Market Survey on Commodities Future Trading

An Industry Internship Project On COMMODITIES FURTURE responsibility WITH RESPECT TO GEOJIT COMTRADE LTD MARKET SURVEY D peerless at CALICUT, KERALA down the stairs the guidance of MRS. C. ANITHA RANI (Asst. Professor of good deal Dept. ) (Project Guide) Mr. CHACKO . C. VARGHEESE (Regional passenger vehicle) (Corporate Guide) Submitted By LAKSHMI. P. K wheeling No 20028 SIVA SIVANI INSTITUTE OF MANAGEMENT KOMPALLY, SECUNDERABAD ACKNOWLEDGEMENTFirst of ein truth I would wish well to thank Geojit COMtrade Ltd, which is a leading(a) organization in good job, for talent me an opportunity to utilisation with them and to do Market Research to assoil interoperable write outledge of how a Commodities Comp each(prenominal) give-up the ghosts. My special obligations to my corporate guide Mr. Chacko C Varghese, Regional director, GC Branch, Calicut, for granting permission to do the project in their esteem organization. I thank him for dedicating his valuable snip in criti cal re clearing my project work periodic completelyy and for steering me all the inhabit.I am deeply indebted to thank my faculty guideAsst. Prof. C. Anita Rani. I as well as like to thank all my faculties who become taught me and havesh ard their experience with mewhich has processed us in doing my project. I am thankful to Mr. Ajeesh pileus of Minnesota and Mr. Bijesh K. B, senior executives of Geojit COMtrade ltd, Calicut who was al ship federal agency ready to clarify my doubts related to the topic. And my sincere give thanks to them. Also, I am thankful to my family, friends, and classmates and to the Almighty.appointment Sig record Place DECLARATION I, Lakshmi. P. K decl ar that this project entitled Market research on goodness future occupation with compliance to Geojit COMtrade Ltd. , submitted for the award of the PGDM Triple Specialization is a record of original project research written report- carried out during April 5th- June 5th) , that the project has non potpourried before the basis for the award of some(prenominal) Degree/ lambskin/ Associateship/ Fellowship of all pertly(prenominal) corresponding title.Ithas been completed by me at Geojit COMtrade Ltd, Calicut low the guidance ofAsst. Prof. Anita Rani,faculty of marting part of Siva Sivani Institute of Management. Date Sig temper Place C O N T E N T S DECLARATION ACKNOWLEDGEMENT CERTIFICATE skirt OF CONTENTS PAGE NO Chapter IIntroduction 5 res publicament of problem 5 Objectives of the study 6 Scope of study 6 Literature critical review 6 Chapter II Industry profile 8 corporation Profile 19 Departmental Details 26Chapter-III Research Methodology 44 Sources of info 45 Sampling Plan 45 Limitations 45 Chapter IV selective in deviseation Analysis Interpretation and Findings 46 Chapter-VSWOT Analysis 71 Conclusion 73 Suggestions 74 Bibliography 75 Annexure 76 CHAPTER -I INTRODUCTION good work is an part which has gained projection ever since the dawn of civilization.It rotter be attributed to the f correspond that commodities ar an integral part of our lives. Over these geezerhood in that respect has been a formidable sustainth in this segment which in turn has acted as the editorial of strength for the development of our economy. This has arrive at it an attractive investment avenue for investors. primarily we witnessed lot of m adept(a)y macrocosm invested in those companies which specialized in the output of commodities. Now we have a trend reversal commodities have gained prominence over the quantifys.The rapidly advancing technology, special(a)ly the Internet, has drastically changed the social and scotch landscapes and e actually aspect of our daily lives. In the Securities Industry & Futures Commodities, the Internet has facilitated on-line(a) calling, changing the way the grocery place works, as well as the way the investors access the market. Having sustainn advantage of information technology at an good time, India has emerged as a front-running country of on-line handicraft in the globular securities & commodities markets. On-line barter is broadly defined as a traffic mechanism where investors interpose ball clubs and con unanimous business results via electronic communication channels, oftentimes(prenominal) as the Internet, mobile ph unitys, In India, the whole transition of securities & commodities trans accomplishs, from order spot and routing, order execution, to trade con steadyation, is unspoilty automated, thus enabling the investors who have displace orders to confirm their vocation results within fewer seconds. Geojit COMtrade Ltd. is a goodness traffic service firm. It specializes in agricultural commodities, base metals, unprecedented metals, bullion, and talent.The firm engages in trading go on commodities traded on the MCX and NCDEX in India. Its Research stratum offers technical and fundamental research services. The firm as well appe nds research on markets, currency, and economy. Geojit COMtrade Ltd. is based in Kochi, India. STATEMENT OF THE PROBLEM Online future commodities trading subscribe some whizzal factors, technical factors, moving in factors and economic factors. The interplay of these factors on commodities market inquires a deep study nearly the pattern process and procedures and performance.This study is mean to learn the various concepts about online commodities trading and its way of mental process. 1. To identify the take of awargonness of commodities online future trading. 2. To identify the tar approach consumer for online trading of commodities. 3. To identify the gustatory modality of nodes to various investment avenues like goodness market, sh ars, mutual fund, bank deposits, insurance, debentures and fleck office savings. 4. To identify the awargonness take of Geojit COMtrade Ltd. and feedback from the customers about the firm. OBJECTIVES OF THE reckonMy project work program med was likewise directed to some particular targets and the important objectives of the study ar as bellow 1. To clearly state the aw beness level about Geojit commodities 2. To lowstand the perception of pack about Geojit commodities 3. To devise an approach by making people aw atomic number 18 of Geojit commodities The Main purpose of conducting the Survey for Geojit COMtrade Ltd * To identify the target consumer for commodities business. * To identify the p acknowledgement of customers to various investment avenues like trade good market, sh argons, mutual fund, bank deposits, insurance, debentures and post office savings. To identify the aw atomic number 18ness level of Geojit COMtrade Ltd. and feedback from the customers about the firm. * To get a feel of the Customers perception about Geojit commodities services products. * To find an appropriate communication message for attracting the people to Geojit COMtrade Ltd SCOPE OF THE STUDY world-wideization of the pecunia ry market has led to a manifold amplify in investment. New markets have been aerofoiled revolutionary promoters have been positive and new services have been pitched. Be berths, a number of opportunities and challenges have in addition been thrown open.Online Commodities trading is new as comp ard to Equity market in India. Mainly third exchanges are involved in online commodities trading MCX, NCDEX & NMCE literature REVIEW So umpteen studies are made in the field of shove of trade good future trading. Some of the important studies are reviewed as follows In a well-known literature survey on commodity futures research, fair-haired(a) and Rutledge observed that, Anyone who undertakes a survey of the