National Commodity and Derivatives Exchange Ltd.

Transcription

1 TRADING IN COFFEE (ROBUSTA CHERRY AB) ON National Commodity and Derivatives Exchange Ltd. The contents of this product note are subject to Rules, Byelaws and Regulations as

2 2 Table of Contents TRADING IN...1 COFFEE (ROBUSTA CHERRY AB)...1 ON...1 National Commodity and Derivatives Exchange Ltd....1 Table of Contents...2 Chapter Trading Conditions...4 Authority... 4 Unit of Trading... 4 Months Traded In... 4 Tick Size... 4 Basis Price... 4 Unit for Price Quotation... 4 Hours of Trading... 5 Last Day of Trading... 5 Mark to Market... 5 Position limits... 5 Margin Requirements... 6 Special Margins... 6 Pre-Expiry Additional Margin... 6 Delivery Margins... 6 Penalty for cash settlement/failure to deliver... 6 Arbitration... 7 Chapter Delivery Procedures...8 Unit of Delivery... 8 Delivery Size... 8 Quality Standards... 8 Accredited Warehouse... 8 Robusta Delivery... 8 Allowances Good/ Bad delivery Norms Accredited Assayers for Testing Assayer Certificate Robusta Sampling Weight Testing Procedure Validity period Electronic Transfer Delivery Allocation Actual Delivery Charges... 16

3 3 Duties & Levies Stamp duty Taxes Service tax Sales tax/ Value Added Tax (VAT) Premium/ Discount Chapter Clearing and Settlement Clearing and Settlement Schedule Daily Settlement Daily Settlement Price & Final Settlement Price Final settlement Spot Prices Dissemination of Spot Prices Pay in and Pay out for daily settlement/final cash settlement Pay in and Pay out for final physical settlement Pay in and Pay out for Final Settlement in case of physical deliveries Pay in and Pay out for supplemental settlement Supplementary Settlement for Taxes Pay in and Pay out for Taxes Exhibit 1 - Contract Specifications Exhibit 2 Warehouse/Assayer addresses for delivery of Robusta Coffee...26 Exhibit 3 - Good / Bad delivery norms for acceptance of Robusta Coffee at warehouse Exhibit 4- Specimen of Assayer certificate CERTIFICATE OF QUANTITY & QUALITY (GRADE) Exhibit Trading and Delivery Calendar Exhibit Clearing and Settlement Calendar... 30

4 4 Authority Chapter 1 Trading Conditions Trading of Robusta Coffee futures may be conducted under such terms and conditions as specified in the Rules, Byelaws & Regulations as well as directions of the Exchange and the Forward Markets Commission (FMC) issued from time to time. A specimen of Robusta Coffee contract is indicated in Exhibit 1. Unit of Trading The unit of trading for the Robusta Coffee shall be 2 MT. Bids and offers will be accepted in the lots of 2 MT. Months Traded In Trading in Robusta futures may be conducted in the contracts expiring in the months of March, May, July, September and December or as specified by the Exchange from time to time. The trading and delivery calendar will be declared before start of each contract which may change subject to change/declaration of trading/delivery holidays by the Exchange. Tentative trading and delivery schedule is given in Exhibit 5. Tick Size The tick size of the price of Robusta shall be Re 0.05 Basis Price The price of Robusta Coffee as Robusta Cherry AB is basis ex-warehouse Kushalnagar (Karnataka) exclusive of all taxes. Unit for Price Quotation The unit of Price quotation for Robusta shall be in Rupees per Kilogram.

5 5 Hours of Trading The hours of trading for futures in Robusta on week days shall be from 10:00 AM to PM Indian Standard Time (IST) and from 10:00 AM to 11:55 PM Indian Standard Time (IST) during US day light saving period. The hours of trading may be determined by the Exchange from time to time. The hours of trading for futures in Robusta on Saturdays shall be from 10:00 AM to 2.00 PM or as determined by the Exchange from time to time. Last Day of Trading No trades in Robusta Coffee futures deliverable in the current month shall be made after 5.00 p.m. on 20th calendar day of that month and if 20th happens to be a holiday, a Saturday or a Sunday then the due date shall be the immediately preceding trading day of the Exchange. Mark to Market The outstanding positions in futures contract in Robusta would be marked to market daily based on the Daily Settlement Price (DSP) as determined by the Exchange. Position limits The position limits for Robusta contracts shall be 2250 MT maximum or 15% of market wide open position which ever is higher for member (collectively for clients) and 750 MT maximum for individual client/ member s own account. The limit will not apply to bona fide hedgers as may be approved by the Exchange under its policy. The Exchange shall, on case to case basis, prescribe hedge limit for such bonafide hedgers. In the near month the position limits for Robusta Coffee contracts shall be 450 MT maximum for member (collectively for clients and member s own account) and 150 MT maximum for individual client/ member s own account. The position limit will be subject to Exchange Regulations and directions of the Exchange and Forward Markets Commission from time to time.

