Discussion Points with EIC

Stock at M/s Swati Udyog Pvt Ltd.

• FG : 200 MT
• RM : 0 (No RM was dispatched from mid of Feb’19)

Communication strategy to M/s Swati Udyog for closure of

operations

Steps to be taken for bill clearance and reconciliation

Impact of closure of EPA

Communication to customers

Steps to be taken post closure of EPA

• Refund of customers advances

Discussion On Long Term Contract Renewal With “NUVOCO
VISTAS”
Agreement Status till date

1999- Main 2005- 2010- 2016-

Agreement Signed Supplementary
Agreement signed
Agreement signed
on 1st Nov 1999 for
supply of dry & wet
slag
• Dry Slag: 700 KTPA @
Rs. 250 PMT
• Wet Slag: @ Rs. 270
PMT; Qty not defined on
dry basis
• Discounts based on
quality parameters
Supplementary
Agreement
signed
Agreement signed on Agreement signed on
6th July, 2005 to 24th March, 2010 due
cater to G BF to new facility of
expansion at TSJ Lafarge coming up in
Jamshedpur
• Dry Slag: @ Rs. 316.23
PMT [Additional Qty only • Dry Slag: Rs. 379.98 upto
700 KTPA & Rs. 410.38 >
from G BF]
• Wet Slag: @ Rs. 175 PMT 700 KTPA
[Additional Qty only from G • Wet Slag: 0.9 MTPA @ Rs.
BF] on dry basis 300 PMT on wet basis with
maximum 15% moisture
Supplementary
Agreement
signed
Agreement signed on
1st April, 2016 for
price revision as
Supplementary 2010
was valid from 2010 -
2016; Effective till
2019
Dry Slag: Rs. 477.54 PMT
for upto 58.5 KTPM [700
KTPA] & Rs. 515.75 PMT
above 58.5 KTPM
Price of Wet Slag: Rs. 435
PMT upto 75 KTPM [900
KTPA]WPI based pricing
henceforth
 Discussion on Major Clauses
Main Agreement Analysis
Clause 12.3: The clause either should be suitably amended or removed
"The contract is auto-renewed for successive period of 20 years w/o any end date; price increase of > 20% not permitted"

Clause 1.7: "Price as the meaning ascribed in Schedule 1.7 A and 1.7 B as appropriate" Needs to be changed; clearly defining prices for dry and wet slag

Def of Slag as set out in Schedule 1.9 A and 1.9 B Definition to be revisited; and all clauses referring to discounts in case of quality
Clause 1.8: "Slag means the granulated slag derived by the Seller from the molten slag which is a by-product of the Iron making non-compliance needs to be removed
process from its blast furnaces at Jamshedpur complying with the Specifications set out in Schedule 1.9A and 1.9B, as appropriate"
Clause 1.9: "Specifications means the physical properties and chemical analysis of the slag in accordance with the testing and
sampling parameters defined in schedule 1.9A and 1.9B or may be mutually agreed upon by both the Parties"

Reference Amount in conjunction Puts restriction on TSL on increasing customer base or improving price
Clause 7.3.1: "The amounts set out in (a) and (b) below are collectively referred to as "the Reference Amount": realization beyond Rs. 800; Should be removed
(a) the amount of the purchase price that the Seller has received for the sale of such Slag to a 3rd party, it being understood that the
Seller shall use its best possible endeavours to seek bonafide offers to obtain the highest possible price for such Slag;
(b) the Price as set out in Schedule 1.7 A"
Clause 7.3.2: "If the Reference Amount is less than Rs. 800, then the shortfall between Rs. 800 and the Reference Amount will be
paid by the Purchaser to the Seller. If, however, the Reference Amount exceeds Rs. 800, then the Seller shall pay to the Purchaser
the excess amount. The amount of Rs. 800 shall be duly indexed in accordance with Schedule 1.7A"

