3-5 June 2018, PARKROYAL on Beach Road, Singapore

Transcription

1 Volume 8 Issue 1 DOP 6 January 2018 Price Rs 50 TM a Product of 08 Editorial 09 Essentials of Gold in India J K Dadoo, Additional Secretary & Financial Adviser, Ministry of Commerce & Textiles Government of India 12 Kundan Follows Strict International Due Diligence Guidelines while Sourcing Dore 15 Artisanal Mines and World Gold Markets Wayne Lau, Chairman of Cameroon Inc 20 SENCO Gold and Diamond is Looking to Expand its Reach across the Country Shankar Sen, MD, Senco Gold and Diamond 24 Perspective of Indian Gold Refineries on Sourcing Dore James Jose, Director, CGR Metalloys Pvt. Ltd 40 aééåsqû Måü uéérésé LuÉÇ BmzÉlÉ xéå AÎeÉïiÉ AÉrÉ uréuéxééìrémü réé xé É? xéñuålsì qéåwûiéé, léæzlésé xéå åüoûuï, AÉDoÉÏeÉåL 43 Data, Statistics & IBJA Rates ND 2 ASIA PACIFIC PRECIOUS METALS CONFERENCE June 2018, PARKROYAL on Beach Road, Singapore

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4 2 nd ASIA PACIFIC PRECIOUS METALS C O N F E R E N C E 3-5 JUNE 2018 PARKROYAL on Beach Road, Singapore Organised by Supported by In Association with Managed by Title Sponsor Cocktail Dinner Sponsor Lunch Sponsor Cocktail Reception Sponsor Logistics Partner Lanyard Sponsor Global S ervices MARK YOUR DATES 3-5 June 2018 PARKROYAL on Beach Road Singapore For delegate registration & exhibition queries, abhinaya@fbspl.com, For sponsorship & speaker queries, vinayak@fbspl.com,

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7 TABLE OF CONTENT Editorial:...8 Essentials of Gold in India J K Dadoo, Additional Secretary & Financial Adviser, Ministry of Commerce & Textiles, Government of India:...9 Kundan Follows Strict International Due Diligence Guidelines while Sourcing Dore:...12 Artisanal Mines and World Gold Markets Wayne Lau, Chairman of Cameroon Inc:...15 SENCO Gold and Diamond is Looking to Expand its Reach across the Country Shankar Sen, MD, Senco Gold and Diamond:...20 Perspective of Indian Gold Refineries on Sourcing Dore James Jose, Director, CGR Metalloys Pvt. Ltd:...24 Future & Option in Gold is Speculation Income or Business Income? CA Surendra Mehta, National Secretary, IBJA:...26 Palladium Stages Stellar Performance in 2017 G. Chandrashekhar, Senior journalist and Policy Commentator:...30 Indian November Gold Imports Decline Year-On-Year By 31% Sudheesh Nambiath, Lead Analyst, Precious Metals Demand (South Asia & UAE) - GFMS, Thomson Reuters:...31 Finally we have an Indigenous Certified Reference Material Bhartiya Nirdeshak Dravya (BND 4201) Nilesh Gupta, Chairman Administrative Committee, India Bullion & Jewellers Association Ltd:...34 aééåsqû Måü uéérésé LuÉÇ BmzÉlÉ xéå AÎeÉïiÉ AÉrÉ uréuéxééìrémü réé xé É? xéñuålsì qéåwûiéé, léæzlésé xéå åüoûuï, AÉDoÉÏeÉåL:...40 Volume 8 Issue 1 DOP 6 January 2018 Page 7

8 Volume 8 Issue 1 DOP 6 January 2018 ADVISORY BOARD Rajesh Khosla Bhargava Vaidya Surendra Mehta S K Jindal PRESIDENT G Srivatsava VICE PRESIDENT Vinayak Meharwade ASST. VICE PRESIDENT Abhinaya CONSULTING EDITOR G Chandrashekhar EDITOR Debajit Saha DESIGNER Radhika WEB DESIGN Manivannan CIRCULATION Shivakumar Jaisheelan DATA SUPPORT Gajendra PUBLISHING OFFICE Foretell Business Solutions Pvt Ltd #146, 1-2 Floor, Gopal Towers Ramaiah Street, HAL Airport Road, Kodihalli Bangalore TM Tel: /53, Fax: info@bullionbulletin.in, abhinaya@fbspl.com Web: Dear Readers, 2017 was an eventful year for bullion trade in India. Market emerged strongly in the first half of the year after demonetization effect in the end of Then country s most memorable tax reforms- GST, got introduced in the month of July. The initial apprehension of the market about its effect on trade withered away almost smoothly barring some concerns here and there. It can be classified as smooth transition. Kudos to the government. Country s first option contract in gold got introduced in October 17 at MCX. Options contract is considered as one of the best instruments for hedging for its low cost and low risk factors in the world. It has been a demand of the industry for a long time. With the launch, the entire value chain now has a new instrument to hedge the market risk. Over a period of time, I am sure, with awareness programme and promotion, options contract will catch the attention of traders very fast. The industry participants remained vocal about the need for establishing a Spot Gold Exchange. It is also good to see country s oldest gold association, Indian Bullion and Jewellers Association (IBJA), had taken the initiative of developing an Indian Good Delivery Standard so that India does have its own standard for domestic market and at the same time, Indian bullion products could compete in the world market. I am sure industry participants will take this forward in 2018 for meaningful discussion and pave the way for writing the final draft. India Government Mint, a unit of the Security Printing and Minting Corporation of India Ltd (SPMCIL), launched India s first home-grown purity reference material, the Bharatiya Nirdeshak Dravya (BND 4201) towards the end of December. Developed in association with Bhabha Atomic Research Centre -- National Centre for Compositional Characterisation of Materials (Hyderabad), and Council of Scientific & Industrial Research-National Physical Laboratory (New Delhi), BND 4201 stands for reference material in gold of 9999 fineness. This is absolutely a priceless development towards making the Indian Gold Standard. We have now our own reference material which can be used as guiding reference towards making the Gold Standard. In global market, gold had a strong year in 2017 achieving double digit growth. I am expecting strong year for gold in 2018, especially after seeing the Fed s last Committee meet towards the end of December. The Federal Reserve Committee made a striking balance in its policy decision on two counts first, positive development in economic growth and unemployment. This led the Committee to tighten the monetary policy and raise the rate. On the other hand, the consumer inflation (excluding food and energy) remained lower than expected at 1.7 percent in 12 months time. There is a possibility that the Federal Reserve might take cautious approach towards raising the interest rate in 2018 and will look closely at job and inflation number. This factor may continue to support gold in Uncertainty in economic outlook will continue to persist in developed economies. In 2018, India is expected to announce its Gold policy, implement compulsory hallmarking and initiate further reforms in the bullion market. Going by the past, the policy is expected to make the sector more transparent, promote employment generation and incentivise export of value-added products. Best wishes for a great year ahead! Debajit Saha Editor Foretell Business Solutions Private Limited neither endorses the advertised product, service or company nor any of the claims made by the advertisement or the advertiser. Readers are encouraged to do necessary due diligence before initiating any action. Should you like to share your feedback on any of advertisers, please write to debajit@bullionbulletin.in

9 Essentials of Gold in India J.K. Dadoo A study done by IIM, Ahmedabad shows that a gold exchange needs to be set up in India with gold vaulting facilities. Delivery should be at least 21 major locations in India the next day, to establish credibility of the exchange and enhance its overall significance. According to the study, nearly 100 tonnes of gold can be traded annually, which will be vital to convert the stock of gold into a transactional flow. Gold and Jewellery Summit was held in Vigyan Bhawan on the first day and Ashoka Hotel on the second day where all stakeholders dealing with gold were present. On the "Gold Policy Focus" session where I was one of the speakers, several issues were raised by the learned speakers. Finance Secretary, and CEO of World Gold Council Mr. Aram Shishmanian also spoke eloquently on the occasion. Chairman, GJEPC Mr. Pandya underlined the need for MEIS for the gold sector. The World Gold Council CEO, highlighted the fact that India constitutes 25% of world gold demand, and had estimated hoardings of gold of tonnes. He emphasized 4 main issues namely Common Market - need for hallmarking, timely delivery, transparency in all operations and fair dealings in the market. Organized Market - need for spot exchange, bullion trade, adequate banking services, accredited refineries and better logistics. Household Financial Security - need for gold monetization, investment products, Ubiquitous access to certified gold and integration of gold in the financial system. Employment and Economic Growth - Need for innovation in jewellery design, focus on exports, sale of Indian gold coins and skill development. Mr. Koker, Head of the Turkish Treasury outlined the new investment instrument started by Turkey which has netted 6.5 tonnes of gold so far. Revenue Secretary's intervention included removal of any policy neglect in the gold sector and Government's intention to incentivize exports of gems and Volume 8 Issue 1 DOP 6 January 2018 Page 9

10 jewellery. He also highlighted that GST and demonetisation are two structural reforms which have curtailed the parallel economy. Representing the Commerce Ministry and answering the queries of the stakeholders, I spoke about 12 essential matters relating to Gold in India. 1. Gold Exchange: A study done by IIM, Ahmedabad shows that a gold exchange needs to be set up in India with gold vaulting facilities. Delivery should be at least 21 major locations in India the next day, to establish credibility of the exchange and enhance its overall significance. According to the study, nearly 100 tonnes of gold can be traded annually, which will be vital to convert the stock of gold into a transactional flow. 2. Converting stock of temple gold into flow: India is the second largest market for gold with an average annual import of about tonnes valued at $ 30 billion. To convert stock of gold into a flow, 3 Government schemes were announced last year namely gold monetization, sovereign bonds and gold coins. However, success has been limited due to practical and implementation challenges. The largest stock of gold in this country is estimated to be in the hands of the top 100 temples of the country estimated to the tune of nearly tonnes over the last 100 years. The top 10 temples get an estimated donation of Rs.100 crores annually of which 10% is in the form of gold or silver jewellery. Because of the fear of tax authorities, specially with regard to the source of this donated gold, it is lying in the vaults of the temple trusts or in the vaults of the banks and remain as a stock with no transactional value as a flow. To convert this large stock into a perpetual annual flow, an expert A bilateral MoU has been signed between India and Italy recently for Italian assistance in design space. GJEPC should tap into this institutional framework and get the best of Italian designers to assist our trade and industry. At present, design courses in NIFT and NID are largely in textiles and leather and hence there is a need to include jewellery design in all the 16 campuses of NIFT and 4 campuses of NID, so that a cadre of jewellery designers can be created for our vibrant gold jewellery sector. team led by Joint Secretary in the Ministry of Finance, with a member each from RBI, SBI and CBDT, can visit each of these top 100 temple trusts over a year. They can win their confidence, assuage their fears and enlist their support with assurance that the trust will not be harassed and the gold source will be taken as public donation only. If even 5 tonnes of gold is released by the 100 top temple trusts annually, it will result in 500 tonnes of gold stock getting converted into a flow annually. This will allow a locked valuable resource to become available for recycling through banks and jewellers. It will be at no extra expense to the exchequer and will meet the huge domestic demand causing a win-win situation for the temple trusts, the banks, the jewellers, the Government and the public at large. Hoarded gold wealth will then replace large scale gold imports. 3. Hallmarking centres: Hallmarking centres instil confidence in the public and lead to more informed purchases. There are presently only 300 such centres while gold jewellery is sold in 7000 towns in India. There is, therefore, an urgent need to enhance the number of hallmarking centres from 300 to at least Design Intervention: A bilateral MoU has been signed between India and Italy recently for Italian assistance in design space. GJEPC Page 10 Volume 8 Issue 1 DOP 6 January 2018