6 6 Margin Requirements NCDEX will use Value at Risk (VaR) based margin calculated at 99.95% confidence interval for one day time horizon. NCDEX reserves the right to change, reduce or levy any additional margins as per its Regulations. Special Margins In case of additional volatility, a special margin at such other percentage, as deemed fit, will be imposed in respect of outstanding positions, which will remain in force as long as the volatility exists, after which the special margin may be relaxed. Pre-Expiry Additional Margin There will be an additional margin imposed during the last 5 trading days prior to the start of tender period of the contract. The pre-expiry additional margin will be added to the normal exposure margin and will be increased by 3% everyday only during the last five trading days prior to the start of tender period and will continue till the expiry of the contract. Exchange reserves the right to impose pre-expiry additional margin and the margin requirements notified by the exchange from time to time shall accordingly apply. Delivery Margins Upon allocation of delivery, delivery margins shall be charged from the buyer and the seller. Such delivery margins will be calculated based on the number of days required for completing the physical delivery settlement (the look-ahead period and the risks arising thereof). Penalty for cash settlement/failure to deliver A penalty will be imposed on sellers and buyers with open positions on the expiry of contract who chooses not to deliver the commodity or chooses not to take delivery of the commodity, as the case may be. In the event of default by seller or buyer to give delivery or take delivery, as the case may be, a penalty as decided by the Exchange will be imposed on such defaulting seller or buyer. The Exchange reserves the right to change the penalty structure.

7 7 Arbitration Disputes between NCDEX members inter-se and between members and constituents, arising out of or pertaining to trades done on NCDEX shall be settled through arbitration system under the Bye laws and Regulations of NCDEX. The arbitration proceedings and appointment of arbitrators shall be as governed by the Bye-laws and Regulations of NCDEX. Any dispute wherein Exchange is made party shall be subject to exclusive jurisdiction of courts at Mumbai.

8 8 Chapter 2 Delivery Procedures Unit of Delivery The minimum unit of delivery for Robusta shall be 2 MT. Delivery Size Delivery is to be offered and accepted in lots of 2 MT or multiples thereof. A Quantity variation of +/- 5% with applicable rates is available as per contract specifications. Quality Standards The contract grade for delivery of Robusta Coffee futures contracts made under NCDEX Regulations shall be Robusta Cherry AB Coffee conforming to the quality specifications indicated in Exhibit 1. No lower grade/ quality below the stated specifications shall be deliverable for futures contract delivery except as provided in the contract specifications. Accredited Warehouse NCDEX has accredited warehouse for receipt and delivery of Robusta. Delivery and receipt of Robusta will be undertaken only from the accredited warehouse. The details of NCDEX accredited warehouse for delivery and receipt of Robusta Coffee is as per Exhibit 2. NCDEX may add or change the accredited warehouse within radius of 50 Kms from the municipal limits of the delivery centre. Robusta Delivery All the open position shall have to be settled through physical delivery either by giving or taking delivery as the case may be. The Robusta Coffee received at the warehouse will be tested and certified by the warehouse through one of the NCDEX approved Assayers before acceptance as good delivery in the warehouse. Likewise, Robusta delivered to buyers will be from the accredited warehouse only. The delivery tender can be submitted only after assaying of the goods by an exchange approved assayer and acceptance of the good delivery by the exchange accredited warehouse.

9 9 The buyer members with open position can give their intention to take delivery through the delivery request window on any tender day, except Saturday, Sunday or any trading holiday as specified by the Exchange. If the intentions are not matched on the requested tender day then the request will get cancelled from the system and buyer member will have to give fresh intention on any subsequent day during the tender period when the buyer desires the matching to happen. Delivery would be received by the buyer on the seventh day from day of matching intention excluding Saturday, Sunday or any trading holiday from the tender day as per the Settlement Calendar issued by the Exchange for that month. Seller members with open position can tender delivery through the delivery request window on the trading terminal on any tender day, except Saturday, Sunday or any trading holiday as specified by the Exchange. If delivery request made by the seller is rejected by the system for any reason then the seller member will have to make fresh request on any subsequent tender day. All valid delivery requests will be matched at the end of the tender day on which such request has been submitted. Delivery would have to be made on the seventh working day from the day of matching of intentions as per Settlement Calendar issued by the Exchange for that month. Delivery intention once given can be withdrawn before it is matched by the Exchange, by making a request on the delivery information window. On each tender day during the expiry month NCDEX would complete the matching process where buyer and the seller positions would be matched by the process put in place by the Exchange. The Buyers and the Sellers need to give their location preference through the front end of the trading terminal. The delivery allocation information will be sent to all concerned buyer and seller members through their work stations and their respective positions to the extent of matched would be squared off. Buyer may be allocated delivery even at the locations other than those specified by the buyer. The allocation once made will not be changed both for the buyer and the seller. In case no delivery information is received from the Buyer, and the Seller has tendered delivery, the Exchange would allocate delivery to the Buyer with the open position as per process put in place by the Exchange and the Buyer will be bound to settle by taking physical delivery. In the event of default by Seller or Buyer to give or take delivery, as the case may be, such defaulting seller or buyer will be liable to penalty as may be prescribed by the Exchange from time to time. Robusta delivered shall be packed in new hydrocarbon free Jute bags of IJIRA standard (Indian Jute Industries Research Association) in merchantable condition with the mouth of the bag stitched disallowing sweating/ spilling. The packaging of Robusta Coffee should be in standard bags containing of 60 Kg Net weight.