literature on futures trading is confronted with an unbody structured and rather disjointed argument of publications (1971 p 57).Some of the pioneers in futures research, like Hol stick out Working, Roger Gray, Tom Hieronymus, Allen Paul, and Henry Bakenwere based on an in -depth understanding of economic institutions, an wonder of the major(ip) problems facing the industry, and careful analysis of relevant data. Gray and Rutledge (1971) deliver the goods the most comprehensive survey on futures markets and the topics covered in their review include evolutionary aspects of futures markets, inter-temporal bell relationships, and concept of hedgerow, determine variability, and the stochastic nature of cost fluctuations. The Keynesian theory of normal backwardation was one of the earliest theories of the inter-temporal futures bells and it postulated that futures p strains are biased estimates of forthcoming specie equipment casualtys beca uptake hedgers must compensate speculators for assuming the wrong risk of holding future subscribe tos * Working (1949) developed the idea that the ancient function of commodity futures markets was the provision of the returns for the storage services, and he viewed inter-temporal monetary values as the jo intly determined price of storage. Holbroook Working (1953) categorized alternative motives for commercial hedging in the commodity futures and these categories continue to be valid today. The trinity arbitrage hedging, operational hedging and anticipatory hedging. Since the futures and cash price converge in the economy month, a commercial firm tooshie arbitrage the devil markets and earn a risk-free return from the predictable change in the basis- the mathematical difference between the futures and cash price.Operational hedging facilitates commercial business by act asideing firms to buy and sell on the futures markets as temporary substitutes for the attendant cash market transactions. This provides firms with an avenue for creation flexible in daily operations and reducing price risk. Anticipatory hedges involve buying or selling futures contracts by commercial firms in anticipation of the forthcoming cash market transactions. value expectation plays a major role in t his type of hedge. * Leuthold and Tomek (1980) explained that semi-perishables (e. . , butter, eggs, onions, potatoes) were traded at the turn of the century but the introduction of trading in nonstorables much(prenominal)(prenominal)(prenominal) as live hogs and live cattle in the 1960s was a water supplyshed for the industry. They presentd that since future prices for nonstorables are non being apply to allocate inventories, frontward pricing is an important economic apology for these markets They pointed out that some of the furthermers remain come to about the alleged perverse influence of futures trading. fit in to theoretical literature, primary commodity invokers stand to pull a capitulum considerable price risk reduction benefit from hedging with each future contracts or forward contracts (Johnson 1960 Stein 1961 McKinson in 1967 Danthine 1978 Holthausen 1979 Feder, Just and Schmitz 1980 Andearson and Danthine 1983) * According to empirical literature either min imum variance hedge ratios or optimal hedge ratios (i. e. % of output to be hedged) and has found large potence risk reduction benefits from hedging (Henifner 1972 Peck 1975 Ederington 1979 Grant and Eaker 198559 Casteino 1992 Lene, Kimle, and Hayenga 1993) * But two(prenominal)(prenominal) theoretical and empirical literature appears to contradict reality because very few primary producers actually hedge (Helmuth 1977 Berk 1981 Brorsen 1995) * Survey results of Blank, Carter and McDonald 1997 found thatfarmers prefer forward contracting to direct hedging with future contracts.According to Miller (1986) the one observe distinguishing feature between these deuce factors is the absence of basic risk in forward contracting. * Carter and Loyns (1985) found that due to a high basis risk, there was a little incentive for Canadian feedlots to hedge cattle on the Chicago futures market. * Rolfo in 1980 suggested end product risk as an explanation for the deficiency of hedging interes t in the real world. Most research demand to be directed towards the impact of government farm programs on commodity futures markets, a hanker the lines of Crain and Lee (1996) * The theory of price of storage explains inverted markets by appealing to the concept of convenience yield. According to this theory, the futures price can be less than the spot price plus the cost of carry when the commodity generates convenience yield. CHAPTER -II INDUSTRY PROFILE 1) COMMODITY MARKET A commodity is a material that is traded in big quantities and whose quality standards and price are objective and universally applicable.For example, notes is a commodity because quality standards and price of gold are objective and universal, but gold jewelry is not a commodity because the price of jewelry depends on subjective factors such as de preindication, brand image, and so on Other examples of commodities are agricultural produce such as food grains, pulses, cotton, and so forth metals such as n ickel, zinc, aluminum, etceteratera good marketsare markets where stark naked or primary products are exchanged. These raw commodities are traded on find outdcommodities exchanges, in which they are bought and sold in similar contracts.It covers physical product (food, metals, and electricity) markets but not the ways that services, including those of governments, nor investment, nor debt, can be seen as a commodity. commodity Market is an organized traders exchange in which standardized, graded products are bought and sold. Worldwide, there are 50 major commodity exchanges that trade over 100 commodities, ranging from shuck and cotton to silver and oil. The trading of commodities consists of direct physical trading and derivatives trading. permute traded commodities have seen an upturn in the volume of trading since the start of the decade.This was largely a result of the suppuration attraction of commodities as an asset class and a pro lookration of investment options which has made it easier to access this market. trade good trading Spot trading Spot trading is any transaction where language either takes place immediately, or with a minimum lag between the trade and obstetrical delivery due to technical constraints. Spot trading normally involves visual follow-up of the commodity or a sample of the commodity, and is carried out in markets such aswholesale markets. trade good markets, on the separate hand, require the mankindkind of concord standards so that trades can be made without visual inspection. forrard contracts Aforward contractis an agreement between two parties to exchange at some fixed future naming a given up metre of a commodity for a price defined today. The fixed price today is known as theforward price. Futures contracts Afutures contracthas the said(prenominal) general features as a forward contract but is transacted done with(predicate) and through a futures exchange. Futures contracts which set a price for the delivery of a particular commodity in, say, six months or a course of instruction are not themselves to blame.Theyre the grease that solves these markets function. Futures allow businesses like power companies or airlines to hedge against increases in dismiss be, or food processors to down over fluctuations in the price of wheat and corn. Wall Street plays an invaluable role, too, since financial investors those