Shankar Type Kapas Product Note - ACE SPHEREcontent.acesphere.com/Commodity/PNotes/ShankarKapas.pdfShankar Type Kapas Product Note The contents of this product note are subject to

Shankar Type Kapas Product Note

The contents of this product note are subject to Rules, Byelaws and Regulations of NCDEX as in force from time to time and be read therewith.

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CHAPTER 1 - TRADING PARAMETERS .................................................................3

Authority ....................................................................................................3 Unit of Trading ............................................................................................3 Months Traded In........................................................................................3 Tick Size .....................................................................................................3 Basis Price ..................................................................................................3 Hours of Trading .........................................................................................4 Last Day of Trading .....................................................................................4 Mark to Market............................................................................................4 Position limits .............................................................................................4 Margin Requirements ..................................................................................5 Special Margin ............................................................................................5 Pre-Expiry Additional Margin.......................................................................5 Delivery Margins .........................................................................................5 Penalty for cash settlement.........................................................................6 Arbitration ..................................................................................................6

CHAPTER 2 - DELIVERY PROCEDURES ................................................................7

Unit of Delivery ...........................................................................................7 Delivery Size ...............................................................................................7 Delivery Requests .......................................................................................7 Delivery Allocation ......................................................................................8 Actual Delivery............................................................................................8 Accredited Warehouse ................................................................................9 Quality Standards .......................................................................................9 Packaging ...................................................................................................9 Standard Allowances...................................................................................9 At the time of deposit..................................................................................9 Weight ........................................................................................................9 Good / Bad delivery Norms .......................................................................10 Shankar Kapas Sampling...........................................................................10 Accredited Assayer....................................................................................10 Quality Testing Report ..............................................................................10 Testing Procedure .....................................................................................11 Assayer Certificate ....................................................................................11 Validity period...........................................................................................11 Electronic transfer ....................................................................................12 Charges ....................................................................................................13 Duties & levies ..........................................................................................13 Stamp Duty ...............................................................................................13 Taxes ........................................................................................................13 Premium / Discount ..................................................................................14

CHAPTER 3 - CLEARING AND SETTLEMENT.......................................................15

Daily Settlement .......................................................................................15 Daily Settlement Prices .............................................................................15 Final Settlement Prices .............................................................................15



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Spot Prices................................................................................................15 Dissemination of Spot Prices .....................................................................16 Pay in and Pay out for Daily Settlement / Final Settlement........................16 Pay in and Pay out for final physical settlement ........................................16

Exhibit 1 – Shankar Type Kapas future Contract Specification .........................19

Exhibit 2- Warehouses for the delivery of Shankar Kapas ................................22

Exhibit 3 - Good / Bad delivery norm ...............................................................23

Exhibit 4 – Specimen of Shankar Kapas testing report .....................................24



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CHAPTER 1 - TRADING PARAMETERS

Authority

Trading of Shankar type Kapas futures may be conducted under such terms and

conditions as specified in the Rules, Byelaws & Regulations as well as directions of

the Exchange. A specimen of the Shankar type Kapas futures contract is indicated in

Exhibit 1.

Unit of Trading

The unit of trading for Shankar type Kapas contracts shall be 200 maunds of 20 kg

each. Bids and offers may be accepted in lots of 200 maunds of 20 kg each i.e. 4 MT.

Months Traded In

Trading in Shankar type Kapas future may be conducted in the months as specified

by the Exchange from time to time. The trading and delivery calendar will be

declared before start of each contract subject to change/declaration of

trading/delivery holidays by the Exchange or by the Forward Markets Commission

from time to time. Tentative trading and delivery schedule is given in Exhibit 1.

Tick Size

The tick size of the price of Shankar type Kapas futures contract shall be 10 paisa.

Basis Price

The unit for Price quotation for Shankar type Kapas futures contract would be in

Rupees per maund (20 kg). The basis for price would be the average of the spot

prices of the four centers, Kadi, Rajkot, Vijapur and Gondal, exclusive of VAT and

inclusive of all other applicable taxes/fees including mandi fee and other levies till

the point of delivery.



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Hours of Trading

The hours of trading for futures in Shankar type Kapas futures shall be as follows:

As per the directives of the Forward Market Commission from time to time, currently • Mondays through Fridays - 10 a.m. to 5.00 p.m.

