Risk Mitigants in coal trading

a. Quality of Material: As per the normal practice in coal industry the coal procurement is certified from external quality certifying agent. We shall get our supplies certified from reputed quality certifying agencies like SGS International, S K Mitra and Associates etc. This will ensure the quality and shall help us in building our brand among buyers in India. Further our group has presence in 25 countries across the globe through our offices/ employees/ exclusive sourcing agents. Therefore whenever we shall be procuring the material from a country wherein we have our offices / employees/ agents in the same country or nearby country, our employee or agents shall personally inspect the coal shipment and ensure the quality and quantity. b. Storage of material: The coal shall be stored in plots under the ports. A Tripartite Agreement will be signed with port authorities for custody/lien on goods/delivery procedure etc, Port permits free storage upto 30 to 60 days depending upon port & thereafter storage for additional period on nominal per ton charges. Our group is engaged in import of metal scrap for the last 18 years and has experts who take care of storage of materials near port. They have successfully handled the port unloading and storage of metal scrap whose price per ton is much higher than price per ton of coal. Hence we are confident that material handling and its storage shall not be a challenge for us. c. Control on stock: The coal after reaching the port shall be unloaded and transferred to yard for the same under a Tripartite Agreement as detailed in point b. Though the goods have been sold on High Sea Sales (HSS) basis but the same is kept in yard. A Deed of pledge is signed between buyer, port and us thereby hypothecating the coal in favor of our company to ensure realization of full payment either by PDC or cash of sales price, bank charges, warehousing charges and other incidental expenses. d. Payment: We ask for either Earnest Money Deposit (EMD) in the form of BG or advance from our buyer, to cover the price fluctuation, customer credit worthiness and other factors. We also incorporate clause in sales agreement for additional

margin in case commodity traded have price fluctuation more than the margin money received from buyer. e. Market Risk: Since the buyer contract precedes the suppliers contract hence the market risks is passed on the buyers. Further the buyers are also required to give PDCs along with undertaking for 100% value before request for opening of L/C. We monitor market risk as well as price movement of imported material on regular basis and in extreme case we reserve the right to dispose off material to alternate source to mitigate risks. However, all losses in such case are to borne by the buyer. f. Foreign Exchange Fluctuation: We shall buy the material and sell the same in USD terms hence the Foreign exchange risk shall be minimized. g. Expertise in coal trading: The group already has two coal mines in South Africa from where it is extracting as well as selling coal. On the other hand the group is into metal scrap trading business for the last 18 years and has developed expertise in various aspects of international trading. In addition to this the coal trading activity shall be spearheaded by Mr. H.S. Mann (MD), Ex-CMD, MMTC Limited who has wide experience in Coal Trading. The financial shall be handled by Mr. R. S. Aggarwal (CFO), EX-Chief General Manager, PEC Limited which is also a pioneer PSU involved in coal trading business. With such vast expertise in trading, coal mining and selling, highly efficient team of professionals the group has a strong platform to start coal trading business in India. h. Customers: We are doing trading business in India for the last 18 years and know the creditworthiness of customers and have good relationship with them. Since majority of customers of coal are also customers of scrap hence we have the knowledge of reputation and credibility of various customer. We prefer to sell the coal to small customers in initial stage. In addition to the above, the company is headed by Mr. H. S. Mann; ex CMD, MMTC Ltd. M/s MMTC were the first organization to introduce coal import in India. The network of major international suppliers as well as major buyers in power, cement, sponge and steel sector is intact and available to the company from the experience of Mr H.S. Mann.

i. Capital infusion: The capital in the company shall be infused by its parent company i.e. Worlds Window Impex India Pvt Ltd (WWIIPL) and Mr Piyoosh Goyal. WWIIPL shall get capital to the tune of USD 20.0 mn from existing investor namely International Metal B.V. Holland during this year in addition to USD 5.0 mn that has been brought in by it in the month of March 12. It has also given mandate to SBI Caps to arrange equity investor in WWIIPL. Further Mr Piyoosh Goyal shall also be raising capital by way of dilution of his stake in some company or by way of pledge of shares. The process has already been started and within a short span his share of equity shall be infused in MTPL. j. Excellent track record: We take the pride in the fact that though we have are enjoying working capital limits of Rs 490.0 Crores (including LC limit of Rs 405.0 Crores) in WWIIPL and we have not allowed a single LC to get devolved even for a single hour or day or any rescheduling of payments/ retiring of LC. Though this is a very small fact, this underlines the strength of our planning, control system, management and core value of management. We have a fully dedicated professional team to monitor the cash flows, fund flow, budgets of the company thereby ensuring the timely payments of interest, charges, PDCs or other commitments.