Market Survey on Commodities Future Trading

An In break upry Internship Project On COMMODITIES FURTURE TRADING WITH RESPECT TO GEOJIT COMTRADE LTD MARKET SURVEY D unmatched at CALICUT, KERALA Under the guidance of MRS. C. ANITHA RANI (Asst. Professor of Marketing Dept. ) (Project Guide) Mr. CHACKO . C. VARGHEESE (Regional manold ager) (Corporate Guide) Submitted By LAKSHMI. P. K Roll No 20028 shibah SIVANI INSTITUTE OF MANAGEMENT KOMPALLY, SECUNDERABAD ACKNOWLEDGEMENTFirst of on the whole I would akin to thank Geojit COM clientele Ltd, which is a conduct organization in goodness business, for giving me an opportwholey to establish with them and to do Market Research to name practical noesis of how a Commodities Compevery works. My special obligations to my corporate guide Mr. Chacko C Varghese, Regional manager, GC Branch, Calicut, for granting permission to do the project in their esteemed organization. I thank him for dedicating his valuable time in re dealing my project work periodi chaty and for directing me tot solelyy the mien.I am deeply indebted to thank my faculty guideAsst. Prof. C. Anita Rani. I withal like to thank all my faculties who harbor taught me and havesh bed their experience with mewhich has helped us in doing my project. I am grateful to Mr. Ajeesh Paul and Mr. Bijesh K. B, senior executives of Geojit COM trans transaction ltd, Calicut who was al appearances ready to clarify my doubts related to the topic. And my sincere thanks to them. Also, I am thankful to my family, fri oddments, and classmates and to the Almighty.Date Signature Place DECLARATION I, Lakshmi. P. K decl be that this project entitled Market assay on trade good approaching(a) concern with respect to Geojit COM spate Ltd. , submitted for the appoint of the PGDM Triple Specialization is a show of original project research study- carried place during April 5th- June 5th) , that the project has non formed a soul the basis for the award of whatever Degree/ Diploma/ Associateship/ Fellowship of any early(a) similar title.Ithas been completed by me at Geojit COMtrade Ltd, Calicut on a lower floor the guidance ofAsst. Prof. Anita Rani,faculty of marketplaceing section of Siva Sivani Institute of Management. Date Signature Place C O N T E N T S DECLARATION ACKNOWLEDGEMENT surety TABLE OF CONTENTS PAGE NO Chapter IIntroduction 5 Statement of problem 5 Objectives of the study 6 Scope of study 6 Literature Review 6 Chapter II Industry Profile 8 Company Profile 19 Depart psychogenic Details 26Chapter-III Research Methodology 44 Sources of data 45 Sampling Plan 45 Limitations 45 Chapter IV Data emergeline Interpretation and Findings 46 Chapter-VSWOT Analysis 71 Conclusion 73 Suggestions 74 Bibliography 75 Annexure 76 CHAPTER -I INTRODUCTION goodness trade is an battlefield which has gained prominence ever since the dawn of civilization.It smoke be attri furthered to the fact that commodities ar an integral part of our lives. everywhere these yrs there has been a tremendous growth in this segment which in turn has acted as the pillar of strength for the development of our economy. This has make it an attractive enthronement avenue for investors. Earlier we witnessed lot of slap-up organism invested in those companies which specialized in the production of commodities. Now we have a trend coke commodities have gained prominence all over the times.The rapidly advancing technology, particularly the Internet, has drastically changed the social and economic landscapes and every aspect of our daily lives. In the Securities Industry & nexts Commodities, the Internet has facilitated on-line trading, changing the way the market works, as well as the way the investors access the market. Having questn advantage of instruction technology at an well-timed(prenominal) time, India has emerged as a front-running country of on-line trading in the global securities & commodities markets. On-line trading is in general defined as a trading mechanism where investors place founds and con loaded trading results via electronic intercourse enthrals, such(prenominal) as the Internet, mobile phones, In India, the whole process of securities & commodities proceedings, from order placement and r come forrading, order action, to trade confirmation, is fully automated, thus enabling the investors who have placed orders to confirm their trading results within few seconds. Geojit COMtrade Ltd. is a commodity trading service firm. It specializes in verdant commodities, base metals, singular metals, bullion, and energy.The firm engages in trading service on commodities traded on the MCX and NCDEX in India. Its Research Division offers skilful and fundamental research services. The firm alike provides research on markets, currency, and economy. Geojit COMtrade Ltd. is found in Kochi, India. STATEMENT OF THE PROBLEM Online upcoming commodities trading command personal factors, technical factors, business factors and eco nomic factors. The interplay of these factors on commodities market requires a deep study or so the pattern process and procedures and performance.This study is intended to pose the sundry(a) inventions close to online commodities trading and its way of functioning. 1. To let out the level of assuredness of commodities online future trading. 2. To identify the tar halt consumer for online trading of commodities. 3. To identify the preference of customers to divers(a) investment avenues like commodity market, shares, mutual fund, confide deposits, insurance, debentures and office staff office savings. 