11 should tap into this institutional framework and get the best of Italian designers to assist our trade and industry. At present, design courses in NIFT and NID are largely in textiles and leather and hence there is a need to include jewellery design in all the 16 campuses of NIFT and 4 campuses of NID, so that a cadre of jewellery designers can be created for our vibrant gold jewellery sector. Target of exports of $ 20 billion or 3 times the present exports, by 2022 will require enhanced design capabilities. 5. GST refund to foreign tourists: Gold jewellery bought by foreign tourists, as also handicrafts and textiles, should be allowed GST refund. At present there is no mechanism, but like foreign airports, Customs should create a mechanism to provide refund of GST, on purchases made by foreign tourists in foreign exchange in India, at 10 major international airports. This will boost purchases by foreign tourists, of all items including jewellery. 6. Exports Strategy: While GJEPC is targeting exports of $ 20 billion by 2022 and $ 25 billion by 2025, GJEPC needs to craft an exports strategy to ensure that the entire Indian Diaspora spread over the world is covered. Also many emerging markets in CIS countries, Latin America, Middle East, South East Asia and Africa are also given due attention to boost exports of Indian jewellery. 7. Jewellery Parks: Jewellery parks is a demand of the stakeholders and can be easily met if such parks can easily be started in the SEZ where 30% domestic tariff area is also allowed. GJEPC needs to apply for such parks in the SEZ, to the Department of Commerce, after assessing the desired location for the same. 8.Common Facility Centres: 4 such state of the art facilities have already been created and another 8 are being planned in the next 2 years, fully funded by the DoC. There are total of 20 clusters in India and the remaining 8 will also get covered in the next 3-5 years. 9. Factoring: ECGC which is tasked with the service of factoring or monetising the accounts receivables of exporters, had stopped this service because of a major fraud few years ago. ECGC has re-started the factoring services, which should be availed by the jewellery exporters, and GJEPC should promote this facility among all its members. 10. MEIS: Estimate of the funding requirements of any MEIS proposal needs to be made and submitted to the Commerce Department for assessing and examining it. So far gold has never been covered in the MEIS policy. 11. MMTC: MMTC is going to start e-commerce facility for sale of Ashoka Emblem gold coin which were minted last year. This will be a new marketing avenue for MMTC, and a convenient purchasing mechanism for the general public. 12. Gold Refineries: Need to set standards for all gold refineries in India is paramount. This will ensure that their output is certified, and this will instil confidence in the minds of gold dealers and the general public. Commerce Ministry sees a bright future for the export of gold jewellery and is ready to support, the achievement of the target of exports of $ 20 billion by GJEPC needs to professionalise its entire structure, and work on all the above points with full dedication, so that the targets set for all its members, are met fully. A lot will finally depend on the recommendations of the NITI Ayog for a comprehensive gold policy in India. GJEPC should submit all its relevant inputs to NITI Ayog, so that a holistic assessment can be made, of the action plan that will orchestrate the development of the gold sector in India.... About Author Mr. J K Dadoo is Additional Secretary & Financial Adviser, Ministry of Commerce & Textiles, Government of India. Disclaimer: Views are personal and not the views of the publisher. Volume 8 Issue 1 DOP 6 January 2018 Page 11

12 Kundan Follows Strict International Due Diligence Guidelines while Sourcing Dore Brief profile of Kundan Care Products Ltd. Company Kundan Refinery was established in the year 2006 with state of the art technology installed at Haridwar (Uttarakhand), an area in the foot-hills of Himalayas and in the basin of River Ganga, a pollution free zone. In the year, 2013, the company diversified itself into refining of gold as well as manufacturing of Jewellery etc. The Company has certification of ISO , and therefore is guranteering the quality standard of its products. Refining Unit : It is one of the State of the Art modern plants. Company has installed capacity of refining of 72 MT p.a. (6000 Kg. per month) and is permitted by Government of Uttrakhand, Directorate of Industries. Accomplishment: Kundan Care Products Ltd. is also Four Star Export House a Govt. of India Recognized Status. Our refined gold bars match the quality standard of those of reputed international SWISS brands. Kundan Care Products Ltd. has been designated as Nominated Agency under Foreign Trade Policy of Govt. of India. By virtue of this nomination, Company is permitted to import Gold / Bullion directly in their name- a status enjoyed by a very few organizations in India. Company s laboratory is accredited with NABL Certification which is equivalent to certification of quality issued by international testing agencies. In other way the Page 12 Volume 8 Issue 1 DOP 6 January 2018

13 Comparatively, lower labour cost in India vis-à-vis in other countries shall be an added advantage. MCX may also be advised to accept India good delivery bar, in addition to LBMA standard bars. products certified by the company are taken for its quality contents without any further certification requirement. We feel proud to say that we are one of the only seventeen refineries in India approved to ensure recycled domestic Gold by NCDEX. The Company has also been granted a License by Bureau of Indian Standard to use the standard HALLMARK in its products. The certification enables company to sell its products with this mark as sign of Purity and Good Quality. Kundan Care Products Ltd. has also been accredited with AEO T2 status by Central Board of Excise and Customs, Ministry of Finance, which enable us to export/import goods at faster speed without scrutiny of Custom authorities and also allow us to pay Custom duty on consolidated basis once in a month. This facility is enjoyed by only 20 entities in India at present. Interview The industry is developing the India Good Delivery Standard. Accepting OECD due diligence guideline is other subject that the industry is talking about. You are one of the largest private refiners in the country. In your opinion, how will these two measures shape the Indian gold refining industry? It is heartening to note that Bureau of Indian Standard (BIS) is coming out with good delivery bullion standard for gold bars produced domestically from dore and scrap gold. Though, at present Bars manufactured at our refinery are well accepted in domestic market as well as acceptable AT NCDEX, yet these Bars are not accepted at MCX Exchange. Quite often, we lose business opportunity because of non-availability of any acceptable standard on Indian Bars. Indian Gold Refinery Industries will get international recognition and a boost in their production. In the long run, subject to government policies, India can also become gold hub like UAE & Hongkong. Accepting OECD Due Diligence guidelines: India is one of the countries following International Humanitarian Laws and also affected by terrorist activities, money laundering. Our Company undertakes due diligence for all overseas suppliers and especially, suppliers located in conflict affected and highrisk areas. The company send its representative to such areas followed by visit by Company s top management. Besides that, our banks also call for confidential report of our supplier from independent international agencies such as Dun and Breadstreet etc. Acceptance of OECD Due Diligence guidelines shall Volume 8 Issue 1 DOP 6 January 2018 Page 13

14 also be impetus for the industries as the product shall be accepted worldwide including western countries who insist for strict adherence. Sourcing Gold dore has always been a challenge for refiners in India. According to you, what policy changes can be initiated to ensure smooth dore supply into India? Reducing import duty on Dore it is well accepted that demand for dore far exceed its supply in international market. One of the reasons for short supply is less availability of dore in the open market for export and refining. Further, growing competition in sourcing this limited amount of dore is a big challenge as global refining capacity has increased tremendously. Sourcing Dore Bar involves lot of cost and as such we suggest that import duty on dore should be reduced, which has been recently hiked twice. Two years back, there was gap of 2% between duties of refined gold & dore which has been reduced to 0.65% at present. This gap should be increased considering high interest cost in India and other related expenses for refining dore. Further, there are numbers of conditions like : Goods should come directly from country of produce. Minimum 5 Kgs. Per lot Maximum 95% purity Goods should be imported in accordance with packing list issued by miner Our suggestions : Above conditions should be removed. The scrap should also be treated similar to dore for duty and other purposes. This suggestion is keeping in view that India is the largest consumer of Gold whereas it imports only less than 20% of dore. Further increased refining activity shall be a boost to MSME as most of the refineries are categorized as MSME. Allowing smaller lot for import at concessional duty : As of now there is levy of higher duty if smaller size in Kg. of dore is imported. With availability decreasing continuously it is suggested that duty for smaller lot should also be reduced and made at par with that of import of bigger lot. BIS is likely to permit selfcertification of bullion products by approved refiners when mandatory hallmarking will be introduced. How would this help the industry? Our company already enjoys faith and trust of customers who readily accept certification. BIS permitting self-certification approval shall be an added advantage to us. General public shall have confidence in our vouch and it shall increase our product sale. India's scrap market is highly unorganized and fragmented. What needs to be done so that scrap collection can be organized? Most of the scrap in India is generally exchanged with new jewellery, which is undertaken at present by small and local jewelers. Although, consumers do not get appropriate rate from them, yet they go for it. If scrap collection is undertaken by refineries themselves at various locations and in a transparent method the customers may approach those centers. Transparency implies that testing is done under the supervision and in front of customer concerned. Further, the method employed should be trust-worthy, having recognition from Govt. Authority such as BIS. Moreover, the payment in lieu of scrap should be given expeditiously and preferably immediately by digital mode. Disclaimer: Views are personal and not the views of the publisher. Page 14 Volume 8 Issue 1 DOP 6 January 2018

