FMC/3/2013/C/145 No.3/2/2013-NMCE-AHD/PER Date: 28th October, 2013 To, Managing Director & CEO,

National Multi Commodity Exchange of India Ltd., 5, 4th Floor, H.K.house, B/h jivabhai Chambers, Ashram Road, Ahmedabad – 380009 Subject: Futures Trading Permission for Cardamom contracts expiring in the years 2013 & 2014 at NMCE reg.

Sir, I am directed to refer to your letter no. NMCE/FMC/2013-14/1022 dated 26th July, 2013, NMCE/FMC/2013-14/1185 dated 10th September 2013 and NMCE/FMC/ 2013-14/1537 dated 30th September 2013 on the subject cited above and to convey in pursuance of Bye-law No 1 A of Chapter 4 of the Bye-laws of the Exchange, the approval of the Commission for permission for futures trading in respect of Cardamom contracts expiring in November 2013, December 2013, January 2014, February 2014, March 2014, April 2014, May 2014 and June 2014 subject to approved contract specification (Annexure-I) and approved contracts launch calendar (Annexure-II). 2. I am to add that trading in the above said contracts shall be subject to Rules, Bye-laws and Regulations and also contract specifications of the aforesaid commodity as approved by the Commission and also the directions issued by the Commission from time to time. 3. The permission for the above contracts shall also be subject to: (i) The limits on open position of each member and non-member client and the limit on daily price fluctuation are as specified in the contract specifications. (ii) Once the contracts are commenced, no terms of the contract specifications should be changed without prior approval of the Commission. (iii) The permission granted for the said contracts is subject to daily Mark to Market settlement of outstanding contracts as per the procedure and delivery mechanism/ process specified in the Bye-laws, Rules and Regulations of the Exchange. The Exchange shall intimate the Commission soon after the trading in the above said contracts is commenced and forward the details of the trading activity in Return I and II to the Commission at the close of Business hours every day. 4. Exchange shall send to the Commission a monthly report on the functioning of the various contracts in respect of the above mentioned commodity alongwith market report.

5. The Exchange, being the first tier of regulation shall ensure that there is no unhealthy speculative trading in the market, which may result in cornering or artificial rigging up or down the prices by particular class of members. If trading in the above mentioned deliveries results in excessive/unhealthy speculation, the Commission will intervene and impose stern measures to deal with the situation and if the situation so warrants, revoke the permission granted to any or all the contracts. 6. As far as agriculture contracts are concerned, apart from approved quality standards the Exchange should ensure that the commodity deposited in accredited warehouse should comply with the regulations laid down by other authorities like Food Safety Standard Authority, Agmark/BIS etc. 7. Exchange is requested to take concrete steps to generate liquidity and active improve participation in the contracts. 1. The Exchange is requested to comply with the directions of the Commission issued vide circular No.Div.III/WH/FMC dated 30.8.2013 for strengthening of warehousing facilities in the commodity futures market and registration of warehouses with WDRA.

9. The contents of this letter may please be notified to the trade immediately and the circulars released by the Exchange from time to time should also be sent to the Commission. 10. Exchange may post the details of the contracts and its specifications on the website immediately upon the receipt of this letter.

Yours faithfully,

SD/- (Usha Pralhad Pol)

Director Encl: as above

Annexure –I

Ccontratc specification of Cardamom contract at NMCE, Ahmedabad

Asset Code CARDAM Product Code CARDAMF Series Code CDMMMMYYYY

Trading System NMCE’s Derivatives Trading and Settlement System

Trading Hours Monday to Friday :10:00 am to 5:00 pm Saturday :10:00 am to 2:00 pm

Unit of Trading 100 Kg.

Delivery Unit 100 Kg

Quotation/Base Value

Rs. per Kg. Ex- Vandanmedu (CWC Puttady), Dist. Idukki, Kerala (exclusive of all tax and levies)

Maximum Order Size

5000 Kg

Tick Size 10 paise per kg

Price Band

Daily price fluctuation limit will be +/-3%. Limit on daily price fluctuation will be reckoned with reference to the previous close price. If trade hits this price limit, trade would stop for 15 minutes, where after price would be extended by another +/-1%. No trade would be permitted during the day beyond then revised price limit of +/-4%.