• Saturdays - 10 a.m. to 2.00 p.m.

Or as determined by the Exchange from time to time. All timings are as per Indian

Standard Timings (IST)

Last Day of Trading

Last day of trading shall be last trading day of contract month. If last day happens to

be a holiday, Saturday or a Sunday, then the last trading day shall be immediately

preceding trading day of the Exchange. No trades in Shankar Kapas futures

deliverable in the current month shall be made after 5.00 PM on the expiry day of

that month and if such day happens to be a holiday, a Saturday or a Sunday then

the due date shall be the immediately preceding trading day of the Exchange.

Delivery on the expiry of the contract, if both sellers and buyers having open position

desire to give and take physical delivery at a particular delivery center, then such

buyers with open position shall be bound to settle by taking physical delivery. NCDEX

would thereafter complete the matching process based on the location, the quantity

for which intention has been marked for and other factor(s) that the Exchange

deems appropriate for completion of the matching process. The settlement for sellers

and buyer having open positions and not providing information for physical delivery

of Shankar type Kapas future shall be completed by cash settlement.

Mark to Market

The outstanding positions in futures contract in Shankar type Kapas future would be

marked to market daily based on the Daily Settlement Price as determined by the

Exchange.

Position limits

Member: Maximum of 75,000 MT or 15 % of Market Open Position in the

commodity, whichever is higher



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Client: 25,000 MT

The above limits will not apply to bona fide hedgers. For bonafide hedgers, the

Exchange will, on a case to case basis decide the hedge limits. Please refer circular

no. NCDEX/TRADING-100/2005/219 dated October 20, 2005

Near Month Limit (Applicable from one Month prior to expiry date)

Member Level: Maximum of 15,000 MT or 15 % of total near month Open Position

in the commodity, whichever is higher

Client Level: 5,000 MT

Margin Requirements

NCDEX will use Value at Risk (VaR) based margin calculated at 99.995% confidence

interval for one day time horizon. NCDEX reserves the right to change, reduce or

levy any additional margins including any mark up margins.

Special Margin

In case of additional volatility, a special margin at such percentage, as deemed fit;

will be imposed in respect of outstanding positions which will remain in force as long

as the volatility exists.

Pre-Expiry Additional Margin

There will be an additional margin imposed for the last 5 trading days, including the

expiry date of the Shankar Kapas contract. The additional margin will be added to

the normal exposure margin and will be increased by 3% everyday for the last 5

trading days of the contract.

Delivery Margins

In case of open positions materializing into physical delivery, delivery margins as

may be determined by the Exchange from time to time will be charged. The delivery

margins will be calculated based on the number of days required for completing the

physical delivery settlement (the look-ahead period and the risks arising thereof).



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Penalty for cash settlement

Presently, there are no penalties for open positions that do not end in deliveries and

are settled in cash.

Arbitration

Disputes between NCDEX member’s inter-se and between members and

constituents, arising out of or pertaining to trades done on NCDEX shall be settled

through arbitration. The arbitration proceedings and appointment of arbitrators shall

be as governed by the Bye-laws and Regulations of NCDEX.



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CHAPTER 2 - DELIVERY PROCEDURES

Unit of Delivery

The unit of delivery for Shankar type Kapas future shall be 1 lot (200 Maunds of 20

kg each, i.e. 4 MT).

Delivery Size

Delivery is to be offered and accepted in lots of 4 MT with 200 maunds of 20 kg

each, i.e. 1 lot. Weight variation of +/- 1 % maximum for each lot is acceptable

subject to overall acceptable limit of quantity variation or multiples thereof.

Delivery Requests

The procedure for Shankar type Kapas delivery is based on the contract

specifications as per Exhibit 1. Sellers & Buyers having open positions are required

to give their intention/notice to deliver to the extent of his open position, at least 5

days before the expiry of the contract. Accordingly, the window for acceptance of

delivery requests will be open for 3 working days and shall close 5 days prior to the

expiry date (including the expiry date) of the contract. Members giving delivery

requests for the commodities are not permitted to square off their open positions

once such request is made. A penalty of 5% of final settlement price on the position

squared off will be levied on the Members violating the same.