15 Artisanal Mines and World Gold Markets Wayne Lau In practice, it is difficult to justify transporting doré internationally for shipments much under 10kg. This provides the opening for traders who buy doré from AMs at big discounts to world gold prices on then aggregate shipments for sale to large refineries. (This article was first published in the January 2018 edition of the Alchemist, LBMA publications ( Though artisanal and smallscale mining (AM) employs 90% of the workforce behind gold extraction, an AM typically produces a fraction of an industrial mine. Thus AMs receive much lower gold prices, and often must sell to intermediaries with uncertain reputations. How can AMs do better? A key gateway is provided by gold refineries who buy or receive doré gold and, ideally, process it into pure gold for sale on world markets. There are two types of refineries: those accredited by the London Bullion Market Association (LBMA), and those that are not. Non-LBMA refineries range from serious companies to small local operations that produce gold below the purity demanded for top gold prices. Many are willing to accept artisanal mined gold from legitimate sources. Challenges are inefficiencies in transporting doré to the refinery, and a refiner s capacity. Both ultimately result in discounts to world market selling prices. A local refinery may not be large enough to process nor to finance the purchase of doré from an AM. This often forces the AM to transport production to a larger refinery in another country. The secure transport of gold involves cost and risks which, on a per gram basis, escalate dramatically with small shipments even when hand carrying doré on a commercial flight. In practice, it is difficult to justify transporting doré internationally for shipments much under 10kg. This provides the opening for traders who buy doré from AMs at big discounts to world gold prices on then aggregate shipments for sale to large refineries. LBMA refineries essentially are the world s legitimate gold market, processing about 85-90% of world production. In 2014 they refined 4,921 tonnes of gold which exceeded world industrial mine production of 3,131 tonnes, the difference mainly being recycled gold. They produce gold bars on the LBMA Good Delivery List which is the de facto standard for sale on major gold exchanges at world market prices. LBMA refineries also offer virtually limitless capacity to accept doré with transparent purchasing. The refinery can either sell refined gold on world markets for the AM or deliver the gold to whomever the AM may wish. They also offer superior cash flow Volume 8 Issue 1 DOP 6 January 2018 Page 15

16 where the bulk of payment (typically over 90%) is made upon receipt of the doré with the rest a few days later after the exact quantity of pure gold as well as actual world price of sale is determined. The very best refineries will also pay the AM for the by-products of refining containing silver, platinum and other precious metals. Their challenges are that a) refinery margins are very thin so large volumes are required and b) gold is nearly as fungible as currency, so LBMA refineries are examined with regulations close to banking industry standards. Small deliveries and the cost of monitoring AM clients are the main reasons why most LBMA refineries avoid dealing with AMs. Among the 70 LBMA refineries, Swiss or Swiss owned LBMA gold refineries account for 65-70% of annual worldwide gold refinery output. There are a few LBMA refineries, both Swiss and non-swiss, which are willing to consider dealing with AMs. However, all LBMA refineries are subject to LBMA Responsible Gold Guidance ( downloads/responsible%20sourcing/ Responsible_Gold_Guidance.pdf). The Guidance has the following specific directive when dealing with the Artisanal Mining Sector Mined Gold from Artisanal and Small-Scale Mining (ASM) Refiners should gather evidence to determine, as applicable, the factual circumstances of gold extraction, trade, handing and export. Refiners should, with reference to Appendix 1 of the OECD Supplement on Gold, consider measures to create economic and development opportunities for artisanal and smallscale miners and assist legitimate ASM producers to build secure, transparent and verifiable gold supply chains from mine to market. Measures should include: Identification of the origin of the gold based on reasonable and good Fairmined ( is an assurance initiative which specializes in ethically produced gold from AMs. In recompense for the effort and resources needed for ethical certification of an AM s mine, Fairmined will assure that gold is sold at a fair price (equal or higher to 95% LBMA gold price) and a premium of 4000 USD/kg of gold to world market prices for further sale to ethical jewelry makers and other downstream consumers. Alliance for Responsible Mining (ARM), faith efforts, such as: Identification of the suppliers of ASM gold sources to local gold exporter, including local artisanal mining team, association or cooperatives using reliable, independent source documents data or information. It is however not expected to identify the individual diggers; Assessment whether artisanal mining team or association can be considered to be involved in legitimate ASM; Collecting and assessing mining practice, including extraction, processing and transportation method and assessing human right abuses risk. In practice, this means that an LBMA refinery will usually require the following policies from an AM. Examples of some specific policies and practices adopted by Cameroon Inc. (CMINC) can be found at www. camerooninc.com/policies. 1) Anti-Money Laundering - this is to prevent the sale of gold to finance terrorism and other illegal activities. It requires serious assurances that an AM can identify the source of its gold and has robust Know Your Customer (KYC) practices for purchased doré. 2) Child Labor an AM should not employ any child labor nor purchase gold obtained with child labor under its KYC practices. 3) Mercury Use (Environmental) Page 16 Volume 8 Issue 1 DOP 6 January 2018

17 an AM should not use mercury nor purchase gold obtained using mercury under its KYC practices. 4) Anti-Bribery depending on country jurisdiction, some LBMA refineries may require assurances against bribery. A challenge is that it may be unclear exactly what constitutes bribery for an AM operating in a jurisdiction which may not have adequate legal definitions of bribery. The responsible Jewellery Council (RJC), an ethical standards body described below, reasons that an AM which discourages facilitation payments by employees is in compliance with its guidelines. These policies are much easier to fulfill if an AM only produces doré from its own mines. It is more difficult if doré is collected or purchased from traders or individual miners. How does a LBMA refinery ensure that a client AM is following its stated policies and practices? In an ideal world, the LBMA refinery itself would visit an AM regularly to ensure compliance. In practice, refinery margins are not robust enough to justify the expense of regular inspections for small volume producers. In practice there are several ways an AM can try to build credibility with an LBMA refinery: Ownership and Management credibility can be more easily established if an AM is owned and/ or managed by individuals or groups with established reputations in the world gold industry. Transporters - the refining industry depends heavily upon a small group of international transporters such as Brink s ( G4S ( and Loomis (www. loomis.com) who carry doré from an AM mine directly to a refinery s door. By having regular contact with an AM, these trusted carriers provide a form of inspection service for a refinery. The challenges are that a) the trusted transporters typically start with a minimum of 100 kg making small shipments very expensive per kg, b) the transporters may not have a presence in the region where the AM is located, and c) if an AM does not have single source mines from which a transporter can pick up gold, the transporter cannot offer assurances to a refiner on the sources of the AM s gold. Certification by Ethical Bodies certification, or even a sincere application for certification, by one of the three major ethical industry bodies below would be a significant step in establishing credibility with an LBMA refinery. The challenges are that standards for AMs are still evolving, and that all three bodies follow a conventional standards followed by regular third party audits procedure. The auditing process can be expensive and time consuming. The wide variety of AMs can often make existing standards inappropriate or inapplicable. Fairmined ( is an assurance initiative which specializes in ethically produced gold from AMs. In recompense for the effort and resources needed for ethical certification of an AM s mine, Fairmined will assure that gold is sold at a fair price (equal or higher to 95% LBMA gold price) and a premium of 4000 USD/kg of gold to world market prices for further sale to ethical jewelry makers and other downstream consumers. Alliance Currently gold demand is supported by developing markets where per capita wealth and population are growing. But in developed markets, consumer gold demand has stagnated along with declining birth rates. Perhaps more importantly young consumers are increasingly aware of the environmental and social damage which industrial gold mining sometimes causes, making gold less fashionable for succeeding generations. Volume 8 Issue 1 DOP 6 January 2018 Page 17

18 for Responsible Mining (ARM), the creator of the Fairmined Certification also has significant specialized ASM mining expertise which it is willing to share with candidate ASM organizations. Given their mining knowledge, Fairmined s Standards are demanding but also realistic for most AMs who have their own source of production. Responsible Jewellery Council ( sets standards and certifies a wide range of jewelry products in addition to gold across the entire supply chain from mine to consumer. The RJC does have certification status for traders who do not own actual mines. The RJC recognizes the Fairmined Standard for gold from artisanal mining as a responsible mining Standard under RJC Chain of Custody (CoC) Standard. Fairtrade International (www. fairtrade.net) is a global association of producers, labellers, and marketing organizations descended from the pioneering 1988 introduction of Max Havelaar (a fictional Dutch character) ethically sourced coffee in Holland. Fairtrade International has a consumer brand for Fairtrade gold. FUTURE TRENDS While it is difficult for AMs to penetrate world gold markets, trends are improving for several reasons. Firstly LBMA refineries are increasingly recognizing that AMs may be willing to pay higher refinery margins to compensate for low volumes and high compliance costs. AM compliance costs are also gradually falling as AMs better understand compliance goals, ethical standards + audit certification becomes more efficient, and transport firms spread their networks to more areas. Secondly, industrial gold mine production is forecasted to fall leaving unsatisfied demand to be filled by recycling as well as AM production. Financial services firm Bloomberg estimates that gold production from mines could fall by a third by Lastly there is an evolving demand for ethical gold for which AMs may be well positioned to satisfy. Currently gold demand is supported by developing markets where per capita wealth and population are growing. But in developed markets, consumer gold demand has stagnated along with declining birth rates. Perhaps more importantly young consumers are increasingly aware of the environmental and social damage which industrial gold mining sometimes causes, making gold less fashionable for succeeding generations. This trend creates a growing demand for gold which does no harm in the form of recycled gold and ethical gold as supported by the three non-profit standards groups described above. The market premiums which Fairmined and Fairtrade can command, though small at the moment, show that such ethical demand exists even without significant market promotion. A possible new product may be development gold that helps communities where gold is located by providing income and social services. This intriguing possibility might be best realized by AMs operating as community cooperatives or social enterprises focusing on small scale, shallow mining rather than large scale industrial mines focusing on deep deposits.... Notes: This article will be presented at the 2nd Annual Global Gold Doré Forum in Dubai, January 2018 (www. golddoreforum.com). The author Wayne Lau is a Visiting Researcher at the Centre for Sustainable Development, Department of Engineering, Cambridge University. Mr. Lau is also the Chairman of Cameroon Inc. ( com) a social enterprise that seeks innovative ways to support rural village gold miners. Disclaimer: Views are personal and not the views of the publisher. Page 18 Volume 8 Issue 1 DOP 6 January 2018

