Contract Specifications of Cotton - Long Staple Symbol Description LONGCOTTON LONGCOTTONMMMYY

Contracts available for trading January contract February contract March contract April contract May contract July contract October contract November contract December contract August 16 of the earlier year to January 15 of the contract year September 16 of the earlier year to February 15 of the contract year October 16 of the earlier year to March 15 of the contract year November 16 of the earlier year to April 15 of the contract year December 16 of the earlier year to May 15 of the contract year February 16 to July 15 of the contract year May 16 to October 15 of the contract year June 16 to November 15 of the contract year July 16 to December 15 of the contract year Trading Trading period Trading session Mondays through Saturdays Monday to Friday: 10.00 a.m. to 5.00 p.m. Saturday: 10.00 a.m. to 2.00 p.m. 50 bales (25 candy approx.) Rs. per candy (1 candy = 355.60 Kg) 500 bales Rs. 10.00 3% Ex Warehouse Kadi (excluding Sales tax/VAT/Octroi and all other taxes)

Trading unit Quotation/Base Value Maximum order size Tick size (minimum price movement) Daily price limits Price Quote

Initial margin Special Margin

5% In case of additional volatility, a special margin at such percentage, as deemed fit, will be imposed immediately on both buy and sale side in respect of all outstanding position, which will remain in force for next 2 days, after which the special margin will be relaxed. Delivery 25% of the open position during the delivery period For individual clients: 20000 bales For a member collectively for all clients: 60000 bales or 15% of the market-wide open position whichever is higher. For Near Month Delivery For individual clients: 4000 bales For a member collectively for all clients: 12000 bales or 15% of the market-wide open position whichever is higher. (As per FMC letter no. 6/1/2008/MKT-II dated 11th February, 2008) 50 bales (85 quintals) 25 candy approx. Kadi, Gujarat Rajkot, Gujarat

Delivery Period Margin Maximum Allowable Open Position

Delivery Unit Delivery Centers Additional Delivery Center Quality Specifications Staple length

Basis (On HVI Mode) Tenderable range Above 28. 50 mm 28.00 28.49 mm Below 28.00 mm

28.50 mm 28.00 mm & Above No Premium Discount of Rs 150 per candy on pro-rata basis. Rejection 3.8 to 4.9 3.5 to 4.9 Rejection Discount of Rs 200 per candy on pro-rata basis. Rejection

Micronaire

Basis Tenderable range Below 3.5 3.50 3.79 Above 4.9

Strength

Basis (On HVI Mode) Tenderable range

28 G/Tex 28 G/Tex or above

Trash

Basis Tenderable range Below 3% Above 3% Basis Tenderable range 8.01 to 8.50 % 8.51% and Above Basis Tenderable range Fine

3.00 % 3.00% maximum No Premium Rejection 8.00 % 8.50 % maximum Discount 1% Rejection Super Fine Fine and Super Fine Discount of Rs 300 per candy

Moisture

Grade

Goods should lie under the Tenderable Range according to defined quality specifications. Outlaying goods will not be accepted for delivery. Crop conditions: 1. Only current season Indian crop (October to September) is deliverable. 2. Re-tendering of goods delivered in earlier contracts in subsequent contracts would attract Rs. 50/- candy discount to the tenderer per subsequent contract. For example, if cotton delivered in November 2006 contract is re tendered in February 2007 contract, then the amount of discount would be Rs. 150 per candy. Out of this, 90% would be passed on to the buyers and 10% would be appropriated by the Exchange. Delivery Logic Sellers Option

Delivery and Settlement Procedure of Cotton Long Staple Delivery Logic Tender day (Sellers / Buyers Intentions) Tender period Delivery period Tender notice / Delivery Pay-in Sellers Option 10th of the contract expiry month by 6:00 pm 11th to 15th of the contract expiry month 16th to 18th of the contract expiry month The seller will issue tender notice on tender day. Submit Warehouse Receipt and Quality Certificate issued by Quality Certifying Agency during tender period. Fax / Courier

Mode of Communication

Dissemination of Information on tendered delivery on Trader Work Station Tender and Delivery Period Margin Exemption from Delivery Period Margin Delivery Allocation - Date of Delivery Allocation - Rate Delivery Pay-in Delivery Pay-out Pay-in of Funds Pay-out of Funds Penal Provision

On next working day after the tender day

25% on outstanding position during tender and delivery period. Delivery Period Margin is exempted if goods tendered during tender period with all the documentary evidence On the Expiry date At Due date rate (DDR) During Tender period by 6.00 p.m. E+3 working days by 11.00 a.m. ( E Expiry date ) E+2 working days by 11.00 a.m. E+3 working days by 11.00 a.m. 1) Any seller who has not submitted intention to deliver during tender day and having open position on the expiry date, a penalty of 1% of the DDR shall be imposed on him out of which 90% shall be passed on to the counter party while 10% will be retained by the Exchange towards administrative expenses. Delivery Default 2) If Seller fails to deliver after giving the tender notice, a penalty of 2.5% of the DDR shall be imposed on him. 3) In case a buyer refuses to take delivery or fails to honour his fund obligations then the open position will be closed out at lower of the following two rates: Due Date Rate (DDR) of the contract or The Spot market price, as disseminated by the Exchange, on the date of the pay-in default/refusal by the buyer to take delivery. Accordingly, If the spot market price is lower than the DDR as mentioned above - the difference between the two will be debited to the buyer. A penalty of 2.5% will be imposed for delivery allocated to him. Additionally, a replacement cost of 4% will be recovered from the defaulting buyer / seller.

