I today
 review the entire year’s perfor- mance, it has been a eventful and
 challenging one, but we have been able to take up the challenge in our
 stride, seize the opportunities that have opened up, invested in
 future, to reap the benefits in multiples when they mature.
 
 Q. 2. You deal in a commodity that is a vital raw material to the steel
 making process, which in turn is cyclical in nature.  Where do you see
 the steel industry heading? Where will this demand take Gujarat NRE in
 the benchmark year?
 
 A. The steel industry in India has been riding a perpetual growth
 trajectory for last five years except for a setback from the second
 half of 2008-09, caused by the global financial crisis. India’s economy
 is largely domestic con- sumption led and accordingly it has been less
 affected by the deceleration in global economic growth when com- pared
 to other countries. As a result, Indian steel demand remains better
 than in many countries. The construction industry is expected to rise
 further due to the government’s stimulus plan. The automotive sector is
 doing well. Hence, it is expected that domestic steel demand is going
 to re- cover soon and for the long term as well.  According to the
 World Steel Association, India’s apparent steel use is fore- casted for
 2009 is expected to see a 1.7% increase from 2008 and is expected to
 reach 58 million tonne in 2010 an increase of 8% YoY. As per recent
 announcements of the Steel Ministry, Government of India, Investment
 worth US$ 176.49 billion is likely to go into the steel sector by 2020,
 taking India’s steel capacity to around 300 million tonnes.  India is
 poised to be the world’s 2nd largest producer of steel before 2016. As
 the fifth largest producer of steel, India now consumes an average of
 25 - 30 million tonnes of coke. At about 300 million tonnes of steel,
 she will throw up a demand of roughly 120 - 150 million tonnes of coke
 by the year 2020, a sea of opportunity for merchant coke producers in
 India and a Mecca for coking coal producers worldwide.
 
 Gujarat NRE Coke Ltd is geared up to take advantage of increased demand
 of coke, in face of existing severe short supply in India. We plan to
 invest in two additional over one million tonne coke facilities in
 Andhra Pradesh and Gujarat, taking our total capacity to around 4
 million tonne in next 3-5 years. This would be further supplemented by
 increased production of coking coal in our Australian mines, which is
 slated to touch around 7 million tonnes per annum by 2014 -15.
 
 Q. 3. NRE Stands for Natural Resource and Environment. How do you
 relate coal and environment? How do you claim to be environ friendly?
 
 A. I believe that coal is the most environment friendly com- modity to
 deal with. Human civilization is hungry for en- ergy to have the
 industry running, to put the turbines of the power plant in motion, and
 the wheels of his trans- ports moving. Think of a civilization without
 coal and fos- sil fuels, where the only prime source of energy would
 have been trees. Forests by now would have turned to bar- ren lands.
 Civilization would have been near extinct today due to large scale
 felling of trees and forests for want of energy.
 
 Having said that, GNCL is an environmentally conscious and a
 responsible corporate citizen. The belief that envi- ronment
 conservation is fundamental to the survival of any organization
 combined with a desire to contribute more to the environment than what
 we acquire from it, has led us to adopt stringent pollution control
 measures.  GNCL has in place the necessary safeguards to minimize
 environmental pollution through the complete combus- tion of volatile
 matter, and the gaseous emissions are well below the norms, by
 employing the best of technologies available. GNCL aims to extensively
 use wind energy to power its captive requirement. It has invested in 62
 Wind Turbine Generators with a total capacity of 87.5 MW. The company
 is also investing in cogeneration of power using the heat generated
 during coke production to the tune of 60 MW, thus using all means at
 its disposal to be a green company. We take pride in our environment
 ethics-rain- water harvesting, green belt across all plants & wind en-
 ergy to name a few. GNCL is a part of the emerging carbon credit market
 through Clean Development Mechanism (CDM) under the Kyoto Protocol
 agreement. The efforts of the company towards reducing greenhouse gas
 emissions have made the company eligible for earning carbon cred- its,
 which besides generating increased returns will strengthen its
 commitment of being a socially responsible citizen.
 