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20 SENCO Gold and Diamond is Looking to Expand its Reach across the Country Shankar Sen, MD, Senco Gold and Diamond, speaks about company s plan to reach more customers across the country. He also speaks about why India needs a comprehensive gold policy to sustain growth across the value chain. Excerpts People are buying jewellery online but they go for costume, junk, silver and light weight jewellery which has a Low or medium ticket size. As technology and also the logistics of different online market are changing and it s becoming more trustworthy, there is a chance that consumers will also buy heavy diamond and gold jewellery in future. But keeping in mind the mindset of people when it comes to Jewellery now we feel it s only the light weight sector of jewellery which has a scope to be sold online. First we wish to know a bit about SENCO jewelers its history, current share in the market where you have presence and about your expansion plan. History Senco Gold and Diamonds is a company with more than 80 years of legacy. It was found in Dacca, now in Bangladesh, in 1938 by late Sri M.C Sen, who started it as Senco Jewellers. After M.C Sen the company passed on to his sons. His fourth son, Mr Prabhat Chand Sen, started his own store in Bowbazar, and gradually made way for 2 more branches. In 1979, his son, Mr Shankar Sen, stepped in, and helped the family business to grow. With over 35 years of experience in the industry, Mr Shankar Sen became a pioneer in the business, and created the brand Senco Gold. As a pioneer and visionary, he initiated the franchisee model along with company owned store to reach out to more customers and then began company s journey towards growth. Under his leadership, Senco Gold began the golden journey for all their stakeholders. Page 20 Volume 8 Issue 1 DOP 6 January 2018

21 After finishing his MBA from IMT Ghaziabad in 2007, Suvankar Sen (Son of Shankar Sen) joined the family business. With Shankar Sen s experience and Suvankar s youthful disposition, the company experienced sustained growth. In the last decade, Senco Gold and Diamonds has left a lasting impression in the minds of young consumers along with their old loyalists. What used to be 3 stores has expanded to over 87 booming showrooms across India comprising of 14 states and 2000 work force. Today, it is one of the fastest growing jewellery companies in India. PRESENCE The company spans across Bengal with its head quarter in Kolkata, and covers a pan-india customer base. Besides conducting business with retail stores in Delhi NCR, Mumbai, Bengaluru, Bihar, Orissa, Jharkhand, Assam, UP, MP, and Raipur, Senco Gold & Diamonds exports gold and diamond jewellery to the Middle East, Singapore, UK, and the USA. FUTURE PALN Senco Gold & Diamonds is looking to tap the capital market through an IPO. Senco Gold has 87 stores that include both company-owned and franchisee outlets. It plans to add 70 stores in the next two - three years. SHARE In whole of eastern India, Senco has probably the largest market share in jewellery among all the other branded jewellery. SENCO was primarily a regional brand. What prompted you to think that it is time for expansion? Senco Gold has always aspired to be a national brand. Being a regional Volume 8 Issue 1 DOP 6 January 2018 Page 21

22 and it s becoming more trustworthy, there is a chance that consumers will also buy heavy diamond and gold jewellery in future. But keeping in mind the mindset of people when it comes to Jewellery now we feel it s only the light weight sector of jewellery which has a scope to be sold online. brand with 80 years of legacy when the brand won the trust of people, that is when the brand thought of spreading its wings. We wanted to be present in all the metropolitan cities along with tier 2 and 3 cities. Jewellery merchandising is changing perhaps. You have created Begam Jaan collection and Tanishq is launching Padmavati with Sanjay Leela Bhansali film. Tell us how customers get attracted to this kind of branding. Bollywood has always had an influence on the people. People get aspiration from these kinds of collections and like flaunting it. And specially when a movie is woman centric and the jewellery related to it captures the essence of power. What is the scope of jewellery to be sold through digital means in India? The jewellery sector is based on touch and feel factor. People will prefer to see the jewellery, wear and see how it looks and then buy it. And another crucial factor is trust. The premium they are paying for the jewellery should be worth it. The above factors are not applicable when it comes to online buying of jewellery. But time is changing. People are buying jewellery online but they go for costume, junk, silver and light weight jewellery which has a Low or medium ticket size. As technology and also the logistics of different online market are changing Do you think India needs a comprehensive jewellery policy so that not only the trade competitiveness improves but also it will create opportunity for bigger livelihood? Yes. Size of business in Gems & Jewellery Industry is about 3.5 lac crore but the source of raw material like Gold and Silver are imported from abroad. Comprehensive jewellery policy is required to maintain a smooth flow of sale in the industry. Gold price keeps changing and 80% of the revenue comes from gold jewellery. Disclaimer: Views are personal and not the views of the publisher. Page 22 Volume 8 Issue 1 DOP 6 January 2018

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24 Perspective of Indian Gold Refineries on Sourcing Dore James Jose, Director, CGR Metalloys Pvt. Ltd. With the Govt of India promoting the Make in India campaign and supporting the gold industry s initiatives on India good delivery standard, regulatory frame work for operationalising it, bullion spot exchanges, responsible sourcing etc, the Indian gold refineries are also upgrading their bullion production capabilities and dore sourcing arrangements Absence of direct airline connectivity from Latin American sources is a major challenge faced by the refineries; transhipments often take weeks time, and this accounts for extra financial burden on the operating margins of a gold refinery. India, one of the largest gold consuming countries in the world, has been importing an average of tonnes of bullion per annum for the past 2 decades, mostly from LBMA accredited Gold refineries. However this scenario is gradually changing, with India emerging as a manufacturer of bullion in the past few years. India has been increasingly sourcing gold dore from 2012 onwards and the share of domestically manufactured bullion as against the total requirement has been gradually growing from 4 tonnes in 2012 to around 150 tonnes in In , the share of bullion manufactured from dore was 30% of the total domestic consumption, and in the current year also, the same trend is expected to continue. Regarding the sourcing of dore, the Indian gold refineries are facing several challenges and the most important being locating reliable suppliers offering consistent quality. Except for some of the large scale refineries having long term supply contracts with large scale mining companies, majority of the medium scale refineries in India are dependant on artisanal mining of dore from various countries. Out of the 14 countries supplying gold dore to India, 2/3rds of the volumes are coming from Ghana, USA, Peru and Bolivia and the remaining 1/3rd from the rest of the 10 countries. Absence of direct airline connectivity from Latin American sources is a major challenge faced by the refineries; transhipments often take weeks time, and this accounts for extra financial burden on the operating margins of a gold refinery. In the recent past, India has undergone disruptions in business operations by way of demonetisation of currency and GST, and this has Page 24 Volume 8 Issue 1 DOP 6 January 2018

25 The present import duty structure in India is skewed in favour of the finished product bullion imports, and the gold refineries are at a considerable disadvantage in terms of their import duty differentials, IGST rate on dore, the customs tariff rates applied on dore and the foreign exchange payments periodicity etc. This industry can sustain to import more gold dore for higher domestic production of bullion in the coming years, only if a favourable ecosystem for viable operations are ensured by the policy makers. impacted the dore supply linkages and production capacities of gold refineries. Also the changes in the Govt policies on gold import has lead to periodic shut downs at refineries in and , playing havoc with the long term supply contracts on dore and the resultant diversion of dore supplies to neighbouring countries. With the introduction of GST in India and the resultant removal of area based tariff exemptions, many of the smaller dore importing refineries have become unviable, leading to their closure. Simultaneously at the dore exporting countries, regulators have become more vigilant in terms of their export revenue mobilisation and responsible sourcing of gold, leading to the winding up of many a small scale artisanal mines. When the gold dore ecosystem in these exporting countries are gradually getting transformed, the same reverberations are happening in the importing stations as well, with the number of players gradually coming down and the industry is becoming more professional and transparent. In India, for import of gold dore, the Govt has imposed certain quality parameters and accreditations for the gold refineries, which also has resulted in the removal of non serious players from the refining scenario. With the Govt of India promoting the Make in India campaign and supporting the gold industry s initiatives on India good delivery standard, regulatory frame work for operationalising it, bullion spot exchanges, responsible sourcing etc, the Indian gold refineries are also upgrading their bullion production capabilities and dore sourcing arrangements. Locating reliable dore suppliers confirming to OECD guidelines of responsible gold is a major challenge for the Indian refineries. In many dore exporting countries, actual dore exports are made by the aggregators or Govt approved export agencies and the dore importing Indian refineries do not have access to the data on their actual ground level sourcing/ mining partners, which may create problem under the new emerging regulatory framework. Absence of accurate and transparent mechanism of assaying the gold content of dore at the shipping stations is another challenge faced by the gold refineries. Dore business being a high volume low margin activity, variations in the assay certificate of the imported dore s gold content, often play havoc with the viability of the entire operations of dore import. Another factor challenging the dore sourcing is the availability of secured logistic agencies in the shipping country, for transporting the dore from the mines to the smelter and then to the airstations. Until and unless internationally rated reliable agencies are taking care of these transhipments, with adequate insurance coverage, the dore importing refineries are not comfortable with long term sourcing and funding arrangements in procuring their gold dore. The present import duty structure in India is skewed in favour of the finished product bullion imports, and the gold refineries are at a considerable disadvantage in terms of their import duty differentials, IGST rate on dore, the customs tariff rates applied on dore and the foreign exchange payments periodicity etc. This industry can sustain to import more gold dore for higher domestic production of bullion in the coming years, only if a favourable ecosystem for viable operations are ensured by the policy makers. Disclaimer: Views are personal and not the views of the publisher. Volume 8 Issue 1 DOP 6 January 2018 Page 25

26 Future & Option in Gold is Speculation Income or Business Income? CA Surendra Mehta, National Secretary, IBJA Derivative trading in India is happening in case of shares, currency and index benchmark through NSE & BSE whereas commodities exchange allows derivative trading in case of metals,non-metals & agriculture items. The manner of derivative trading is Future & Option trades. Section 43(5) defines what is considered as Speculation under Income Tax Act. In a very simple term, all transactions without actual delivery is defined as speculative transaction. So, upto 31/03/2005, every derivative transaction whether in share or commodity was SPECULATIVE transaction within the meaning of section 43(5) i.e for Income Tax Act purpose. Finance Act 2005 brought in amendment in section 43(5), by which Futures & Option trade in case of SHARES transaction through stock exchange recognized by CBDT for THIS purpose was taken out of the definition of SPECULATION. F & O on Shares is Business Activity CBDT later recognized NSE, BSE & Others for the purpose of section 43(5). So position in case of derivative trading ( F& O) in case of shares, the transaction is not speculative from 01/04/2006 (AsstYr ) onwards. F & O on Commodity is Business Activity Finance Act 2013 has from 01/04/2014( Assessment Year ) has also brought in amendment to section 43(5), by which commodity trade through recognized exchange will not be regarded as Speculative. CBDT vide NOTIFICATION NO. 92/2013 New Delhi, the 29th November, 2013 recognized Multi Commodity Exchange of India Limited under Rule 6DDD. Thus any derivative trading in commodity through Multi Commodity Exchange of India Limited (mcxindia.com ) will be regarded as business activity from 01/04/2013 ( FY ) F & O on Foreign Currency The derivative trading in Foreign Currency through NSE & BSE is business activity.further, CBDT also recognised MCX Stock Exchange Ltd and United Stock Exchanges under Rule 6DDB of Income tax Rule as under : MCX Stock Exchange Ltd. SO 1327(E), dated United Stock Exchange of India Limited Notification No. 12/2011 [F. No. 142/20/2010-SO(TPL)], dated Thus, derivative trading in foreign exchange through these stock exchange is also now business activity. For ready reference section 43(5) of Income Tax Act (5) speculative transaction means a transaction in which a contract for the purchase or sale of any commodity, including stocks and shares68, is periodically or ultimately Page 26 Volume 8 Issue 1 DOP 6 January 2018

