Download - Project report on Bharat forge
PROJECT REPORT
ON “THE PROCEDURE OF IMPORT AND EXPORT OF BHARAT FORGE”
Submitted for the partial fulfillment of the requirement for the
Award of the degree
Of
Post Graduate Diploma in Import & Export Management (PGDIEM)
SUBMITTED TO: SUBMITTED BY: MRS. APEKSHA SOMWNSHI ESHAN RASTOGI FACULTY PGDIEM
SINHGAD INSTITUTE OF MANAGEMENT VADGAON(BK), PUNE.
(AFFILIATED TO PUNE UNIVERSITY, PUNE).
ACKNOWLEDEMENT
It has been honour and privilege to do my project on the subject IMPORT AND EXPORT OF BHARAT FORGE. I take this an opportunity to communicate my sincere thanks and regards to everyone who had contribute to my project and helped me successfully completion.
This project report couldn’t have been completed without the guidance of my project guide PROF. APEKSHA SOMWNSHI.
I express my sincere thanks and gratitude to the above stated person who have helped in directly and also to those who have helped me directly.
At last I am thankful to honourable director DR. RUPALI JAIN to give us an opportunity to experience the concrete reality of the project.
ESHAN RASTOGI
PGDIEM
SIOM, PUNE
TABLE OF CONTENTS
S.NO. CONTENTS
1 Registered name of company 2 Mission & Vision Statement 3 Year Of Establishment 4 Promoters 5 Current Turnover 6 Growth Statistics Over Past Five Year 7 Major Product Line 8 Major Brands Offered Under Each Product Line 9 Operation Location Of Subsidiaries, Branch Office,
Corporate Office 10 Number of Employees 11 Recognition/Awards 12 Market share 13 Major Competitors 14 Corporate Strategy 15 Total Export F.Y 2010 – 2011 16 Major Importing/Exporting Countries 17 List Of Goods/Services Exported By The Company 18 Future Plans 19 Export Import Procedures 20 CSR Activities
BHARAT FORGE LIMITED
REGISTERED NAME OF THE COMPANY
Bharat Forge Ltd., the flagship company of the US $ 1.25 billion Kalyani Group, is a 'Full Service Supplier' of engine & chassis components. It is the largest exporter of auto components from India and leading chassis component manufacturer in the world. With manufacturing facilities spread over 6 locations - two in India, three in Germany and one in North America, the company manufactures a wide range of safety and critical components for passenger cars, commercial vehicles and diesel engines. The company also manufactures specialized components for the railway, construction equipment, oil & gas and other industries. It is capable of producing large volume parts in both steel and aluminum. Bharat Forge has built up a strong capability in design and engineering, including a full fledged product testing and validation facility, which gives Bharat Forge a Full Service Supply Capability - from product conceptualization to designing to manufacturing and product testing & validation.
MISSION & VISION STATEMENT
Ø To be a world class organization and a leader in every aspect of our business
Ø To aggressively grow business by accessing global markets Ø To deliver products and services of uncompromising quality and
integrity consistent with the Kalyani brand and image Ø To be committed to listening and responding to the needs of our
customers, associates and business partners and honoring their individual value
Ø To be committed to an entrepreneurial spirit that fuels the growth of our companies and increases shareholder value.
YEAR OF ESTABLISHMENT
Bharat Forge Limited established in the year 1961
PROMOTERS
Sr.No Name the Director Category
1 B.N. Kalyani Chairman & Managing Director
Promoter, Executive and Managing Director
2 S.M. Thakore Non-executive, Independent
3 S.D. Kulkarni Non-executive, Independent
4 P.G. Pawar Non-executive, Independent
5 Dr. Uwe Loos Non-executive, Independent
6 P.C. Bhalerao Non-executive Director
7 Lalita D. Gupte Non-executive, Independent
8 P.H. Ravikumar Non-executive, Independent
9 Alan Spencer Non-executive, Independent
10 Naresh Narad* Non-executive, Independent
11 Dr. T. Mukherjee ** Non-executive, Independent
12 G.K. Agarwal Deputy Managing Director
Executive
13 Amit Kalyani Executive Director Executive
14 B.P. Kalyani Executive Director
Executive
15 S.E. Tandale Executive Director Executive
16 Sunil Kumar Chaturvedi Executive Director
Executive
CURRENT TURNOVER
Bharat Forge limited current turnover is 1.3$ million
GROWTH STATISICS OVER PAST FIVE YEAR
Today, Bharat Forge operates in three continents: Europe, North America and Asia. Over the last four years, the Company has successfully made several acquisitions: Carl Dan Peddinghaus and CDP Aluminiumtechnik (in Germany), Imatra Kilsta AB (in Sweden), and Federal Forge in the USA. BFL also has a majority stake in a joint venture with First Auto Works (FAW) called FAW Bharat Forge (Changchun) Company Limited that operates in China.