 Q.4.Gujarat NRE has been a pioneer in foraying into overseas coal mine
 ownership. The move has the potential of ensuring that you morph into a
 global resource giant.  At what stage are the company’s Australian
 operations?
 
 A. India has severe shortfall of good quality hard coking coal. It is
 estimated that by 2013 as per the current pro- jections, India would
 need more than 75 million tonnes of coking coal. Australia has
 excellent resource of hard cok- ing coal and is the primary source for
 imports to India.  We went to Australia in search of coal, but bought
 mines in 2004 and made it our second home. The Australian experience
 has been both challenging and satisfying.
 
 The investment and growth plans as well as the opera- tions of our
 Australian subsidiary are perfectly on course and progressing as per
 plans. We have recently secured a Long Term Loan Facility of USD 50
 million from a consor- tium of Indian banks which is being utilised to
 support & improve the existing infrastructure and facilities and de-
 velop new ones at NRE No. 1 & NRE Wongawilli collieries.  The Gujarat
 NRE Group has earmarked plans to incur a further capital expenditure of
 over A$ 470 million by FY 2014 in addition to the existing A$ 250
 million already incurred. Various other efforts are in place to ramp up
 production of ROM Coal from the mines to 7 million tonnes per annum by
 the year 2014-15. We aim to be one of the largest coking coal producers
 of Australia. We are the only independent Company listed in Australia
 having pure focus on hard coking coal while all the other hard coking
 coal reserves are owned by bigger resource conglomer- ates globally.
 
 Gujarat NRE has made an off-market bid for Rey Resources Limited, an
 ASX Listed Company, which is focusing on the development of its thermal
 coal exploration assets in the Canning Basin, Western Australia. The
 Company an- nounced its maiden JORC Resource of nearly 500 million
 tonnes of thermal coal in April 2009. The successful completion of the
 proposed takeover would allow diversi- fication of the Company’s asset
 base and to become a major player in the coal mining sector with
 resources of over 1 billion tonnes of coking and thermal coal.
 
 Q.5. What is the differentiating factor that makes you peerless and the
 undisputed market leader? What are your plans to maintain the
 leadership position and increase stakeholder’s wealth?
 
 A. In the past few years the company has made large invest- ments in
 capacity expansion and integration. The com- pany is ready to reap the
 fruits of these investments. The company’s coke facility in Dharwad,
 Karnataka is ready for production. This provides the company extra
 leverage of enhanced capacity to meet the increasing demand of coke in
 India. Though the current recession had its effect in the consumption
 of coke in the global market, the do- mestic scenario has been bullish.
 India is one of the few countries that imported coke in 2008 and is
 also going to do so in 2009 as well, due to increased domestic con-
 sumption levels, which augurs well for merchant manu- facturers of met
 coke in India. Demand for coke in India has been buoyant in the first
 half of 2009. Shortages of coking coal are adding to the pressure in
 the market. We plan to increase our capacity further by setting two
 plants of 1 million tonne each in Andhra Pradesh and Gujarat to take
 advantage of this ever yawning gap of demand and supply of coke in
 India. Consistent and reliable supply of coking coal from Australian
 mines adds to the company’s advantage.
 
 With China closing its coal mines and becoming a net importer of both
 coking coal and coal has created coke and coking coal a commodity of
 global short supply.
 
 Going ahead, with our coal mines in Australia increasing production at
 one end as well as increase in our domestic coke production capacity
 will strengthen our value chain, insulate us from external effects of
 adverse price swings and transform us from a coke manufacturer into an
 inte- grated coking coal mining company. This would inevita- bly
 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 – in- creased capacity and sale,
 widened sale and enhanced valuation – will grow the value of our
 stakeholders over the coming years.