September 7, 2013 To The Chairman Forward Markets Commission (FMC), Government of India, Everest, 3rd Floor, 100, Marine

Drive, Mumbai - 400 002 Dear Sir, Re: Concerns over the goods lying in the NSEL designated warehouses 1. We refer to our meeting on August 4, 2013, our letters to you on August 20, 2013, August 22,, 2013, August 30 2013 and September 03 2013 and our discussions with you from time to time in relation to the current state of affairs of National Spot Exchange Limited (NSEL). 2. We are deeply concerned over recent new reports which indicate that of the 22 NSEL warehouses visited by SGS across India, the quantity of goods in the NSEL warehouses is less than 20% of the stated quantity. Further, it appears that SGS was not allowed entry into the other so-called certified NSEL warehouses which makes it clear that stocks in these warehouses are either paltry or do not exist at all. A copy of a press article published in the Economic Times on September 2, 2013 in this regard is annexed as Annexure 1 hereto. 3. We understand from your letter to NSEL on August 16, 2013 that SGS has been appointed by NSEL to make detailed assessment of the quality and quantity of the commodities lying at all the accredited warehouses of NSEL. By way of the same letter, you had also directed NSEL to submit the terms of appointment of SGS along with the preliminary findings of NSEL. You have noted NSELs failure to comply with these directives in your letter to NSEL on August 20, 2013. We understand that these directives have still not been complied with by NSEL till date, despite a lapse of over two weeks. 4. We understand from your letter to NSEL on August 20 2013 and August 21 2013 directing to liquidate the commodities lying in the warehouses. As most of the commodities are perishable and further there would be a pilferage of these commodities. We understand that these directives have still not been complied by NSEL till date, despite a lapse of over two weeks. We understand from your letter to NSEL on August 20 2013 stating that they have still not complied with the FMC directives for the details of the post dated cheques collected from borrowers have not been submitted to FMC inspite of repeated reminders. 5. By way of a Press Release on August 26, 2013, which is approximately 10 days after the FMC letter of August 16, 2013, NSEL disclosed the appointment of SGS and informed the public that reports from SGS are being received in stages based on the inspection being done. On August 27, 2013, NSEL further disclosed the appointment of Grant Thornton as the forensic auditors to inspect the goods.

6. It is important note NSEL has been conducting its trading activities on the basis of the conditional exemption granted by the Ministry of Consumer Affairs, Food and Public Distribution on June 5, 2007, exempting all forward contracts of one day duration for the sale and purchase of commodities traded on NSEL from the operation of the Forward Contracts (Regulation) Act, 1952 (FCRA) strictly subject to compliance with the specific conditions set out therein. The first and fundamental condition specified is that no short sale by members of the exchange will be allowed . Therefore, the underlying goods were required to be maintained and verified by NSEL. The shortage of goods in the NSEL designated warehouses clearly show that either there has been pilferage pursuant to the settlement crisis or that there were no commodities maintained in these NSEL designated warehouses to begin with. 7. Despite the FMC being appointed as the designated agency as per the Notification of the Ministry of Consumer Affairs, Food and Public Distribution on August 6, 2013, it is appalling that the affairs of NSEL have been unsupervised and a fraud that was perpetrated on a systemic level and not just isolated to a few warehouses, went undiscovered for such a prolonged period of time. 8. In light of the serious issues involved and given that it appears now that serious crimes have been committed, it is imperative you to take the following immediate actions, in exercise of your powers under the FCRA and the Notification dated June 5, 2007: i. Direct NSEL to publicly disclose the details as to the current status of the stock lying in the exchange controlled warehouses, as valued and reported by SGS. The reports of the stock audit are required to be made publicly available so that the true state of affairs at NSEL is known to all and so as to ascertain whether NSEL has complied with its obligations in supervising the integrity of the warehouses (i.e. whether goods of appropriate quality and quantity corresponding to the trades were maintained). Seize all books and records of NSEL to ensure that there is no scope of tampering with evidence. It will not be unusual in such cases where serious crimes have been committed that the key persons involved attempt to destroy evidence and thereby frustrate investigation. We are seriously concerned about such acts by NSEL, its management and its promoter - FTIL. Direct NSEL to furnish details as to the proceedings conducted and steps taken thus far by the NSEL Independent Committee constituted by NSEL on August 5, 2013. We seriously apprehend that the formation of this so-called Independent Committee is merely a faade directed at falsely restoring confidence of investors and another step by NSEL to conceal the fraud and delay the investigation process. Direct NSEL to publicly disclose the status of audit by Grant Thornton and to provide a clear date for publication of the report on its findings. Direct NSEL to furnish details as to the investigation and actions taken the Officer on Special Duty (OSD), Mr. PR Ramesh. We urge you to ensure that the OSD provides regular reports to FMC. Ensure disposal of stock from the exchange controlled warehouses is done under your supervision on ASAP basis.

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9. You will note that the settlement crisis has now continued for over a period of five weeks and there has been no action to secure the NSEL warehouses and underlying goods and to punish the wrongdoers. We urgently seek your response and action with respect to the issues highlighted herein. Please note that this letter is without prejudice to the other rights available to us under law, equity or otherwise. Yours faithfully, For and on behalf of

NSEL Investors Forum, Sd/Arun Dalmia Secretary

Mobile: 09821013308 Email: arundalmia2000@yahoo.com Enclosed: Annexure 1 Article published in the Economic Times on September 2, 2013 With Copy to : 1. The Secretary Department of Consumer Affairs, Ministry of Consumer Affairs, Food and Public Distribution, Krishi Bhavan, New Delhi 110001 2. The Secretary Department of Economic Affairs, Ministry of Finance, North Block, New Delhi 110001 3. The Board of Directors Financial Technologies (India) Limited (as Promoter of NSEL), FT Tower, CTS No. 256 & 257, Suren Road, Chakala, Andheri (East), Mumbai - 400 093 4. Mr. PR Ramesh Officer on Special Duty, National Spot Exchange Limited (NSEL), FT Tower, CTS No. 256 & 257, 4th Floor, Suren Road, Chakala, Andheri (East), Mumbai - 400 093 5. The Board of Directors, National Spot Exchange Limited (NSEL), FT Tower, CTS No. 256 & 257, 4th Floor, Suren Road, Chakala, Andheri (East), Mumbai - 400 093