3 Brokers downgraded, page-22

Where did you come up with that?

This is explicitly explained in the recent LGC announcement:
"Due to market and pricing conditions and within the Scheme design, ERM Power has elected to pay the shortfall charge in lieu of surrendering 1.9 million LGCs.

As advised in June, the market price for LGCs has more than doubled and traded up toward $90 per certificate during FY2017 versus the non-tax deductible shortfall charge of $65 per certificate.

By electing to pay the shortfall charge of $65 per certificate in place of surrendering 1.9 million LGCs, ERM Power has adopted an approach which accelerates the utilisation of tax losses and preserves the right to purchase and surrender certificates for 2016 within the prescribed three-year window.

The impact is an incremental tax charge of $37 million which is recognised at 31 December 2016. A consequence of this strategy is that franking credits are made available for future dividends.

This does not change ERM Power’s previously stated outlook for the FY2017 full year and as previously noted, earnings will be weighted to the second half."

So you know the financial implications better than the board? Better call them and offer your advice.