betting that prices pass on fall, as well as those betting theyll rise provide decisive liquidity. Commodity and futures contracts are based on whats termed forward contracts. too soon on these forward contracts agreements to buy now, present and deliver later were utilise as a way of getting products from producer to the consumer.These typically were lonesome(prenominal) for food and agricultural products. Forward contracts have evolved and have been standardized into what we know today as futures contracts.. In essence, a futures contract is a standardize d forward contract in which the buyer and the seller accept the footing in regards to product, grade, quantity and location and are simply free to transact the price. Hedging Hedging, a common practice of farming cooperatives insures against a brusque harvest by purchasingfutures contractsin the same commodity.If the cooperative has importantly less of its product to sell due to weather or insects, it makes up for that loss with a profit on the markets, since the overall supply of the curb is short eachwhere that suffered the same take aims. Delivery and condition guarantees In addition, delivery day, method of stop anddelivery pointmust all be undertake. Typically, trading must end two (or much) business years preceding to the delivery day, so that the routing of the shipment can be finalized via ship or rail, and assumement can be settled when the contract arrives at any delivery point.Most trading is done in futures contracts, that is, agreements to deliver goods at a set time in the future for a price launch at the time of the agreement. Futures trading allow both hedging to cherish against serious losses in a declining market and speculation for gain in a uphill market. For example, a seller may sign a contract agreeing to deliver grain in two months at a set price. If the grain market declines at the end of two months, the seller will still get the higher(prenominal) price quoted in the future contract.If the market rises, however, speculators buying grain stand to profit by paying the lower contract price for the grain and reselling it at the higher market price. Spot contracts, a less widely used form of trading, call for immediate delivery of a specified commodity and are often used to obtain the goods necessary to fulfill a futures contract. An mugwump U. S. regulative agency, the Commodity Futures Trading counseling was established in 1974 to regulate commodity markets. In 1982, the Chicago Mercantile step in introduced a futures contract for Standard Poors 500 U.S. companies that allow investors to speculate on the future prices of the stocks. Trading of SP 500 and other financial futures has skintn down some of the barriers that once separated stock, bond, and commodity markets and made it easier for investors to hedge their stock investments. Critics charge that the futures trading at the commodity markets in Chicago have made stock prices more volatile. The Chicago mesa of Trade is the largest futures and options exchange in the Unites States, the largest in the world is Eurex, an electronic European flip-flop.GLOBAL COMMODITY MARKET It is the trading of materials used to make finished products, Is far more important that what the most people give it credit for. Its what to gives millions consumers worldwide their cups of creamy lattes, their breakfast cereals, the steel for their home construction, and even the fuel to run their cars. In fact inter subject commodity trading is a multi-billion dollar business, and on average the number of trade executed in the commodity exchanges are about basketball team times as much as those on major stock exchanges.And to be honest in the recent past it has been anything but dull. In the past five yrs commodities have provided all the thrills and spills of a high octane Vin Diesel movie. The idea of trading in commodity future contracts is really very old school, although it has occurred new age glitz because of electronic exchanges. Most experts trace their origins back to Japan, were rice futures were outgrowth traded in the 17th century. Future market for precious metals such as gold and silver has to a fault been around since in the nineteenth century with maize contracts with the Chicago Board Of Trade (CBOT).Basically commodity futures allow buyers and sellers to make bets on the expected future spot prices. They help both sides obtain insurance for the future value of their outputs or inputs. Cereals were first to be traded under t he future contracts and the farmers were the first to use such contracts as they protect them from any steep fall in the value of crop harvested in future. Commodity future differed from virtue derivatives in ternary important ways 1. They are derivative securities not claims on long living corporations. 2. They are short maturity claims on real assets 3. nlike financial assets, they experience distinct seasonal variations in price and volatility Today there are more than 50 commodity exchanges in the world wide trading in more than 100 products. The major products come under five categories 1. Precious metals (gold, silver, platinum, etc. ) 2. Industrial metals (copper, nickel, aluminum, zinc, etc. ) 3. Agricultural commodities (wheat, corn, cotton, oilseeds, coffee, cocoa, sugar etc. ) 4. Livestock (pork bellies, cattle, etc. ) 5. Energy(crude oil, natural gas, petrol, diesel etc. ) anoint makes up the worlds largest commodity future market. Daily turnover on the New York Merc antile deepen(NY mex) alone totals about $15 billion) followed by coffee, steel, gold and wheat. New contract ideas however keep popping up all the time. For instance, freight futures are likewise traded on the Norwegian futures and Options Clearing upkeep and the Nymex. While the Chicago Mercantile exchnge9 now taken over by the CBOT) offers contracts on temperatures, useful for hedging agricultural commodity or energy prices. COMMODITY emerging TRADING EVOLUTION OF FUTURE TRADING AND ITS ease up STATUS Organized future market evolved in India by the condition up of Bombay Cotton Trade affiliation Ltd. in 1875. In 1893, pursual widespread discontent amongst leading cotton mill owners and merchants over the functioning of the Bombay Cotton Trade Association, a separate link by the agnomen Bombay COTTON convert Ltd. was constituted. Futures trading in oilseeds were organized in India for the first time with the setting up of Gujarati VyapariMandali in 1900, which carried on futures trading in groundnut, castor seed and cotton. Before the Second World War broke out in 1939 several futures markets in oilseeds were functioning in Gujarat and Punjab.Future trading in Raw Jute and Jute Goods began in Kolkata with the establishment of the Calcutta Hessian commute Ltd. , in 1919. Later East Indian Jute Association Ltd. was set up in 1927 for organizing futures trading in Raw Jute. These two linkup amalgamated in195 to form the present East India Jute Hessian Ltd. , to conduct organized trading in both Raw Jute and Jute goods. In case of wheat, future markets were in existence at several centers at Punjab and U. P. The most notable amongst them was Chamber of commerce at Hapur, which was established in1913.Other markets were located at Amritsar, Moga, Ludhiana, Jalandhar, Fazilka, Dhuri, Barnala and Bhatinda in Punjab and Muzaffarnagar, Chansausi, Meerut, Saharanpur, Hathras, Ghazibad, Sikenderabad and Barielly in U. P. Futures market in Bullion began a t Mumbai in 1920 and later similar markets came up at Rajkot, Jaipur, Jamnagar, Kanpur, Delhi and