These businesses, along with Bharat Forge’s Indian operations form the global BFL group — whose performance gets reflected in the consolidated accounts of Bharat Forge Limited. The standalone & consolidated financial performance is detailed below (figures in Rs Million)
STANDALONE FINANCIAL PERFORMACE OF THE LAST 5 YEARS
FY 2011 FY 2010 FY 2009 FY 2008 FY 2007
Total Income 29,935.47 18,887 21,064 22,849 19,453
EBIDTA 7,623.18 4,693 4,075 6,105 5,485
PBT 4,476.08 1,807 1,577 3,970 3,598
PAT 3,105.67 1,270 1,033 2,736 2,410
FINANCIAL PERFORMANCE (CONSOLIDATED)
FY 2011 FY 2010 FY 2009 FY 2008 FY 2007 FY 2006
Total Income 51,544.41 33,787 48,427 47,516 42,752 30,851
EBIDTA 8,522.34 3,896 5,214 8,038 7,433 5,889
PBT after Exceptional Item 4,444.80 (645) 1,107 4,498 4,363 3,925
PAT after Minority interest 2,899.06 (634) 583 3,015 2,906 2,505
MAJOR PRODUCT LINE
Ø Closed Die Forging
Ø Crankshaft
Ø Front Axle Beams
Ø Steering Knuckle
Ø Connecting Rods
Ø Rocker Arm
Ø Transmission Parts
Ø Hubs
Ø Oil & Gas
Ø Open Die Forging
MAJOR BRANDS OFFERED UNDER EACH PRODUCT LINE
OPEN DIE FORGINGS The company currently has one 1600T double column pull-down type press with material handling, heat treatment facilities and supporting machining facilities to address the forging needs of the following sectors.
Sugar Industry (Fully /Semi Machined) Steel Plants Mining Fan and Pump Tools & Plastic Injection Moulding Cement Industry Gear Manufacturing and Material Handling Marine Oil & Gas Forging Industry Wind Energy
The company is currently expanding its Open Die forging capabilities by installing a 4000T press line with material handling and heat treatment facilities.
SUGAR INDUSTRY Fully / Semi-Machined
• Mill Roller Shafts • Pinion Shafts • Tail Bars • Shredder Shafts • Cane Cutter Shafts • Fibrizor Shafts
STEEL INDUSTRY
• Blooming Mill Rolls • Universal Couplings • Wobblers • Roll blanks for Cold Rolling Mills • Hardened Hot Rolling Mill Rolls for slab, plate mills, etc. • Trunnioms
GEAR INDUSTRY
• Gear Blanks / Rims • Excavator Axles • Excavator / Shovel Components • Wheel and Gear Shafts
FANS AND PUMPS INDUSTRY
• Integral Flange Shaft • Pump Casing • Stainless Steel Pump Shafts • Fluid End
OIL & GAS
• Shafts • Casing / Tubing Spools • Open Forge Valve Body / Well Head Blocks • Tube Sheets • Interconnecting Blocks
TOOLS & PLASTIC INJECTION MODULING
• P-20 Blocks for Plastic Injection Moulding • H-13 Tool Steel Blocks for Pressure Casting Tools
FORGING INDUSTRY
• Die Blocks (DIN 2714 grade) • Crankshafts for upsetters • Container Assembly for Aluminium extrusion • Ready to assemble Hammer Spares like Rams / Tups / Sow
Blocks
SEAMLESS TUBE INDUSTRY
• Piercing Mill Rows • Mandrel Bars and other toolings
WIND ENERGY
• Wind Mill Shaft
CEMENT INDUSTRY
• Pinion & Pinion Shafts • Kiln Support Rollers • Tie Rods • Crusher Shafts
MINNING • Conveyor Shafts • Pinions
MARINE • Propeller Shafts • Rudder Stock
OPERATIONS LOCATION OF SUBSIDIARIES, BRANCH OFFICE, CORPORATE OFFICE
GLOBAL LOCATION
Branch (India)
BFL Corporate / Head Office - Pune
BFL Delhi
BFL Kolkata
BFL Jamshedpur
BFL Mumbai
BFL Bangalore
BFL Chennai
BHARAT FORGE OFFICES
Headquarters - India Pune Cantonment Mundhwa Pune - 411 036 INDIA Tel: +91-20-26702777 Fax: + 91-20-26822387 Email: [email protected] Plant at Daun CDP Bharat Forge GmbH Julius Saxler - Str.4 D-54550 Daun / Vulkaneifel Phone: ++ 49 (0) 6592 - 9501- 0 Fax: ++ 49 (0) 6592 - 9501 -11