10 10 Allowances The standard allowances towards loss arising on account of sample weight per validation of quality and spillage shall be 0.20% of each lot delivered. At the time of deposit the quantity credited will be adjusted to the base moisture level at which the contract has been traded after allowing for the standard allowances on account of spillage and sampling. Good/ Bad delivery Norms Robusta delivery into NCDEX designated warehouse would constitute either good delivery or bad delivery based on the good/ bad delivery norms as per Exhibit3. The list contained in Exhibit3 is only illustrative and not exhaustive. NCDEX would from time to time review and update the good/ bad delivery norms based on the trade/ industry practices. Accredited Assayers for Testing NCDEX has approved Assayer for quality testing and certification of Robusta Coffee received at the designated warehouse/s. The quality testing and certification of Robusta Coffee will be undertaken only by such approved Assayer. The Assayer details are given in Exhibit 2. The details of the accredited warehouses will also be displayed on the website in due course. The list of the assayer may be changed by the Exchange/ warehouse. Assayer Certificate Testing and Certificate of Grade with quality and quantity issued by NCDEX approved Assayer for Robusta delivered at designated warehouses shall be acceptable and binding on all parties. Each delivery of Robusta at the warehouse must be accompanied by a certificate from NCDEX approved assayer in the format as per Exhibit 4. The Assayer will issue a Certificate of Grade with respect to each deliverable lot delivered. Only a lot which has been issued a Certificate of Grade which states that the meets Exchange standard may be delivered under the Contract. The Exchange may at any time suspend, cancel or revoke a Certificate of Grade previously issued, if the Exchange has reasons to believe that the covered by such Certificate of Grade was sampled, graded, or certified in any manner inconsistent with the Rules; or does not satisfy the minimum standards for delivery under the Coffee Contract.

11 11 The Exchange, at any time and in its sole discretion, may order that for which a Certificate of Grade has been issued be re-sampled, re-graded and re-inspected for quality and quantity. In case of dispute with regard to quality of the Exchange may get the samples assayed by the Coffee Board or any other entity and their decision will be binding on all concerned. The fees and the cost of any re-sampling, re-grading and re-inspection conducted hereunder may, in the event a discrepancy is discovered, be assessed by the Exchange against the Person whom the Exchange may determine. Robusta Sampling Robusta samples shall be drawn by NCDEX approved assayer at the time of delivery into the accredited warehouse 100% of the bags from each lot constituting a lot of 2 MT to make one composite sample of 1200 grams. At the time of revalidation, samples would be drawn from approximately 20% of the total no. of bags. All bags containing the sample will be tied, sealed and tagged by the Sampler. The sample shall be marked specifically as per the operational guidelines laid down by the Exchange from time to time. Samples so drawn shall be equated into 4 partsa. one for testing and certification by the assayer, b. the second shall be retained by the assayer for 4 months, c. the third shall be retained as NCDEX referee sample and d. the fourth is given to the depositor. For each sampling the assayer will maintain a log as prescribed by the Exchange. If the Assayer believes that one or more lot are markedly inferior and not conforming to the Exchange specification individually, then that lot may be excluded from the sampling and the holder will be required to substitute deliverable Coffee as per Exchange specifications for that lot. The extra cost of sampling the substitute lot will be paid by the holder of the Coffee. The sampling procedures have been designed to promote the integrity and impartiality of the sampling process, and do not constitute any assumption of any responsibility or liability for sampling by the Exchange in any manner. All sampling of continues to be the responsibility of the person on whose behalf the is sampled. Weight The quantity of Robusta received at the NCDEX designated warehouse would be determined/ calculated by the weighbridge/ weigh scale at the premises of the warehouse or such other weighbridge/ weigh scale recognized by the accredited warehouse and would be binding on all parties.

