1. DEFINITION AND INTERPRETATION:

Kappas: Farmer produce or seed cotton

 

Trading day: The day on which the actual trade transaction occurs between seller and buyer. The trading date including time is specified in our TTN number.

 

Ginner: Ginner is a person or group of persons having TMC standard Ginning mill by own/ lease/ hiring basis and is able to produce good quality lint bales as per international standards by procuring good quality raw material with quality conscious in each and every stage of Ginning process and deliver the goods as per agreed time.

 

Spinner: Spinner is a person or group of persons having standard Spinning mill by own/ lease /hiring basis and is able to produce good quality yarn as per international standards by procuring good quality raw material with quality conscious in each and every stage of Spinning process and deliver the goods as per agreed time.

 

TReDS: TReDS means Trade Receivables electronically Discounting System. It is an electronic platform for facilitating the financing / discounting the trade receivables of Micro, Small and Medium Enterprises (MSMEs) through multiple financiers. These receivables can be due from corporates and other buyers, including Government Departments and Public Sector Undertakings (PSUs).

 

Factoring: Factoring is a financial service in which the business entity sells its bill receivables to a third party at a discount in order to raise funds. Factoring involves the sale of all the account receivables to an outside agency. Such an agency is called a factor.

 

FOS Option Lint Bales: Farmer Option Sale is part of Normal market Option sale system. It is also called as SOS (Seller Option Sale). Here on every Monday, Wednesday and Friday [popularly known as MWF days] the farmer puts up his quote/ price and the buyer shall accept the said price if he wants to buy the stock on that particular day. Here, the seller can change his quote any time of that day and the buyer shall agree to the said quote.

 

SOS Option Lint Bales: Seller Option Sale is part of Normal market Option sale system. Here every Monday, Wednesday and Friday [popularly known as MWF days] the farmer shall put forth his quote/ price and the buyer shall accept the said price if he wants to buy the stock on that particular day. Here, the seller can change his quote any time of that day and the buyer shall agree to the said quote.

 

BOS Option Lint Bales: Buyer Option Sale is part of Normal market Option sale system. Here on every Tuesday, Thursday and Saturday [popularly known as TTS days] the buyer shall put forth his quote and the seller shall agree to sell the stock for the quoted price if he wants his stock to be sold on that day. Here, buyer can change his quote any time of that day and the seller shall agree to the said quote.

 

 

2. THE SPINNER CONCEPT:

 

            Spinners can buy their Raw Material Lint bales in all Trade Terminals from T1 to T6, from Farmers [T1 & T2] https://youtu.be/q3tOf1guMDs  and  https://youtu.be/1YuZoG9VQ7I, Ginners [T3 & T4] https://youtu.be/hGSWg7m4sQs and https://youtu.be/PMLyTKQc21Y and Traders [T5 & T6] https://youtu.be/tZ91AR0kebc as per his desire, quality and rates available on terminals all odd number terminals offers MSP option sale system[ MSP1 to MSP6] and all even number Terminals offers Normal Market option sale system [SOS/BOS] and Spinner can sell their yarn directly to weavers & yarn Importers in Trade Terminal no 7 under MSP system and in Trade Terminal no 8 can sell to yarn Traders and exporters under Normal Market Option sale system [SOS/BOS]. They can also sell their waste generated in the mills directly sell in Terminal no 9 under Normal Market option sale system [SOS / BOS]  ICSINDIA shall create online plot form for Spinners for their own products of yarn and waste to sell their products, so that the spinners can do the dual jobs, i.e., buying the bales and selling their products online in ICSINDIA.COM platform.

 

There are various types of Spinners category based on their Credit Ratings and ICSINDIA shall treat them accordingly.

 

i) Credit ‘A’:

• The Spinners who have credit rating "A" and above for the last 2 years shall be considered ‘Diamond customers’ by ICSINDIA.  
• These customers need not open any Bank Guaranty as special offer but they must enter into Factoring or TReDS agreement with a third party who is having tie up with ICSINDIA, so that ICSINDIA will discount the bills with Factoring or TReDS Company without recourse condition. 

 

ii) Credit ‘BBB’:

• The Spinners who have credit rating "BBB" for the last 2 years shall be considered ‘Golden customers’ by ICSINDIA. 
• These customers shall submit Bank Guarantee to ICSINDIA.

If they have any problem in submitting the Bank Guarantee, they can sign ECS mandate of ICSINDIA Bankers as per their exact payout dates so that ICSINDIA will present the cheques under ECS

• These spinners also shall enter Factoring or TReDS agreement with third party who is having tie up with ICSINDIA, so that ICSINDIA.COM will try to discount the bills with Factoring or TReDS Company without recourse condition. 