4. To identify the awareness level of Geojit COMtrade Ltd. and feedback from the customers near the firm. OBJECTIVES OF THE STUDYMy project work programmed was also directed to any(prenominal) particular targets and the main objectives of the study are as bellow 1. To clearly state the awareness level nearly Geojit commodities 2. To experience the perception of great deal about Geojit commodities 3. To devise an approach by making people aware 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 preference of customers to various investment avenues like commodity market, shares, mutual fund, bank deposits, insurance, debentures and post office savings. To identify the awareness 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 line up an admit communication message for attracting the people to Geojit COMtrade Ltd SCOPE OF THE STUDY Globalization of the monetary market has led to a manifold increase in investment. rude(a)-sprung(prenominal) markets have been commited new arrange instruments have been developed and new services have been grounded. Besides, a number of opportunities and challenges have also been im pel open.Online Commodities trading is new as compared to Equity market in India. Mainly tether changes are voluminous in online commodities trading MCX, NCDEX & NMCE LITERATURE REVIEW So many studies are made in the field of battle of commodity future trading. Some of the important studies are reviewed as follows In a well-known publications survey on commodity futures research, Gray and Rutledge observed that, Anyone who undertakes a survey of the literature on futures trading is confronted with an amorphous and quite disjointed angle of inclination of publications (1971 p 57).Some of the pioneers in futures research, like Hol brook Working, Roger Gray, Tom Hieronymus, Allen Paul, and enthalpy Bakenwere based on an in-depth understanding of economic institutions, an appreciation of the major(ip) problems facing the industry, and careful analysis of relevant data. Gray and Rutledge (1971) provide the most comprehensive survey on futures markets and the topics covered in thei r review acknowledge evolutionary aspects of futures markets, inter-temporal represent relationships, and concept of hedge, wrong variability, and the stochastic nature of price fluctuations. The Keynesian theory of modal(prenominal) backwardation was one of the earliest theories of the inter-temporal futures prices and it postulated that futures prices are biased estimates of forthcoming cash prices because hedgers must compensate speculators for assuming the price happen of holding future pinchs * Working (1949) developed the idea that the unproblematic function of commodity futures markets was the formulation of the returns for the storage services, and he viewed inter-temporal prices as the jointly determined price of storage. Holbroook Working (1953) categorized alternative motives for mercantile-grade hedging in the commodity futures and these categories continue to be valid today. The three arbitrage hedging, operational hedging and anticipatory hedging. Since th e futures and cash price converge in the givey month, a commercial firm can arbitrage the two markets and earn a imperil- idle return from the predictable change in the basis- the numeric difference between the futures and cash price.Operational hedging facilitates commercial business by haveing firms to get and sell on the futures markets as temporary substitutes for the subsequent cash market transactions. This provides firms with an avenue for being flexible in casual trading operations and reducing price risk. Anticipatory hedges involve buying or selling futures mothers by commercial firms in anticipation of the forthcoming cash market transactions. Price expectation plays a major routine in this 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 such as live hogs and live cattle in the 1960s was a watershed for the indu stry. They argued that since future prices for nonstorables are not being utilise to allocate inventories, forward pricing is an important economic justification for these markets They pointed out that few of the farmers remain concerned about the alleged adverse influence of futures trading. According to theoretical literature, primary commodity producers stand to derive considerable price risk reduction benefit from hedging with both 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 experimental literature all minimum variance hedge ratios or optimal hedge ratios (i. e. % of output to be hedged) and has found macroscopical potential risk reduction benefits from hedging (Henifner 1972 Peck 1975 Ederington 1979 Grant and Eaker 198559 Casteino 1992 Lene, Kimle, and Hayenga 1993) * But both 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 key distinguishing run around between these two 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 production risk as an explanation for the lack of hedging interest in the real world. Most research needs to be directed towards the impact of government farm programs on commodity futures markets, a retentive 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 pl us 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 subject, gold 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 issueive factors such as design, brand image, and so on otherwise examples of commodities are agricultural produce such as food cereal grasss, pulses, cotton, etc. metals such as nickel, zinc, aluminum, etc. trade good marketsare markets where painful or primary products are exchanged. These raw commodities are traded on make up ones minddcommodities exchanges, in which they are bought and sold in standardized contracts.It covers physical product (food, metals, and electricity) markets but not the ways that services, including those of governm ents, 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. World massive, there are 50 major commodity exchanges that trade over 100 commodities, ranging from wheat and cotton to silver and oil. The trading of commodities consists of direct physical trading and derivatives trading. sub traded commodities have seen an upturn in the volume of trading since the start of the decade.This was largely a result of the growing attracter of commodities as an as desexualise class and a proliferation of investment options which has made it easier to access this market. good trading office staff trading