Bullion @ MCX

MCX : An Overview
Inaugurated on November 10, 2003 A demutualised and electronic platform, which facilitates online trading, clearing and settlement operations in commodity derivatives Regulated by the Forward Markets Commission (FMC), Union Ministry of Consumer Affairs, Food and Public Distribution More than 180,000 trading terminals 2000+ Members, Presence in 1,139 cities Average daily turnover of Rs 29,824 cr for nine months ended December 31, 2010 In CY 2010, MCX was worlds No. 1* in Silver, No. 2* in Gold, Copper & Natural Gas and No. 3* in Crude Oil In CY 2010, MCX was 6th largest commodity futures exchange, globally, in terms on No. of contracts traded

* In terms of the number of commodity futures contracts traded for each of these commodities during this period # Source: Data published for the period between January 1 and December 31, 2010 on the websites of exchanges listed in Certain Conventions; use of market data, and Futures Industry Association Annual Volume Survey, March 2011

MCX Record Delivery

Highest Delivery in Gold 4898 kgs

Highest Delivery in Gold Mini 1244 kgs

Highest Delivery in Gold Guinea 87 kgs

Highest Delivery in Silver 1,41,810 kgs

Characteristics of Gold
1. 2. 3. 4. 5. International currency Safe commodity Brings liquidity to market Portfolio Diversification Hedge against inflation

GOLD RESPONDS WHEN YOU NEED IT MOST

Fundamentals of Precious metals

Supply and demand fundamentals The huge increases in debt Growing uncertainty about the dollar Rising retail investment Increasing investor interest in gold ownership Hedge Funds

Cost of Production

Gold Supply Sources 2009

30

Total - 4025 Tons

1673 Mine Supply Old Scrap 2322 Official Sector Sales

Gold Consumption - 2009

216 228 Total - 3480 Tons 287

373 1759

Jewellry ETF Industrial & Dental Coins Investment Bar Hoarding

617

World Gold markets

London as the great clearing house New York as the home of futures trading Istanbul, Dubai, Singapore and Hong Kong as doorways to important consuming regions. Tokyo where TOCOM sets the mood of Japan Mumbai under India's liberalized gold regime

World - Gold Reserve Holding

Interest Rates vs. Gold

Returns vs Risk : Benefits to Reap upon

Source: CME Study

Gold Returns
Year 2004 2005 2006 2007 2008 2009 2010 Gold Prices Rs. per 10gms 6307 7638 9265 10598 13630 16686 20728 Returns (%) (Y-o-Y) 21.10% 21.30% 14.39% 28.61% 22.42% 24.22%

Increasing ETP assets

US Economic indicators affecting Gold

Employment data First Friday of month GDP Last Friday of the month ISM Mfg. Index First working day of month Trade Deficit Third week of month Consumer price index- Third week Production price index Third week Industrial production Third week Retail sale Third week Durable goods order Last week Federal bank meeting (8 times in a year)

Contract Specifications

GOLD

Gold Regular

Gold Mini

Gold Guinea

Gold Petal

Quote 10 gms Lot Size 1 Kg +/- Rs. 100/tick

Quote 10 gms Lot Size 100 gms +/- Rs. 10/tick

Quote 8 gms Lot Size 8 gms +/- Rs. 1/tick

Quote 1 gm Lot Size 1 gm +/- Rs. 1/tick

Gold Petal

Features of Gold petal

The Worlds first commodity exchange to launch 1gm Gold petal contract Physical delivery available in multiple of 8gm, delivery possible in demat or physical form Maximum duration to trade Trade timing 10.00am to 11.55pm Purity 999 LBMA approved coin Absolute appreciation in value for gold Lowest Transaction cost

Contract Specifications GOLD Petal (1gms)

GOLD petal (1gram)
Contract Months Expiry Date Trading Unit Quotation Price quote January to December (monthly contract) Last day of the contract expiry month 1 Gram 1 Gram Ex-Mumbai (inclusive of all taxes and levies relating to import duty, customs, but excluding Sales Tax / VAT, any other additional tax or surcharge on sales tax, local taxes and octroi) 10 kg Re. 1 3% 4% 5 preceding days before the contract expiry month. 1st working day after the contract expiry 25% on marked quantity. In multiples of 8 grams Compulsory Group 4 Securitas at Mumbai and at additional delivery centers at Ahmedabad ,New Delhi,Hyderabad, Bangalore, Chennai and Kolkata. 999 purity, It should be serially numbered Gold petal supplied by LBMA approved suppliers or other suppliers as may be approved by MCX, to be submitted along with suppliers quality certificate Exchange shall announce the DDR based on the Mumbai Spot price for Gold (10gms) polled on the last day of the expiry of this Gold petal contract by around 5.00pm, said spot price will be converted for 1gms Gold petal (Gold spot price per 10 gms X 1/10) and Rs. 200/- shall be added as making charges per Gold petal. No trading shall be allowed after the declaration of DDR.