Calcutta. In due course several other exchanges were also created in the country to trade in such diverse commodities as pepper, turmeric, potato, sugar and Gur (jaggory). later onward independence, the Constitution of India brought the subject of bank line turns and Futures in the coupler list.As a result, the responsibility for regulation of commodity futures markets developed on Govt. of India. A bill on forward contracts was reffered t an expert committee headed by Prof. A. D. Shroff select committees of two successive Parliaments and finally in declination 1952 Forward Contracts (Regulation) meet, 1952, was enacted. The make a motion provided for 3-tier regulatory system (a) An acquaintance recognized by the governance of India on the recommendation of Forward markets bearing (b) The Forward Markets Commission (it was set up in September 1953) (c) The telephone exchange authorities.Forward Contracts (Regulation) Rules were notified by the Central government in July, 1954. The Act divides the commodities into 3 categories with reference to extent of regulation, viz (a) The commodities in which futures trading can be organized under the auspices of recognized association. (b) The Commodities in which the future trading is prohibited. (c) Those commodities in which have neither being traded under the recognized association nor prohibited are referred as free Commodities and the association organized in such free commodities is required to obtain the surety of Registration from the forward Markets Commission.In the seventies, most of the registered associations became inactive, as futures as well as forward trading in the commodities for which they were registered came to be either suspended or prohibited altogether. The Khursho Committee(June 1980) had recommended reintroduction of futures trading in most of the major commodities, including cotton , Kapas, raw jute and jute goods and suggested that get going may be taken for introducing futures trading in commodities, like potatoes, onions, etc. at appropriate time.The government, fitly initiated futures trading in Potato during the latter(prenominal) half of 1980 in quite a few markets in Punjab and Uttar Pradesh. After the introduction of economic reforms since June 1991 and the consequent gradual trade and industry easiness in both the domestic and external sectors, the Govt. of India appointed in June 1993 one more committee on Forward Markets under Chairmanship of Prof. K. N. Kabra. The Committee submitted its comprehend in September 1994. THE MAJORITY REPORT OF THE Committee ecommended that futures trading be introduced in 1) Basmati Rice 2) Cotton Kapas 3) Raw Jute Jute Goods 4) Groundnut, rapeseed/mustard seed, cottonseed, sesame seed, helianthus seed, safflower seed, copra and soya bean, oils and oilcakes of all of them. 5) Rice brain oil 6) beaver oil its oilcake 7) Linseed 8) Silver 9) Onions. The committee also recommended that some of the existing commodity exchanges particularly the ones in pepper and castor seed, may be upgraded to the level of international future markets.The liberalized policy being followed by the Government of India and the gradual withdrawal of the procurement and distribution channel necessitated setting in place a market mechanism to perform the economic functions of price husking and risk management. The case Agriculture Policy announced in July 2000 and announcements of Honble Finance Minister in the Budget Speech for 2002-2003 were indicative of Governments crock up to put in place a mechanism of futures trade/market. As a follow up the Government issued notifications on 1. 4. 003 permitting futures trading in the commodities, with the issue of these notifications futures trading is not prohibited in any commodity. Options trading in commodity are, however presently prohibited. ECONOMIC BENEFIT OF FUTURE TRADING ITS PROSPECTUS Futures contracts perform two important functions of price discovery and price risk management with reference to the given commodity. It is useful to all segments of economy. It is useful to producer because he can get an idea of the price likely to run at a future point of time and therefore can decide between various competing commodities, the surmount that suits him.It modifys the consumer get an idea of the price at which commodity would be available at a future point of time. He can do decorous costing and cover his purchases by making forward contracts. The futures trading is very useful to the exportingers as it provides an advance information of the price likely to prevail and thereby help the exporter in quoting a realistic price and thereby secure export contract in a competitive market. Having entered into an export contract, it enables him to hedge his risk by operating in futures market.Other benefits of futures are (i) Price stabili zation-in times of violent price fluctuations this mechanism dampens the peaks and lifts up the valleys i. e. the amplitude of price variation is reduced. (ii) Leads to integrated price structure throughout the country. (iii) Facilitates lengthy and complex, production and manufacturing activities. (iv) Helps balance in supply and demand position throughout the year. (v) Encourages competitions and acts as a price barometer to farmers and other trade functionaries.Futures trading are also capable of being misused by unscrupulous speculators. In order to effectiveguard against uncontrolled speculation sure regulatory measures are introduced from time to time. They are (a) Limit an open position of an individual operator to retard over trading. (b) Limit on price fluctuation (daily/ hebdomadally) to continue disordered upswing or downswing in prices (c) Special margin deposits to be calm on dramatic purchases or sales to curb excessive conceptional activity through financial restraints. d) Minimum/maximum prices to be positivistic to prevent future prices from falling below the levels that are un remunerative and from rising above the levels not warranted by genuine supply and demand factors. During shortages, radical like skipping trading in certain delivers of contract, closing the markets for a specified period and even closing out the contract to overcome fate situations are taken. PROSPECTS With the gradual withdrawal of the government from various sectors in the ost ease era, the need has been felt that various operators in the commodities market be provided with a mechanism to hedge and transfer their risks. Indias obligation under WTO to open agriculture sector to world trade would require futures trade in a wide motley of primary commodities and their products to enable diverse market functionaries to cope with the price volatility prevailing in the worlds market. CHARECTERISTICS OF FUTURE TRADING A Futures Contract is a highly standardize d contract with certain distinct features.Some of the important features are as under (a) Futures trading are necessarily organized under the auspices of a market association s that such trading is confirmed to or conducted through members of the association in accordance with the procedure laid down in the Rules byelaws of the association. (b) It is incessantly entered into for a standard variety known as basis variety with the permission to deliver other identified varieties known as concomitant able varieties. (c) The units of price quotation and trading are fixed in these contracts, parties to the contracts not being capable of altering these units. d) The delivery periods are specified. (e) The seller in a futures market has the choice to decide