Spot trading is any transaction where talking to either takes place immediately, or with a minimum lag between the trade and delivery due to technical constraints. Spot trading unremarkably involves visual inspection of the commodity or a sample of the commodity, and is carried out in markets such aswholesale markets. goodness markets, on the other hand, require the existence of agreed standards so that trades can be made without visual inspection. send on contracts Aforward contractis an agreement between two parties to exchange at most fixed future date a minded(p) quantity of a commodity for a price defined today. The fixed price today is known as theforward price. Futures contracts Afutures contracthas the comparable general features as a forward contract but is transacted through a futures exchange. Futures contracts which muckle a price for the delivery of a particular commodity in, say, six months or a year are not themselves to blame.Theyre the grease that makes these markets function. Futures allow businesses like power companies or airlines to hedge against increases in evoke costs, or food processors to smooth over fluctuations in the price of wheat and corn. Wall Street plays an valuable role, too, since financial investors those betting that prices will fall, as well as those betting theyll go provide essential liquidity. Commodity and futures contracts are based on whats termed forward contracts. Early on these forward contracts agreements to buy now, pay and deliver afterward were used as a way of getting products from producer to the consumer.These typically were only 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 standardized forward contract in which the buyer and the vender accept the terms in regards to product, grade, quantity and location and are only handsome to negotiate the price. hedgerow Hedging, a common practice of farming cooperatives insures against a poor harvest by purchasingfutures contractsin the same commodity.If the cooperative has significantly 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 crop is abruptly everywhere that suffered the same particularises. Delivery and condition guarantees In addition, delivery day, method of settlement anddelivery pointmust all be specified. Typically, trading must end two (or much) business days prior to the delivery day, so that the routing of the shipment can be finalized via ship or rail, and salary can be settled when the contract arrives at any delivery point.Most trading is do in futures contracts, that is, agreements to deliver goods at a set time in the future for a price realised at the time of the agreement. Futures trading allow both hedging to protect against serious losses in a declining market and speculation for gain in a rising 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 price quoted in the future contract.If the market rises, h owever, 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 infallible to fulfill a futures contract. An independent U. S. regulative agency, the Commodity Futures calling committal was established in 1974 to regulate commodity markets. In 1982, the Chicago cashmaking(a) supercede introduced a futures contract for Standard Poors 500 U.S. companies that allow investors to speculate on the future prices of the computer memorys. Trading of SP 500 and other financial futures has broken 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(prenominal) volatile. The Chicago Board of switch over is the largest futures and options exchange in the Unites States, the largest in the world is Eurex, an electronic European commutation.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 give the sack to run their cars. In fact external commodity trading is a multi-billion dollar business, and on number the number of trade executed in the commodity exchanges are about five times as much as those on major stock exchanges.And to be honest in the recent ago it has been anything but dull. In the past five years commodities have provided all the thrills and spills of a high octane Vin diesel motor movie. The idea of trading in commodity future contracts is really very old school, although it has o ccurred new age glitz because of electronic exchanges. Most experts trace their origins back to Japan, were rice futures were firstly traded in the 17th century. Future market for precious metals such as gold and silver has also 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 anticipate 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 the future contracts and the farmers were the first to use such contracts as they protect them from any immerse fall in the value of crop harvested in future. Commodity future differed from equity derivatives in three 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 hard-hitting seasonal variation s in price and capriciousness 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. ) rock oil makes up the worlds largest commodity future market. Daily turnover on the New York Mercantile turn(NY mex) alone totals about $15 billion) followed by coffee, steel, gold and wheat. New contract ideas however make soda up all the time. For instance, freight futures are also traded on the Norwegian futures and Options Clearing house and the Nymex. fleck the Chicago Mercantile exchnge9 now taken over by the CBOT) offers contracts on temperatures, useful for hedging agricultural commodity or energy pri ces. COMMODITY FUTURE TRADING EVOLUTION OF FUTURE TRADING AND ITS limn STATUS Organized future market evolved in India by the setting up of Bombay Cotton Trade Association Ltd. in 1875. In 1893, following widespread discontent amongst leading cotton mill owners and merchants over the functioning of the Bombay Cotton Trade Association, a separate connective by the name Bombay COTTON Exchange 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 presidential term of the Calcutta jackboot Exchange Ltd. , in 1919. Later East Indian Jute Association