Plant at Ennepetal CDP Bharat Forge GmbH Mittelstr. 64 D-58256 Ennepetal Phone: ++ 49 (0)2333-796-0 Fax: ++ 49 (0)2333-796-388 E-mail: [email protected]
Plant at Brand - Erbisdorf Bharat Forge Aluminiumtechnik GmbH & Co. KG Berthelsdorfer Str. 8 09618 Brand-Erbisdorf (Germany) Tel. 0049 37322 16389 Fax 0049 37322 16333 Email: [email protected]
Bharat Forge America 2807 South Martin Luther King Jr. Blvd Lansing, MI 48910 Telephone: 517.393.5300 Fax : 517.393.6256 Bharat Forge Scottish Stampings Limited Neptune Works, East Park Road, Ayr Scotland KA8 9HR Telephone: ++ 44 (0) 1292 613400 Fax : ++ 44 (0) 1292 6134333 Bharat Forge Kilsta AB P.O. Box 428, SE-69127 Karskoga, Sweden Telephone: ++ 46 58663200 Fax : ++ 46 58663209 FAW Bharat Forge (Changchun) Company Ltd 118-1 Dong Feng Da Jie Changchun Municipality Jilin Province PRC
BHARAT FORGE OFFICES IN INDIA
Chennai (Madras) Bharat Forge Limited Fagun Mansion 3rd Floor 26, Ethiraj Salai Chennai- 600 105 Tel : +91-44-28272116 Fax: +91-44-28270921 Email : [email protected] New Delhi Bharat Forge Limited Antriksh Bhavan, 14th Floor 22 Kasturba Gandhi Marg New Delhi-110 001 Tel : +91-11-3312484 / 3312946 Fax: +91-11-3357083 Email:[email protected] / [email protected] Mumbai Bharat Forge Limited Mittal Towers, B Wing 15th Floor, Opp. New Council Hall Nariman Point, Mumbai - 400 021 Tel : +91-22-22830317/22830523 Fax: +91-22-22040053 Email : [email protected]
Kolkata (Calcutta) Bharat Forge Limited 20 Netaji Subash Road Kolkata - 700 001 Tel : +91-33-22305976 / 22306592 Fax: +91-33-28500017 Email : [email protected] Jamshedpur Bharat Forge Limited 61-A , Rajendra Nagar Sakchi Jamshedpur - 831 001 Tel / Fax : +91-657-2426732 Email : [email protected] Bangalore Bharat Forge Limited 23/2, 2nd Floor Kammanahalli Main Road Next To Vinayak Temple Opp Libetrty Shoe Mart St Thomas Town Post Bangalore 560084 Tel: (080) 25806570 Fax: (080) 25806570 E-mail: [email protected]
NUMBER OF EMPLOYEES
Employee Strength is over 10,000
RECOGNITION /AWARDS
2011
Bharat Forge receives the prestigious ‘Golden Peacock Innovative Product / Service Award – 2011’
Bharat Forge Limited wins the 6th Annual CIO Awards 2011
ITI Khed awarded Educational Excellence Award
Bharat Forge receives the Golden Peacock Award for Best HR Practices – 2011
Baba Kalyani receives the highest French civilian award : "Chevalier de l’Ordre de la Legion d’Honneur
Bharat Forge receives India Shining Star CSR Award
Chairman, Mr. B N Kalyani honored with the Udyog Ratna Award for 2010-11
2010
Bharat Forge Limited honoured with the INS Industrial Excellence Award
Bharat Forge receives the EEPC India National Award for Export Excellence 2009 - 2010
BABA KALYANI DECORATED WITH COMMANDER FIRST CLASS OF THE ROYAL ORDER OF THE POLAR STAR
2009
Bharat Forge receives National Award for Best HR Practices – 2009
Bharat Forge receives the Golden Peacock Award for Occupational Health and Safety – 2009
2008
Mr B N Kalyani, Chairman & Managing Director, Bharat Forge honoured with the Prestigious Padma Bhushan Award
2006
Mr B N Kalyani, Chairman & Managing Director, Bharat Forge honoured with the 7th Annual Ernst & Young Entrepreneur of the Year Award Manufacturing - 2005
Bharat Forge receives the IGCC Award for the Year 2005
Mr B N Kalyani, Chairman & Managing Director, Bharat Forge Limited awarded the Global Entrepreneur of the Year Award.