NCDEX would thereafter complete the matching process based on the location and

by random, keeping in view the storage capacity of warehouse and Shankar type

Kapas already deposited / available in dematerialized form for delivery or any other

factor(s) that the Exchange deems appropriate for completion of the matching

process.

All open positions of those sellers who do not provide required information for

physical delivery or are unable to find a corresponding buyer as with similar intention

shall be settled in cash.



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Delivery Allocation

The Exchange would compile delivery information received from the selling and

buying members on the last trading day. The buyers who have to receive delivery

would be notified on the same day after the close of trading hours. Delivery of

Shankar type Kapas has to be accepted by buyers, who have provided intention to

take deliveries and that have been matched, from the accredited warehouse where

the seller effects delivery in accordance with the contract specifications.

Actual Delivery

Where Shankar type Kapas is sold for delivery in a specified month, the seller must

have requisite electronic credit of such Shankar type Kapas in his Clearing Member’s

Pool Account before the scheduled date of pay in. On settlement, the buyer’s

Clearing Member’s Pool Account would be credited with the said delivery quantity.

The clearing member is expected to transfer the same to the buyer’s depository

account. However, the buyer must take actual physical delivery of Shankar Kapas

by tenth of the month following For example, if the contract expires on the 30th April,

then the allocation for delivery shall happen on the same day and actual physical

delivery shall have to be taken by the buyer on or before 10th of May.

The goods delivered at the Exchange platform have to be picked up by the buyer

after allocation of delivery. The said goods cannot be tendered again for delivery on

the Exchange platform.

Any seller willing to give delivery can bring in goods to the accredited warehouse

after confirming the space availability and other details with the warehouse service

provider from the first working day of the expiry month. The corresponding buyer to

whom the delivery has been allocated has to withdraw the goods within tenth of the

month following the expiry month. If buyer comes after this designated date then

the entire responsibility for quality of the goods lies with the buyer.



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Accredited Warehouse

NCDEX has accredited warehouse for receipt and delivery of Shankar type Kapas.

Receipt and delivery of Kapas will be undertaken only from the accredited warehouse

as per Exhibit 2.

Quality Standards

The contract grade for delivery of Shankar type Kapas made under NCDEX

Regulations shall be Kapas conforming to the quality specification indicated in

Exhibit 1. No lower grade /quality shall be accepted in satisfaction of contracts for

future delivery except as provided in the contract specifications. Delivery of other

grades would be accepted with suitable premium/discounts as indicated in the

contract specifications. Further all deliveries made on the Exchange should be free of

contaminants.

Packaging

Shankar Kapas delivered should be well compressed and packed with white twill

cloth (woven cloth) without any stains. All sides of the packaging material should be

stitched manually. The Shankar Kapas delivered should not bear any stains or be

contaminated with any other foreign matter. The Kapas should be packed in bags of

50 kg each. For each lot a total of 80 bags are to be delivered.

Standard Allowances

Sample weight per validation of

quality

80 Kg on account of sample testing

At the time of deposit

The quantity credited will be the actual quantity delivered at the tested moisture

level, after providing for standard allowances on account of sampling.

Weight

The bags of Shankar Kapas received and / or delivered at the NCDEX designated

warehouse would be determined / calculated by the predesignated weighbridge /

weigh scale at the premises or in its vicinity of the designated warehouse and would



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be binding on all parties. Any evidence of false packing or deviation from prescribed

requirements, if found would result in the rejection of the entire lot.

Good / Bad delivery Norms

Shankar type Kapas future delivery into NCDEX designated Warehouse would

constitute good delivery or bad delivery based on the good / bad delivery norms as

per Exhibit 3. The list contained in Exhibit 3 is only illustrative and not exhaustive.

NCDEX would from time to time review and update the good / bad delivery norms as

per the trade / industry practices.

Shankar Kapas Sampling

Sample of 80 Kg. will be drawn from every delivery lot of 4 MT received at the

designated warehouse. Moisture testing of the lot will be done by assayers

immediately on arrival at the warehouse. The Shankar Kapas delivered should be

free of contaminants and would be inspected by assayers while bags are opened for

sampling. Each bag would be opened and 1 kg of sample will be drawn randomly.

Sampling would be as per assayer’s procedure. The samples drawn will be packed in

clean and dry plastic bag or any other standard material & marked to recognize

NCDEX member/client identity, quantity, date, time etc. The Shankar Kapas samples

drawn will be dispatched to the testing laboratory.