Ltd. was set up in 1927 for organizing futures trading in Raw Jute. These two affilia tion 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 c visualises 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 at 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). After independence, the Constitution of India brought the subject of Stock Exchanges and Futures in the Union 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 serial Parliaments and finally in December 1952 Forward Contracts (Regulation) typify, 1952, was enacted. The Act provided for 3-tier regulatory system (a) An association recognized by the Government of India on the recommendation of Forward markets guidance (b) The Forward Markets Commission (it was set up in September 1953) (c) The Central Government.Forward Contracts (Regulation) Rules were notified by the Central Government in July, 1954. The Act divides the commodities into 3 categories with reference to boundary 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 no r prohibited are referred as free Commodities and the association organized in such free commodities is required to obtain the certificate 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 steps may be taken for introducing futures trading in commodities, like potatoes, onions, etc. at appropriate time.The government, accordingly initiated futures trading in Potato during the latter 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 liberalization 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 report 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, sunflower seed, safflower seed, copra and soya bean, oils and oilcakes of all of them. 5) Rice brain oil 6) Castor 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 insularity of the procurement and distribution channel necessitated setting in place a market mechanism to perform the economic functions of price baring and risk caution. The content Agriculture Policy announced in July 2000 and announcements of Honble Finance Minister in the compute Speech for 2002-2003 were indicative of Governments resolve 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 make headway 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 prevail at a future point of time and and so can finalise between various competing commodities, the best that suits him.It enables the consumer get an idea of the price at which commo dity would be available at a future point of time. He can do beseeming costing and cover his purchases by making forward contracts. The futures trading is very useful to the exporters as it provides an move 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 stabilization-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 equilibrate in supply and demand rig throughout the year. (v) Encourages competitions and acts as a price barometer to farmers and other trade functionaries.Futu res trading are also capable of being misused by unscrupulous speculators. In order to safeguard against un obligeled speculation sure regulatory measures are introduced from time to time. They are (a) Limit an open position of an private operator to foil over trading. (b) Limit on price fluctuation (daily/ workweekly) to prevent abrupt upswing or downswing in prices (c) Special margin deposits to be collected on expectant purchases or sales to curb excessive speculative activity through financial restraints. d) Minimum/ maximal prices to be prescribed to prevent future prices from falling below the levels that are un remunerative and from rising supra the levels not warranted by genuine supply and demand factors. During shortages, extreme like skipping trading in certain delivers of contract, closing the markets for a specified period and even closing out the contract to reduce fatality situations are taken. PROSPECTS With the gradual withdrawal of the government from various sectors in the ost liberalization 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 contour 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 standardized 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 ingredients of the association in accordance with the procedure laid down in the Rules byelaws of the association. (b) It is invariably entered into for a standard variety known as basis variety with the permission to deliver other identified var ieties known as tender 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 only at the location of the Association through which trading is organized but also at a number of other pre-specified delivery centers. (f) In futures market actual delivery of goods takes place only in a very few cases. Transactions are mostly shape up to begin with 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 Natures Commodity Outputs Commodity thinking is undergoing a more direct revival thanks to the theorists of natural capital whose products, some econ omists 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 man-made lake of controversy in many nations.Most types of environmental economics consider the shift to measuring them inevitable literary argument that reframing political economy to consider the flow of these basic commodities first and foremost, helps avoids use of any military club 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 relatively conservative sustainable development schemes that would be amiable to measuring well-being over long periods of tie, typically seven generations, in line with Native 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 through with(p) by natural conditions. It has matured not only into a system of interlocking guarantees, but also into a system of indirectly trading on the actual damage done by weather, exploitation weather derivatives for a rice, this relieves the purchaser of concerns such as whether a freeze will hurt the Brazilian coffee crop, whether there will be a drought in the U. S. orn belt and what the chances that we will have a cold winter are, driving natural gas prices higher and creating havoc in Florida orange tree areas. Emissions Trading Weather trading is just one example of negative 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 disposal services are poorly accounted for. One way to sanely al locate the waste disposal 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 atmospheres 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 emissions 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 pressure 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 global greenhouse gas emissions without U. S. nourishment. 