Quality Specification (Basis)

Cardamom 7 mm bold bulk: 1. Size of the capsules: Entire quantity of cardamom delivered shall remain on a sieve

of 7mm size. However, 5% droppings by count will be allowed. 2. The entire stock delivered shall be crop of current season. 3. Density of stock delivered shall be 385 gms per litre [385 gm l/w] minimum. 4. The cardamom delivered shall be free from blacks. 5. Split and thrips capsules. 3% max by count. 6. The colour of cardamom delivered shall be green, as per prevailing market available

quality in the particular crop year. 7. It shall not be discoloured capsules. However, 2 sides green and 1 side discolored

capsule will be allowed upto 20% by count. 8. Tips Open: 5% maximum by count allowed. 9. Shriveled Capsules: 2% max by count allowed. 10. Fruits (Yellow): 2% max by count allowed. 11. However, the relaxations at Sl.No. [1], [5], [8], [9] & [10] above put together shall

not exceed 15% max. by count in the entire stock.

Quality Specification

Cardamom 6 mm bold bulk

(Additional Tenderable Variety)

1. Size of the capsules: Entire quantity of cardamom delivered shall remain on a sieve of 6 mm size. However, 5% droppings by count will be allowed.

2. The Entire stock delivered shall be crop of current season. 3. Density of stock delivered shall be 375 gms per litre [375 gm l/w] minimum. 4. The cardamom delivered shall be free from blacks. 5. Split and thrips capsules. 3% max by count 6. The colour of cardamom delivered shall be green, as per prevailing market available

quality in the particular crop year. 7. It shall not be discoloured capsules. However, 2 sides green and 1 side discoloured

capsule will be allowed upto 20% by count. 8. Tips Open: 5% maximum by count allowed. 9. Shriveled Capsules: 2% max by count allowed. 10. Fruits (Yellow): 2% max by count allowed. 11. However, the relaxations at Sl.No. [1], [5], [8], [9] & [10] above put together shall

not exceed 15% max. by count in the entire stock.

Tolerance limits for Outbound deliveries

Specifications Basis Tolerance limit

Cardamom 7mm bold bulk Density of stock delivered shall be 385 gms per litre [385 gm l/w] minimum.

385 gm l/w min

+/- 3.85 gm l/w

Delivery unit 100 kgs +/- 0.5% Cardamom 6mm bold bulk Density of stock delivered shall be 375 gms per litre [375 gm l/w] minimum.

375 gm l/w min

+/- 3.75 gm l/w

Delivery unit 100 kgs +/- 0.5% Note: Tolerance limit is applicable only for outbound deliveries. Variation in quality parameters within the prescribed tolerance limit as above will be treated as good delivery when members/clients lift the materials from warehouse.

Packing Delivery would be accepted only if the stock is packed in double jute bag with inner black polyethylene lining containing 50 kg net weight of cardamom of specified quality.

No. of delivery Contracts in a year

Maximum 12 monthly contracts in a year

Delivery Centers CWC (Puttady warehouse) at Vandanmedu in Idukki Dist of Kerala State.

Opening of Contracts

Trading in any contract month will open on the 16th day of the month, if 16th is holiday then next working day

Due Date 15th day of the delivery month if 15th happens to be holiday then previous working day.

Due Date Rate*

Due date rate for 7 mm cardamom (basis variety) shall be calculated on the last day of contract maturity by way of taking the simple average of last 3 days spot price of the Vandanmedu basis centre for the basis variety (i.e. 7mm cardamom).

Delivery Logic Compulsory Delivery

Initial margin Minimum 5%

Additional and/ or Special margin

In case of additional volatility, an additional margin (on both buy & sell side) and/ or special margin (on either buy or sell side) at such percentage, as deemed fit, will be imposed in respect of all outstanding positions.

Delivery period Margin

15%

Limit on open position

Client – 160 MT Member – 800 MT or 15% of total market open position in the commodity whichever is higher Near Month Limit: Client – 40 MT Member – 200 MT or 15% of the total near month position in the commodity, whichever is higher

Delivery and Settlement procedure for Cardamom Contracts

Due Date Rate

The Due Date Rate (DDR) shall be arrived at by taking the simple average of the last three trading days polled spot prices, viz. E0 , E-1, E-2 (E-Expiry date). In the event of the spot prices for any one of the E-1and E-2 not being available the spot price of E-3 would be used for arriving at the average. In case spot prices are not available for both E-1and E-2 then the average of E-0 and E-3 (two days) would be taken. If all the three days’ prices viz. E-1, E-2 and E-3 are not available, then only one day’s price E-0 will be taken as DDR.

Discount On Additional Tenderable Variety

Delivery of the said variety (6mm) shall be settled on the basis of average of last three days spot price polled for this variety (6 mm).