Accredited Assayer

NCDEX warehouse service provider has appointed the Assayer for quality testing and

certification of the Shankar Kapas received at the designated warehouse. The quality

testing and certification of the Shankar Kapas will be undertaken only by the

appointed Assayer. The assayer details are given in the Exhibit 2.

Quality Testing Report

Samples will be drawn by assayer and sent for testing. Moisture testing will be done

at the time of deposit for each bag. The assayer will arrange for sending the Shankar

Kapas samples to the testing laboratory, packed in sealed plastic bags for quality

testing only if lot passes in Moisture and visual observation for presence of

contaminants.



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Testing Procedure

In view of the time taken for sampling, dispatch and receipt of the test report from

testing laboratory, delivering members are advised to effect delivery of Shankar

Kapas bags at the earliest. An illustration of the minimum expected time taken for

receipt of Shankar Kapas bags at the designated warehouse, sampling, testing and

receipt of test report is indicated below:

Sr.

No. Activity day Activity

1

Day 1

a) Delivery of Shankar Kapas

b) Sampling and dispatch to testing laboratory.

2 Day 3 Receipt of Shankar Kapas at testing laboratory

3 Day 4 Conditioning of Shankar Kapas at laboratory

premises

4 Day 5 to 7 Testing of Shankar Kapas

5 Day 8 Availability of Report

Assayer Certificate

Testing and quality certificate issued by NCDEX approved Assayer for Shankar Kapas

delivered at designated warehouse at delivery locations announced by the Exchange

from time to time shall be acceptable and binding on all parties. Each delivery of

Shankar Kapas at the warehouse must be accompanied by a certificate from NCDEX

approved assayer in the format as per Exhibit 4.

Validity period

Months of

Deposit

/Date of

entry by

warehouse

in

Expiry

period

from the

date of

Fresh

Deposit

Validity

period

at the

time of

fresh

deposit

How many

times

revalidations

allowed

Validity

Period of first

revalidation(n

o. of months)

Validity

period of

second

revalidation

(no. of

months)



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system(Jan

- Dec)

(no. of

months)

(no of

months)

January 1 1 0 0 0

February 1 1 0 0 0

March 1 1 0 0 0

April 1 1 0 0 0

may 1 1 0 0 0

June 1 1 0 0 0

July 1 1 0 0 0

August 1 1 0 0 0

September 1 1 0 0 0

October 1 1 0 0 0

November 1 1 0 0 0

December 1 1 0 0 0

Electronic transfer

Any buyer or seller receiving and or effecting Shankar Kapas future would have to

open a depository account with an NCDEX empanelled Depository Participant (DP) to

hold the Shankar Kapas in electronic form. On settlement, the buyer’s account with

the DP would be credited with the quantity of Shankar Kapas received and

corresponding seller’s account would be debited. The Buyer wanting to take physical

delivery of the Shankar Kapas holding has to make a request to in prescribed form to

his DP, with whom depository account has been opened. The DP would route the

request to the warehouse for issue of the physical commodity i.e. Shankar Kapas to

the buyer and debit his account, thus reducing the electronic balance to the extent of

Shankar Kapas rematerialized.



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Charges

All charges and costs payable at the designated warehouse towards delivery of

Shankar Kapas including sampling, testing, weighing, handling charges, storage etc.

from the date of receipt into designated warehouse up to date of pay in & settlement

shall be paid by the seller.

No refund for warehouse charges paid by the seller for full validity period shall be

given to the seller or buyer for delivery earlier than the validity period.

All charges and costs associated including storage, handling etc. after the pay out

shall be borne by the buyer. Warehouse storage charges will be charged to the

member / client by the respective Depository Participant.

The Assayer charges for testing and quality certification should be paid to the

Assayer directly at the delivery location either by cash / cheque / demand draft.

Duties & levies

All duties, levies etc. up to the point of sale will have to be fully borne by the seller

and shall be paid to the concerned authority. All related documentation should be

completed before delivery of Kapas into the NCDEX accredited warehouse.

Stamp Duty

Stamp duty is payable on contract notes issued as may be applicable under the

Stamp Act of the respective States.

Taxes

Service tax

Service tax will be payable by the members of Commodity Exchanges on the

brokerage charges charged by them from their clients on account of dealing in

commodities.