Maximum order size Tick size Daily Price Limit Initial Margin Tender period Delivery Period Delivery period margin Delivery Unit Delivery logic Delivery Center Quality Specification

Due Date Rate Calculation

USP of MCX Gold petal (1gms) contract

Features Delivery MCX Petal Physical delivery on accumulation of 8gms Others Physical delivery not possible OR on accumulation of 1000 units i.e. 1kg Purity 995 LBMA Approved 9.15am to 3.30pm Compulsory 90% to 100%

Purity Timing Demat Investment in Gold

Purity 999 LBMA Approved 10.00am to 11.55pm Delivery can be in Physical or demat form 100%

USP of MCX Gold Guinea(8gms) contract

Features MCX Gold Guinea (8gms. Contract) 2-3% above Import Parity Offers better liquidity i.e.. Both buy/sell quotes offered London Bullion Market Association (LBMA) approved, with tamperproof packing Ability to buy/sell at lower impact cost Others

Pricing Buy/Sell quotes Quality

10-12% above Import Parity Only one way sell quotes provided No guarantee on quality in Physical markets Difference in Bid/Ask quotes of around 100200 Rs

Impact cost as compared to options available

Odd Lot Treatment

If buyer is in odd lot, it will be treated as buyer default, and the buyer will be penalised. If seller is in odd lot, it will be treated as seller default, and the seller will be penalised.

Group 4 Vaulting Charges

Charges

Gold
Rs.10/- per kg per day Rs.1/- per 100 gms per day and for Gold Guinea is Rs. 0.10 per Guinea No loading/unloading charges for gold

Silver

Vault Charges

Rs. 15/- for 30 kg bar Per day.

Loading and Unloading charges

Rs. 10/- per bar

Silver

Uses of Silver
Industrial and decorative uses, photography and jewellery & silverware. Electrical and Electronics Solar Energy Medical Applications

Demand for Silver

Total Fabrication demand forecast to be around 10% higher year-onyear in 2010. Industrial off take expected to recover by more than 65 Moz for full year 2010 Photographic demand continues to contract, mainly due to ongoing substitution by digital technology. Jewelry & Silverware demand combined will decline marginally yearon-year. (Jewelry actually up a little basis substitution gains at gold expense) Coin demand continues to rise

World Silver Demand

2010 2009
Coins 9% De-hedging 3% De-hedging 0% Photography 8%

Coins 10% Industrial 41% Photography 9%

Investment 13% Investment 14% Industrial 46%

Jewelry & Silerware 23%

Jewelry & Silerware 24%

World Silver Supply

2009
Government Sales 1%

2010
Government Sales 2%

Scrap 19%

Scrap 20%

Mine Production 80%

Mine Production 78%

Silver Returns & Volatility

Silver Price Rs. per Kg Volatility 19424 19463 18355 26771 46217 41.40% 22.57% 36.58% 27.71% 22.51%

Year 2006 2007 2008 2009 2010

Returns (%) (Y-o-Y) 46.35% 0.20% -5.69% 45.85% 72.64%

Silver Micro Right product for retail clients

Cost effective for retail clients (e.g. at CMP Rs. 68000/- Margin deposit required is Rs. 3400/- Only) Can be used as portfolio diversification tool for retail clients having exposure to other assets Kind of SIP investment in commodity market for clients who want to start investing mainly in silver

Silver Prices

Contract Specifications
SILVER

Silver Regular

Silver Mini

Silver Micro

Quote = 1 Kg Lot Size 30 Kg +/- Rs. 30/tick

Quote = 1 Kg Lot Size 5 Kg +/- Rs. 5/tick

Quote = 1 Kg Lot Size 1 Kg +/- Rs. 1/tick

Contract Specification Silver Micro

SILVER Micro Contract Months Expiry Date Trading Unit Quotation Price quote April, June, August & November Last working day of the month prior to the contract expiry month 1 Kgs 1 Kgs Ex- Ahmedabad (inclusive of all taxes & levies relating to import duty but excluding sales tax/VAT, any other additional tax or surcharge & octroi 600 Kgs Re. 1 4% 5% 1 working day after expiry of the contract 1 to 3
st rd st

Maximum order size Tick size Daily Price Limit Initial Margin Tender period Delivery Period Delivery period margin Delivery Unit Delivery logic Delivery Center Quality Specification Due Date Rate Calculation

working days after expiry of the contract.

5% incremental margin 30 Kgs Both option Ahmedabad 999 fineness (Serially numbered Silver bars supplied by LBMA approved suppliers) Settlement rate will be the official closing price fixed by the system on the basis of Silver 30 Kg contract of the same day.

Thank You!
Contact:

102 A , Landmark Suren Road, Chakala Andheri (East) Mumbai 400 093. Tel: +91-22 - 6709 9300 Fax :+91-22 - 6709 9044 Web : www.mcxindia.com

DISCLAIMER:The Information in the presentation is solely for informational purpose and should not be regarded as a recommendation by MCX. All information in the presentation is obtained from the sources believed to be reliable and MCX or any of the associate entities make no representation as to its completeness or accuracy.MCX accepts no obligation to correct or update the information or opinion.No member of MCX or its associate entities accept any liability whatsoever consequent ional or other loses arising from the use of the presentation and or further communication in relation to this presentation.

MCX hits record turnover of 19577.88 crores