Staggered Delivery Tender Period

The Staggered delivery tender period would be the last 10 days (including expiry day) of the contracts. If 5th of the month happens to be a holiday at the Exchange, the period would start from the previous trading day. During Staggered delivery tender period, each day seller’s (short holders) shall have options to give delivery intention with valid CWC Warehouse receipt.

Staggered Delivery Allocation

Delivery Allocation will be done by the mechanism put in place by the Exchange. Funds pay-in of the delivery allocated by the buyer will be on T+3 working days i.e. excluding Sunday and Public holiday. The buyer to whom the delivery is allocated will not be allowed to refuse taking delivery and any default in delivery taking will entertain penalty and subject to the penal provisions including conducting online auction by the Exchange. On expiry of the contract, all open positions shall be marked for compulsory delivery. If the seller fails to deliver, the penal provisions as specified for seller default shall be applicable.

Delivery Allocation

During Staggered Delivery period: The delivery order rate (the rate at which delivery will be allocated) shall be the closing price on the respective tender day. On Expiry: On expiry date, the delivery order rate of final settlement price shall be the Due Date Rate (DDR) and not the closing price.

Tender notice/Delivery Pay-in

The seller shall submit the valid Warehouse receipts of CWC duly endorsed and signed by the depositor as Tender notice. All outstanding long and short positions will be marked for delivery at the expiry of the contract.

Mode of Communication

Sellers to send intention of delivery on any tender day except Saturday, during tender period till 3.00 PM. Any intention, received from the sellers and buyers will be broadcasted on TWS by the Exchange by 4.00 PM on the respective tender days.

Taxes, Duties, Cess and Levies

Ex- Vandanmedu (CWC Puttady), Dist. Idukki, Kerala (exclusive of all tax and levies) Sales Tax/VAT and any other levies will be on the account of the Buyer.

Penal Provision

I – Seller Default Any seller having open position on the expiry date fails to deliver on the next day then a penalty of 6% of DDR shall be imposed on such defaulting seller. Out of which 4.75% will be deposited to IPF, 1% of penalty will be given to the buyer & balance 0.25% will be retained by the Exchange. Additionally, the difference between the DDR & the average of the three highest last spot prices of the five succeeding days after the Expiry of the contract (E+1 to E+5 days) if the average price so determined is higher than DDR and such difference will be given to the buyer. II – Buyer Default The buyer will have to compulsorily take the delivery of goods. Default on taking delivery by the buyer is not permitted and therefore, the amount due from the buyer for delivery obligation shall be recovered from the buyer as pay-in of

funds on stipulated pay-in day. Failure to discharge the pay-in amount will be treated as pay-in default which may lead to deactivation of the trading terminal/s of the member and will also be liable for such other actions as Exchange deems appropriate. Exchange, as deemed appropriate, shall have the right to sell/dispose the goods through auction (or through other appropriate mechanism as and when required) on account of such defaulting buyer to recover the dues. Penalties & charges to be debited to defaulting Buyer:

S. No

Where Auction is fully conducted

Where Auction is partly conducted

Where no Auction is conducted

1 Penalty @ 3% on DDR AND

Penalty @ 3% on D DR AND

Penalty @ 3% on DDR AND

2

Difference between DDR & Auction price if Auction price is lower than DDR (including proportionate quality and quantity differences) And

Difference between DDR & Auction price if Auction price is lower than DDR to the tune of auctioned quantity (including proportionate quality and quantity differences) AND

NA AND

3 NA

Difference between DDR and the average of the three lowest last spot prices of the five succeeding days after the Expiry of the contract ( E+1 to E+5 days ) if the average price so determined is lower than DDR.

Difference between DDR and the average of the three lowest last spot prices of the five succeeding days after the Expiry of the contract ( E+1 to E+5 days ) if the average price so determined is lower than DDR.

Out of penalty of 3%, 1.75% will be deposited to IPF, 1% of the penalty will be given to the seller and balance 0.25% will be retained by the Exchange.

Annexure-II

Contract Launch Calendar of Cardamom at NMCE, Ahmedabad

Contract Launch Months

Contract Expiry Months

On receipt of the approval from the Commission

November 2013, December 2013, January 2014, February 2014 and March 2014

16th November 2013 15th April 2014 16th December 2013 15th May 2014 16th January2014 14th June 2014

Whereas out of the close out amount for un-auctioned quantity as mentioned above, 90% will be credited to the counter party and 10% of the same will be retained by the Exchange towards administrative expenses.