Luxoft successfully developed a commodity trading and risk management system for a large global agribusiness company over 3 years with a team of 9. The system allows traders to execute contracts, track market prices, manage risks, and generate reports. It integrates with the company's SAP and market data systems. The client was able to effectively trade commodities and manage associated risks through all stages of the contract lifecycle using the customized solution.

1. For more information about Luxoft, visit
www.luxoft.com
www.luxoft.com/financial-services/
case study
Commodity Value Chain Service Solution
Summary
26.09.2012
The system is used daily by traders in the global agribusiness company
for commodity contracts trading and risk management.
uu Client: One of the largest global agribusiness and food company
uu Business Area: Trading, Risk Management
Front Office, Middle Office, Back Office
uu Asset Classes: Commodities
uu Technology Set: J2EE, IBM WebSphere, Oracle, TIBCO, Struts,
Hibernate, AJAX, Web-FOCUS
uu Integration: ERP system (SAP), Market data provider
uu User Profile: Traders (400+ users)
uu Geography: Worldwide
uu Relationships Status: Ongoing, T&M
uu Services Provided: Full cycle: business analysis, development,
QA, maintenance with production support
uu Team Size: 9 team members
uu Duration: 3+ years

2. Business Challenge
The world’s largest commodity trading company was beginning the
development of a significant internal software solution that would provide
for the management of commodity trading contracts throughout the life
cycle of the contract.
The client required support for trade execution, marking to market futures
values, risk management, and reporting.
Purchasing and Sales were separate departments in different locations.
The system was to be customized for the unique needs of each department.
02Luxoft - Case Study
Luxoft Delivered Solution
Luxoft successfully joined the international team to create the system,
providing analysis, development, testing and maintenance services.
The delivered solution covered multiple financial instruments including
swaps and swaptions (Barrier, Asian, Digital, European Strip). Tight
integration with existing systems (i.e., SAP, SunGard Trading) provided
managing and monitoring functionality in the finance and goods flow.
Continuous, up-to-date market data from the Chicago Board of Trade
(CBOT) with feeds every 30 minutes via SunGard services along with a
flexible architecture gave the middleand back-offices an unfailing source of
critical data for the highest returns.
The developed platform was divided into the following systems:
1. Trading Execution and Management System
The application enables execution of the full life cycle of commodity
contracts and supports the pricing for the contracts. The solution
provides flat, provisional, premium and frame pricing for futures
contracts.
The pricing is based on the current quotes from Chicago Board of
Trading and includes support for the multiple currencies. The execution
of the contracts covers commodities delivery and payments processing.
The following strategies for delivery are supported: inventory, delivery,
string, circle and washout. The solution for the contract settlement
supports various financial transactions such as settlement, equity
liquidation and memo, as well as the generation of invoices. Final
invoicing is completed in an external solution in the SAP application.

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Document management within the supported areas of the business was
also provided.
2. Market Data System
The application tracks the market price of commodities and provides the
workflows for contract pricing based on origin, commodity type, market,
quality, and currency. It includes functionality for the management of
estimated expenses based on commodity type, quality, party location,
origin, and expense type.
3. Mark to Market System
This data transformation system consolidates information from the
Trading Execution and Management System and the Market Data
System and prepares it for further processing in the Managed Reporting
Environment.
4. Managed Reporting Environment
The system compiles comprehensive contract execution reports for
business users and senior executives.
5. Finance Risk Management
The system maintains the registry of deals, tracks their financial risks,
and produces statistical information reports.

4. 04Luxoft - Case Study
Customer Feedback
Benefits
Luxoft has successfully delivered the systems on schedule and within the
budget. The implemented solution fully meets the client’s business needs
and objectives. The developed platform enables the client to effectively
trade commodities covering all stages of the contract life cycle, as well as
to manage the risks associated with them.
Detailed feedback is available on request.

5. About luxoft
Luxoft, a principal subsidiary of IBS Group, is a provider of advanced
application and software engineering outsourcing services for global and
regional enterprises. Luxoft builds partnerships with its clients, such as
Boeing, IBM, Deutsche Bank, UBS, Harman, Avaya, Alstom, and Sabre, based
on the culture of engineering excellence, innovation, and deep domain
expertise. Luxoft offers international delivery capability through its network
of state-of-the-art delivery centers in North America, Eastern Europe, and
Asia. Luxoft`s customers benefit from the right mix of technology skills,
industry knowledge, proprietary processes and methodologies, and a
choice of engagement models.
For more information about Luxoft, visit
www.luxoft.com
www.luxoft.com/financial-services/
© 2012 Luxoft