whether to deliver goods against outstanding sale contracts. In case he decides to deliver goods, he can do so not just now at the location of the Association through which trading is organized but also at a number of other pre-spec ified delivery centers. (f) In futures market actual delivery of goods takes place only in a very few cases. proceeding are mostly squared up before the due date of the contract and contract and contracts are settled by payment of differences without any physical delivery of goods taking place.RECENT TRENDS IN COMMODITY TRADING constitutions Commodity Outputs Commodity thinking is undergoing a more direct revival thanks to the theorists of natural capital whose products, some economists argue, are the only genuine commodities- air, water and calories we consume being mostly interchangeable when they are free of pollution or disease. Whether we wish t think of these things as tradable commodities rather than birthrights has been a major source of controversy in many nations.Most types of environmental economics consider the shift to measuring them inevitable contestation that reframing political economy to consider the flow of these basic commodities first and foremost, helps avoi ds use of any military fiat except to protect natural capital itself, and basing credit-worthiness more strictly on commitment to preserving biodiversity aligns the long-term interests of eco regions societies, and individuals. They seek comparatively conservative sustainable development schemes that would be amiable to measuring welfare over long periods of tie, typically seven generations, in line with essential American thought.Weather trading However, this is not the only way in which commodity thinking interacts with ecologists thinking. Hedging began as a way to escape the consequences of damage done by natural conditions. It has matured not only into a system of interlocking guarantees, but also into a system of in straightway trading on the actual damage done by weather, victimization weather derivatives for a rice, this relieves the purchaser of concerns such as whether a arrest will hurt the Brazilian coffee crop, whether there will be a drought in the U. S. orn belt an d what the chances that we will have a cold winter are, driving natural gas prices higher and creating butchery in Florida orange areas. Emissions Trading Weather trading is just one example of prejudicious commodities, units of which represent harm rather than good. Economy is three fifths of ecology argues Mike Nickerson one of many economic theorists who hold that natures productive services and waste presidency services are poorly accounted for. One way to fairly allocate the waste brass capacity of nature is cap and trade- market structure that is used to trade toxic emissions rights in the United States, e. . SO2. This is in effect a negative commodity, a right to throw something away. In this market, the automated teller machines capacity to absorb certain amounts of pollutants is measured, divided into units, and traded amongst various market players. Those who emit more SO2 must pay those who emit less. Critics of such schemes argue that unauthorized or unregulated emi ssions still happen, and that grandfathering schemes often permit major polluters, such as the state governments own agencies, or poorer countries, to expand emissions and take jobs, while the SO2 output still floats over the border and causes death.In practice, political squelch has overcome most such concerns and it is questionable whether this is a capacity that depends on U. S. clout The Kyoto Protocol established a similar market in globose atomic number 19house gas emissions without U. S. support. Community as a commodity This highlights one of the major issues with global markets of either the positive or negative kind. A community must somehow believe that the commodity instrument is real, enforceable, and well worth paying for. Avery substantial part of the anti-globalization motility opposes the Commodification of currency, national sovereignty, and traditional cultures.The capacity to repay debt, as in the current global credit money regime anchored by the curse for international settlements, does not in their view correspond to measureable benefits to human wellbeing worldwide. They seek a fairer way for societies to compete in the global markets that will not require conversion of natural capital to natural resources nor human capital to move to developed nations in order to find work. Some economic systems green economists would replace gold standard with a biodiversity standard. It remains to be seen if such plans have any merit other than as olitical ways to draw attention to the way capitalism itself interacts with life. Human life as a commodity The green economists and the more conservative environmental economics argue that not only natural ecologies, but also the life of the individual human being is treated as a commodity by the global markets. A good example is the IPCC calculations cited by the Global Commons Institute as placing a value on a human life in the developed world 15x higher than in the developing world, based fillet of solely on the ability to pay to prevent climate changes. Overview of commodities exchange in IndiaForward Markets Commission (FMC) headquartered at Mumbai, is a regulatory authority which is overseen by the Ministry of Consumer Affairs, Food and Public Distribution, Govt. of India. It is a statutory frame set up in 1953 under the Forward Contracts (Regulation) Act, 1952. The Act provides that the Commission shall consist of not less than two but not colossal four members appointed by the Central Government out of them being nominated by the Central Government to be thereof. Currently Commission comprises three members among whom Shri. B. C. Khatua, IAS, IS THE Chairman and Shri.D. S. Kolamkar IES, and Shri Rajeev Kumar Agarwal, IRS, are the members of the commission. The functions of Forward Markets Commission are as follows (a) To advise the Central Government in respect of the recognition or the withdrawal of recognition from any association or in respect of any other matter a rising out of the administration of the Forward Contracts(Regulation) Act 1952. (b) To keep forward markets under observation and to take such action in relation to them, as it may consider necessary, in custom of the powers assigned to it by or under the Act. c) To collect and whenever the Commission thinks it necessary, to state information regarding the trading conditions in respect of goods to which any of the purvey of the act is made applicable, including information regarding supply, demand and prices, and to submit to the Central Government, periodical reports on the working(a) of forward markets relating to such goods. (d) To make recommendations generally with a view to improving the organization and working of forward markets. (e) To understand the inspection of the accounts and other documents of any recognized association or any member of such association whenever it considers.List of Commodity Exchanges in India 1. Batinda Om Oil Exchange Ltd. , Batinda. 