12 12 Testing Procedure The sample size is checked visually for Residue on Sieve under screen no. 15 & 14, Triage, Pea Berry, Black Beans and Foreign Extraneous Matters. Moisture content will be measured by calibrated moisture meter. Sample size = 300 gms Steps Findings Action Go to step 1 Check moisture Moisture is more than Reject Stop 13% Moisture is below 9% Reject Stop Moisture equal to or below 13% and equal to or above 9% (= or <13% or moisture > or = 9%) Accept 2 2 Pass the sample through screen 15 3 Pass the "passing through Screen 15" through screen 14 4 Divide the sample into three parts Content less than 90% by weight of the complete sample is retained on screen 15 Content more than or equal to 90% by weight of the complete sample is retained on screen 15 Content more than 1.5% by weight of the sample passes through Screen 14 Content less than or equal to 1.5% by weight of the sample passes through Screen 14 Part 1: Content retained on Screen 15 Part 2: Content retained on screen 14 Part 3: Content that passes through Screen 14 Reject Accept Reject Accept Stop 3 Stop 4 5

13 13 5 Separate extraneous matter/ foreign matter from three parts obtained in step 4 Foreign/ extraneous matter more than 0.2% by weight of the sample Foreign/ extraneous matter less than or equal to 0.2% by weight of the sample Reject Accept Stop 6 6 Separate triage (Round Small Beans, Spotted Beans, Elephant Beans, Pales, Dried and Shriveled Beans, Broken Beans) from three parts obtained in step 4 (excluding black, brown, and insect damaged triage) 7 Separate Pea Berry from three parts obtained in step 4 (excluding brown, partially black, black and insect damaged Pea Berry) Triage content is more than 3% by weight of the sample Triage content is equal to or less than 3% by weight of the sample Pea Berry content is more than 5% by weight of the sample Pea Berry content is less than or equal to 5% by weight of the sample Reject Accept Reject Accept Stop 7 Stop 8 8 Separate Brown Beans and partially black beans from the three parts obtained in step 4 (excluding insect damaged Brown Beans) Brown Beans and partially black content is more than 2.5% by weight of the sample Brown Beans and partially black beans content is less than or equal 2.5% by weight of the sample Reject Accept Stop 9 9 Separate Insect Damages Beans from the three parts obtained in step 4 (excluding black insect damaged beans) Insect damaged beans content is more than 2% by weight of the sample Insect damages beans content is less than or equal to 2% by weight of the sample Reject Accept Stop 10

14 14 10 Separate Black Beans Black beans content is more than 0.2% of the sample Black beans content is less than or equal to 0.2% of the sample Reject Accept Stop Stop Validity period The validity period of the Assayer s Certificate for Robusta delivered in the Exchange accredited warehouse before May 20 th will be up to 5th June of the same calendar year. On such expiry of the validity on June 5 th the in the accredited warehouses may be revalidated by taking sample from 100% bags and restacking all bags in the accredited warehouse. The delivered/ revalidated after May 20 th in any year will have validity up to October 5 th of the said year if found by the Approved Assayer to be of contract specification of Exchange. The cost of revalidation and restacking will be borne by the holder of the. It is clarified that the eligibility for revalidation as specified above is not an assurance that the same would be revalidated. The revalidation of is the responsibility of the holder of the and if the Approved Assayer does not confirm the quality of to meet contract specification, the same shall not be deliverable on the Exchange. Validity date Month of fresh deposit Valid up to Valid up to Revalidation January 5th June 5th October February 5th June 5th October March 5th June 5th October April 5th June 5th October May 5th June 5th October June 5th October - July 5th October - August 5th October - September 5th October - October *** - - November *** - - December *** - - *** No deposits shall be accepted during the months of October, November and December.

15 15 Electronic Transfer Any buyer or seller receiving and or effecting Robusta delivery would have to open a depository account with an NCDEX empanelled Depository Participant (DP) to hold the Robusta in electronic form. On settlement, the buyer s account with the DP would be credited with the quantity of Robusta received and corresponding seller s account would be debited for delivered. The Buyer wanting to take physical delivery of the Robusta holding has to make a request in prescribed form, to the DP with whom depository account has been opened. The DP would route the request to the warehouse who would issue the physical commodity i.e. Robusta to the buyer and debit his account, thus reducing the electronic balance to the extent of Robusta rematerialized. Delivery Allocation The Exchange would receive delivery information/ tender from the selling members and the buyer members on any trading day, except Saturday, during the tender period as specified by the Exchange. After matching and allocation process after the close of trading on the tender day the Exchange would notify both the buyer and the seller to receive/ give delivery. Delivery of Robusta is to be accepted by buyers at the accredited warehouse where the seller gives delivery in accordance with the contract specifications (see also para on Robusta Coffee Delivery) Actual Delivery Only latest harvest will be deliverable on the exchange platform Where Robusta is sold for delivery in a specified month, the seller must have requisite electronic credit of such holding in his Clearing Member s Pool Account before the scheduled date of pay in. On settlement the buyers Clearing Member Pool Account would be credited with the delivery quantity on pay out. The clearing member is expected to transfer the same to the buyers depository account. However, the buyer must take actual physical delivery of Robusta before expiry of the validity date as indicated in the quality test report/ Assayer Certificate of the Assayer. The deliverable Coffee should: a. be stored in duly accredited warehouse at Chikmangalur (Karnataka), Hassan (Karnataka), Kushalnagar (Karnataka) and Kalpetta (Kerala) up to the radius of 50 kms from the municipal limits of the respective centers at par unless otherwise notified by the Exchange before the launch of the respective contract; b. be stored in not more than one of the above mentioned delivery locations;

