summer internship project [sip] – 2014 a project report on “a study of customer buying...

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A

SUMMER INTERNSHIP PROJECT REPORT

On

“STUDY OF EXPORT PROCEDURE &

DOCUMENTATION AT VINAYAK INDUSTRIES” AT

Prepared by

Nikunj J. Selarka MBA SEM-III

Enrollment no 138270592113

Batch 2013-2015

Guided by Ms. Falguni Shelani Assistant Professor

Submitted to Gujarat Technological University

Ahmedabad.

IN PARTIAL FULLFILLMENT OF DEGREE OF MBA

MARWADI EDUCATION FOUNDATION GROUP OF INSTITUTE Affiliated with GTU- MBA Programme

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COLLEGE CERTIFICATE

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COMPANY CERTIFICATE

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DECLARATION

I undersigned NIKUNJ J. SELARKA a student of M.B.A. (SEM - III) hereby declared

that this project report is my own work and it has been carried out by me, in well reputed

company VINAYAK INDUSTRIES under the supervision of MS. FALGUNI SHELANI

Assistant Professor of MARWADI EDUCATION FOUNDATION GROUP OF

INSTITUTIONS.

This report has not been previously submitted to any other University for any

examination.

Date: Student’s

Sign.

Place: Rajkot Nikunj J. Selarka

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PREFACE

Knowledge is one of the most important Treasures for any person. The amount of the

knowledge in this world is a doubling every five years and with the end of the 21st

century it is now expected to double every two years. So if I plan to be in this knowledge

explosion means that I would be facing with unprecedented challenges and

opportunities. How well I address that I would depend upon, in large part on my ability to

adapt to the continuing changes. Journal work like this gave an exposure to the

practical and real life experience of the modern market.

Theories don’t teach unless accompanied by the working in original situation. This

project report was carried out according to the course of MBA.

Moreover in modern world practical knowledge has given more importance than

theoretical knowledge enables the student to get some experience of management,

affairs of course, theoretical knowledge is essential as a sound base.

As a part of my industrial trial training I have taken industrial visit at VINAYAK

INDUSTRIES, KUVADVA G.I.D.C. for 6 weeks. I have collected various information

from Export departments.

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ACKNOWLEDGEMENT

It is quite delighting for me to get admission in course of business administration .Which

is the most valuable in commerce field. This is a great opportunity for me to present my

first report of the industrial unit that I have visited.

I am very grateful to our H.O.D for giving us permission to visit VINAYAK INDUSTIES.

I am also highly obliged to Ms. Falguni Shelani for her sincere attention valuable

guidance and providing suggestion and thus guiding me all the way in my efforts to

prepare this report.

I am thankful to Training officer Mr.Yogendra Bhanderi of Vinayak Industries for

providing me the permission to visit this unit and giving me chance to study the

company for a particular subject and helping me to collect all such information.

During my training period, I have not only learnt the Shipping documentation& How to

do Export but also learned about shipping industries scenario and growth of export-

import. The various department of the organization work in close co-ordination with

each other in order to achieve a common end.

Again I am heartily thankful to all those who directly or indirectly contributed their

valuable time and helped me for preparing this report.

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EXECUTIVE SUMMRY

As a partial fulfillment of MBA all students are required to undergone project for 2

months. With respect to that I have prepared this project report on “on Export

Procedure & Documentation.

I have selected this topic to know about procedure of Export and Documentation. This

report also tells about present scenario of Indian export industries and how to foreign

trade. Another objective is to know Documentation process done by CHA (Clearing

House Agent) to clear the goods from custom.

My secondary objective is to know the relation between CHA and EXPORTER. It is

provide the detail on export process. We discussed Inco-Terms and ITC-HS code.

In the final objective a brief summary of all the export documents used at Vinayak

Industries for legalizing an export order is given. Further the documents regarding pre

and post shipment procedure are discussed.

We also describe that which Documents are useful for CHA, IMPORTER and

EXPORTER.

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Contents

Sr. No. Particulars Pg. No.

Part-I : General information 10

1 Industry overview 11

1.1 History 11

1.2 Growth & Development 12

1.3 Market player in the industry 13

2 Company overview 13

2.1 Introduction and history 13

2.2 Company profile 14

2.3 Organization chart 15

2.4 Certificate & Awards of the company 16

2.5 Product 17

2.6 Valuable customer 17

2.7 Vision & mission 18

2.8 SWOT analysis 18

Part-I I: Research work 20

3 Introduction of study 21

3.1 Background of the study 21

3.2 Review of literature 21

3.3 Statement of study 24

3.4 Objective of study 24

3.5 Contribution & learning from the project 24

4 Research methodology 25

4.1 Research design 25

4.2 Sources of data 26

4.3 Data collection method 26

4.4 Data collection instrument 26

5 Analysis & interpretation of data 27

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5.1 Ratio analysis 27

5.2 Export documents 33

a) Export company legal documents 34

b) Export goods documents 36

c) Other documents 59

5.3 Inco-terms 60

5.4 Terms of payment 65

5.5 Export procedure 68

6 Findings 72

7 Suggestion 73

8 Limitation of the study 73

9 Conclusion 74

10 Bibliography 75

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1. INDUSTRY OVERVIEW

1.1 HISTORY

Wheat is the second most important staple food after rice in India and generally

provides about 50% of the calories and protein requirement to a vast Majority of the

Indian population.