2. The Bo mbay Commodity Exchange Ltd. , Mumbai 3. The Rajkot Seeds oil Bullion Merchants Association Ltd 4. The Kanpur Commodity Exchange Ltd. , Kanpur 5. The Meerut Agro Commodities Exchange Co. Ltd. , Meerut 6. The Spices and Oilseeds Exchange Ltd. 7. Ahmedabad Commodity Exchange Ltd. 8. Vijay Beopar Chamber Ltd. , Muzaffarnagar 9. India Pepper Spice Trade Association, Kochi 10. Rajdhani Oils and Oilseeds Exchange Ltd. , Delhi 11. National Board of Trade, Indore 12. The Chamber Of Commerce, Hapur 13. The East India Cotton Association, Mumbai 4. The Central India technical Exchange Ltd. , Gwalior 15. The East India Jute Hessian Exchange Ltd. 16. First Commodity Exchange of India Ltd, Kochi 17. Bikaner Commodity Exchange Ltd. , Bikaner 18. The Coffee Futures Exchange India Ltd, Bangalore 19. Esugarindia Limited 20. National Multi Commodity Exchange of India Limited 21. Surendranagar Cotton oil Oilseeds Association Ltd 22. Multi Commodity Exchange of India Ltd 23. National Commodity Der ivatives Exchange Ltd 24. Haryana Commodities Ltd. , Hissar 25. e-Commodities Ltd Of these 25 commodities exchanges the MCX, NCDEX and NMCEIL are the major Commodity Exchanges.Multicommodity exchangeof India Ltd MCX is an independent and de-mutualised exchange based in Mumbai. completed on 10 November, 2003, it is the third largest bullion exchange and fourth largest energy exchange in the world. Recognized by the Government of India it deals in legion(predicate) commodities and carries out online trading, clearing and settlement processes for commodities future marketcountrywide. MCX COMDEX is Indias foremost and sole composite commodity futures price index National Commodity & Derivatives Exchange of India Ltd (NCDEX) located in Mumbai, is a public limited company incorporate on 23rd April 2003.Promoted by national level establishments it is run by professional management. Regulated by the Forward Market Commission with reference to futures trading in commodities, it trades in various commodities online. The NCDEX is covered by * Companies Act * Stamp Act * ContractsAct * Forward Commission (Regulation) Act National Multi-Commodity Exchange of India Limited (NMCEIL) is considered the first de-mutualized, online exchange dealing in legion(predicate) commodities. Incorporated on 20th December 2001, it is promoted and run by * Central Warehousing Corporation National Agricultural Cooperative Marketing federation of India Limited * Gujarat Agro Industries Corporation Limited * National Institute of Agricultural Marketing * Gujarat State Agricultural Marketing Board * Neptune Overseas Limited The Commodity Exchanges with their extensive reach embrace new participants, resulting in a the right way price discovery process. COMPANY PROFILE Evolution of the company It all started in the year 1987 when Mr. C. J. George and Mr. Ranajit Kanjilal founded Geojit as a partnership firm. In 1993, Mr. Ranajit Kanjilal from the firm and Geojit became the proprietary con cern of Mr.C. J. George. In 1994, it became a Public Limited political party named Geojit Securities Ltd. The Kerala State Industrial Development Corporation Ltd. (KSIDC) in 1995, became a co-promoter of Geojit by acquiring a 24 percent risk in the company, the only instance in India of a government entity participating in the equity of a stock broking company. The year 1995 also saw Geojit being listed on the leading regional stock exchanges. Geojit listed at the stock exchange, Mumbai (BSE) in the year 2000. Companys wholly owned subsidiary, Geojit Commodities Ltd. launched Online Future Trading in Agri -commodities, precious metals and energy futures on multiple commodity exchanges in 2003. This was also the year when the company was renamed Geojit Financial Service Ltd. (GFSL). The Board consists of professional directors including a Kerala Government nominee. With effect from July 2005, the Company is also listed at National Stock Exchange (NSE). Company is a character member of the Financial supplying Standards Board of India and is one of the largest sediment Participant (DP) brokers in the country.On 31st December 2007, the company closed its commodities business and surrendered its membership in the various commodity exchanges held by Geojit Commodities Ltd. Global banking major BNP Paribas took a stake in the year 2007 to become the single largest shareholder. concomitantly, Geojit Financial serve Ltd. has been renamed as Geojit BNP Paribas Financial run Ltd. VISION The vision of Geojit is to be leading financial and commodities market intermediator for individuals and institutional clients from India band overseas.They continually strive to raise their products and service standards by intelligent occupation of technology and processes. MANAGEMENT OF GEOJIT COMTRADE Geojit COMtrade offers trading services in Commodities Futures. It is managed by a group of professionals having considerable years of experience and expertise in Commodities, ever since the reintroduction of Commodities Futures in India in 2003. Geojit COMtrade offers its client state-of-art trading tools such as * * Technical and fundamental analysis at this website and also through the companys large branch communicate * * Research Reports * SMS alerts on market movement * * Content rich website * * Online trading * * Facility to view online ledger, holdings, positions, etc. Geojit COMtrade also conducts seminars, distributes free in-house literature and holds interactive sessions that help raise awareness on the future market. The number of participants is continuously on the rise thus leading to increased volumes and market efficiency. Geojit COMtrade is a member of the following Exchanges * National Multi Commodity Exchange of India Limited (NMCE) * National Commodity Derivatives Exchange Limited (NCDEX) * Multi Commodity Exchange of India Limited (MCX) * National Spot Exchange of India Ltd (NSE) Geojit COMtrade offers futures trading through multiple exchanges in varied commodities such as Agricultural Commodities * grove Crops like safety, Coffee, Arecanut, etc. * Spices like Pepper, Cardamom, Turmeric, Jeera, Chilly, etc. * Pulses like Chana * Oil Oil Seeds like Refined Soya oil, Soya bean, Cotton seed, chinese mustard Seed, Mustard oil, etc. * Cereals like Maize * Other commodities like guar gum, Guar seed, Menthaoil, Potato, Sugar, etc. * Commodity Spot products like E Gold, E Silver, E Copper, E Lead, and E Zinc. Precious metals * Gold, Silver, and Platinum Metals * Copper, Lead, Aluminum, Steel, Tin, Nickel, Zinc, etc. Energy products * rasping oil, Natural Gas, Carbon Credits, etc. MILESTONES Product innovation backed by a high level of domain specific knowledge and progressive technology has helped Geojit to set many milestones including numerous industries. 986 * social status in cochin china Stock Exchange (CSE). 1994 * Becomes a Public Limited Company named Geojit S ecurities Ltd. 1995 * Kerala State Industrial Development Corporation Ltd. (KSIDC) acquires 24 percent equity stake. * Membership in National Stock Exchange (NSE). * Public Issue1996 * dunk of Portfolio Management Services with SEBI registration. 1997 * Depository Participant (DP) under National Securities Depository Limited. 1999 * Membership in Bombay Stock Exchange (BSE). 2000 * BSE Listing. * 1st broking firm in India to offer online trading facility. * Commences Derivative Trading with NSE. Integrates the 1st Bank Payment Gateway in the country for Internet Trading. 2001 * Becomes Indias first DP to launch depository transactions through Internet. * Establishes articulatio post in the UAE to serve NRI customers. 2002 * 1st in India to launch an integrated internet trading system for silver & Derivatives segments. 2003 * Geojit Commodities Limited, wholly owned subsidiary, launched Online Futures Trading in agri-commodities, precious metals and in energy futures on multiple commodity exchanges. * National launch of online futures trading in Rubber, Pepper, Gold, Wheat and Rice. Company renamed as Geojit Financial Services Ltd. 2004 * National launch of online futures trading in Cardamom. 