16 16 c. be packaged in sound, hydrocarbon free and new jute bags of IJIRA (Indian Jute Industries Research Association) standards containing net weight of 60 kg each. Charges All charges and costs payable at the designated warehouse towards delivery of Robusta including sampling, grading, weighing, handling charges, storage etc. from the date of receipt into designated warehouse up to the date of Settlement shall be paid by the seller. All charges and costs associated & including storage, handling etc. after the Pay-Out shall be borne by the buyer. Warehouse storage charges will be charged to the member/ client by the respective Depository Participant. The Assayer charges for testing and quality certification should be paid to the Assayer directly at the delivery location either by cash/ cheque/ demand draft. The details of the charges, frequency and mode of payment will be displayed on NCDEX website. Duties & Levies All duties, levies etc. up to the point of sale will have to be fully paid by the seller to the concerned authority and all documentation will be fully complied with and completed before delivery of Robusta into NCDEX designated warehouse. Stamp duty Stamp duty is payable as may be applicable in the State from where the contract note is issued or as per the Stamp Act of the State in which contract note is received by the client if the client is located in other State. Taxes Service tax Service tax will be payable by the members of Commodity Exchange on the gross amount charged by them from their clients on account of dealing in commodities. Sales tax/ Value Added Tax (VAT) Local taxes/ VAT where ever applicable is to be paid by seller on all contracts resulting in delivery. Accordingly the buyer will have to pay the taxes to the seller at the time of settlement. Members and/ or their constituents requiring to receive or deliver Robusta should register with the relevant tax authorities of the place where the delivery is proposed to be received/ delivered. In the event of sales tax/ VAT exemption, such exemption certificate should be submitted before settlement of

17 17 the obligation. There will be no exemptions on account of resale or second sale in VAT regime. Premium/ Discount Robusta confirming to contract specification and delivered to Exchange accredited warehouse will be tested for quality, graded and stored. Due to quality variations and other parameters there may be premium/ discount determined by the Exchange. The decision of the Exchange in determination of premium/ discount if any, is final and binding on all market participants. The reckoner for the quality variations is as shown in the table below. READY RECKONER Moisture content Extraneous matter Pea Berry to 12.5 = to 0.1 = to 3 = to 13 = to 0.2 = to 4 = 2 0 to 12 = to 5 = 3 0 to 2 = 4 Brown Beans & Partially Black Beans Black Cotyledons Insect Damaged Beans 0.01 to 1 = to 0.1 = to 1 = to 2 = to 0.2 = to 2 = to 2.5 = 3

18 18 Chapter 3 Clearing and Settlement Clearing and Settlement Schedule Clearing and Settlement schedule is given in Exhibit 6. The Exchange will declare the Clearing and Settlement calendar from time to time before start of the Expiry Month. Daily Settlement All open positions of a Robusta Coffee futures contract would be settled daily based on the Daily Settlement Price (DSP). Daily Settlement Price & Final Settlement Price The Daily Settlement Price (DSP) shall be as disseminated by the Exchange at the end of every trading day. The DSP will be utilized for marking to market all open positions. The Final Settlement Price (FSP) will be determined by the Exchange on maturity of the contract. Final settlement On expiry of the contract, the following types of open positions where delivery information is not provided by the seller would considered as delivery default and be cash settled with appropriate penalty as may be decided by the Exchange. Cash settlement: The pay in and pay out in case of cash settlement would be the day after the expiry date of the contract (E+1) as per settlement calendar issued by the Exchange. Seller is expected to give delivery intention before the expiry of the contract as per process put in place by the exchange. Non availability of delivery intention by the seller will be considered as his failure to give delivery and shall be settled in cash with appropriate penalty as may be prescribed by the exchange. Final Settlement: The open positions for which information have been provided for and the same have been matched by the Exchange, would result in physical delivery. Final settlement will be on E+7 basis as per settlement calendar issued by the Exchange.

19 19 Spot Prices NCDEX will announce/disseminate spot prices for Robusta Coffee relating to the designated delivery centers and specified grade/quality parameters, as determined through the process of polling a set of market participants representing different segments of the value chain such as traders, importers, exporters, processors, etc. The polled prices shall be input to a normalizing algorithm (like bootstrapping technique) to arrive at a representative, unbiased and clean benchmark spot price for Robusta Coffee. The security of data and randomness of polling process will ensure transparency and correctness of prices. The Exchange has absolute right to modify the process of determination of spot prices at any time without notice. Dissemination of Spot Prices Spot prices for Robusta Coffee as determined by process put in place by the Exchange will be collected and disseminated in such time and manner as may be decided by the Exchange. Pay in and Pay out for daily settlement/final cash settlement The table below illustrates timings for pay in and pay out in case of daily settlement as well as cash settled positions for final settlement. The buyer clients would have to deposit requisite funds with their respective Clearing Member before pay in. All fund debits and credits of the Member would have to be done in the Member s Settlement Account with the Clearing Bank. Time (T/E+1) On or before hours After hours Activity PAYIN: Debit paying member a/c PAYOUT: Credit receiving member a/c Pay in and Pay out for final physical settlement The table below illustrates timings for pay in and pay out in case of positions marked for physical settlement during the expiry month or on expiration of contract for final physical settlement. The buyers/sellers would have to deposit requisite funds/robusta with their respective Clearing member before pay in. Pay in and Pay out for Final Settlement in case of physical deliveries Time ( *T + 7 ) On or before hours Activity PAYIN Debit: Buyer Member Settlement a/c for funds Debit Seller Member s CM Pool Account