27 settled otherwise than by the actual delivery or transfer of the commodity or scrip s: Provided that for the purposes of this clause (a) a contract in respect of raw materials or merchandise entered into by a person in the course of his manufacturing or merchanting business to guard against loss through future price fluctuations in respect of his contracts for actual delivery of goods manufactured by him or merchandise sold by him; or (b) a contract in respect of stocks and shares entered into by a dealer or investor therein to guard against loss in his holdings of stocks and shares through price fluctuations; or (c) a contract entered into by a member of a forward market or a stock exchange in the course of any transaction in the nature of jobbing or arbitrage to guard against loss which may arise in the ordinary course of his business as such member; [or] (d) an eligible transaction in respect of trading in derivatives referred to in clause 70[(ac)] of section 2 71 of the Securities Contracts (Regulation) Act, 1956 (42 of 1956) carried out in a recognized stock exchange; 71aor The following clause (e) shall be inserted in proviso to clause (5) of section 43 by the Finance Act, 2013, w.e.f : (e) an eligible transaction in respect of trading in commodity derivatives carried out in a recognised association, shall not be deemed to be a speculative transaction. [Explanation]. For the purposes of this clause, the expressions (i) eligible transaction means any transaction, (A) carried out electronically on screen-based systems through a stock broker or sub-broker or such other intermediary registered under section 12 of the Securities and Exchange Board of India Act, 1992 (15 of 1992) in accordance with the provisions of the Securities Contracts (Regulation) Act, 1956 (42 of 1956) or the Securities and Exchange Board of India Act, 1992 (15 of 1992) or the Depositories Act, 1996 (22 of 1996) and the rules, regulations or bye-laws made or directions issued under those Acts or by banks or mutual funds on a recognised stock exchange; and (B) which is supported by a time stamped contract note issued by such stock broker or sub-broker or such other intermediary to every client indicating in the contract note the unique client identity number allotted under any Act referred to in subclause (A) and permanent account number allotted under this Act; (ii) recognised stock exchange means a recognised stock exchange as referred to in clause (f) of section 2 73 of the Securities Contracts (Regulation) Act, 1956 (42 of 1956) and which fulfills such conditions as may be prescribed and notified by the Central Government for this purpose;] The following Explanation 2 to clause (5) of section 43 shall be inserted by the Finance Act, 2013, w.e.f : Explanation 2. For the purposes of clause (e), the expressions (i) commodity derivative shall have the meaning as assigned to it in Chapter VII of the Finance Act, 2013; (ii) eligible transaction means any transaction, (A) carried out electronically on screen-based systems through member or an intermediary, registered under the bye-laws, rules and regulations of the recognised association for trading in commodity derivative in accordance with the provisions of the Forward Contracts (Regulation) Act, 1952 (74 of 1952) and the rules, regulations or bye-laws made or directions issued under that Act on a recognised association; and (B) which is supported by a time stamped contract note issued by Volume 8 Issue 1 DOP 6 January 2018 Page 27

28 such member or intermediary to every client indicating in the contract note, the unique client identity number allotted under the Act, rules, regulations or bye-laws referred to in sub-clause (A), unique trade number and permanent account number allotted under this Act; (iii) recognised association means a recognised association as referred to in clause (j) of section 2 74a of the Forward Contracts (Regulation) Act, 1952 (74 of 1952) and which fulfils such conditions as may be prescribed and is notified by the Central Government for this purpose; F&O Transaction carried out through recognized Stock Exchange is not Speculative Transaction, can be set off against Ordinary Business Income: ITAT The Ahmedabad bench of Income Tax Appellate Tribunal recently ruled that the future and option transaction carried out through recognized stock exchange cannot be treated as speculative transaction, and can be set off against ordinary business income. The assesse in the instant case has started trading activities in shares, filed a copy of bank statement and ledger account ofbroker wherein AO held that the loss shown by the assessee as speculative loss and observed that since the assessee has no speculative profit, therefore, he has neither entitled to claim set off nor to claim carry forward. Dissatisfied with this finding of the AO, the assessee carried the matter in appeal before the CIT (A). On appeal, the CIT (A) confirmed the order of the AO. Aggrieved, assessee went in appeal before the tribunal challenging the order of lower authority. The counsel for the assessee submits that loss from F&O carried out through recognized stock exchange cannot be treated as speculative transaction. After considering the arguments from both sides and identical case laws, the judicial member found that the loss from F&O business carried out through recognized stock exchange cannot be treated as speculative loss in view of the exceptions carried out under section 43(5) of the Income Tax Act. Thus the loss arising out from the trading in derivatives must be considered as ordinary business loss. The various explanations, Notification & Judgement in relation to section 43(5) of Income Tax Act, 1961 favours that loss or profit from F&O is business loss/profit. Of course, it is in the interest of Bullion Dealer/Jeweller to know what F&O means and how F&O can help generate profit from the stock in trade inspite of not disposing the same. Illustration:- Computation of Taxable income of refiner/bullion dealer/manufacturer/ jeweller etc. Case I Case II Profit/(loss) from business as bullion dealer/refiner/jeweller retailer/ 50,00,000 (20,00,000) manufacturer etc say, Add/less: profit/(loss) from option trading in commodity exchange as (10,00,000) 30,00,000 per section 43(5) of Income Tax Act 1961 Net Taxable Income 40,00,000 10,00,000 Disclaimer: Views are personal and not the views of the publisher. Page 28 Volume 8 Issue 1 DOP 6 January 2018

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30 Palladium Stages Stellar Performance in 2017 G. Chandrashekhar Palladium is once again voted as the metal of the year in 2017; and it is a consensus vote. The precious metal put up a stellar performance during the year and left all the precious metals and most commodities behind. You may recall, palladium had risen by a fifth in It followed up the performance with even vastly better show in 2017 with an increase of well over 50 percent. Indeed, the metal has more than doubled as compared with its multi-year low price during mid-january The precious metal with industrial application breached the psychological three digit barrier to trade well above $ 1,000 an ounce by the end of the year; and at the beginning of 2018 was testing the new high of $ 1100/oz. The previous record high was achieved as far back as January Traditionally, palladium has been less expensive than platinum. It is primarily used in the automotive industry. Robust demand for cars with gasoline engines drove palladium prices higher; and it is believed that demand was exacerbated by the diesel scandal as well as concerns over shortages. It is likely 2018 may be another year of supply deficit. In the process, platinum suffered and its prices declined to a two year low of about $ 870/oz. Since September 2017, palladium has been more expensive than platinum. The last such recorded case was 17 years ago in Spurt in palladium prices has naturally attracted speculative capital. Speculators, now euphemistically called investor, have built long positions. Such positions are at record highs at the bourses which have had an exaggerated impact on the metal price. In the ETF market, sentiment towards palladium has remained subdued. The outflows from palladium ETFs 380,000 ounces last year, almost 640,000 ounces in the year before and even close to 730,000 ounces in 2015 appear to be playing no role, asserted an analyst. Going forward, there is strong possibility that the US Fed will raise interest rates at least three times in 2018, with an outside chance of a fourth hike. The US dollar too is set to appreciate. In the event, the precious metals complex, mainly gold and silver, will come under downward pressure. No wonder, investors have turned more bearish on the prospects for prices (notwithstanding the latest spurt) as evidenced by the sharp drop in net long positions in precious metals futures. However, palladium has been an exception to this trend and net long positions increased last week. A view that the price of palladium may have overshot the fundamentals is slowly gaining ground. History tells us that when speculative long positions reach record highs, correction follows. (G. Chandrashekhar, senior journalist and policy commentator, is a commodities market specialist. Views are personal. He can be reached at and gchandrashekhar@gmail.com ) Disclaimer: Views are personal and not the views of the publisher. Page 30 Volume 8 Issue 1 DOP 6 January 2018

31 Indian November Gold Imports Decline Year-On-Year By 31% Sudheesh Nambiath, Lead Analyst, Precious Metals Demand (South Asia & UAE) - GFMS, Thomson Reuters In November gold imports using the Merchandise Export Import Scheme (MEIS) were approximately one-third of India s total gold imports for domestic consumption. This to a large extent destabilised the premia in the market despite retail consumption holding firm. We here take a look at the import trends in November and the factors that influenced the metal flow. Indian imports in November were 68.6 tonnes, 31% lower compared to the same period last year. It is important to note here that November last year when high valued notes were demonetised and the public scrambled to convert the unaccounted cash in hand to gold. Last month 13 domestic banks, 5 nominated agencies, 19 refiners and 32 exporters who imported directly, contributed to this volume. IMPORTS CLASSIFICATION Imports (tonnes) Bullion (for domestic market) Doré (fine purity) Bullion (for export market) as of Nov Total Official Total official imports for domestic Source: GFMS, Thomson Reuters; Various AGENCY IMPORTS Units in tonnes Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Banks Duty paid Duty free Nominated agencies Duty paid Duty free Fine gold from doré Direct import by exporters Total Net import for domestic consumption i.e., after deducting gold imported for exports Source: GFMS, Thomson Reuters; Various Volume 8 Issue 1 DOP 6 January 2018 Page 31