Sales Tax / VAT

Local Mandi and other applicable taxes/ VAT wherever applicable is to be paid by the

seller up to the point of delivery, to the local mandi tax/VAT authorities on all

contracts resulting in delivery. Accordingly the buyer will have to pay the VAT to the



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seller at the time of settlement. Members and / or their constituents requiring to

receive or deliver Shankar Kapas should register with the relevant authorities for

local mandi tax/VAT/any other taxes as applicable at the place where the delivery is

proposed to be received / given. In the event of sales tax exemption, such

exemption certificate should be submitted on settlement of the obligation.

Premium / Discount

Premium & Discount on the Shankar Kapas delivered will be provided by the

Exchange on the basis of quality specifications:

Ready Reckoner for grades

Commodity Staple Length Grade

Grade Value per 20 kg Multiplier

Grade Value per 4MT

SHANKRKPAS 28.00 to 28.50 = SKPAS2800 -10 200 -2000 SHANKRKPAS 28.51 to 29.00 = SKPAS2850 0 200 0 SHANKRKPAS 29.01 to 30.00 = SKPAS2900 2 200 400 SHANKRKPAS 30.01 to 31.00 = SKPAS3000 4 200 800 SHANKRKPAS 31.01 and above = SKPAS3100 4 200 800



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CHAPTER 3 - CLEARING AND SETTLEMENT

Daily Settlement

All open positions of a futures contract would be settled daily based on the Daily

Settlement Price.

Daily Settlement Prices

The Daily Settlement Price (DSP) is determined by the Exchange at the end of every

trading day. The DSP will be utilized for marking to market all open positions.

Final Settlement Prices

The Final Settlement price (FSP) will be determined by the Exchange on maturity of

the contract.

On expiry of the contract, the following types of open positions would be cash

settled:

1. Delivery information not provided.

2. Delivery intention unmatched.

The open positions for which information have been provided by both the buyer and

the seller and those have been matched by the Exchange, would result in physical

delivery.

Spot Prices

NCDEX will announce / disseminate spot prices for Shankar Kapas relating to the

designated delivery center and specified grade/ quality parameters determined

through the process of polling a set of market participants representing different

segments of the value chain such as traders, importers / exporters, brokers,

processors etc.

The polled prices shall be input to a normalizing algorithm (like ‘bootstrapping’

technique) to arrive at a representative, unbiased and clean ‘benchmark’ spot price

for Shankar Kapas. The Exchange has absolute right to modify the process of



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determination of spot prices at any time without notice. The Exchange will arrive at

the spot price of Shankar type Kapas as calculated from Shankar Bales and the seed

prices of Shankar cotton from the spot markets of Kadi, Rajkot, Vijapur and Gondal

(all in Gujarat).

For the purpose of Spot Price and FSP calculation the Exchange would use a standard

formula based on the following:

Standard outturn – 35%

Standard Ginning loss – 1.5%

Total (all inclusive) cost incurred to process 20Kg Shankar Kapas into lint – Rs. 30

Dissemination of Spot Prices

Spot prices for Shankar Kapas as derived above will be collected and disseminated

on daily basis once when arrival starts in the market.

Pay in and Pay out for Daily Settlement / Final Settlement

The table below illustrates timings for pay in and pay out in case of daily settlement

as well as cash settled positions for final settlement. The buyer clients would have to

deposit requisite funds with their respective Clearing Member before “pay in”.

All fund debits and credits for the Member would be done in the Member’s

Settlement Account with the Clearing bank.

Time (T / E+1) Activity

On or before 11.00 hrs PAYIN: Debit paying member a/c for funds

After 13.00 hrs PAYOUT: Credit receiving member a/c for funds

Pay in and Pay out for final physical settlement

The table below illustrates timings for pay in and pay out in case of positions marked

for physical settlement. The buyers / sellers would have to deposit requisite funds /

Shankar Kapas future with their respective Clearing member before “pay in”.



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Pay in and Pay out for Final Settlement in case of physical deliveries

Time (E+2) Activity

On or before 12.00 hrs

PAYIN

- Debit Buyer Member Settlement a/c for funds

- Debit Seller Member’s CM Pool Account for Shankar

Kapas.