The existing storage capacities for wet and dry slag shall not be reduced except with the prior consent of the Purchaser Puts restriction on TSL's Long Term Strategy; should be removed
Clause 7.4: The existing storage capacities for wet and dry slag shall not be reduced except with the prior consent of the Purchaser
"The current existing effective storage capacity for Slag complying with the Specifications set out in Schedule 1.9A is 1000 Metric
Tonnes and the Slag complying with the Specifications set out in schedule 1.9B is approximately 20,000 metric tonnes. The existing
storage capacity for wet and dry slag and the drying facilities shall not be reduced except with the prior consent of the Purchaser.
the Seller shall use its best efforts to increase its storage capacity of Slag, if necessary, corresponding to the Specifications set out
in Schedule 1.9A"
 Other Clauses to be suitably modified
Main Agreement Analysis
Business Transfer Agreement Clause B & D
Seller shall supply and the Purchaser shall purchase slag for the remainder of the life of the cement plant of the business
B. "Pursuant to Business Transfer Agreement dated March 9, 1 999 as amended by Suppliment No. 1 dated March 19, 1999 and further amended by
Supplement No 2 dated Sept 29, 1999 and by an indenture of conveynnce of even date ahd other transfer documents entered between the Seller (as
the seller) and the Purchaser (as the purchaser), the Seller sold and transferred to the Purchaser and the Purchaser purchased, acquired and assumed
from the Seller, the Business (as defined therein to mean the split location cement facility) as going concern, owned and operated by the Seller, prior
thereto, on the (terms and conditions recorded therein;" Analyse BTA dt. March 9, 1999 & subsequent supplementary
amendments dt. March 19, 1999 & September 29, 1999
D. "One of the essential conditions precedent to the consummation of the transfer contemplated by the BTA is that the seller and the purchaser shall
enter into a long term slag supply agreement on the Closing Date (therein defined) under which the seller shall supply and the purchaser shall
purchase slag for the remainder of the life of the cement plants of the business on the T&C set out hereinafter"

Clause 1.11: Def of WPI - Index of Manufactured Product Base Year 1981-1982
Clause 1.11: "WPIN means the Wholesale Price Index for the YearN for the manufactured products (base 1981-82=100) as published by the RBI in its
wekly bulletin (or if no such index rate is published by the RBI for the relevant reset date, the wholesale price index as may be published by any
Clause 1.11: Def of WPI - Index of Manufactured Product Base
recognized statutory body or organization), calculated as a simple arithmetic average of indices for the fifty two weeks of the year"
Year 1981-1982 to be changed to Slag cement

Clause 2.2: Sale and Purchase of slag

"During the term and all subsequenct renewals thereoff, so long as the seller generates slag in its manufacturing operations, any and all slag shall be
sold only to the Purchaser & the Purchaser shall purchase all such slag generated by the Seller, on the T&C, subject to the terms set in this agreement" Gives exclusivity and first right of refusals to Nuvoco

Clause 3: Initial Qty: "Supply of 700 KT of dry slag; Quality Specs - As per schedule 1.9A & price- As per Schedule 1.7A“ Quantities to be modified and slab wise pricing to be
Clause 4: Additional Quantity: "Wet Slag ; Quality Specs - As per schedule 1.9B & price- As per Schedule 1.7B" removed
 Other Clauses to be suitably modified- Continued
Main Agreement Analysis
Clause 5: Production Forecast & Estimated Slag Supply
Clause 5.1: "The Seller shall within 45 days prior to the commencement of each FY, submit a monthly forecast for the subsequent 12 months production schedule of its
BF's to the Purchaser to enable the Purchaser to plan its Production Schedule (12 Month Forecast), provided however, that the first period for the 12 month forecast shall
commence on the perido commencing on the Effective Date and ending on the last day of the relevant FY. The Seller acknowledges that the smooth and timely supply of
slag is critical to the Purchaser's business. The 12 month forecast shall therefore particularly disclose any maintenance shut down or any other factors which could affect Puts obligation on TSL to share BF wise
the continued an dtimely supply of slag to the Purchaser to enable the Purchaser to plan appropriately for such contingency by storing adequate quantities and/or making daily production data on daily basis, along
alternate arrangements in time. The Purchaser acknowledges that it is critical for the Seller that the Purchaser should offtake slag continuously and on time spoecially any
with slag chemical analysis of each BF of
slag exceeding the storage capacity of the Seller so that it does not create a congestion of the manufacturing opeartions of the Seller"
TSL; should be removed as HM Production
Clause 5.2: "The Seller shall in addition, no later than the 2nd working day of each month, submit to the Purchaser, the confirmed monthly schedule for that calender month
data and forecast has material impact on
TSL stock price
(Monthky Schedule". The Seller will complete the entire production schedule during the month for which such Monthly Schedule has been confirmed. The Monthly
Schedule for any month shall not vary more tha 10% as slated in the 12 month forecast"
Clause 5.3: "The Seller shall also provide to the Purchaser on a daily basis, the daily blast furnaces production data and slag chemical analysis for each BF to enable the
Purchaser to anticipate and determine for its own usage in its production process, the proportion and quality of slag"