 

iii) Standard Assets:

• Those Spinners who are standard assets in the Banks shall be considered our potential customers.

•  These customers shall submit Bank Guarantee to ICSINDIA.

• If they have any problem in submitting the Bank Guarantee to ICSINDIA, they are provided with four other options by ICSINDIA. They are as specified hereunder:

a. They can sign ECS mandate of ICSINDIA.COM bankers as per their exact payout dates so that ICSINDIA will present the cheques under ECS.

 b. Ceding Second charge paripasu  on Primary assets and collateral assets of the company from your financed banks.

c. 60% of company shares must be pledged with ICSINDIA.COM and same to be mentioned and filed in ROC by company secretary.

d. They must enter Factoring or TReDS agreement with third party who is having tie up with ICSINDIA, so that ICSINDIA.COM will discount the bills with Factoring or TReDS company with recourse condition.

 

iv) NPA Status:

• Those Spinners who have NPA status in banks and are symbolic possessions taken by the banks shall be considered ‘highly risk & high return customers’
• But if banks were unable to proceed further in SARFAESI Act due to unfavorable market and economic situations or any other reasons and are running the units partially by management those units are also eligible to enter into this agreement with alternate options  as specified hereunder:

• Pledging of 100% company shares to ICSINDIA or third party. The same shall be mentioned and filed in ROC  
• NOC from banks to run the unit with current stock position or Tripartite agreement either under Conversion agreement or Leave and license agreement for 1 to 3 years based on mutual understanding of 3 members with condition of 3 months prior notice to be given to ICSINDIA by banks to vacate the unit.
•  All the bank transactions of the unit must be through one separate current account of the unit in existing banks. 

 

3. SCOPE & CONDUCT OF WORK:

 

            ICSINDIA shall supply lint bales from farmers, Ginners, Lint bale traders to the Spinners and the Spinner shall provide Bank Guarantee or the alternate options provided to the Spinners as specified in the Spinner concept. After that, ICSINDIA shall allot TTL limit to the Spinner to start business in their website.

As per actual test results of LYP & HVI test and the data available online, the Ginner shall enter the values in crop adding and lint bale adding. The system will calculate premium and deductions based on above HVI values. If length, strength and Rd values are more than the standard values, the lint rate rate will deduct automatically by system. Then by clicking ‘add lint bales’, all the options of lint rate available will be shown on the screen. The Ginner shall select any one of the options shown and the same shall be listed in the concerned Trade Terminal. Farmer crop lint bales listed in Terminals 1 & 2, Ginner crop lint bales in Terminals 2 & 4 and Trader lint bales in Terminals 5 & 6. Here, all the Terminals in odd number, i.e., 1,3 & 5 are related to MSP options and the even number terminals, i.e., 2, 4 & 6 are related to Normal Market Option Lint Bales.

 

Based on the TTL (Total Trading Limit) allotted to the Spinner, he has option to buy any number of bales from any trade terminal, i.e., 1 to 6. After the purchase, the amount equivalent to the invoice value shall be blocked by the system. The Spinner can only buy the stock equivalent to the TTL as allotted to him. He can purchase by simply clicking ‘buy now’ button and in case of Normal Market Option Sale, by accepting the quotes of FOS/ SOS option lint bales and quote the rates for BOS option lint bales. After the sale, TTN (Trade Transaction Number) shall be generated by the system and the same shall be informed to both the Spinner and the buyer through SMS, mails. The same shall be updated in their respective homepages also.

 

            After receiving the lint bales from farmers, Ginners, Lint bale traders  the Spinner shall test the quality parameters in spinners  Cluster Testing Franchise, and same shall be entered in website of ICSINDIA., as ‘receipt of goods updating’, and then the payment is liable to be made as per their payout dates. As soon as the payment is made by the Spinner, the same amount of TTL will be released to Spinner by ICSINDIA.

 

            The Spinner can sell his yarn through Trade Terminals 7 & 8 in case of MSP and Normal Market Option Sales and also sell his waste through Trade Terminal 9 which is only for Ginner and Spinner waste Normal Market Option Sales. The Spinners can cross check their costing with the Minimum Support Price or Manufacturing Support Price of Yarn (newly introduced by ICSINDIA) with a simple formula called Yarn MSP Calculator. This can be used as a bench mark by the Spinners. Spinner can test his yarn sample in Spinners Testing Franchise available in his area and add the yarn quantity & quality data based on the yarn price and accordingly, MSP yarn is calculated. It guides the Spinners and weavers accordingly.