32 IMPORTS UNDER MEIS IMPACTING THE LOCAL PREMIA: Merchandise Export Import Scheme was introduced in Foreign Trade Policy in April Objective of MEIS is to offset infrastructural inefficiencies and associated costs involved in export of goods/products, which are produced / manufactured in India, especially those having high export intensity, employment potential and thereby enhancing India s export competitiveness. The rewards under the scheme are given only for goods and destination countries as notified in the policy. The rewards are granted in the form of duty credit scrips and these are allowed to pay as customs duty for imports of notified goods. The percentage benefit of this credit scrip is evaluated in matrix structure of commodities and countries to which it is exported to. According to those importing under this scheme the gross margin varied between a percentage to two, this has however narrowed in November with increasing demand for these scrips, as supply is limited. There was a notable change in the importing agency volumes, primarily due to the importers using the export credit certificates under the MEIS. Last month two banks, one nominated agency and 17 refiners imported using the credit scrip, which in aggregate contributed to approximately one-third of total imports for domestic consumption. Surprisingly not all banks wanted to be in this business, though they were losing a good part of the overall business; we think this could be due to a perceived business risk for banks. Business risk primarily stems from risk of duplication of a certificate s usage and a lack of compliance check on the exporter; there is always a possibility that the export credit for an exporter could be made invalid on a retrospective basis for any fraudulent transaction in the past. In such an event the agency issuing the certificate and importer will be held responsible and this will eventually lead to litigation. According to market sources, most of these certificates are being bought from agents and not directly from the respective exporter, questioning the due diligence and in some cases the importing agency will settle for an indemnity from the agent. Nevertheless, gross margin one to two percent was definitely lucrative to be in the business. Imports using MEIS have helped traders to sell gold at rates more competitive than those rates applying after paying full customs duty. The firm demand trend should have ideally lifted premia in market to more than $2/ounce however since mid-november to date premia have averaged tad below $1. Share of imports to fabrication centres drifted lower in November. This was again primarily due Page 32 Volume 8 Issue 1 DOP 6 January 2018

33 to imports under MEIS, as these were imported to Delhi port and metal was shipped from Delhi to various fabrication centres. Ghanian government tightened the monitoring of exports following audit finding of high revenue pilferage. Source: GFMS, Thomson Reuters; Various Gold imports basis country of origin: Imports from Switzerland continued to dominate and this time rising to 83% of the total imports. CURRENT MARKET TREND: Lower prices have been very supportive to lift retail sales through December since price touched $1250/ oz, as a result fabrication volumes are holding firm across India, while retail investment demand has been strong only in Southern region. Traders expect overall demand shall continue to hold firm till mid-january post which seasonally weak period is expected to resume. Additionally unofficial volumes have been holding strong with cross-border flows through ground transport continuing to dominate. Disclaimer: Views are personal and not the views of the publisher. DORE IMPORTS: Gold doré supplies were from regions as detailed in figure below. There has been consolidation with respect to sourcing; large volumes are now moving to handful refiners. As a result out 19 refineries that imported it took only four refineries to capture 80% of the import volumes. Amongst supplying countries important to note the decline in total volumes from Ghana, it was at 3.4 tonnes as against an average of seven tonnes before Volume 8 Issue 1 DOP 6 January 2018 Page 33

34 Finally we have an Indigenous Certified Reference Material Bhartiya Nirdeshak Dravya (BND 4201) Nilesh Gupta Fire assaying is defined as a branch of quantitative chemical analysis, which is applied in determining the precious metal content of jewellery or articles. This process is based on the principle that precious metals do not oxidize or react chemically, unlike the base metals; so when they are heated at high temperatures, the precious metals remain apart and the others react forming slags or other compounds. As you may already know, India known as Soneykee Chidiyaa rightly so, is the world s largest consumer of gold. Around 65 per cent of India s demand for gold is said to be for jewellery. But, ironically, according to a BIS survey, of 162 samples drawn from 16 cities, more than 90 per cent were found to be not of the declared purity, meaning that consumers were losing between 20 and 30 per cent of gold value in their jewellery purchases, and so as you may already be aware, India s government has agreed to the industry s demand to make hallmarking of gold jewellery mandatory to help ensure quality levels, boost investment in the jewellery sector, and reclaim the lost trust of the consumers. By approving amendments to the Bureau of Indian Standards (BIS) Act, 1986, the Cabinet has endorsed compulsory hallmarking of gold jewellery products. What is hallmarking all about? The earliest attempt to initiate regulation of the jewellery industry was initiated by Henry III in 1238 A.D, in London, and six goldsmiths were discreetly appointed to supervise, prevent fraudulent activities and regulate the industry then. Gold had to be of the touch of Paris (19.2 carats), while Sterling Silver was supposed to be 92.5% pure. Goldsmiths outside London were also supposed to keep the same standards. In 1478, the gold standard was lowered to 18 Karats and the Goldsmith s Company was specifically made responsible for the Keeper of the Touch and liable for penalties for their misdoings. The old mark of only the leopard s head was replaced now, with the leopard s head with a crown. A Common Assayer was appointed who was to make assays at Goldsmiths Hall supervised by the Touch Warden on a weekly basis. It also led to the introduction of the date stamp, which changed every year, and identified the Touch Warden responsible. Most of the main elements of hallmarking were now put in place: the leopard s head, the Page 34 Volume 8 Issue 1 DOP 6 January 2018

35 manufacturers mark, and the date stamp. From this point onwards Goldsmiths Hall became the home of a permanent assay office, and it is probably from this that the term Hallmark originates. Hallmarking is a process of certification of the purity of gold jewellery, in accordance with specifications determined by the Bureau of Indian Standards in India. Gold jewellery or articles are to be evaluated and tested at an official assaying and hallmarking centre, which then certifies that the metal used conforms to the national and international standards of purity and fineness. Hallmarking centres assay the samples mainly by two processes: a) X Ray Fluorescence Spectrometry - wherein a small scratched area of the sample is beamed with an X ray and the reflected X ray analysed for the fluorescent light emitted by the present elements and their density in the said sample, thereby giving an estimate of percentage of an element present in the said sample. b) Fire Assay by the cupellation process Fire assaying is defined as a branch of quantitative chemical analysis, which is applied in determining the precious metal content of jewellery or articles. This process is based on the principle that precious metals do not oxidize or react chemically, unlike the base metals; so when they are heated at high temperatures, the precious metals remain apart and the others react forming slags or other compounds. Now a very important question arises as to the accuracy of both these processes. XRF Spectrometry is based on the calibrations of its sensors with samples which have a definite composition and a certified purity. These samples are known as Certified Reference Materials. So also the fire assay process needs these Certified Reference Materials henceforth abbreviated as C.R.M. to establish the accuracy of the assaying process. The results of both these processes are as accurate as the C.R.M s and their calibrations. All the law abiding Hall marking Centres, Refining Centres etc. in India, invariably source these Certified Reference Material Samples from overseas from trustworthy agencies like, for example, the National Institute of Standards and Technology U.S.A. etc. Now, for the first time in India the India Government Mint has launched their first Certified Reference Material in Gold of 99.99% purity known as Bhartiya Nirdeshak Dravya (BND 4201). It was inaugurated on 22nd December 2017 at their facility based at Fort, Mumbai, Maharashtra. BND 4201 has been developed in collaboration with some of the premiere government scientific agencies like the Bhabha Atomic Research Centre, National Centre for Compositional Characterization of Materials (Hyderabad), and Council of Scientific & Industrial Research National Physical Laboratory. This development heralds a pathbreaking development for the industry. It will be an initiation of greater ease, in generating transparency and accuracy for the industry. Now, finally we have an indigenous certified product to compare the purity of your assayed gold - with 100% confidence. Make in India has finally arrived for a very important segment of the gold industry. It remains to be seen how industry participants adapt this standard to lift the purity standard of the gold and gold jewellery. Consumer protection bill 2017 is also awaiting clearance from the Parliament which will eventually synchronise with purity standard.... About Author The author is Ex. Director Technical, Chairman Administrative Committee, India Bullion & Jewellers Association Ltd. He is also the Vice President of World Silver Council, India. Volume 8 Issue 1 DOP 6 January 2018 Page 35

36 PRESS RELEASE SINGAPORE BULLION MARKET ASSOCIATION (SBMA) APPOINTS MARTIN HUXLEY AS NEW CHAIRMAN Singapore, 2 January 2018 The SBMA is pleased to announce the appointment of Martin Huxley as the new Chairman of the Association, effective from 14 December, Martin, Managing Director of INTL Asia Pte. Ltd. was elected to succeed Sunil Kashyap who has ended his twoyear tenure. At a recent Management Committee meeting, a new set of office bearers was elected among the nine committee members together with a host of subcommittee members, namely, Membership Committee, Finance Committee, Good Delivery List Committee, Public Affairs Committee and the newly formed Strategic Review Committee. The Management Committee comprise of the following members: 1. Chairman, Mr. Martin Huxley of INTL Asia Pte Ltd 2. Vice Chairman, Mr. KL Yap of Metalor Technologies Singapore Pte Ltd 3. Hon. Secretary, Mr. Kazuya Naoki of ICBC Standard Bank Plc, Singapore Branch 4. Hon. Treasurer, Mr. Baskaran Narayanan of Brink s Global Services Pte Ltd 5. Committee Member, Mr. Sunil Kashyap of The Bank of Nova Scotia 6. Committee Member, Mr. Stephen Jani of J. P. Morgan Global Commodities 7. Committee Member, Mr. Robin Martin of World Gold Council 8. Committee Member, Mr. William Chin of Singapore Exchange 9. Committee Member, Mr. Robin Lo of YLG Bullion The new Strategic Review Committee is formed to review the work SBMA has done for the bullion industry, activities organised by the Association, and to explore any other forward-looking initiative which will cement Singapore as a Gold Hub for Asia. The SBMA will continue to operate under its current 3-tier approach with the Management Committee being guided by the Advisory Board and supported by a Secretariat under the able leadership of Honorary CEO Albert Cheng. Ms. Gina Lim, Group Director, Ecosystem Development Group of International Enterprise (IE) Singapore and Mr. Ng Cheng Thye, former Chairman of SBMA remains on the Advisory Board. AmreetaEng, Group Director (Trade Promotion Group) of the IE Singapore commented I am delighted to welcome Martin as Chairman of the Association. His appointment symbolizes the industry s commitment to continue building Singapore as a precious metals hub in Asia. I would also like to take the opportunity to extend my heartfelt appreciation to Sunil Kashyap for his significant contribution during his tenure as Chairman. Albert Cheng will stay on as CEO on a part-time and honorary basis, leading a small team to develop Singapore and SBMA into a platform where both global and regional precious metals players can convene to access the ASEAN market and beyond going forward. Some of the activities in the pipeline are to organise the second edition of Asia Pacific Precious Metals Conference in collaboration with sponsors like LBMA, WGC, CME Group, CGSE, Brink s and ABC Bullion amongst other partners. We will be looking into holding a few more local and regional seminars in the near future, arranging customized seminar for interested members and developing educational courses which will benefit the bullion industry. Page 36 Volume 8 Issue 1 DOP 6 January 2018