20 20 for Robusta After hours PAYOUT: Credit Seller Member Settlement a/c for funds Credit Buyer Member s CM Pool Account for Robusta *T = Date of allocation/expiry The supplemental settlement for Robusta futures contracts to include premium / discount adjustments if any, for quality and other parameters of delivered and close out for shortages will be conducted on the same day. Clearing Members are required to maintain adequate fund balances in their respective accounts. Pay in and Pay out for supplemental settlement Time (T + 7) On or before hours After hours Activity PAY IN: Debit Member Settlement a/c for funds PAY OUT: Credit Member Settlement a/c for funds Supplementary Settlement for Taxes The Exchange will conduct a separate supplementary settlement, as illustrated below, three days after normal Pay Out for completion of tax transactions. In order to facilitate issue of invoice to right parties, the buyer Clearing Members are required to give the buyer client details to the Exchange latest by noon on E+8 day failing which buying member name is considered as the end buyer and accordingly invoice is issued in their name. The Seller Clearing Members are required to give the seller client details to the Exchange latest by hrs on E + 4 day. The amounts due to the above differences will be debited/ credited to members clearing bank account similar to normal settlement. Pay in and Pay out for Taxes Time (T + 10) Activity On or before hours PAY IN: Debit Buyer Member Settlement a/c for funds. After hours PAY OUT: Credit Seller Member Settlement a/c for funds

21 21 Exhibit 1 - Contract Specifications Type of contract Name of commodity Ticker Symbol Trading system Basis Unit of trading Delivery unit Quotation/Base value Tick size Quality specification Futures Contract Specifications Robusta Cherry AB Coffee COFFEERC NCDEX Trading System Ex-warehouse Kushalnagar (Karnataka) exclusive of all taxes 2 MT 2 MT deliverable in sound and new jute bags containing net of 60 kg Rs /Kilogram 5 paise Robusta Cherry AB Coffee specifications: Parameter Basis Max/Min Permissible limits Moisture 9% to 12% 9% min., 13% max.* Retention on Screen 15 (screen with round holes of 6 mm) by weight Passage through screen 14 (screen with round holes of 5.5 mm) by weight Extraneous matter by weight Black cotyledon (full Black) beans by weight Triage (round small beans, spotted beans, Elephant beans, Pales, Dried and Shriveled Beans, broken beans) by weight 90% and above 1.5% and below 90% min. 1.5% max. 0% 0.2% max.* 0% 0.2% max.* 0% 3% max. Pea Berry by weight 0% to 2% 5% max.* Insect damaged beans by weight Brown Beans and Partially Black Beans by weight 0% 2% max.* 0% 2.5% max.* *See premium and discount

22 22 Quantity variation +/- 5 % Kushalnagar (Karnataka) up to the radius of 50 kms from Delivery centre the municipal limits) Delivery shall also be acceptable at Hassan (Karnataka), Chikmangalur (Karnataka) and Kalpetta (Kerala) up to the Additional delivery radius of 50 kms from the municipal limits of the respective center centers at par unless otherwise notified by the Exchange before the launch of the respective contract month As per directions of the Forward Markets Commission from time to time. Hours of Trading Currently Mondays through Fridays: 10:00 a.m. to 11:30 p.m. 10:00 a.m. to 11:55 p.m. (during US day light saving period) Saturdays: 10:00 a.m. to 2:00 p.m. The Exchange may vary the above timing with due notice Tender Date -T Tender Period and Pay-in and Pay-out Due date/expiry of contract Tender Period: Tender period would be during trading hours of 10 trading days, excluding Saturday, before the expiry of the contract including the day of expiry of the contract. Pay-in and Pay-out for settlement through physical delivery: on a T+7 basis. If the Tender Date is T then, payin and pay-out would happen on T + 7 day. If such a T + 7 day happens to be a Saturday, a Sunday or a holiday at the Exchange, Clearing Banks or any of the Service Providers, Pay-in and Pay-out would be effected on the next working day. Pay-in and Pay-out for cash-settlement on expiry of the contract: on a E+1 basis. If the Expiry Date is E then, Pay-in and Pay-out would happen on E+1 day. If such a E+1 day happens to be a Saturday, a Sunday or a holiday at the Exchange, clearing Banks, Pay-in and Pay-out would be effected on the next working day. Pay-in and pay-out schedule will be declared by the exchange from time to time 20 th day of the delivery month If 20 th day happens to be a Saturday, Sunday or Holiday, then the due date shall be the immediately preceding trading day of the Exchange The Settlement of the contract would be by a staggered system where settlement through physical delivery tendered on T day would happen on the T+7 th day and final settlement of the contract would happen on E+7 day.