 

Sale of Yarn: Based on the details of the yarn provided by the Spinner, it shall be listed accordingly in Trade Terminal 7 for MSP Option Sales and Terminal 8 for Normal Market Option Sales. As per the requirement, the weaver will buy the yarn and TTN number shall be generated by the System. The same shall be informed to both the buyer and the seller and also updated in their respective homepages. The seller shall dispatch the yarn after entering the required details of the gate pass and an invoice shall be generated and updated in the system as proof of dispatch. Only after updating the receipt of goods by the buyer, TTL will be released by ICSINDIA admin.

 

Sale of Waste: The Spinner shall add his waste specifics and quantity and the same shall be listed in Trade Terminal 9 for Normal Market Option Sales. As per the requirement, buyer will buy the waste subject to availability of TTL limit, and TTN number will be generated by system. The same shall be informed to both the buyer and the seller accordingly. The seller shall dispatch the yarn after entering the required details of the gate pass and an invoice shall be generated and updated in the system as proof of dispatch. Only after updating the receipt of goods by the buyer, TTL will be released by ICSINDIA admin.

 

Spinner can purchase lint bales in Trade Terminals 1 to 6. The Spinner can sell his yarn in Trade Terminals 7 & 8 and spinners waste in Trade Terminal 9. Thus, it is clear that Spinner has a special and prestigious role in this concept and the entire concept is running based on purchase and sale by the Spinner. It clearly shows that all the Trade Terminals are used by the Spinners. Therefore, this concept is in favour of the Spinner and he can benefit the most out of it.

 

 

 

4. ICSINDIA AGREES TO:

1. Ensure smooth working of spinning by continuous supply of lint bales to the Spinners.

 

1. Finalize Spinners based on consumption, reputation, credit rating of the Spinner and lastly provision of Bank Guarantee.

 

1. Ensure that the benefit shall reach farmers and Spinners mutually.

 

1. Update cotton lint bales [28.5mm] rate in Rs/candy and cotton seed rate in Rs/quintal daily before 11.00AM.

 

1. Ensure that the standard values of cotton Moisture, trash, length, strength, Mic, Rd, CG, +b will be available on their website.

 

1. Ensure that the standard values of Yarn U%, IPI/KM, Count CV%, Strength (RKM), Strength (RKM) CV%, Classimate faults, Yarn breaks per 1lac meters, will be available on their website.

 

1. Provide the most reliable, reasonable sources and payment options to all Spinners.

 

1. Update the ruling ocean freight rates based on destination ports.

 

1. Update the service charges of admin and franchise service charges.

 

1. Update the currency value.

 

1. Ensure and fix quality claims, penalties and compensations as and when required.

 

 

5. THE SPINNER AGREES TO:

1. Register in the website of ICSINDIA, i.e., www.indiancottonsolutions.com or www.icsindia.com.

 

1. Provide irrevocable bank guarantee or letter of credit or maintain margin money as per conditions and requirement of admin

 

1. Have good infrastructure and place of storage for bales and yarn.

 

1. Test the quality parameters of the lint bales after receiving them from farmers, other Ginners, lint bale traders.

 

1. Pay initial non-refundable registration charges.

 

1. Pay admin service charges on fortnight basis.

 

1. Obey the compensation as per admin decisions if any default, delay in delivery, or quality claims.

 

1.  Obey the compensation as per admin decisions if any default, delay in delivery, or quality claims from their suppliers.

 

1. Obey the compensation as per admin decisions if any quality claims from their customers and if any default or delay in payments.

 

 

6. PAYMENT TERMS:

 

Payment Terms for each and every trade is fixed in the website of ICSINDIA.

 

• In case of Farmer concept MSP sales, first installment payment to Spinner starts on 2nd day from the trading day and the last installment is on 168th day depending on the option [MSP1 to MSP6] selected by the particular seller to match the Farmer crop payout dates.

 

 

• In case of MSP sales, first installment payment to Spinner starts on 15th day from the trading day and the last installment is on 180th day depending on the option [MSP1 to MSP6] selected by the particular seller.

 

• In case of Normal Market option sales, full and final payment to Spinner shall be settled on 3rd day from the trading day.

 

• In case of any Spot rate sales or full payment option in our system, full and final payment shall be settled on 2^nd day from Trading day whichever the later.

 

Spinner must note that same above terms of payment applicable for their yarn sales and waste sales depend on their sale option selection.

 

 

7. PENALTIES:

 

If the Spinner fails to fulfill three consecutive payments or payout default, ICSINDIA shall treat him as defaulter and start recovery actions/ procedures against such default spinners without any second thought to protect the interest of farmers and sellers.

 

In case of any omission of an act as mentioned above or commission of any wrongful act by any person, he shall be punished as per the provisions of Information Technology Act, 2000.

 

In case of any other omission of act as mentioned in this agreement, the penalty shall be specified on the website of ICSINDIA.