NCDEX SPOT EXCHANGE (NSPOT)

Spot the future with us

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*NSPOT: The Leading Electronic Spot Market NSPOT is the leading electronic spot market in India

It is promoted by NCDEX

NSPOT is market leader in all its launched commodities: Chana, Sugar, RM Seed, Gold and Silver.

NSPOT is governed by respective state laws and regulations of spot markets (APMCs) as applicable for the select commodity.

*NSPOT Offerings Continuous markets: Compulsory delivery based contracts in

Agriculture: Chana, Sugar, RM Seed,Mustard, Imported Lemon Tur ,Gubarga Tur and Imported Urad

Bullion : Gold and Silver from Mumbai, Ahmedabad

Metals: Steel Ingots would be launched soon

NCDEX SPOT AdvantagesPrice Transparency

Timely Payment

Counterparty Risk Mitigation

Wider Network and Geographical Reach

Alternate platform for delivery

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Tur Spot ExchangeNSPOT obtained license to start spot exchanges for various commodities in KarnatakaSpot exchange in Tur launched in January 2010 at GulbargaPlans to extend scope to Sedam, Chitapur, Yadgir etc. in the course of timeModel being rolled out after extensive discussions with value chain participants including farmers, traders, commission agents, brokers, trading corporates, and end consumers

Current status of Red gram India is largest producer and consumer of red gram in the world.

Occupies 3.6 million hectare area with production of 2.6 million tonnes.

Karnataka holds second position in tur production occupying 681000 ha. Producing 485000 tones.

In Karnataka ,Gulbarga is the potential grower of Tur holding first rank in the production.

Gulbarga Tur famous for good quality in terms of its taste.

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Existing marketing scenario

Farmers sell Tur in the APMC through commission agents and commissions are in the range of 2-4%.

Farmers pledge their loan against the advances taken between sowing and harvesting.

Do not get remunerative prices due to lack of awareness about grading ,sorting, etc.

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Contd

Lack of marketing information regarding arrivals and price prevailing in other markets.

Inadequate storage facilities in rural areas.

Inadequate transportation facilities.

Farmers are forced to go for distress sell.

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To support farmers online spot trading is proposed by NSPOT

Farmers would bring their produce in the godowns of exchange and after grading online trading will be done.

Growers would be able to fix the price of their produce.

On the basis of warehouse receipt bank will give 65% of the cost of commodity as loan.

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TUR SPOT EXCHANGE MODEL

Encourages Farmer deposits by providing them with transportation, packaging and labour cost on recoverable basis in colloboration with Tur Board and MYRADA.

MYRADA ,an NGO,aggregates farmer stocks thro its farmer facilitation centres spread across 12 locations in Gulbarga District,Karnataka

These stocks are brought to the accredited warehouse of NSPOT,managed by NCMSL-warehouse service provider

Farmers can avail pledge loan on their deposits thro SBI

Once sale is concluded on the NSPOT ,the proceeds will be adjusted against pledge loan and other expenditure and balance will be transferred to beneficiary A/C

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Incurs expenditure on Aggregation of Farmers Produce (Like Packing, Transportation & Loading / Unloading)Transfer of Sales proceeds by the NSPOT after adjusting, transaction and assaying charges

Business Model- FunctioningThe Seller has to first bring in the commodity in accredited godown at designated warehouse.

Assaying according to NCDEX Spot specifications

The required quantity of commodity stored in warehouse then needs to be locked in for trade/Sale by the Seller client or member in the WMS at the NCDEX Spot member level.

The seller can then sell the commodity equivalent to that locked quantity or less than that quantity.

All the outstanding sell positions will result into delivery at the end of the day.

The sell positions can also be squared off

Selling Side

The buyer needs to pay upfront margin to take the buy position on the Spot platform .All outstanding buy positions at the end of the day will result into delivery.The buyer if desired can square off his position during the day.

Buying SideSettlementThe settlement of funds and sales tax if any will happen on T + 2 (i.e Settlement will take place on second day after trading day)

Price TransparencyBetter price discovery mechanism owing to larger participationAlternative platform for sale of commodity. Opportunity for bulk deals.Reduction in transaction costDirect selling of small quantities with reduction in channel.Buyer Default adequately compensatedProper assaying of quality & quantityFacility of pledge loan thro BanksDirect transfer of sale proceeds to seller bank A/C on 3rd day of sale

Benefit Accrual - Farmers

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Price TransparencyBetter price discovery mechanism owing to larger participationAlternative platform for availability of commodity. Opportunity for bulk deals with reduction in channel.Reduction in transaction costDirect Buying for small quantitiesSeller Default adequately compensated30 % reduction in market fee-which is at 1.5%Pledge loan facility for traded stock thro BanksAssured quality & quantity

Benefit Accrual - Consumers

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Farmer awareness programmes

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Cost comparison between Traditional and NSPOT trading per Quintal*

ParticularsCost in traditional trading (In Rs.)Cost in NSPOT trading(In Rs.)Transportation /Quintal50 ( Approx) 30 (Approx)Weighment & sieving/Q612( At FFC)Soot (2kg/Q)100NilLoading & unloading/Q109.50Sampling charge (300gm/Q)15NilQuality assessment Nil1.66Weighment charge in warehouse/QNil0.40Transaction charge/QNil8Commission (2% on sell)100NilTur BoardNil7Ware house charge/Q/month4.506Total 285.5074.56

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Contract Specifications*

Lot size10 MT after std. deduction of 0.5% with =/- 5% qty. variationPacking100 or 50 kg in sound jute bagsMoisture content12% maxDamaged//discoloured grainsUp to 5% maxForeign matter(including dust,sand & other admixtures)1% maxBroken seeds1% maxAd mixture0.5% maxGrain RetentionMin 90% on 3.75 mm SieveTick sizeRs.1 per qtlQuotation base valueRs. Per qunitalUnit of trading10 MT (10000 kg)Unit of delivery10 MT (10000 kg)Buyer margin9%Validity 3 months from the date of sample collection

Quality Analysis Report-Sample lots*

Lot NoDateAdmixtureMoistureForeign MatterDamagedBroken seeds Grain RetentionVillage130/1/20100.429.10.473.090.7498.29Sarsamba22/2/20100.419.20.731.90.1197.21Kodli33/2/20100.099.20.244.90.0896.29Sarsamba46/2/20100.39.30.23.290.292.19Sarsamba56/2/20100.5610.20.020.80.1899.2gilda`s610/2/201009.90.381.170.1698.19Kodli710/2/20100.069.20.761.830.2797.65Kodli811/2/20100.259.80.95.80.597.34Sarsamba915/2/20100.039.30.354.340.299.16Sarsamba(sindagi)1015/2/20100.069.20.41.540.3298.76SugoorAverage0.229.440.452.870.2897.43Std Parameter0.50%12%1%upto to 5%1%Min 90% on 3.75mm sieve

THANK YOU*

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