23 23 Delivery logic Delivery specification Closing of contract Corresponding to each delivery The supplemental settlement shall also happen on T+7 days and the settlement for taxes shall happen on T+9 days. Compulsory delivery Upon expiry of the contract all outstanding positions will result in delivery. The penalty structure for failure to meet delivery obligations will be as per Circular no. NCDEX/TRADING-091/2007/235 dated October 4, The exchange will have right to change the penalty structure. During the Tender period, if any delivery is tendered by seller, the corresponding buyer having open position and matched as per process put in place by the Exchange, shall be bound to settle by taking delivery on T + 7 day from the delivery centre where the seller has delivered same. Clearing and settlement of contracts will commence with the commencement of Tender Period by compulsory delivery of each open position tendered by the seller on T +7 to the corresponding buyer matched by the process put in place by the Exchange. On the expiry of the contract, all the outstanding positions shall be settled by physical delivery Opening of contract No of active contracts Price band Position limits Trading for contracts will open on the 10th day of month of the latest expiring contract. If the 10th day happens to be a non-trading day the contracts would open on the next trading day Contracts expiring in the month of March, May, July, September and December will be available for trading. Daily price fluctuation limit is (+/-) 2%. If the trade hits the prescribed daily price limit there will be a cooling off period for 15 minutes. Trade will be allowed during this cooling off period within the price band. Thereafter the price band would be raised by another (+/-) 2% and trade will be resumed. If the price hits the revised price band (4%) again during the day, trade will only be allowed within the revised price band. No trade/order shall be permitted during the day beyond the revised limit of (+/-) 4% Member level limit: 2250 MT or 15% of market wide open position which ever is higher Client: overall 750 MT The above limits will not apply to bona fide hedgers. For bona fide hedgers, the Exchange will, on a case to case basis, decide the hedge limits. Please refer to Circular No. NCDEX/TRADING-100/2005/219 dated October 20, Following limit will apply in the near month:

24 24 Member level limit: 450 MT Client level 150 MT a) Moisture content of 12.01% to 13% shall be discounted as under: Moisture content Discount on weight of 12.01% to 12.50% 0.5% 12.51% to 13% 1% b) Extraneous Matter content upto 0.2% by weight shall be discounted as under Extraneous matter Discount on weight of 0.01% to 0.1% 0.1% 0.11% to 0.2% 0.2% c) Pea Berry content of 2.01% to 5% by weight shall be discounted at Rs. 2 per kg as under: Actual content Discounted Reduction in the value of Pea Berry content of Pea of Berry 2.01% to 3% 1% 3.01% to 4% 2% 4.01% to 5% 3% Rs. 2 multiplied by the discounted content of Pea Berry by weight in Kilograms Premium/Discounts d) Brown Beans and Partially Black Beans content up to 2.5% by weight shall be discounted at Rs. 4 per kg as under: Actual content Discounted of Brown content of Beans/Partially Black Beans Brown/Partially Black Beans 0.01% to 1% 1% 1.01% to 2% 2% 2.01% to 2.5% 2.5% Reduction in the value of Rs. 4 multiplied by the discounted content of Brown Beans/Partially Black Beans by weight in Kilograms e) Black Cotyledons (full black) Beans content up to 0.2% by weight shall at a discounted at Rs. 5 per kg as under: Actual content Discounted Reduction in the of Full Black content of Full value of Beans Black Beans 0.01% to 0.1% 0.1% Rs. 5 multiplied by 0.11% to 0.2% 0.2% the discounted content of Full Black Beans by weight in Kilograms

25 25 f) Coffee with insect damaged beans will be discounted at Rs 2 Per Kg of delivered. Further discount of Rs. 4 per kg of insect damaged beans shall be applied as under: Actual content Discounted of Insect content of Insect Damaged Damaged Beans Beans 0.01% to 1% 1% 1.01% to 2% 2% Reduction in the value of Rs. 4 multiplied by the discounted content of Insect Damaged Beans by weight in Kilograms Special margins Allotment of Deliveries In case of additional volatility, a special margin at such other percentage, as deemed fit, will be imposed in respect of outstanding positions, which will remain in force as long as the volatility exists, after which the special margin may be relaxed. Procedure should be in FIFO