Out of the penalty (as mentioned in 2 and 3 above), 2% will be credited to IPF and 0.5% will be credited to the counter party. While out of the replacement cost and differences recovered 90% will be passed on to the counter party and 10% will be retained by the Exchange towards administrative expenses. Members should not square off their positions once intention of delivery is given to the Exchange. In case a member squares his open position (in full or in part) after giving the intentions, the Exchange may initiate disciplinary action as it may deem fit or may charge additional penalty. Buyer pays the Sales Tax or submits relevant form, whereas all other charges, levies or APMC Cess applicable at the delivery center will be on account of sellers. The buyer will pay VAT, if implemented in the state where the delivery centre is located. In case of Inter-State movement, the buyer has to submit requisite forms or pay CST as applicable. Post lifting delivery all charges are borne by the buyer.

Taxes, duties, cess and levies

Due date rate

Exchange shall take spot prices from a panel of different entities from spot market and shall compute the daily average price from the prices taken on a day from different entities. DDR will be calculated by way of taking simple average of last 3 days of the spot market prices so computed. Odd Lot treatment Not applicable Adjustment of transportation The seller will bear the cost of transportation from cost for delivery made at a center the center where the delivery is actually made and upto Kadi for any delivery made at a center other other than Kadi than Kadi. Packaging and Weighment Norms Cotton bales must have new iron hoops. Cotton bale must have packaging of cotton cloth with 100 to 120 gm per bale. Hessian packaging is also acceptable with good packaging conditions. There should be weightment of individual bale at the time of deposit and delivery both and weight note of each lot with individual bale weight, should be provided by seller to buyer. Tare weight of 2.25 kg will be deducted per bale to get net weight of a bale.

A variation of 2 Kgs per bale will be acceptable as maximum weight loss during storage from the time of deposit to the time of delivery.

Warehouse, Insurance and transportation charges

Buyers option Delivery Delivery center

for

lifting

Borne by the seller upto pay-out date of funds or delivery, whichever is earlier. Borne by the buyer after payout date of funds or delivery, whichever is earlier. of Buyer will not have any option about choosing the place of delivery and will have to accept the delivery as per allocation made by the Exchange. Deliveries can either be effected from the factory or godown where the Cotton is either ginned or pressed (i.e. producers own godown where the goods are produced) or Govt. warehouse within the vicinity of the factory (STC warehouse or CWC godown within the taluka-district out of Octroi limits, if applicable) at Kadi or else from designated centers - Rajkot, Gujarat. While the delivery can be effected from Rajkot, however this will be subject to deduction of freight from the place of delivery to Kadi. Freight deduction will be specified by the Exchagne. Each delivery order issued shall be in multiples of minimum delivery lots and shall be designated for only one delivery center and one location in such center. The tenderer of delivery order shall also disclose the identity of the Member / Registered Non Member who shall be performing the Delivery. The seller shall not issue delivery order at a place where there is restriction against movement of goods. In case, the seller is unable to give permit to the buyer, the same would be treated as NoDelivery and he shall be liable to pay such penalty as may be applicable for failure to tender delivery.

Weighment at the time of delivery Independent surveyor will do the weighment, and treatment of short delivery or which will be final. Buyer may send his representative while surveyor is weighing and excess delivery. drawing the sample to see whether the Surveyor is following the right procedure as mentioned by Exchange. In case of non-availability of buyers representative, the seller shall claim and receive compensation for delay in delivery in terms of

warehouse charges, insurance charges etc. as decided by Exchange. Delivery shall be treated as complete if the seller delivers the quantity within the limits as prescribed by the exchange. Delivery will be rejected if it is below the minimum permissible limit. In case the delivered quantity exceeds the maximum permissible limit the balance quantity shall be treated as excess. In case of shortage in delivery, the buyer shall be entitled to claim the difference between the price payable as per the delivery order and the market price on the date of delivery from the seller if the spot market price is higher. Similarly, in case of excess delivery the buyer will pay for the excess quantity at the delivery order price or the spot market price on the date of delivery, whichever is lower. Delivery Order will be submitted in specified format giving details of Members / Registered NonMembers who shall perform delivery. The delivery can be effected from Exchange designated warehouse or from sellers factory or godown where the Cotton is either ginned or pressed. The procedure followed for drawing samples and carrying out test analysis shall be as per EICA Bye-Laws. Delivery order once submitted cannot be withdrawn or cancelled or changed unless so agreed by Exchagne in writing. Members tendering the delivery order shall clearly specify the grade and shall be in conformity with the surveyors certificate accompanied with the delivery document and cannot be changed subsequently. The members tendering delivery will have the option of delivering such grades of goods as permitted by the Exchange under the contract specifications. The Buyer will not have any option to select a particular grade and the delivery offered by the seller and allocated by the Exchange shall be binding on him. At the time of issuing the delivery order, the member must prove to the Exchange that he holds stocks of the quantity and quality specified in the delivery order at the declared delivery center. This should be substantiated by way of producing warehouse receipt The Buyer member can endorse delivery order to