Food ministry officials said the next tender, for the export of 210,000 tones, would be

floated on December 12. The wheat would be exported from the KANDLA, MUNDRA,

VISAKHAPATNAM and PIPAVAV ports.

Earlier, the government had to reduce the base price for export from $300 a tones to

$260 a tones, after its attempt to export 0.15 mt was cancelled, as the bids received

were much lower than the base price.

1.2 GROWTH & DEVELOPMENT

“We expect to get a good price in the coming months, too,” said a senior government

official. “We were hoping to get a price of $270-275 a tones, but the price quoted (about

$290 a tones was unexpected, which showed Indian wheat had started commanding a

premium in international markets.” He said the price received was even more than that

quoted for Black Sea wheat, one of the most valuable wheat brands in the world.

“In the coming months too, the trend is expected to be maintained because according to

information, the Australian wheat crop is not as good as expected. This will enable us to

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sell more in foreign markets,” he said. Exporting wheat was more profitable for the

government than selling it domestically, as at an average price of $285 a tones, the

government was expected to earn about Rs 18,000 a tones, while in India, it had to sell

at Rs 16,000 a tones, he added.

In 2012-13, the government had earned $1.4 billion by exporting 4.2 mt of wheat

through public sector undertakings. Last financial year, Indian wheat had fetched an

average price of $311.38 a tones.

(Source: www.dgft.gov.in )

1.3 MARKET PLAYERS

RIDHIMA INTERNATIONAL

R.K.AGRO PEARLS & COMPANY

http://www.dgft.gov.in/

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CHREOTECHNICS INC

SAMUEL & SAMUEL INTERNATIONAL TRADE

2. COMPANY OVERVIEW

2.1 INTRODUCTION AND HISTORY:

Vinayak Industries, based in Rajkot-Gujarat is a leading international trading company,

specialized in the processing and trading of various Agri commodities from India.

Established in 2001, we are leading exporters of Wheat directly from the growing

region. In international Market, the company has earned goodwill in products like

Wheat, Wheat Flour, Rice, Millet and Maize.

We are one of the leading exporters of Wheat and other Agri products. We also produce

world class Machine Clean Wheat required in Human Consumption in India and Abroad

In Brand Name of “Khandan No.1” & “Golden Harvest Wheat” Our Milling Wheat is

exported widely and has a large number of satisfied customers throughout the country

and abroad.

We source our raw materials from farmers and local traders in the growing region bring

the produce to our factory / warehouse for further processing/packing.

We offer a solid combination of high-quality products at the best prices and our

expertise in sourcing products. Every day, we help our clients by providing them market

information and expertise from local as well as global knowledge.

Our products are popular throughout the country and our present in Malaysia, Srilanka,

Burma, Vietnam, Taiwan, Indonesia, Singapore and Philippines.

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We can assure you of our quality products and long term association for supply of our

highly popular and hygienic food products listed above that are manufactured under

strict quality control in our ultramodern plant in Rajkot.

Being situated in the nearest port Mundra, kandla and Pipavav and well connected to

the entire world easily we are able to supply our products anywhere within short notice.

2.2 COMPANY PROFILE

Name of company : Vinayak Industries

Address : 11-K, Kuvadva GIDC,

Rajkot-Ahmedabad Highway,

Village: Kuvadva Dist.: Rajkot-360 023

Phone : +91-281-6580280, 2784185

E-mail : [email protected]

Website : www.vinayakindustries.biz

Name of Partner : Mr. Nayanbhai Raithatha

Mr. Bhavinbhai Raithatha

Establishing year : 2001

Bankers : Axis Bank Limited

Type of Product : Wheat, Rice, Wheat Flour, Millet, Maize.

Accounting Year : April to March Annual Turnover : Rs. 250 Crores(Approx.) Factory Area : 6000 Square meter Auditors : Pabari & Co.

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Size of Org. : Medium Scale Industry Form of Org. : Partnership

2.3 ORGANISATION CHART

WORKERS

WORKERS

DOCK

SUPERVISOR

H R

MANAGER

MARKETING

MANAGER

PURCHASE

MANAGER

FINACEL

MANAGER

EXPORT

MANAGER

QUALITY OFFICER ACCOUNT

OFFICER

ASSI. EXPORT

MANAGER

EXPORT

WORKER

S

WORKERS

WORKERS

STORE

KEEPER

GENERAL MANAGER

(Mr.H.R.Nandva)

CEO

(MR.MAHENDRABHAI PANOT)

PLANT OPERATOR

CLERK EXPORT

EXECUTIVE

COMPUTER

OPERATOR BOILER OPERATOR

LABORATORY

ASSISTANCE

MANAGER

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2.4 CERTIFICATES & AWARDS OF THE COMPANY

Export –Import License certificate

Agricultural & Processed Food Products Export Development Authority.