Clause 5.4: Change in Quality of RM of TSL to be notified to Nuvoco 6 months in advance OR twleve month forecast, whichever is lesser
BF Slag LTP to be shared with Nuvoco
"In the event the Seller makes or proposes to make any planned change in the quality or quantity of raw materials used in the manufacture of steel in its production facility
or its production proceses which could ultimately impact the quality of the Slag to be supplied to the Purchaser, then and in that event, the Seller shall make available the
information to the Purchaser at least 6 months in advance or in the 12 month forecast, whichever is earlier, to enable the Purchaser to consider the impact on its own Puts obligation & unnecessary constraints
operations. However, in case of temporary changes in any RM, the Seller shall inform the Purchaser of any material change in the Slag quality or quantity as soon as it is on TSL; Clause should be removed
reasonably possible. In the event any of the changes could have a material impact on the operations of the Purchaser, the Seller and the Purchaser shall discuss a solution
to either negate or reduce such impact. It is clarified here that this clause shall not restrict the Seller from making any change in the quality or quantity of the RM used for
the manufacturing of steel in its production facility or its production process. The Seller shall also provide its LTP to the Purchaser to indicate the possible effect on the
quality and quantity of the Slag to be produced"

Clause 6: Delivery Terms Puts obligation on TSL to give COA with

Clause 6.3: "The Slag supplied to the Purchaser shall be weighed by each consignment loaded bny the Seller and a delivery voucher provided to the Purchaser specifying each consignment. Also, the weighment
the consignment quantity along with the Certificate of Analysis as required, in a mjutually agreed format. The Purchaser shall weigh the Slag at its premises to results of dry and wet slag at TSL
independently confirm the quantity of Slag delivered to the Purchaser and in the event of a difference or dispute between the quantities recorded by the Seller and the weighbridges is to be considered as final
Purchaser , the Parties hall determine how to reconcile such differences and/or dispute including by calibration of their weighing machines" and binding for both parties, instaed of the
vague clause currently in the contract
 Other Clauses to be suitably modified- Continued
Main Agreement Analysis
Clause 6.4: "All quantities of Slag delivered to the Purchaser by the Seller shall be delivered and adjusted in the following order:"
Clause 6.4.1: "Firstly towards the Assured Quantity for the current month out of the Initial Quantity"
Clause 6.4.2: "Secondly, towards the balance of the Initial Quantity for the preceding months, if any, calculated cumulatively" Adjustment against balance of quantities of preceding moths
Clause 6.4.3: "Thirdly, towards the balance of the Initial Quantity for the current month" should be removed
Clause 6.4.4: "Fourthly, the excess, if any, towards the Additional Quantity" Concept of Assured Qty etc should be removed

Clause 7: Minium Assured Offtake/Evacuation of Slag

"For Months 1-120: 40 KTPM
For Months 121-240: 25 KTPM" These clauses from 7.1 to 7.2 put in place minimum assured
offtake volume; should be removed

Reference Amount in conjunction with Clause 9.2

Clause 7.3: "In the event the Purchaser does not offtake the Purchaser's Assured Quantity, as set out above, even though the Seller is ready and able
to supply slag in accordance with Section 6.4, then the Seller shall be entitled to pre-measured liquidated compensation at the rate per metric tonne Puts restriction on TSL on increasing customer base or
calculated and payable in the manner set out below improving price realization beyond Rs. 800; Should be
removed

