Product Presentation

Investment opportunities in NSEL Exchange

Contract Specifications (few Example)

Product Duration Buy & Selling T+3 & T+36 T+5 & T+30 T+2 & T+25 T+2 & T+25 T+2 & T+25 T+2 & T+25 Investment Yearly Return (approx ) 14-17% 14-17% 14-17% 14-17% 14-17% 14-17%

Castor Seed Castor Oil Sugar Paddy Steel Raw wool

Rs. 10 lacs Rs 10 lacs Rs 3.20 lacs Rs 4 lacs Rs 4.8 lacs Rs 3.5 lacs

Opportunity for Investors

Investors can invest money and lack their returns. Investor has to buy in near settlement contract and sell in far settlement contract simultaneously. Price for both settlement available. Exchange provide counter guarantee in respect of quality of goods, weight and counter guarantee risk. No basis risk, no limit with future contracts.

Features of Investment Opportunity

T+2 and T+25 contract offers unique investment opportunity to investors. Investor Purchases T+2 contract and simultaneously sells T+25 contract. Pay-in obligation is on T+2 while Pay-out of the funds will be on T+25. Entire Settlement cycle is of 31-33 days. Hence the money remains invested for such period. Price differential between the two settlement dates offers a net annual interest rate of about 14-17% after deducting all expenses. Income arising out of such trade are treated as business Income.

Short term investment opportunity: Settlement Cycle difference

The difference in the buy price in near contract and far contract provides the opportunity for the investors to get the ensured return. Tabular representation of the trade mechanism.

Contract T+2 T+25 Trade on Same day

Investors Buy (lower Price) Sell (higher price) Sell Buy

Traders

Fund Movement Contract T+2 T+25 Investors Traders Contract T+2 T+25

Commodity Movement Investors Traders

Calculation of Raw Wool

COSTS INVOLVED IN BUYING AND SELLING IN RAW WOOL TRADERS CONTRACT EX-LUDHIANA DELIVERY QTY. IN KGS A 1 2 3 4 5 6 BUYING IN T+2 Contract Cost of One Lot - 500 Kgs Exchange Transaction Fee: @ Rs 10 Per Lac Delivery Charges @ Rs 90/- per Lac CNF Billing Charges Per lot Rs. 50/- (Tax Exemption) Brokerage Service Tax Total Cost to Investors in Buying Raw Wool in T+2 Contract B 1 2 3 4 5 6 SELLING IN T+25 Contract Sale Proceeds of One Lot RECEIVABLE Less:Exchange Transaction Fee: Rs 10 Per Lac Less: Delivery Charges : Rs 90 Per Lac CNF Billing Charges Per lot Rs. 50/- (Tax Exemption) Brokerage Service Tax NET RECEIVABLE BY INVESTORS C D 1 2 3 4 5 NET EARNINGS PER ONE LOT OF RAW WOOL IN T+25 DAYS SETTLEMENT DAYS CALCULATION Date of Trading Settlement Date for T+2 Contract i.e. FUNDS PAY IN Difference i.e. number of days for which initial margin is blocked Settlement Date for T+25 Contract i.e. FUNDS PAY OUT Number of Days for which funds are invested LESS: ONE DAY on account of utilisation of fund by both parties. G 1 2 COST OF INVESTMENT Initial Margin Cost: @ 2% Up To T+2 Day Balance Money: Day 25 Total Return calculated for one day investment of H ANNUALIZED RETURNS [ NET EARNINGS*100*365/Total Investment] 28400.00 12453400.00 12453400.00 14.15 10/09.2012 35 35 02/08/2012 06/08/2012 4 500 723.1 3615550.00 36.16 325.40 50.00 361.55 95.56 360681.34 4827.41 500 RATE Per 1 Kgs 710 AMOUNT Rs. 355000.00 35.50 319.50 50.00 355.00 93.94 355853.94 CONTRACT SYMBOL RAWWOOLLH2 RAWWOOLH25

Comparison
Bank FD 9.25% for 390 days. NSEL Trading Opportunity 13.5-17%. Individual can withdraw there return after ending of expiry NSEL trade duration 33-55 days depending on the contract.

Bank FD minimum duration 390 days

Rolling over FD after 390 days.

Individuals have an option of rolling over their position as per their convenience.