Lease Agreement Details:

- Lease period: 20 years
- Rate of Royalty: 50 paise per tonne
- Minimum Rent: Rs. 8,000 per year

Calculation of Royalty:

- Royalty to be paid = Total yield in tonnes x Rate of Royalty
- For example, if the total yield is 10,000 tonnes in a year, then royalty to be paid = 10,000 x 0.50 = Rs. 5,000

Calculation of Minimum Rent:

- If the royalty calculation gives an amount less than Rs. 8,000, then the leaseholder has to pay a minimum rent of Rs. 8,000 per year.
- For example, if the total yield is 5,000 tonnes in a year, then royalty to be paid = 5,000 x 0.50 = Rs. 2,500 which is less than Rs. 8,000. So, the leaseholder has to pay a minimum rent of Rs. 8,000 for that year.

Calculation of S. W.:

- S. W. means Short Workings which is the difference between the minimum rent and the amount of royalty paid in a year.
- For example, if the minimum rent is Rs. 8,000 and the royalty paid is Rs. 6,000 in a year, then the S. W. is Rs. 2,000.

Explanation of the Question:

- The leaseholder has to pay a minimum rent of Rs. 8,000 per year even if the yield is less than 8,000 tonnes.
- So, in the year in which the yield is less than 8,000 tonnes, the leaseholder has to pay a minimum rent of Rs. 8,000.
- If the yield is less than 8,000 tonnes, then the royalty paid will be less than Rs. 4,000 (8,000 x 0.50). So, the S. W. will be more than Rs. 4,000 (8,000 - royalty paid).
- The leaseholder can recoup the S. W. in the following year when the yield is more than 8,000 tonnes and the royalty paid is more than Rs. 8,000.
- If the S. W. is not recouped in the following year, then it will be carried forward to the next year and so on.
- The year in which the royalty will be paid depends on the total yield in that year. If the yield is more than 8,000 tonnes, then the royalty will be paid based on the rate of royalty. If the yield is less than 8,000 tonnes, then the leaseholder has to pay a minimum rent of Rs. 8,000.