Mr. B N Kalyani Chairman and Managing Director, Bharat Forge receives the Rashtra Bhushan Puraskar
2005
Bharat Forge awarded with the Outstanding Organization Award 2004
Bharat Forge receives the Best Value Creator Company Award at the Third Annual Outlook Money Awards 2004
Mr B N Kalyani, Chairman & Managing Director, Bharat Forge receives the Business Standard CEO of the Year 2004
Bharat Forge included in Forbes 'Best under a Billion' list for the third consecutive year
2004
Bharat Forge included in Forbes ‘Best under a Billion’ list for the second consecutive year
MARKET SHARE
SYMBOL NAME LAST TRADE
TYPE EXCHANGE
BHARATFORST.BO BHARAT FORGE
283.15 STOCK BSE
BHARATFORG.BO BHARAT FORGE LTD
322.65 STOCK BSE
BHARATFOR.NS BHARAT FORGE LTD
322.80 STOCK BSE
BHARAT_a.NS BHARAT FORGE CO LTD
326.00 STOCK BSE
BHARATFOQF.BO BHARAT FORGE
320.40 STOCK BSE
MAJOR COMPETITORS
v Aditya Forge Ltd
v Ahmednagar Forgings Ltd
v BCL Forgings Ltd
v EL forge Ltd
v Hilton Metal Forging ltd
v Kalyani Forge Ltd
v LGB Forge Ltd
v M M Forgings Ltd
v Mahindra Forgings Ltd
v Micro Forge ( India) Ltd
v Patheja Forgings & Auto Parts Manufactures Ltd
v Pradeep Metal Ltd
v Rajkumar Forge Ltd
v Pamkrishna Forgings Ltd
v SS Forging & Engineering Ltd
CORPORATE STRATEGY
At the Kalyani Group, the key to successful marketing is a thorough understanding of the environment in which your business operates, your position in the market place, products and service opportunities, competition, and most of all changing customer need.
With a business experience of 27 years, Group Chairman, Mr B N Kalyani believes that the ability to innovate and change is critical to the ongoing success of any business. Anticipating what the future may bring and predicting the needs of customers in a fast changing marketplace can be extremely difficult; yet that really is the basis of any strategy.
POSITIONING
“Kalyani Group Companies are positioned No.1 or No.2 in all main businesses in the Indian Market and are also exporting to international OEM’s”
Ø 1 in Forging & Machined components
Ø 1 in Axle Aggregates in India
Ø 1 in Wheels in India
Ø 1 in Alloy Steel
TOTAL EXPORT F.Y 2010 – 2011
Top‐line growth ahead of estimates: Bharat Forge (BFL) reported 26.6% YoY growth in its top-line at Rs9.1bn (PLe-Rs8.7bn) on account of an improvement of 57.6% YoY in export revenues at Rs4.3bn (Rs3.8bn in Q1FY12). Tonnage production for the quarter grew by 16.5% YoY to 53,740MT (52,959MT in Q1FY12). EBITDA was in line with our estimate at Rs2.0bn, whereas EBITDA margin declined by 60bps QoQ to 23.7%. However, EBITDA/kg grew by 6.2% YoY to Rs40.1/kg (Rs39.4/kg in Q1FY12), thereby, leading to a growth of 23.7% YoY in absolute EBITDA. Due to lower interest expenses, PAT (adjusted for Rs65m one-time other income) grew by 46.6% to Rs1bn (PLe: Rs949m).
Non‐Auto revenues increased by 51.3%: Driven by higher contribution of the new non-auto facilities at Baramati, which grew by 86.4% YoY in revenues at Rs1.8bn (Rs1.6bn in Q1FY12), the overall non-auto business grew by 24.1% YoY to Rs 3.3bn (Rs2.8bn in Q1FY12). Non-auto contribution in standalone revenues now stands at ~40%.
Overseas subsidiaries margins expand 170bps YoY: Top-line, on a consolidated basis, grew by 25.3% YoY, with EBITDA performance improving by 29.2%. Overseas subsidiaries reported a top-line growth of 23.4% YoY to Rs6.5bn, with an EBITDA margin of 5.9% for the quarter. Adj. PAT, on a consolidated basis grew by 52.6% YoY at Rs1bn (Rs1bn in Q1FY12).