37 NEWS Jewellery exports not seeing a Merry time as GST refunds remain bottleneck The Micro, Small and Medium Enterprises (MSMEs) in the jewellery sector are facing a difficult time as the refunds under GST continue to be a bottleneck for the economy, Indian Bullion and Jewellers Association informed in a press interview.pankaj Parekh, State President of Indian Bullion and Jewellers Association informed that there is difficulty with regard to registering fresh orders due to the blockage of working capital. Also since the blocked amount is interest-free for the jewellery exports, it adds to the stress on the sector, he said.talking to KNN, Nitin Khandelwal, President of All India gems and jewellery trade federation (GJF) informed that the situation for local manufacturers isn t as bad as it for exporters.khandelwal said that the exporters in general, across sectors are facing the stress due to the blockage in GST refunds, however the domestic market is not much upset with the GST.Also earlier, West Bengal Finance Minister Amit Mitra said that the GST refund problem is beginning to become the new normal hampering the micro, small and medium enterprises. Noting the probable reasons for the blockage, the Minister said that there are glitches in between the GSTN and the EDI as well as DGFT that is causing the delay in refunds. The Goods and Services Tax (GST) was launched earlier this year from July 1 marking it as the biggest tax reform since independence. (KNN/ DA) Source: India gets its own gold reference standard India Mint's first home-grown high-purity gold reference standard, Bharatiya Nirdeshak Dravya (BND ), will help coin manufacturers and exporters, with the country's leading jewellery association promoting the benchmark among its members. Simultaneously, refiners such as MMTC PAMP, the only LBMA-(London Bullion Market Association) accredited refiner in the country, is also open to the idea of using India Mint's gold reference standard if it is certified by 2-3 international laboratories. At present, the refiner uses certified reference material from the National Institute of Standards and Technology (NIST) of the US. BND-4201, which is the reference material for gold of '9999' fineness, will be beneficial to the public to ensure purity of gold. The high purity gold reference standard has been developed through collaboration among the India Government Mint (IGM), Bhabha Atomic Research Centre, National Centre for Compositional Characterisation of Materials (Hyderabad), and Council of Scientific & Industrial Research-National Physical Laboratory.Sources at IGM told ET that the gold reference standard has been verified by the Perth Mint in Australia. The mint is waiting for the formal launch by the ministry, following which it will be available for the global markets. "In the current market scenario where jewellers are yet to adopt accountability standards, this is a big move by IGM. It will bring transparency in the bullion trade," said Nilesh Gupta, executive director (technical), at the India Bullion & Jewellers Association(IBJA).Surendra Mehta, national secretary of IBJA, said that the BND-4201 will help coin manufacturers and exporters. "Foreign buyers will not doubt the purity of gold jewellery exported from India after the full-fledged roll out of the standard." Source: Now, PhonePe joins hands with SafeGold for digital gold product Ecommerce major Flipkart's digital payments arm, Phone- Pe, has launched a digital gold product in partnership with SafeGold. Paytm, the country's largest digital payments company, already offers a similar product. As the battle in the digital payments space heats up, companies are not restricting themselves to cash-back schemes and incentives, but are also making other Volume 8 Issue 1 DOP 6 January 2018 Page 37

38 NEWS attractive offers like this savings product to entice users. "We are focused on creating multiple use cases for consumers. We did credit card payments on PhonePe app and now digital gold is an addition in that direction," said Hemant Gala, head of banking relations and strategic partnerships at PhonePe. PhonePe leverages the Unified Payments Interface for its customers, thereby enabling them to make payments directly from their bank accounts without the need to park money in a wallet. The company will allow consumers to buy 24-karat gold worth any amount. The price will be linked to that in the bullion market. IDBI Trusteeship Services will act as the trustee bank, administering the gold holdings of the consumer. Safe- Gold, which offers online buying and selling of the yellow metal, has integrated its platform with PhonePe for carrying out the transactions. Source: Gems & jewellery exports up 50% December 28, 2017 In a sharp turnaround in global consumer sentiment, gems and jewellery exports from India jumped 56 per cent in November after a sustained decline over the previous months. Gems and jewellery exports from India are down by over 13 per cent, year on year, between April and October The sudden spurt in jewellery demand, especially from the US, has brought cheer to Indian exporters. Retailers in the world s largest jewellery market (US) saw increased consumer footfalls. Some of the surge is also due to the base effect and other factors. We had Diwali last year in November, which resulted in closure of manufacturing units. This year, Diwali was in October. So jewellery manufacturers and exporters utilised the full month for executing overseas orders. Indian exporters delivered to buyers their entire consignments that were stuck because of GST (goods and services tax) headwinds. Since the issues hindering growth in exports were eased, exporters utilised the opportunity to fulfill orders. All these worked together to propel growth in gems and jewellery exports in November, said Praveen Shankar Pandya, Chairman, GJEPC. The phenomenal growth in November has covered a part of India s loss in gems and jewellery exports between April and October. During the first seven months of the current financial year, gems and jewellery exports fell per cent to $19.57 billion (Rs 1,26,172 crore) from $21.73 billion (Rs 1,45,331 crore) in the same period last year. There has been a phenomenal growth in business recorded in the US. We expect 6-7 per cent in growth in sales this year compared to last year, said Mehul Choksi, managing firector, Gitanjali Gems, one of India s largest exporters of branded diamond jewellery to the US. The spurt in jewellery exports was driven by a phenomenal jump in shipments of gold jewellery and cut and polished diamonds. While gold jewellery exports jumped by per cent to $ million (Rs 568 crore) in November this year, shipments of cut and polished diamonds shot up by 50 per cent to $1.78 billion (Rs 11,520 crore) in the month under consideration. Source: Data compiled by the apex industry body, the Gems and Jewellery Exports Promotion Council (GJEPC), show net exports of gems and jewellery shot up to $2.78 billion (Rs 18,002 crore) in November 2017 from $1.77 billion (Rs 12,001 crore) during the same month last year. Page 38 Volume 8 Issue 1 DOP 6 January 2018

39 ASEAN NEWS Cambodia: Derivative brokerage firm starts gold trading Alpha Gold Futures, a new local derivative brokerage firm, officially launched operations yesterday, joining in on Cambodia s young but growing regulated derivative trading market after it received a licence late last month. Speaking at the launch ceremony for the company, Keo Maly, director of Alpha Gold Futures, said that the company would first offer services to execute buy and sell orders for gold, as well as a mixed bag of foreign currencies. The company plans to expand operations in the future to the buying and selling of oil derivatives and other global commodities. By investing in Alpha Gold Futures, we guarantee that your investment is carefully and clearly managed by our professional team, Maly said. According to regulations set by the Securities and Exchange Commission of Cambodia (SECC) in late 2015, a brokerage firm must meet a minimum capital requirement of $250,000 while a central counterparty must have $5 million. Sou Socheat, director of SECC, said that since the market became regulated, there are now more than 10 licensed derivative brokerage firms. In March 2017, the SECC capped the number of central counterparty licences at four, citing adequate demand. While Socheat declined to disclose the number of registered derivative trading accounts, he said that the popularity of the risky financial instrument was increasing. The growth in the number of traders reflects that there is increased confidence in this new market, he said. Source: Vietnam: New SBV decree to ease gold trading regulations The State Bank of Việt Nam is collecting feedback for a decree on gold trading, which will include a monopoly for the central bank on accepting gold deposits. The new decree will supersede Decree No.24/2012/NĐ-CP and get rid of certain conditions for companies that make gold jewellery.decree No.24 confers on the Government a monopoly on gold bullion production and import and export of the metal.it classifies bullion trading as a conditional business requiring institutions and individuals to obtain a license from the central bank. To get a licence they should have a capital of at least VNĐ100 billion (US$4.7 million), a distribution network covering at least three provinces or centrally-administered cities, at least two years experience in the gold trade and paid taxes on gold trading of over VNĐ500 million (23,800) for at least two years when the business was not restricted. Before Decree No.24 was issued, gold deposits and loans by banks had been stopped in November 2012 under the central bank s Circular No.11/ 2011/TT-NHNN. Before 2012 the gold market had been very volatile. Banks acceptance of gold deposits and lending had greatly impacted the liquidity of the banking system and even caused economic instability. In the five years since, Decree No.24 has reduced the importance of gold in the economy and stabilised the gold market. Gold price movements no longer affect foreign exchange rates and, thus, economic stability. At a recent meeting with the governor, the Prime Minister s Working Group led by Government Office chairman, Mai Tiến Dũng stressed the need to mobilise foreign exchange and gold. Dũng said Việt Nam s decision to ban gold deposits and reduce interest on dollar deposits to zero have helped restrict the pervasive influence of the dollar and gold on the economy and prevent chaos in the market, since people have stopped using them as a means of payment. However, an estimated 500 tonnes of gold is held by the public, which, if brought into the market, would be good for the economy. To enable this, the central bank found it necessary to amend some provisions in Decree 24.Along with the task of continuing to manage the bullion market, the new decree also aims to simplify administrative procedures and scrap some of the conditions for issuing licences to gold businesses. Source: Volume 8 Issue 1 DOP 6 January 2018 Page 39