After 14.30 hrs

PAYOUT

- Credit Seller Member Settlement a/c for funds

- Credit Buyer Member’s CM Pool Account for Shankar

Kapas.

Additionally the supplemental settlement for Kapas futures contracts for Premium /

discount adjustments relating to quality of Shankar Kapas delivered, actual quantity

delivered and close out for shortages will be conducted on the same day. Clearing

members are required to maintain adequate fund balances in their respective

accounts.

Pay in and Pay out for supplemental settlement

Time (E + 2) Activity

On or before 15.00 hours PAY IN: Debit Member Settlement a/c for funds

After 15.00 hours PAY OUT: Credit Member Settlement a/c for funds

Supplementary Settlement for Taxes

The Exchange will conduct a separate supplementary settlement, as illustrated

below, three days after normal pay out, for completion of tax transactions.

In order to facilitate issue of invoice to right parties, the buyer Clearing Members are

required to give the buyer client details to the Exchange latest by 15.00 hours on

E+3 day failing which the buying member is considered as the end buyer and

accordingly invoice is issued in his/their name.



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The Seller Clearing Members are required to give the seller client details to the Exchange latest by 15.00 hrs on E + 4 day.

The amounts due to the above differences will be debited / credited to Member’s

clearing bank account similar to normal settlement.

Pay in and Pay out for Taxes

Time (E + 5) Activity

On or before 11.00 hours PAY IN: Debit Buyer Member Settlement a/c for funds.

After 11.00 hours PAY OUT: Credit Seller Member Settlement a/c for funds.

For further clarification and detailed procedure on sales tax settlement, participants

can refer to circular number NCDEX/CLEARING-001/2008/002 issued on January 04,

2008.



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Exhibit 1 – Shankar Type Kapas future Contract Specification

(updated on March 21, 2009)

Type of Contract Futures Contract Specifications

Name of Commodity SHANKAR Kapas

Ticker symbol SHANKRKPAS

Trading System NCDEX Trading System

Basis Average of spot prices of the following stations Rajkot, Gondal, Kadi, Vijapur (Exclusive of VAT)

Unit of trading 1 lot (200 maunds of 20 kg each i.e. 4 MT)

Delivery unit 1 lot (200 maunds of 20 kg each i.e. 4 MT)

Quotation/base value Rs. Per 20 kg

Tick size 10 paisa

Quality specification

Raw Cotton 1. Staple Length Basis : 28.5-29 mm Tenderable Range: 28mm and above and not deliverable below 28 mm. Premium/Discount: • Discount for 28-28.5 mm shall be Rs. 10 per 20kg. • Premium of Rs. 2 per 20 kg for lengths between 29-30 mm • Additional Premium of Rs. 2 per 20 kg for lengths between 30-31mm. • There would be no additional premium for lengths above 31mm. 2. Outturn Minimum 35% with no premium above 35% and not Tenderable below 35%. 3. Trash content: Maximum 2%. Tenderable Range: Maximum up to 2% with no premium below 2%. 4. Micronnaire: Basis: 3.7-4.8 Micronnaire



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Tenderable range of 3.7 – 4.8 Micronnaire with no premium/discount. 5. Strength: Basis: Minimum 29 GTex Tenderable above 29 GTex with no premium or discount. Strength less than 29 GTex is not deliverable on Exchange platform. 6. Reflectance (Rd value) Deliverable Range: 75-81 7. Yellowness (+b value) Deliverable Range: 7.5-9.5 8. Moisture: Max. 8% with no premium below 8%.

Quantity variation +/- 1% for total weight of each deliverable lot

Trading Months October, December, February and April

Delivery center Rajkot and Kadi (Gujarat) at Par

Additional Delivery centers

Goods meeting contract specifications may also be delivered at Guntur and Akola. The Locational Premium/Discounts for Akola and Guntur will be announced before the launch of the contracts.

Trading hours

As per directions of the Forward Markets Commission from time to time, currently Mondays through Fridays : 10:00 AM to 5.00 PM Saturdays : 10.00 AM to 2.00 PM The Exchange may vary the above timing with due notice

Delivery specification

Upon expiry of the contracts, the delivery position would be arrived at by the Exchange based on the information to give/ take delivery furnished by the sellers and buyers as per the process put in place by the Exchange for affecting physical delivery.