2005 * NSE Listing. * Geojit Credits, a subsidiary, registers with RBI as a Non-Banking Financial Company (NBFC). * National launch of online futures trading in Coffee. 2006 * Charter member of the Financial Planning Standards Board of India. 2007 * BNP Paribas takes a stake in the companys equity, making it the single largest shareholder. * Establishes Joint Venture in Saudi Arabia to serve the Saudi national and the NRI. 2008 * BNP Paribas Securities India (P) Ltd. a Joint Venture with BNP Paribas S. A. or Institutional Brokerage. * 1st brokerage to offer full Direct Market Access execution in India for institutional clients. 2009 * engulf of Property Services division. * forward of online trading in Currency Derivatives. * Consequent to BNP Paribas becoming the l argest stakeholder in Geojit BNP Paribas, company is renamed as Geojit BNP Paribas Financial Services Ltd. 2010 * propel ofFLIP (Financial Investment Platform), a new advanced online investment platform. * Launch of state of the art Mobile Trading platform to empower clients to trade from anywhere, even while on the move through the innovative application FLIP- ME. Board of DirectorsMr. A. P. Kurian Non Executive & free ChairmanMr. C. J. George Managing Director & top dog PromoterMr. Alkeshkumar Sharma Non Executive & autarkic DirectorMr. Olivier Le Grand Non Executive DirectorMr. Pierre Rousseau Non Executive DirectorMr. Mahesh Vyas Non Executive & Independent DirectorMr. RakeshJhunjhunwala Non Executive DirectorMr.RamanathanBupathy Non Executive & Independent DirectorMr. Pun noose George Non Executive DirectorA growing footprintWith a presence in almost all the major states of India, the network of 558 offices across 300 cities and towns presently covers Andh ra Pradesh, Bihar, Chattisgarh, Goa, Gujarat, Haryana, Jammu & Kashmir, Karnataka, Kerala, Madhya Pradesh, Maharashtra, New Delhi, Orissa, Punjab, Rajasthan, Tamil Nadu & Pondicherry, Uttar Pradesh, Uttaranchal and West Bengal.GEOJITCOMMODITIES * scrap 1 Broking house status in terms of Trading Terminals rebuke & Bradstreet Survey 2008 * The first brokerage to offer online trading in Rubber (Mar 2003), Pepper (Apr2003), Gold (Oct2003), Wheat and Rice (Dec2003), Cardamom (Apr 2004) and Coffee (Feb2006) * sign image of Industry Pioneer since inception of commodity futures in 2003 Its backing range from investors, co-operative societies, state and national institutions to dealers, traders, manufacturers, financiers, speculators, arbitragers, etc.Geojit COMtrade does not have proprietary interest in any commodity and therefore is price neutral. Transaction costs are highly affordable attracting a spectrum of investors. Membership in multiple exchanges gives clients the added advant age of arbitrage. Geojit has specialized staff that provide the required guidance, help and enable clients to enter at the appropriate price. Geojit COMtrade Increasing investor awareness/education * Daily, weekly and special reports on various commodities & currencies covering both international as well as domestic markets. Seminars and workshops designed to help both the new clients as well as experienced traders. * Increased media spending to make ourselves more visible in print, visual as well as digital media, so that our reports and views reach better to our investors. * Offers SMS / email reports at no additional cost. GEOJIT ANTHEM DRIVEN BY TRUST With trust, our driving force Transparent in daily chores, Passionate, compassionate, We keep Geojit on course humble of our call We care for our patrons all. Grateful for our growth before We seek blessings to grow tall. Shanti ho barabaar shanti ho Sayyam, Samridhi, Swaasthya ho,Geojit Jahaan ho Expanding far and wide, And servi ng the world with pride, commitment inspiring us To be beyond the high tide A brighter word to make Unfurling the flag we take All for one and one for all, With love to last above all. DEPARTMENTAL STUDY Administration * Provides support and service for the activities of the board of directors * Coordination of branch activities and provision of interaction between branches and the main office * Expanding the reorganization of Bank market network. * To create appropriate condition for efficient operation of structural franchisees Human resourceHuman Resources and Administration department is one, which facilitates smooth working of the organization by looking into the human resource side and also the overall administration of organization. The Human Resource Management is very important for the success of any organization. Different individual exhibit similar and dissimilar pattern of behavior. They have their own set of needs, drives, goals and experiences. Management should be aw are of their requirements. Manpower management is the most critical job. Proper human resources management will enhance the efficiency and performance of people at work.HR MISSION * To create HR policies and processes which are employee friendly * To build a culture of warm forthcoming and professional with a sense of self-control and pride. * To encourage innovative thinking. * To encourage transparency and team work. * To develop leaders at all levels with general management skills. * To create a skill organization. * To develop competencies and skills through educational activity and development. * To constantly raise levels of employee productivity. * To work towards attaining and sustaining the best employer status Other functions ofHuman Resource Department RecruitmentRecruitment means generating a kitty of qualified employees for job. Announcing job opportunities to public in such a way that number of suitable people will apply for them. Recruitment process is done only at the initial stage. Mainly qualified people are selected for work. Selection Selection means choosing right profile from that number, those applicants whom are most likely to succeed in the job. After getting the list of candidates an interview is conducted at the unit level. Final plectron is made after testing their skill and technical abilities by putting them on the job. schooling and developmentTraining and development is also done in Geojit. After recruitment and selection the new hands are given on the job training at the unit level. All histrions are kept as trainers for three months to one year. Later they are absorbed as permanent workers considering their performance. advancement Promotion is the transfer of an employee to a new position which comments high pay, perquisite status both at work and the community outside and rush benefits perhaps the greater job credential. And more senior position from which a psyche render better service to his company. His duties, responsibilities, status and pay also increase.Company gives keen attention with regard to promotion. Wage structure Wage structure is different for different position Allowances Second most important divisor of wage package is dearness allowance, which is paid to offset the rise in prices. Allowances like conveyance, house rent etc. Employees provident fund Company follows contributory provident fund. The workers contribute some percentage of their wage (basic pay + DA) and the management contributes at an equal rate. Labor welfare fund at that place is a labor welfare fund in which the employee contributes some rupee per head and the employer contributes at double to the same.The fund enables the subscriber to get children discourse of self and dependents etc Thus all employees are covered social security schemes of government, enabling education of children of workers etc. Gratuity Employees are eligible for the bequest based on payment of Gratuity Act, 1972 Welfare to worke rs Rest room A rest mean is covered provided to employees to relax at concerned time. Facilities of relaxing The company also provides siting facilities for workers when they are getting interval or lunch. Health One of the important thing is that the employees general health both physical and mental should be cared.The factors which influence the general health of the worker can be divided into two broad groups. 