Delivery order

Delivery Grades

Evidence of Stock in possession

Endorsement of Delivery Order

a client or any third party with full disclosure given to Exchange. Responsibility for contractual liability would be with the original assignee. Lifting of Delivery Within 7 days from Delivery Allocation date subject to taking delivery of at least 1/7th of total delivery allocated on each day. In case a Buyer fails to lift delivery within aforesaid days, the seller shall claim compensation in respect of warehouse charges, insurance charges, etc. Similarly, if seller fails to give delivery on the scheduled date because of non availability of sellers representative, the buyer shall claim and receive compensation @ Rs. 50/- per delivery lot each day till default continues. The buyer and seller will indicate to each other about delivery schedule of the said commodity with a copy to Exchagne within 1 day of getting delivery document. Close out of outstanding All outstanding positions on the expiry of contract, positions not settled by way of delivery in the aforesaid manner, will be settled as per the DDR and the respective pay-in and pay-out of funds of such closed out positions with penalty shall be effected by 1:00 p.m. on 16th day of contract expiry month. Sampling and Analysis at the In case the buyer does not agree to the Surveyor's time of Delivery report as to the quality of the commodity, he shall desire for second sampling and intimate the Exchange in writing within 48 hours of the pay-out date. Sampling Procedure The system of drawing of samples tendered for delivery will be as prescribed in the Bureau of Indian Standards procedure.. Three Samples shall be drawn as under: First Sample for the buyer Second Sample for the seller Third Sample for final reference, if If necessary

the first sample collected by the Buyer and analyzed by the surveyor appointed by him, conforms to the specifications, then the goods tendered for delivery shall be accepted and no subsequent claims from the Buyer regarding quantum of rebate or any other indemnification shall be admissible nor sellers shall be obliged to pass any sealed samples to the Buyer if requested subsequently. The sampling methods to be adopted for analysis will be decided by the Exchange.

Failing of First Sample

If the first sample as examined by the buyer's surveyor fails to conform to the quality standards specified, the Buyer shall intimate the seller within 72 hours of collection of sealed sample along with a copy of the analyst's report. The seller shall immediately send the second sealed sample to an approved laboratory, which is also agreed by the buyer. The result of the same shall be binding on both the parties. In the event the Buyer and Seller do not mutually reach agreement with the results of the second sample test, then Exchagne shall send the third sealed sample to any one of the approved laboratories / surveyor, as decided by the Exchange. Final Surveyors Report The analyst's report of the approved and agreed independent laboratory shall be forwarded by Exchange to the parties immediately on receipt of the same. In such case, the final payment to the seller will be made on the basis of test report received by the Exchange pursuant to the third test. The Exchange will also direct the party, in whose favour the result is declared to collect the cost of tests and detention charges from the other party. In case the commodity stands rejected then it will tantamount to failure on the part of the seller to give delivery, which shall be closed out as per the DDR treating the same as shortage. Obligations of the Independent In order to ensure that tests are exactly Analyst comparable and that the results are consistent, the independent analyst shall determine the particular analytical test by applying the methods specified in relevant IS. The analyst shall be required to append a certificate to that effect to the analysis report issued by him. Legal Obligation The member will provide appropriate tax forms wherever required as per law and as customary and neither of the parties will unreasonably refuse to do so. Extension of Delivery Period As per the Exchange decision due to a force majeure or otherwise. Applicability of Business Rules The general provisions of Byelaws, rules and Business Rules of the Exchange and decisions taken by Forward Markets Commission, Board of Directors and Executive Committee of the Exchange in respect of matters specified above will form and integral part of this contract. The Exchange or FMC as the case may be further prescribe additional measures relating to delivery

procedures, warehousing, quality certification, margining, risk management from time to time. (The interpretation or clarification given by the Exchange on any terms of this contract shall be final and binding on the members and others.)

Note : 1. Kindly refer circular no. MCX/366/2005 dated October 27, 2005 and MCX/367/2005 dated October 27, 2005 or any subsequent circulars, regarding Standard deductions and Delivery centers respectively, if applicable. 2. Proprietary account of a member is treated as client account. Please refer circular no. MCX/T&S/052/2008 dated February 5, 2008.