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 private road 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 cuss for international settlements, does not in their view correspond to measureable benefits to sympathetic upbeat worldwide. They seek a fairer way for societies to compete in the global markets that will not require novelty of natural capital to natural resources nor military man 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 tha n 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 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 body 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 exceeding four sections 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 arising 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 exercise of the powers assigned to it by or under the Act. c) To collect and whenever the Commission thinks it necessary, to publish information regarding the trading conditions in respect of goods to which any of the provisions of the act is made applicable, including information regardin g supply, demand and prices, and to submit to the Central Government, periodical reports on the working 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 rock oil Exchange Ltd. , Batinda. 2. The Bombay 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. guinea pig Board of Trade, Indore 12. The Chamber Of Com merce, Hapur 13. The East India Cotton Association, Mumbai 4. The Central India Commercial 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. discipline Multi Commodity Exchange of India Limited 21. Surendranagar Cotton oil Oilseeds Association Ltd 22. Multi Commodity Exchange of India Ltd 23. National Commodity Derivatives 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. Established 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 numerous commodities and car ries 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 accompany incorporated 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 relations in numerous commodities. Incorporated on 20th December 2001, it is promoted and run by * Central storage community 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 powerful price discovery process. phoner 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 concern of Mr.C. J. George. In 1994, it became a Public Limited Company 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 stake 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 20 00. Companys wholly owned subsidiary, Geojit Commodities Ltd. flinged 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 pecuniary 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 Planning Standards Board of India and is one of the largest Depository 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 beat the hit largest shareholder. issuely, Geojit Financial Services Ltd. has been renamed as Geojit BNP Paribas Financial Services Ltd. VISION The vi sion of Geojit is to be leading financial and commodities market intermediary for individuals and institutional clients from India band overseas.They continually strive to raise their products and service standards by intelligent application of technology and processes. MANAGEMENT OF GEOJIT COMTRADE Geojit COMtrade offers trading services in Commodities Futures. It is managed by a radical 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 severalise network * * 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 interac tive 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 change commodities such as Agricultural Commodities * Plantation Crops like Rubber, 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, 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. Pr ecious metals * Gold, Silver, and Platinum Metals * Copper, Lead, Aluminum, Steel, Tin, Nickel, Zinc, etc. Energy products * Crude oil, immanent Gas, Carbon Credits, etc. MILESTONES Product innovation backed by a high level of region specific knowledge and state-of-the-art technology has helped Geojit to set many milestones including numerous industries. 986 * social rank in cochin china Stock Exchange (CSE). 1994 * Becomes a Public Limited Company named Geojit Securities Ltd. 1995 * Kerala State Industrial Development Corporation Ltd. (KSIDC) acquires 24 percent equity stake. * Membership in National Stock Exchange (NSE). * Public figure1996 * Launch 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 Joint hypothesis in the UAE to serve NRI customers. 2002 * 1st in India to launch an integrated internet trading system for Cash & 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, pale yellow 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 run batted in 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 co mpanys 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 * Launch of Property Services division. * Launch of online trading in Currency Derivatives. * Consequent to BNP Paribas becoming the largest stakeholder in Geojit BNP Paribas, company is renamed as Geojit BNP Paribas Financial Services Ltd. 2010 * Launch ofFLIP (Financial Investment Platform), a new advanced online investment platform. * Launch of state of the art Mobile Trading platform to clothe clients to trade from anywhere, even while on the move through the innovative application FLIP- ME. Board of DirectorsMr. A. P. Kurian Non decision maker & Independent ChairmanMr. C. J. George Managing Director & Chief PromoterMr. Alkeshkumar Sharma Non decision maker & Independent 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 Andhra 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 * Number 1 Broking house consideration in terms of Trading Terminals harass & Bradstreet Survey 2008 * The first brokerage to offer online trading in Rubber (Mar 2003), Pepper (Apr2003), Gold (Oct2003), stalk and Rice (Dec2003), Cardamom (Ap r 2004) and Coffee (Feb2006) * Brand image of Industry Pioneer since inception of commodity futures in 2003 Its clientele 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 advantage 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 application program 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 mor e visible in print, visual as well as digital media, so that our reports and views reach best 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 Respectful 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 serving the world with pride, Loyalty animate 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 approp riate 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 aware 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 ownership and pride. * To get along innovative thinking. * To encourage transparency and team work. * To develop leaders at all levels with general ma nagement skills. * To create a learning organization. * To develop competencies and skills through training 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 heart generating a pool 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 humbles 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 selection is made after testing their skill and technical abilities by putting them on the job. Training and developmentTraining and development is also done in Geojit. After enlisting and selection the new hands are given on the job training at the unit level. All workers are kept as trainers for three months to one year. Later they are absorbed as permanent workers considering their performance. Promotion Promotion is the transfer of an employee to a new position which comments high pay, privilege status both at work and the community outside and fringe benefits perhaps the greater job security. And more senior position from which a person 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 component of wage package is dearness allowance, which is paid to offset the rise in prices. Allowances like conveyance, house rent etc. Employees prospicient fund Company follows contributory provident fund. The workers contribute some percentage of their wage (basic pay + DA) and the managem ent contributes at an equal rate. Labor eudaimonia fund There 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 treatment 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 point based on payment of Gratuity Act, 1972 Welfare to workers 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 considerable groups. 1) Those which are associated with his working environment 2) Those which h e shares with the rest of the community Cleanliness The company is kept clean and free from effluvia. Accumulation of dust removed by beseeming drainage facility made in the chemic treatment. Walls, doors and windows shall be repainted or varnished at least once in three years electric pig 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 ventilation and temperature so as to provide comfort to the workers and prevent injury to their health. Adequate ventilation is made for fresh 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 prescribe standards of proper artificial nature lighting facilities are included. Drinking water There shall be effective ar rangements 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 funds. Hence finance department assumes a great role in this organization. A finance department in an organization is responsible for maintaining fair and just history, working capital management, long term funding decision making, costing etc. The finance department provides authorization and control 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 educational activity 2) Providing competent funds to all departments. 3) Cash 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 military officer is the head of the finance dep artment the undefiled financial operationsare controlled and coordinated by C. F. O. The entire reports are submitted before him and it is his certificate of indebtedness to take appropriate steps. He is assisted by Chief passenger vehicle Finance. The general accounts of the company are managed by the Chief four-in-hand.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. Below him there are two assistant managers, four executives and three junior 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 CHIEF FINANCIAL OFFICER CHIEF MARKETING OFFICER (fig-1)Department structural power structure JUNIOR EXECUTIVE EXECUTIVE ASSISTANT MANAGERMANAGING OFFICER The departmentis concerned with the provisions an d 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 betterequipped 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. Journal voucher. ?Preparing debit/credit notes. Updating vouchers in computer system. ?Preparation of reconciliation 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. ?Ensure 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 complaisance o f the various commitments for the borrowings and adherence of the schedule for the repayment 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 mirth. 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 according 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 famous in the coming pages. RISK MANAGEMENT CLEARING AND SETTLEMENT This is one of the subdivisions of the operations department. As say 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 t he shares through Geojit. The foreland 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. There 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