26 26 Exhibit 2 Warehouse/Assayer addresses for delivery of Robusta Coffee For the updated list of Warehouse & Assayers kindly refer to the NCDEX Website Exhibit 3 - Good / Bad delivery norms for acceptance of Robusta Coffee at warehouse No. Particulars Good / Bad delivery 1 Quality not meeting futures contract specification Bad delivery 2 Delivery at non designated warehouse Bad delivery 3 Delivery completed but without sampling & Bad delivery testing/ certification 4 Delivery without weight certificate Bad delivery 5 Coffee is weighed at other than recognized by Bad delivery designated warehouse/ weigh bridge / weigh scale 6 Sample is not drawn as per sampling norms Bad delivery 7 Delivery not as per the packaging specification Bad delivery 8 Delivery found contaminated on visual inspection Bad delivery 9 Delivery having live infestation or moldy beans Bad delivery 10 Delivery made for harvested prior to the latest harvest cycle (November April) Bad delivery 11 Coffee is composed of good immediately Bad delivery next to the bag, and decidedly inferior in the interior of the package 12 Coffee consist of more than two Chops/parcels, except when a Chop is added to make up for the efficiency in the weight, in which case more than three Chops/parcels Bad delivery 13 There are less than 10 bags in any one Bad delivery warehouse

27 27 Exhibit 4- Specimen of Assayer certificate CERTIFICATE OF QUANTITY & QUALITY (GRADE) Date : Report no.: NCDEX member : Commodity: Lorry No. : 1) QUANTITY: This is to certify that National Commodity & Derivative Exchange Ltd.(NCDEX) member / constituent has delivered Metric Tons ( MT ) Net of Robusta at the NCDEX designated warehouse: The net weight / tonnage of material delivered is as per weigh bridge / weigh scale in the premises of the designated warehouse. Date of weighing: Weight of Coffee (MT) Gross : Tare : Standard allowance (0.2%) : Net : Within +/- 5% variation of the multiple of standard deliverable lot size: Yes / No Location of weighing Date of last calibration/ checking of weighing instrument: This is to certify that was weighed in accordance with the procedures set forth by the Exchange and the weights are correctly reported herein. Signature of the in-charge of the weighing instrument

28 28 Date: 2) QUALITY: Date of sampling Time of sampling Sampling done by (name and designation) Sampling done in the presence of (holder s name) Signature of holder / holder s representative Name: Date: Place: Date of grading Grading done at (location of laboratory) The results of analysis performed by our laboratory of the samples collected by Assayer ( ) is stated below : S.No Test Items Test method Specification Test results 1 Coffee is sound (free from condition that may affect the quality of other stored in the warehouse) Visual inspection 2 Moisture content Use of calibrated moisture meter 6 Retention on Screen 15 (screen with round holes of 6 mm) 7 Passage through Screen 14 (screen with round holes of 5.5 mm) 8 Presence of foreign/ extraneous matter Passage through Screen 15 Passage through Screen 14 Manual Sound 12% basis (acceptable between 9% and 13%) 90% min 1.5% max Basis Nil, but acceptable up to 0.2% max 9 Presence of triage Manual Max 3% 10 Presence of Pea Berry Manual Basis 2% but

29 29 acceptable up to 5% 11 Presence of brown beans Manual Basis Nil, but acceptable up to 2.5% 13 Presence of insect damages beans Manual Basis Nil, but acceptable up to 2% 14 Presence of black beans Manual Basis Nil, but acceptable up to 0.2% 15 Is delivered quantity with Net weight Yes in +/-5% variation of multiple of 2 MT The sample is: accepted / rejected If rejected, the rejection of the sample is on account of (indicate S. No of above test items) This is to certify that the samples were drawn in accordance with the procedures of the Exchange at the following warehouse: Address of the Warehouse Signature of the warehouse owner Date and time The material delivered by the above NCDEX member meets Exchange Standards / Specification bearing grade and valid up to. The goods delivered may be accepted / rejected. Assayer Company Chief Inspector / Authorized Signatory: : : Date of issue Assayer s Certificate of Grade (to be used for determining validity, premium and discount) :

30 30 Exhibit 5 Trading and Delivery Calendar (Changes possible subject to announcement of trading /delivery holidays by NCDEX for ) Contract Month First Trading Day First Notice Day / First Tender day Last Notice Day/ last Trading Day First Delivery Day Last Delivery Day May Sept-07 7-May May May May-08 Jul Sept-07 7-Jul Jul Jul Jul-08 Sept Sept-07 8-Sept Sept08 17-Sept Sept-08 Dec Apr-08 8-Dec Dec Dec Dec-08 Mar Apr-08 9-Mar Mar Mar Mar-09 May May-08 7-May May May May-09 Jul Jul-08 7-Jul Jul Jul Jul-09 Sept Sept-08 7-Sept Sept09 16-Sept Sept-09 Dec Dec-08 7-Dec Dec Dec Dec-09 Exhibit 6 Clearing and Settlement Calendar (Changes possible subject to announcement of trading /delivery holidays by NCDEX for 2008) For Settlement Calendar and dates for marking intention for the above mentioned contracts, kindly refer to the circulars issued by the Exchange from time to time.