„ Outlook and Valuation: Operating leverage, coupled with higher utilization at the new non-auto facility in FY13E, will lead to EBITDA margins of ~25% on a standalone basis by FY13E. We value the company on SOTP basis, with standalone business valued at Rs309/share and subsidiaries/JVs valued at Rs26/share. With improving ROE and strong cash flows, we reiterate our ‘Accumulate’ rating on the stock
MAJOR IMPORTING / EXPORTING COUNTRIES
v France
v India
v Ireland
v Singapore
v United Kingdom
v Spain
v United States
v Venezuela
v Netherlands
v Germany
v Dubai
v Madrid
v Houstan
v Oklahoma C
v Mara Caibo
v Amsterdam
LIST OF GOODS/SERVICES EXPORTED BY THE COMPANY
TOP EXPORT PRODUCT INFORMATION OF BHARAT FORGE LIMITED
HS Code Product Description
72249009 Alloy Steel Forging (rough)sion Sr No 36 1 Plug Forging 10 1500
72249099 Sion Sr.no.c 1001 Connecting Rod Forging S
72284000 M/c Bonnet 2 9/16 10k Part No 140058-01-70-02
(epcgLic No.03500 )
73181500 Hexagonal Socket Bolt
73261100 Alloy Steel Forging (rough) 2bonnet Nut 011775-09
Sion Sr No C 361
TOP IMPORT PRODUCT INFORMATION OF BHARAT FORGE LIMITED
HS Code Product Description
27100029 Gear Oil Zx-15 Lubricating Oil
27101119 Lubricants Ar-1ep Grease (walt
34039900 Graphite Based Die Lubricant (220 Kg Per Barrel)
ga 32/cdp
34039901 Graphite Die Lubricnt Sinolga
FUTURE PLANS Bharat Forge, the Pune based forging firm, plans to invest Rs 1,200-1,500 crore in its non-automotive sector business over the next three-and-a-half years. This would mark the beginning of the company’s second phase of expansion in the non-automotive sector, primarily aerospace, marine and nuclear power plants.
“In the last two years, the company has invested nearly Rs 400 crore for expanding in the non-automotive business, and in the coming years we will invest an additional Rs 1,200-1,500 crore to mainly manufacture forgings of up to 500 tonnes needed for large power plants and nuclear power plants,” Baba Kalyani, chairman and managing director, Bharat Forge, said at the inauguration of ring rolling facility at Baramati on Monday.
The company, which currently manufactures forgings of 40-50 tonnes, is targeting 40% of its total sales from the non-automotive sector by 2012 from the present 22%.
The first phase of the non-automotive sector expansion included setting up of a 4,000 tonnes open die press facility at Pune and the Centre for Advanced Manufacturing at Baramati which includes an 80 metric tonne counterblow hammer facility and the ring rolling facility.
The proposed Rs 1,200 crore investment would be for expansion at Baramati and Pune and towards facility for making power plant equipment at Mundra in Gujarat under a joint venture with Alstom. The facility will manufacture 300-800 mw subcritical and supercritical equipment with an annual capacity of 5,000 mw.
The joint venture will also explore possibilities of manufacturing turbines and generators for gas-based plants and nuclear applications.
Apart from this, Bharat forge would set up two more facilities at Baramati. While the first one to be inaugurated by June this year would make crankshafts of about 5 metre long and 4 tonne weight for
heavy locomotive industry,the second unit to be opened by end of 2010 would make 12 metre and 35 tonne crankshafts, mainly to be usedfor large marine applications and aerospace industry.
The Baramati facilithas been set up to primarily cater to the non-automotive sector.
“India is still lagging behind in heavy industry component manufacturing to such an extent that we are highly dependent on overseas companies for critical components. Therefore, in future we would require facilities which can manufacture supercritical and ultra-supercritical technologies and Bharat Forge through its expansion is making a move in that direction,” Kalyani said
EXPORT IMPORT PROCEDURERS
1. SALES CONTRACT An agreement between the buyer and the seller stipulating every details of the transaction. It is a legally binding document. It is therefore advisable to seek legal advice before signing the contract.
• Legally, there are four basic elements of a sales contract. o What is being sold.
§ Description of each item. o At what price.
§ Unit and total price. § Clearly specify the currency.
o In what quantity. o Of what quality.
§ New, used, premium, standard, etc.
• You may write up a formal contract of sale, or you may use: o A purchase order signed by the buyer. o An order acknowledgment countersigned by the buyer. o A pro forma invoice
• An order acknowledgement should supplement a purchase order by: o Confirming terms and conditions of the sale not
covered by the purchase order. § Delivery schedule § Product warranty § Payment schedule
• A pro forma invoice is a document prepared in advance of a sale to provide evidence of the final form and amount of invoice. o It is a form of a quotation.
§ Specify a time limit for the validity of the offer. o A pro forma invoice should be printed on letterhead
stationery. o A pro forma invoice should contain:
§ Description of each item § Quantity of each item § Unit and total price § Terms of sale § Shipping and packing charges § Net and gross weight
• A pro forma invoice should contain enough detail to help the buyer to: o Open a letter of credit. o Obtain an import permit. o Calculate the duty on the items.
2. COMMERCIAL INVOICE:-
It is a formal demand note for payment issued by the exporter to the importer for goods sold under a sales contract. It should give details of the goods sold, payment terms and trade terms. It is also used for the customs clearance of goods and sometimes for foreign exchange purpose by the importer.
