DECLARATION

Title of Project Report

Commodity Price Risk Management: A study on the use of exchange traded derivatives for
managing risk associated with copper.
I declare
(a)That the work presented for assessment in this Summer Internship Report is my own, that
it has not previously been presented for another assessment and that my debts (for words,
data, arguments and ideas) have been appropriately acknowledged.
(b)That the work conforms to the guidelines for presentation and style set out in the relevant
documentation.

Date : 22.07.2013
Diksha Dumra
A3128112018
Master of Financial Management
Class of 2012-14

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CERTIFICATE

I, Dr. Shipra Maitra hereby certify that Diksha Dumra, student of Master of Financial
Management at Amity College of Commerce and Finance, Amity University Uttar Pradesh
has completed the Project Report on- COMMODITY PRICE RISK MANAGEMENT: A
STUDY ON THE USE OF EXCHANGE TRADED DERIVATIVES FOR MANAGING
RISK ASSOCIATED WITH COPPER under my guidance.

Dr. Shipra Maitra

Assistant Professor
ACCF

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ACKNOWLEDGEMENTS

First, I would like to express my thanks and gratitude to all the people at Reliance
Commodities Ltd, for always being there and guiding and helping me in all their small and
big ways and for creating a nurturing environment for my learning.
I am indebted to Mr. Manoj Suvarna, who guided me and supervised my research. I would
like to thank him for giving me ample amount of time for discussing the approach and the
direction of the project.
My second invaluable appreciation goes to Mr. Vishal Narchal, for being my guiding light
and giving me information about the working of financial derivatives in commodity
exchanges for hedging.
I would like to thank Mr. Ashutosh Mishra for being my support always. I would also like to
thank Mr. Niraj Shukla and Sandeep Kumar Kolcharam, for helping me with the technicals
of the research.
Id also like to thank Mr. Chetan Shrimanker, for taking time out of his busy schedule to
interact with me and helping me understand what guides hedging decisions at his copper unit.
I am also grateful as ever to my faculty guide, Dr. Shipra Maitra, for her constant support and
help.
In the end Id like to thank my parents for providing me with the opportunity of doing my
Internship miles away from home during the summer holiday months and for being my pillars
of strength.

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Executive summary
Todays business environment is very dynamic and full of uncertainties. These uncertainties
expose the businesses to various risks. Commodity intensive businesses are exposed to low
margins and volatile input prices. Ensuring highest productivity of resources and highest
quality of service standards is a must in the commodity intensive business. Risks are inherent
in the commodity intensive business which involve market risk, operational risk etc.
The purpose of this study is to identify, measure, monitor and manage risks associated with
copper.

The project work covers:

1. Business process at Accent Metals Pvt. Ltd. And identification of risk
Accent metals is a manufacturer of copper based alloys. The project covers its
business production and procurement process which helps to identify the various risks
such as price and currency associated with copper for accent metals.
2. Hedging strategies to mitigate risk
Once risk is identified various hedging strategies have been discussed and suggested
that help to mitigate and manage those risks.
3. Use of exchange traded derivatives for managing hedging strategies
Use of commodity and currency futures have been understood and discussed in great
length in the various chapters of the research project.
4. Monitoring risk management strategies
When decisions have been made to place a hedge, its decision and position should be
continuously reviewed and managed according depending up on the prevailing market
conditions.