Clause 7.5: Beyond 3 days of notice to Nuvoco for lifting, TSL shall sell the slag to any third party
"In the event the Seller's total storage capacity is exceeded and the Seller reasonably believes that it is likely to run arisk of cessation of its BF's due to
a default on the part of the Purchaser to offtake Slag in the priority set out in Section 6.4, then in that event, the Seller shall give a written notice of at Puts restriction on TSL's tactical plans for ensuring continuity
least 7 days to the Purchaser to give it any opportunity to lift the slag within 3 days thereafter failing which the Seller shall be entitled to sell the Slag to of BF's operations & also chances of lower realization from a
any 3rd paty. In this case, the Purchaser will have the liability to pay the Price set out in Schedule 1.9A, for the slag not offtaken" 3rd party on firesale basis; should be removed
 Other Clauses to be suitably modified- Continued
Main Agreement Analysis
Clause 8.1: Price, Payment Terms, Invoicing; Taxes on Steel Industry should not impact the price of slag
"The price set out in Schedule 1.7A and 1.7B, is exclusive of all taxes and excise duties. Any taxes under any environmental legislation which may be levied in the
future on the steel industry shall not however affect or impact the price of slag and such tax shall be to the account of the Seller“ Reference to Environmental Legislation should be
Clause 8.2: "The Price shsall be fixed for one FY at a time, the first such period to commence on the Effective Dtae an dend with that FY. …..The adjusted price removed & scope to be provided to relaize this
shall become effective from the first invoice raised for the relevant FY. The formula for price adjustment (WPI based) shall be followed for the Term as well as the amount in the selling price of slag
renewed periods in accordance with section 12.3, unless otherwise agreed upon“

Clause 8.3: Provides for unsecured credit period of minimum 30 days and maximum 60 days from the date of delivery
"The Seller shall invoice the Purchaser for the Slag in accordance with the Price set out in 1.7A and 1.7B. The invoice shall be raised by the Seller on the 15th of
each month for all the deliveries made in the preceding month, subject to the provisions of Section 9. The payment shall be made by the Purchaser within 14 days Re-write the clause so that deliveries are met
from the date of invoice, namely by the 29th of each month for the invoice raised for the preceding month. The invoices shall be adjusted by the amount of either against advance or 7 day secured credit
discount agreed, in the event of failure to meet the specifications in 1.9A and 1.9B, for non-supply of the Assured quantity or for not offtaking the Assured
Quantity"

Clause 9: Supply of Minimum Assured Quantity

"For months 1-120: 40 KTPM
For months 121-240: 25 KTPM Should be removed as we have already reached the
For months 241-360: 15 KTPM" sunset date of the clause

Clause 10: Quality, Specs, Inspection and Testing

Clause 10.1: "COA to be submitted
Purchaser's representative to be accomodated in TSL's plant & self certification of seller to be crosschecked by the Purchaser's representative“ Should be removed and TSL's certification should
Clause 10.2: "Gives right to the Purchaser to inspect TSL's BF and granulation and drying facilities for Quality Assurance audit and/or to inspect the be considered final and binding
facilities"

Clause 11: Indemnity & Liability

Clause 11.2: "If either Party fails to make any payment to the other Party when due hereunder such Party shall pay default interest on any overdue
Clauses to be re-written in consulattion with TSL-
amount from and including the due date to the date of actual payment at the interest rate which is equivalent to lhe interest rate charged by the Bank
Legal; Penal Interest rate set out in Clause 11.2
should be clearly mentioned instead of working
of that other Party for the grant of working capital financing at that time"
capital based calculation logic for penal interest
rate
 Other Clauses to be suitably modified- Continued
Main Agreement Analysis
Clause 11.3: "In respect of the Assured Quantity, the Parties agree that neither Party shall be liable to the olher for any compensation in excess of
that stated in Sections 7 and 9 for lhé periods set out thcrcin. It is understood that neither Party shall be liable for any consequential, incidental,
special loss or damage or for loss of profits incurred by the other Party for any breach of this Agreement. Other Ihan.the above, it is expressly Should be removed
clarified here that either Party shnil have recourse to law against the other for any brench of this Agreement"

Clause 13: Termination Clause:

Clause 13.1: "This Agreement shall terminate, at the election of a party (the "Non-Defaulting Party"), in the event the other Party (the "Defaulting
Party")
Clause 13.1.1: is in the material breach of this Agreement and such breach, if capacle of remedy, is not remedied within 60 days of notice by the
Non-defaulting Party to the Defaulting Party of the nature of the breach and the request for cure; or
Clause 13.1.2: is subject to bankruptcy, insolvency, and such proceedings has the effect of suspending or terminating the business operations of
Should be re-written in consultation with Legal to
provide for mutual exit w/o assigning any reason
the Defaulting Party; or
Clause 13.1.3: is dissolved or otherwise ceases to exist in circumstances other than a corporate reorganization or similar arrangement.
Clause 13.2: The termination or expiration of this Agreement shall not release either Party from any obligation which ahs already arisen under the
terms of this Agreement"

Clause 14: Coordinators Head Sales - IBMD, TSJ & Plant Manager, Jojobera,
"VP Ops at TSJ & Plant Manager Jojobera for Nuvoco" Nuvoco

Clause 15: Arbitration

"All disputes arising in connection with this Agreement shall, to the extent possible be amicably settled by prompt good faith negotiations between To be re-written; with advise of Legal to reflect
the representatives of the Parties. In default of such amicable settlement, within 60 days of the commencement of discussions, the dispute shall changes in Indian Arbitration & Conciliation Act 1996,
be finally settled under the Indian Arbitration & Conciliation Act, 1996 by three arbitrators , appointed in accordance with said Act, whose decision post amendment in 2015
the Parties shall recognize and respect as final...........“ Provision for legal costs to be borne by respective
parties to be included

Clause 16: Force Majeure Clause

Clause 16.1: "Neither Party shall be liable to the other if, and to the extent that the performance or delay in performance of any of its obligations under this
agreement is prevented, restricted, delayed or interfered with, due to governmental authority, war, armed conflict, hostile attack, insurrections, riot..........due to To be re-written with advise of Legal & to include plant
no fault of such Party or disruption in transportation of slag due to no fault of the Purchaser" breakdowns
 Other Clauses to be suitably modified- Continued
Main Agreement Analysis
Clause 17:
Clause 17.1.4: "that it has the legal power, corporate authority and capacity to enter into, execute and deliver this Agreement and to perform all of
Remove "there exists no contracts, commitments or
agreements or any nature and that none will be
its obligations hereunder, and further that there exists no contracts, commitments or agreements or any nature and that none will be entered into
entered into that would impair or inhibit the ability of
that would impair or inhibit the ability of the Party to perform its obligations hereunder"
the Party to perform its obligations hereunder"

Clause 17.1.5: "...except as otherwise provided in this Agreement, the Seller shall not, during the Term directly or indirectly, supply any slag to any other Remove clause
Person or any other source"

Clause 17.1.6: ".....that the Purchaser shall not, during the term, whether directly or indirectly, purchase any Slag from any other Person or any other source,
without having first purchased frotn (the Seller the Initial Quantity and the Additional Quantity, except in the event the Seller is unable to supply the Slag"

Clause 18: Miscelleneous Update Seller & Purchaser's address

Cause 18.1: Notices - "Address of Seller & Purchaser"

Clause 18.8: Assignment Clause 18.1: Assignment - The agreement says that our
"No Party may assign or transfer this Agreement without the other Party's consent in writing, except that in relation to the Purchaser in the event of a) obligation to the new buyers continue irrespectively of
merger or amalgamation; or b) assignment between Affiliates; or c) sale of the business unit or undertaking. this Agreement shall be automatically assigned the ownership
to the merged or amalgamated entity or the Affiliate or the successor of such business unit/undertaking

Clause 18.10: Further Acts & Assurances

"Each Party agrees to execute and deliver all such further instruments and to do and perform all such further acts and things, as shall be necessary or
convenient to perform the provisions of this Agreement"
Typical Physical and Chemical Properties
Price comparison of different Supplementary
Cementitious material

Product Product Classification Landed Tentative

Price(INR)
OPC 50KG 230-260
GGBS 50KG 120-150
FA 50KG Industrial by product
freely available
SF 25KG 1050-1200
MK 50KG Industrial by product
freely available