3. BILLS OF ENTRY.
A declaration by an importer or exporter of the exact nature, precise quantity and value of goods that have landed or are being shipped out. Prepared by a qualified customs clerk or broker, it is examined by customs authorities for its accuracy and conformity with the tariff and regulations. See also customs entry.
The different kinds of bills of entry are used for following purpose:
1. Bills of entry for goods imported for home consumption (white coloured).
2. Bills of entry for warehouse (yellow coloured).
3. Bills of entry for ex-bond clearance for home consumption(green coloured).
A bill of entry is a formal declaration describing goods which are being imported or exported. The bill of entry is examined by customs officials to confirm that the contents of a shipment conform with the law, and to determine which taxes, tariffs, and restrictions may apply to the shipment. This document must be prepared by the importer or exporter, with many companies hiring a clerk specifically to handle the process of preparing bills of entry. A typical bill of entry includes a description of the goods in the shipment, including details and the quantity of the goods, along with an estimate of their value. Customs officials reserve the right to inspect the shipment to determine whether or not it is consistent with the bill of entry, and discrepancies can be grounds for legal proceedings. Once a bill of entry has been reviewed and the shipment has been inspected, it can be cleared for sale or transfer. If there is a problem, customs may opt to confiscate the goods.
Many nations have specific laws about how bills of entry should be formatted and presented. It is important to have accurate documentation, or goods can be held up in customs. This can cause an inconvenience in some cases, and spoilage or destruction of the goods in others; a shipment of fruit, for example, will not hold up through a lengthy retention by customs while details of the shipment are worked out.
4. PERFORMA INVOICE
An invoice provided by a supplier prior to the shipment of merchandise, informing the buyer of the kinds and quantities of goods to be sent, their value, and importation specifications (weight, size and similar characteristics). This is not issued for demanding payment but may be used when applying for an import license/permit or arranging foreign currency or other funding purposes.
• Contents of Performa invoice
Ø Name and address of the exporter. Ø Name and address of the importer. Ø Mode of transportation. Ø Name of the port of loading. Ø Name of the port of discharge and final destination. Ø Provisional invoice number and date. Ø Exporter’s reference number. Ø Buyer’s reference number and date. Ø Name of the country of origin of goods. Ø Name of the country of final destination. Ø Marks and container number. Ø Number and packing description. Ø Description of goods giving details of quality. Ø Signature of the exporter with date.
Documentary Letters Of Credit
DOCUMENTARY credit is frequently the agreed method of settlement for international trade. The buyer's bank reimburses the seller against presentation of documents drawn in compliance with conditions stipulated in the documentary credit by the buyer.
There are advantages to both the buyer and seller when settlement is arranged by documentary letter of credit. First, the buyer knows that payment will only be made if the documents received comply strictly with the terms and conditions of the credit as stipulated by the buyer. Second, the seller knows that payment will be received provided the terms and conditions of the credit are strictly complied with.
Documentary letter of credit
A documentary credit can be defined as a conditional undertaking of payment given by a bank. Expressed more fully, it is a written conditional undertaking issued on behalf of the importer (applicant) by the issuing bank to the exporter of goods (beneficiary) to pay for the goods or services, provided the documents submitted conform strictly to terms and conditions of the credit.
From this definition it can be seen that there are basically three parties to a documentary credit: a) the buyer/importer, who requires that a credit be issued in his favour; b) the beneficiary (the supplier of goods); and c) the issuing bank which issue s the credit at the request of the buyer or importer. The credit is usually (but not always) advised to the beneficiary through a bank in the beneficiary's country (the advising bank).
All documentary letters of credit are subject to the provisions of Uniform Customs and Practices (UCP) for Documentary Credits, Brochure No. 500 issued by International Chamber of Commerce, wherever it is incorporated into the text of the credit as such.
BILLS OF LADING
A legal document between the shipper of a particular good and the carrier detailing the type, quantity and destination of the good being carried. The bill of lading also serves as a receipt of shipment when the good is delivered to the predetermined destination. This document must accompany the shipped goods, no matter the form of transportation, and must be signed by an authorized representative from the carrier, shipper and receiver.