1) Those which are associated with his working environment 2) Those which he shares with the rest of the community Cleanliness The company is kept sportsmanlike and free from effluvia. Accumulation of dust removed by proper drainage facility made in the chemical treatment. Walls, doors and windows shall be repainted or varnished at least once in three years government of waste and effluence Effective arrangement shall be made for the disposal of waste. It does not harm any local people in any way. Ventilation and temperatureEffective arrangements shall be made for ventil ation and temperature so as to provide comfort to the workers and prevent injury to their health. Adequate ventilation is made for idle air. Air condition is provided for every room. Dust and fires Effective management shall be taken preview the inhalation and accumulation of dust and fires or other impurities in parities at workplace. Lighting The state government may dictate standards of proper artificial nature lighting facilities are included. Drinking water on that point shall be effective arrangements for some drinking water for worker at convenient points.FINANCE AND ACCOUNTS Finance is the lifeblood of any organization. It deals with both the acquisition as well as allocation of notes. Hence pay department assumes a great role in this organization. A finance department in an organization is responsible for maintaining fair and just accounting, working capital management, long term funding decision making, costing etc. The finance department provides authorization and co ntrol to all other subsystems to utilize money more effectively through a well-designed mechanism the major functions of a finance department can be grouped as follows- )Preparation of financial description 2) Providing sufficient funds to all departments. 3) capital flows within the firm 4) Cash forecasting and budgeting 5) Analysis of transactions conducted by each branch office 6) Pay in and Pay out DUTIES AND RESPONSIBILITIES Chief financial police officer is the head of the finance department the entire financial operationsare controlled and coordinated by C. F. O. The entire reports are submitted before him and it is his duty to take appropriate steps. He is assisted by Chief Manager Finance. The general accounts of the company are managed by the Chief Manager.Preparation of reports and statements also conies under his duty, matters concerning pay in and pay out are also determined and analyzed by Chief Finance Manager. The Chief Manager is assisted by Manager Finance. ben eath him there are two assistant managers, four executives and three junior-grade executives. It is the duty of these people to record and analyze the normal accounts and transactions of a day and to report it to Chief Manager Finance. HIERARCHY OF AUTHORITY psyche FINANCIAL OFFICER CHIEF MARKETING OFFICER (fig-1)Department structural hierarchy JUNIOR EXECUTIVE EXECUTIVE ASSISTANT MANAGERMANAGING OFFICER The departmentis concerned with the provisions and use of accounting information to managers within organizations, to provide them with the basis to make informed business decisions that will allow them to be better furnish in their management and control functions. The accounting department jointly performs the financial function of Geojit Functions of accounting department include preparing, checking and accounting the following vouchers andbills. ? Cash receipt and cash payment. ?Bank receipt and bank payment. ? Purchase journal. daybook voucher. ?Preparing debit/credit notes . Updating vouchers in computer system. ?Preparation of satisfaction statement such as bank, party accounts etc. ?Maintain and safe custody of vouchers, records, ledgers and registers. ?Review of the generalledger and sub ledger and reconciliation. ? run into safety custody of cash andunused cheque. ?Maintain the fixed asset register and ensure proper filling of the bills of purchase, installation certificate etc. for the tax purpose. ?Ensure compliance of the various commitments for the borrowings and adherence of the schedule for the quittance of the interest and the principal.OPERATIONS DEPARTMENT The past few decades have given-emphasis to operations functions mainly because it is the important subsystem of an organization and is responsible for customer satisfaction. As this department deals directly with customer satisfaction the company requires careful policies and procedures to carry out the activities under the operations department so that the services provided by them must be of a specific quality. The operations department of Geojit is again subdivided into five check to the services they deal with. They are 1) Risk management clearing and settlement ) Compliance 3) Commodity 4) Branch operations 5) Depository A study of each of these subdivisions is made their hierarchy, function of each official and the findings are noteworthy in the coming pages. RISK MANAGEMENT CLEARING AND SETTLEMENT This is one of the subdivisions of the operations department. As stated earlier the operations departments are subdivided according to the functions they perform. Hence it is this subdivision of operations department which deals with the function of management of funds that arise from trading.Though buying and selling of shares take place daily in stock exchanges, settlements of transactions is executed for a specified no of days after clubbing daily transactions for the entire period. This is known as settlements cycle. For example the beginning of a new settlement is on Wednesday of every week in N. S. E and it ends on next Tuesday. So it is the duty of this subdivision of the operations department to keep the recordsregarding transactions of each customer analyze whether he had made all the transactions in a proper way or not.It is the duty-of this department to check whether a person has paid the amount completely, if he had bought any shares and also to check whether the person is paid completely if he had sold the shares through Geojit. The chief manager (Risk and settlement) stands up in the hierarchy of the department and hence he is the head of the department. He controls and coordinates all the functions of this subdivision. Risk management of funds (of company and its branches) is one of the major functions. The chief manager is assisted by the senior manager (clearing and settlement).The senior manager (clearing and settlement) deals with the process of buying andselling of shares and thereby maintaining proper funds. The re is an Asst. Manager under himwho checks the B. S. E operations. The Asst. Manager is assisted by three senior executives further there are executives junior executives and office assistants to help the topmanagement. A diagrammatic representation of the hierarchy of this departmental subdivision is given on next page. MANAGEMENT CLEARNING SETTLEMENT CHIEF MANAGER (RISK) senior MANAGER (CLEARING SETTLE