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42 réñìlémüyséécloûaécqåûîloûoûïléçoéuìsréé aérééwûéårééìmüxéïalrélyoûmåüiéwûié CxÉqÉåxjÉÉDZÉÉiÉÉxÉÇZrÉÉSÍzÉïiÉMüÐ eééléï cééìwûréå qéélréiééméëémiéxoûêmülyxécéåçeémüéajéï LåxÉåYxÉcÉåÇeÉxÉåWæûeÉÉåÌMüÍxÉYrÉÑËUOûÏ MüÊlOíûÉYOûLYOû1956 (1956MüÉ42) MåümÉëÉuÉkÉÉlÉÉåÇMåüAkÉÏlÉWÒûAÉWûÉåiÉjÉÉ MåülSìxÉUMüÉUMåü ²ÉUÉCxÉE åzrémåü ÍsÉrÉåeÉÉUÏÌMürÉåaÉrÉåzÉiÉÉåïÇMüÉåmÉÔUÉ MüUiÉÉ WûÉå ÌMüxÉÏqÉÉlrÉiÉÉmÉëÉmiÉxOûÊMüLYxÉcÉåÇeÉ ÌMürÉÉaÉrÉÉuÉÉrÉSÉiÉjÉÉBmzÉlÉsÉålÉSålÉ xéoûéåëurééiqémüséålésåléléwûïwæûiéjééréwû xééqéélréuréuéxééìrémüaéréqéåxéqéérééåîeéiéwûéå xémüiéé Wæû: AÉDOûÏLOûÏ AÉDOûÏLOûÏMåüAWûqÉSÉoÉÉSoÉåÇcÉlÉårÉWû AÉSåzÉeÉÉUÏÌMürÉÉWæûÌMüÌMüxÉÏqÉÉlrÉiÉÉ méëémiéxoûêmülyxécéåçeéqéåìmürééaérééuéérésé iéjéébmzéléséålésåléxéoûéåëurééiqémüséålésålé léwûïwæûiéjééréwûxééqéélréuréuéxééìrémüaéré qéå xéqéérééåîeéiéwûéå xémüiééwæû WûÉsÉqÉåLMürÉÉÍcÉMüÉMüiÉÉïlÉåzÉårÉUqÉå MüÉUÉåoÉÉUMüUlÉÉmÉëÉUÇpÉ ÌMürÉÉ,oÉæÇMüZÉÉiÉÉ ÌuÉuÉUhÉiÉjÉÉoÉëÉåMüUMåüZÉÉiÉÉMüÉÌuÉuÉUhÉ SåiÉåWÒûrÉåurÉuÉxÉÉrÉqÉåWÒûrÉåbÉÉOûÉMüÉåxÉÉqÉÉlrÉ uréuéxééréqéåxéqéérééåîeéiémüuìuéuéuhémé É SÉÎZÉsÉÌMürÉÉjÉÉsÉåÌMülÉLAÉålÉåCxÉårÉWû MüWûMüUsÉÉæOûÉ ÌSrÉÉaÉrÉÉ ÌMüzÉårÉUMüÉUÉåoÉÉU LMüxÉOûÉåËUrÉÉiqÉMüaÉÌiÉÌuÉÍkÉWæûCxÉÍsÉrÉå CxÉbÉÉOûÉMüÉxÉqÉÉrÉÉåeÉlÉrÉÉTüÉuÉïQïûlÉWûÏWûÉå xémüiéé Wæû CxÉ ÌlÉhÉïrÉ xéå AxÉÇiÉѹ MüUSÉiÉÉ léå xéïaédoûï (L)qÉåAmÉÏsÉÌMürÉÉÎeÉxÉlÉå LAÉåMåüTæüxÉsÉåMüÉåoÉUMüUÉUUZÉÉ CxÉmÉÔUå béoûléé üqéxéåaxéçiéñ¹müuséiééléåìoíûoréñlésé Måü xéqé É rééícémüé SÉrÉU MüÐ ÌOíûorÉÑlÉsÉlÉåSÉålÉÉåmÉ ÉÉåÇMüÉåxÉÑlÉlÉåMåüoÉÉS ÌOíûorÉÑlÉsÉlÉårÉWûmÉÉrÉÉÌMüAÉrÉMüUMüÉlÉÔlÉ Måü xéåyzélé 43 (5) Måü AÇiÉaÉïiÉ ÌMüxÉÏ qéélréiééméëémiéxoûêmülyxécéåçeéìmürééaéréé uééréséiéjéébmzéléséålésåléxéoûéåëurééiqémü séålésåléléwûïwæûiéjéécxéxéåaîeéïiébééoûémüéå xé ûémåücéséiéåwòûaébééoûéléwûïqéélééeéé xémüiééwæû CxÉÍsÉrÉåCxÉbÉÉOåûMüÉåxÉÉqÉÉlrÉ uréuéxéérémåübééoåûqéåxéqéérééåîeéiéìmürééeéé xémüiéé Wæû AÉrÉMüUMüÉlÉÔlÉ1961MåüxÉåYzÉlÉ43 (5)MåüxÉÇSpÉïqÉåAlÉåMüÉåÇxmɹÏMüUhÉ, AÍkÉxÉÔcÉlÉÉrÉåÇuÉÌlÉhÉïrÉeÉÉUÏÌMürÉåaÉrÉåWæû ÎeÉxÉqÉårÉWûMüWûÉaÉrÉÉWæûÌMüuÉÉrÉSÉiÉjÉÉ BmzÉlÉMüÉUÉåoÉÉUxÉåAÎeÉïiÉsÉÉpÉ/WûÉÌlÉ LMüurÉuÉxÉÉÌrÉMüsÉÉpÉ/WûÉÌlÉWæû CxÉÍsÉrÉå xépéïoéñíséréléqûïséuéåç/euéæséuéåçmåüíséréåréwû eééléléémüétüðqéwûiuéméôhéïwæûìmüuéérésé iéjéé BmzÉlÉMüÉUÉåoÉÉUxÉåÌMüxÉmÉëMüÉUElÉMåü uréuéxéérémüéåséépéíqéséxémüiééwæû MåüxÉ 1 MåüxÉ 2 ËUTüÉrÉlÉU/oÉÑÍsÉrÉlÉ QûÏsÉU/ÌlÉqÉÉïiÉÉ réé euéæséu eéæxéå uréuéxééré xéå AÎeÉïiÉ séépé/wûéìlé 5,000,000 (2,000,000) ESÉWûUhÉ: ÌMüxÉÏ ËUTüÉrÉlÉU/oÉÑÍsÉrÉlÉ QûÏsÉU/ÌlÉqÉÉïiÉÉ réé euéæséu Måü ÍsÉrÉå OæûYxÉåoÉsÉ AÉrÉ MüÐ aéhéléé- eééåäqåû/béoûéréåç- AÉrÉMüU MüÉlÉÔlÉ 1961 Måü xéåyzélé 43 (5) Måü AÇiÉaÉïiÉ BmzÉlÉ MüÉUÉåoÉÉU xéå AÎeÉïiÉ séépé réé WûÉÌlÉ (1,000,000) 3,000,000 zéñ OæûYxÉåoÉsÉ AÉrÉ 4,000,000 1,000,000 Page 42 Volume 8 Issue 1 DOP 6 January 2018

43 IBJA Opening & Closing Rates for Gold and Silver (All rates in INR) Date Gold 999 Gold 999 Gold 995 Gold 995 Gold 916 Gold 916 Gold 750 Gold 750 Gold 585 Gold 585 Silver 999 Silver 999 (AM Price) (PM Price) (AM Price) (PM Price) (AM Price) (PM Price) (AM Price) (PM Price) (AM Price) (PM Price) (AM Price) (PM Price) 10 Gms 10 Gms 10 Gms 10 Gms 10 Gms 10 Gms 10 Gms 10 Gms 10 Gms 10 Gms 1 Kg 1 Kg NT NT NT NT NT NT NT The above rates are exclusive of GST/VAT Volume 8 Issue 1 DOP 6 January 2018 Page 43

44 Bullion - Data & Statistics Gold Spot Market, International (Per Troy Ounce) Spot gold 01 st Dec 29 th Dec % Change Australia (AUD) Britain (GBP) Canada (CAD) Europe (Euro) Japan (Yen) Switzerland (CHF) USA (USD) Silver Spot Market, International (Per Troy Ounce) Spot Silver 01 st Dec 29 th Dec % Change Australia (AUD) Britain (GBP) Canada (CAD) Europe (Euro) Japan (Yen) Switzerland (CHF) USA (USD) Monthly Exchange Data (Gold) (From Dec 01-29) Exchange Commodity Open High Low Close % Ch. COMEX 2 Gold Feb SHANGHAI SHFE 4 Gold Feb Singapore- ICE (ICESA) 5 Gold Feb MCX 1 Gold Feb NCDEX HEDGE Gold Mar TOCOM 3 Gold Feb Rs/10 gms, 2- $/oz, 3- Jpy/gm 4 (RMB) Yuan/gram 5 - $/gram Monthly Exchange Data (Silver) (From Dec 01-29) Exchange Commodity Open High Low Close % Ch. COMEX 2 Silver Mar MCX 1 Silver Mar TOCOM 3 Silver Feb Rs/kg, 2- $/oz, 3- Jpy 0.1/gm Gold Spot Market, India Rs/10gm Spot Gold 01 st Dec 29 th Dec % chg Ahmedabad Bangalore Chennai Delhi Mumbai Hyderabad Kolkata Currency Change (Monthly) 01 st Dec 29 th Dec EUR/USD USD/AUD USD/GBP USD/INR USD/JPY Silver Spot Market, India Rs/kg Spot Silver 01 st Dec 29 th Dec % chg Mumbai Page 44 Volume 8 Issue 1 DOP 6 January 2018

45 Bullion - Data & Statistics LBMA Gold & Silver Price (Per Troy Ounce) GOLD AM GOLD PM SILVER DATE USDAM GBPAM EURAM USDPM GBPPM EURPM DATE USDPM GBPPM EURAM NT NT NT NT NT NT Disclaimer: All references to LBMA Gold Price are used with the permission of ICE Benchmark Administration Limited and have been provided for informational purposes only. ICE Benchmark Administration Limited accepts no liability or responsibility for the accuracy of the prices or the underlying product to which the prices may be referenced. LBMA Silver Price ( Benchmark ) is owned by The London Bullion Market Association ( LBMA ), calculated by CME Benchmark Europe Ltd. ( CMEBEL ) and administered by Thomson Reuters Benchmark Services Ltd. ( TRBSL ). None of LBMA, CMEBEL, TRBSL, their group companies, nor any of their or their group companies respective directors, officers, employees or agents (collectively the Disclaiming Parties ) shall be liable in respect of the accuracy or the completeness of the Benchmark or the market data related thereto ( Market Data ) and none of the disclaiming parties shall have any liability for any errors, omissions, delays or interruptions in providing the Benchmark or market data. Sources: Domestic Spot precious metals prices Newspaper Volume 8 Issue 1 DOP 6 January 2018 Page 45

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48 ISSN RNI No. KARBIL/2011/40219 Registered No. KRNA/BGE-1091/ Posted at Bangalore PSO on 7 th & 10 th of every month Licensed to post without pre-payment No No of pages 48