CERTIFICATE OF ORIGIN A Certificate of Origin (often abbreviated to CO or COO) is a document used in international trade. It is a printed form, completed by the exporter or its agent and certified by an issuing body, attesting that the goods in a particular export shipment have been wholly produced, manufactured or processed in a particular country. The “origin” does not refer to the country where the goods were shipped from but to the country where they were made. In the event the products were manufactured in two or more countries, origin is obtained in the country where the last substantial economically justified working or processing is carried out. An often used practice is that if more than 50% of the cost of producing the goods originates from one country, the "national content" is more than 50%, then, that country is acceptable as the country of origin. When countries unite in trading agreements, they may allow Certificate of Origin to state the trading bloc, for example, the European Union (EU) as origin, rather than the specific country. Determining the origin of a product is important because it is a key basis for applying tariff and other important criteria. However, not all exporters need a certificate of origin, this will depend on the destination of the goods, their nature, and it can also depend on the financial institution involved in the export operation.
• CONTENT OF CERTIFICATE OF ORIGIN
1. Name and the address of the exporter.
2. Name and the address of the consignee.
3. Name and the address of the notify.
4. Name and logo of the chamber of commerce.
5. Name of the port of lading.
6. Name of the port of discharge and place of delivery.
7. Mark and container number.
8. Packing and container description.
9. Total number of container and package.
DATA ANALYSIS
FLOW CHART: Internal procedure from receiving the order till the final dispatch.
CUSTOMER ENQUIRY
NEGOTIATION
ORDER ACCEPTANCE
INFORM CUSTOMER
PREPARE DOCUMENT
MANUFACTURING
DISPATCH
PAYMENT
PACKING LIST
Itemized list of articles usually included in each shipping package, giving the quantity, description, and weight of the contents. Prepared by the shipper and sent to the consignee for accurate tallying of the delivered goods. Also called bill of parcels, packing slip, or unpacking note.
The exporter prepares the packing list to facilitate the buyer to check the shipment. it contents the detailed description of the goods packed in each case, their gross and net weight etc. the difference between a packing note and a packing list is that the packing note contains the particulars of the contents of an individual pack, while the packing list is a consolidated statement of the contents of a number of cases or packs. The contents of packing list and commercial invoice are same but in packing list number and packing description are mentioned.
Normally, ten copies of the packing list/note should be prepared. The first is to be sent with the shipping documents , two copies in advance to the buyer , one to the shipping agent and the remaining retained by the exporter.
SHIPPING BILL
A shipping list, packing list, waybill, packing slip (also known as a bill of parcel, unpacking note, packaging slip, (delivery) docket, delivery list, manifest or customer receipt), is a shipping document that accompanies delivery packages, usually inside an attached shipping pouch or inside the package itself. It commonly includes an itemized detail of the package contents and does not include customer pricing. It serves to inform all parties, including transport agencies, government authorities, and customers, about the contents of the package. It helps them deal with the package accordingly.
Shipping bill is the main customs documents, required by the customs authorities for granting permission for the shipment of goods. The cargo moves inside the dock area only after shipping bill is duly stamped, i.e., certified by the customs. Shipping bill is normally prepared in five copies:-
1. Customs copy. 2. Drawback copy. 3. Export promotion copy. 4. Port trust copy. 5. Exporter’s copy.
Based on the incentives offered by the government, customs authorities have introduced three types of shipping bills:-
• Drawback shipping bill(green)
• Dutiable shipping bill (yellow)
• Duty-free shipping bill(white)
BILLS OF EXCHANGE
A non-interest-bearing written order used primarily in international trade that binds one party to pay a fixed sum of money to another party at a predetermined future date.
An unconditional order issued by a person or business which directs the recipient to pay a fixed sum of money to a third party at a future date. The future date may be either fixed or negotiable. A bill of exchange must be in writing and signed and dated also called draft.
Bills of exchange are similar to checks and promissory notes. They can be drawn by individuals or banks and are generally transferable by endorsements. The difference between a promissory note and a bill of exchange is that this product is transferable and can bind one party to pay a third party that was not involved in its creation. If these bills are issued by a bank, they can be referred to as bank drafts. If they are issued by individuals, they can be referred to as trade drafts.
SHIPPING BILL OF EXPORT
Shipping bill of export is the main document by the customs authority for the allowing shipment. A shipping bill is used by the shipping agent and represents some kind of certificate.
For all parties, included ship’s owner, seller, buyer and some other parties for each one represent a kind of certificate documents.
PAYMENT
• MODE OF PAYMENT
There are different methods of payment in international trade. The fact that the buyer and seller are located in different counties, minimizing risk becomes a crucial part of the transaction. Some of the popular modes of payment are:
Ø Prepayment via telegraphic transfer.
Ø Open account.
Ø Documentary collection.
Ø Document against payment (D/P)- sight.
Ø Document against acceptance (D/A)-after sight.
• LETTER OF CREDIT
THE L/C is a guarantee given by the buyer’s bank that it will pay for the goods provided the exporter provides a set of documents such as bill of lading and freight documents . the technical term for L/C is documentary credit. L/C deals with document , not goods. Thus it works in favor or both the buyer and the seller.