No. of active contracts As per Launch calendar

Opening of contracts As per Launch calendar

Closing of contract All open positions will be settled as per general rules and product specific regulations



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Price band

Daily price fluctuation limit is (+/-) 3%. If the trade hits the prescribed daily price limit there will be a cooling off period for 15 minutes. Trade will be allowed during this cooling off period within the price band. Thereafter the price band would be raised by (+/-) 1%. If the price again hits the revised price band (4%) during the day, trade will only be allowed within the revised price band. No trade / order shall be permitted during the day beyond the revised limit of (+ / -) 4%.

Position Limits

Member: Maximum of 75,000 MT or 15 % of Market Open Position in the commodity, whichever is higher Client: 25,000 MT The above limits will not apply to bona fide hedgers. For bonafide hedgers, the Exchange will, on a case to case basis decide the hedge limits. Please refer circular no. NCDEX/TRADING-100/2005/219 dated October 20, 2005 Near Month Limit (Applicable from one Month prior to expiry date) Member Level: Maximum of 15,000 MT or 15 % of total near month Open Position in the commodity, whichever is higher Client Level: 5,000 MT

Special margin

In case of additional volatility, a special margin at such percentage, as deemed fit; will be imposed in respect of outstanding positions which will remain in force as long as the volatility exists.

Delivery logic Intention matching

Contract Launch Calendar

Launch Date Expiry Date February 11, 2008 October 31, 2008 April 10, 2008 December 31, 2008 October 10, 2008 February 27, 2009 December 10, 2008 April 30, 2009 February 10, 2009 October 30, 2009 April 10, 2009 December 31, 2009



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Exhibit 2- Warehouses for the delivery of Shankar Kapas

The address of the accredited warehouses where Shankar Kapas can be delivered will

be:

Warehouse Details

Assayer Address

NCMSLNAVAGAM-RAJKOT NCMSL COMMODITY MULTILINK POINT, C/O. GUJCOMASOL GODOWN NO. 7, NAVAGAM GODOWN ESTATE, RAJKOT – 360 001, GUJARAT CONTACT PERSON: MR. PARTHIV MEHTA MOBILE: 09825588677

NATIONAL COLLATERAL MANAGEMENT SERVICES LIMITED (TESTING & CERTIFYING DIVISION) 4-7-18/6B, NACHARAM, RAGHAVENDRA NAGAR HYDERABAD- 500 076, ANDHRA PRADESH CONTACT PERSONS: DR. GANESH RAMAMURTHI: MOBILE - 099593 33267 MR. P. SRINIVAS: MOBILE: 099593 33268 TEL: 040-32939701

For the updated list of Warehouse & Assayers kindly refer to the NCDEX Website http://www.ncdex.com/Downloads/ClearingServices



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Exhibit 3 - Good / Bad delivery norm

No. Particulars Good / Bad delivery

1. Quality not meeting futures contract specification. Bad delivery

2. Delivery at non designated warehouse. Bad delivery

3. Delivery completed but without sampling & testing

/ certification / of expired validity.

Bad delivery

4. Delivery without weight certificate. Bad delivery

5. Weighed at other than the designated warehouse/

weigh bridge / weigh scale

Bad delivery

6. When sample is not drawn as per sampling norms

and not carried out at the time of unloading

Bad delivery

7. Delivery not as per the packaging specification Bad delivery

8. Delivery found contaminated on visual inspection Bad delivery

The above list is only indicative and not exhaustive.



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Exhibit 4 – Specimen of Shankar Kapas testing report

Report Ref: Date:

ANALYSIS:

The above sample was analyzed by us and the average results are as under

Test Report

Institute Sample No.

Marked as

1:Turnout %

2. Moisture Test

Moisture Content

3. Trash Test

Trash (%)

4. Mic

5. Strength

6. Length

7. Rd value

8. +b value

The material delivered by the above NCDEX member is in accordance with the

specification provided by NCDEX and valid up to __________________ subject to

appropriate storage.

The goods delivered may be accepted.

Verified by Checked by

Page ____ of ___ (signature) (Technical officer In Charge)

Documents

Shankar Type Kapas Product Note - ACE SPHEREcontent.acesphere.com/Commodity/PNotes/ShankarKapas.pdfShankar Type Kapas Product Note The contents of this product note are subject to