• Transferable L/C And Non-Transferable L/C
With a transferable L/C, a beneficiary (exporter/seller) has the right to give the instruction to the paying or accepting bank to make the credit (funds) available to one or more third parties, sometimes referred as secondary beneficiaries . A non – transferable L/C is when the bank makes credit available to the beneficiary only and cannot be transferred to any other party.
• Back –To-Back Letter Of Credit
The parties involved in a back-to-back L/C are the buyer and his bank, the seller / manufacturer and his bank and the manufacturer’s subcontractor and his bank. This type of credit transaction is used when a seller/manufacturer has to buy a component or farm out part of production, but may not have the cash flow to do so. What is apply to his bank for a L/C, identical to the original L/C he received from the buyer – but of a lesser value. This second L/C, called a back-to-back, is sent to the subcontractor’s bank , assuring the subcontractor of payments.
CSR ACTIVITIES
EDUCATION
As part of its Corporate Social Responsibility, Bharat Forge actively supports Pratham Pune Education Foundation (PPEF). PPEF helps in imparting primary education to children of economically challenged and migrant workers, mainly in the age group of 3-14 years. Mr. B. N. Kalyani is the Founder and Chairman of PPEF. This initiative is actively funded by BFL and over the past 4 years, has touched the lives of over 50,000 children in Pune, and has become an important catalyst for women empowerment.
PPEF operates through an extensive network of Balsakhis, Balwadis, Bridge Courses and Outreach Programmes. PPEF's contributions have resulted in Pune achieving almost 100% literacy.
COMMUNITY INITIATIVE
As a socially responsible employer, the Kalyani Group has a strong sense of community responsibility, and encourages its businesses to enhance their relationships with the communities in which they operate.
Bharat Forge Ltd., sponsors community centres for 250 families in and around Pune. Of these, 80 employee families are involved in income-generating activities such as hand-glove stitching, stitching uniforms and making of incense sticks. After vocational training these members then use financial assistance from self help groups (SHGs) to start their own small businesses. BFL is involved in developing micro credit savings groups within these families. The company
continues to remain engaged with the members for any assistance that newly formed ventures may need. In addition, BFL also conducts awareness activities vocational training, personality camps and socio-cultural activities for these families, which are greatly appreciated by them.
The staff at Bharat Forge America, also engage themselves in community services in the local Lansing community. These efforts include home rebuilding and refurbishing to help the local disabled and elderly couples. A group of 18 BFA employees spend an entire afternoon on a week end replacing doors, repairing roofs and doing drywall replacement.
ENVIRONMENT
As a corporate entity, we are committed to good environmental practices and are conscious of our responsibility towards creating, maintaining and ensuring a safe and clean environment.
All Kalyani Group businesses are at the forefront of improving their performance while enhancing the environment. They are uniquely positioned to use their resources to grow their organizations in an environmentally sound and responsible manner.
We as a group believe that environmental quality is a key ingredient for long-term profitability. Environmental Best Practices are being employed increasingly within the group to improve business productivity, cut waste and reduce costs.
The Group is committed to minimizing any adverse effects of its activities on the environment, while continuously improving its environmental performance.
Bharat Forge has invested in Renewable Energy Project generating Green Energy. Added to this it is buying Green Energy power, which put together is approx. 30% of Bharat Forge, Mundhwa plant
consumption.
This usage of Green Energy is considered to be a reduction of Carbon Emission to the extent of approx. 30,000 tons per annum and this is recognized & certified by United Nations Framework Convention on Climate Change (UNFCCC) under Kyoto Protocol.
As an active participant in the process of promoting the environmental awareness and in the process of beautifying and maintaining the civic infrastructure of Pune, BFL maintains several gardens across the city.
HEALTH AND SAFETY
The group is committed to having a safe and pleasant working environment. Health & safety best practices form an integral part of the group’s business activities. We believe that our employees are the key to our company's success and it is our moral responsibility to ensure that they have a safe & healthy working environment Safety is a top priority in all our operations across the group. All group companies have a safety committee that meets regularly to provide updates on safety issues, conduct rehearsals of safety procedures and onsite emergency action plan and training programs on safety related issues. Our goal is to drive injuries, occupational illnesses and operational incidents as close to zero as possible. To realize our zero-accident goal, we are taking further measures to reduce risks by undertaking risk assessment of our manufacturing facilities. Operation manuals are prepared and each operation unit also educates its employees on labor safety.
The group also continues its drive of 'Keep Fit' which it started in 2002. The purpose of this drive is to reduce absenteeism due to illness and to encourage individuals to follow a healthy lifestyle. The Keep Fit drive includes regular health check-ups including health, diet and a fitness test.