Food Safety and Standards Authority of India.

AWARD: Rajkot Chamber of Commerce & Industries Best 2013 Industries in Rajkot.

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2.5 PRODUCTS

INDIAN EXPORTER EXPORTING MANY AGRICULTURAL PRODUCTS,

BUT SOME OF THEM VINAYAK INDUSTRIES MOSTLY EXPORTING

BELOW PRODUCTS:

PRODUCTS NAME HS CODE

WHEAT :: 10019010

MAIZE :: 11042300

WHEAT FLOUR :: 11010000

RICE :: 10063010

MILLET :: 10082920

2.6 VALUABLE CUSTOMER

VINAYAK INDUSTRIES doing most of deal in agri products with below buyer:

1) PT CARGILL - INDONESIA

2) AGROCROP INTERNATIONAL

3) PG ANG & SONS, INC - PHILIPPINES

4) EMMSONS ASIA PTE LTD - SINGAPORE

5) FWUSOW INDUSTRY CO., LTD. - TAIWAN

6) AGRO RESOURCES WORLDWIDE SDN BHD.- SINGAPORE

7) EXPORT TRADING COMMODITIES PTE LTD, SINGAPORE.

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2.7 VISION & MISSON

To supply consistently high quality wheat to our customer at the lowest cost in all

market conditions.

We continuously strive to be premier and diversified agricultural produce

exporters, delivering a commitment of quality, price and a level of customer

service that no one can match, in a culture that is performance-driven.

Our mission is to enter in Star Trading Export House. For Star Trading Export

House, yearly turnover is required more than Rs. 500cr.

2.8 SWOT ANALYSIS

SWOT analysis of any company is shows the internal strength and weakness and

external opportunity and threat for the company. In the SWOT analysis includes the

following:

S- Strengths:

We have latest Buhler sortex cleaning plant at factory.

Our own factories in the origin, so, we maintain perfect quality control.

Near to best sea port area Mundra Port, Pipavav port & Kandla port.

Direct material purchasing from farmers, ensure our products price

advantage.

Prompt reaction to client’s requirement with rich information.

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W-Weaknesses :

Lack of highly professional management is the only weakness of Vinayak.

For the raw material company have to depend on the supplier and in

delivery may not on time then they have to stop the production.

O-Opportunities:

Government also supports for the export in the many countries, like

service tax refund, no duties, country focus, etc. So that is the opportunity

for the company.

Opportunity for the export in the Middle East, Africa and central Asia.

There is huge market in the Indian rural so that is also opportunity for the

company.

T-Threats:

In the market there are many importers from the china at the low price so

there company have to compete them in the market.

Threats from the economic cycle i.e. Inflation or Deflation.

Government is planning to banned on wheat for the maintain buffer stock

and price fluctuation.

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3. INTRODUCTION OF STUDY

3.1 BACKGROUND OF THE STUDY

This project gives idea about Ratio analysis and export procedure &

documentation.

Ratio anaysis is widely used of financial analisis.

Ratio analysis is define as the systematic use of ratio to interpret the financial

statements so that strenths and weakness of a firm as well as its historical

performance and current financial condition can be determined.

It includes all details about the export what was conducted for gathering

information about international market.

It gives estimation about scope of expanding business in competitive world.

3.2 REVIEW OF LITERATURE

1) Authors:-

Alessandro Vitale1, Jamie Morrison, Ramesh Sharma

Source:-

The east African community common external tariff on cereals:

an analysis of stakeholder perceptions ( October 2011 ), ( Page-14 to 20 )

This study analyses the perceptions of various stakeholders on the appropriateness of the Common External Tariff (CET) on cereals in the East African Community (EAC). The issues being debated are both the statutory level of the CET and its temporary adjustments. Field interviews were undertaken in three of the five EAC countries to solicit stakeholder views. It was found, as anticipated, that stakeholders do hold different views on these two elements of the CET. These differences are found to be linked to the sizes of the producing and processing sub-sectors, in the case of individual countries ,and to the perceived gains and losses in the case of stakeholders within countries. Stakeholders associate the appropriate CET on maize to food security concerns, but with some arguing for high CET (for self sufficiency)and others for low CET (for low consumer price). For rice and wheat, import dependency is large and so there is some convergence in views towards a lower CET, but with differences among

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farm and processing sub-groups. Lack of convergence on the issues can be related to the poor functioning of the regional market, both real and perceived due to reasons such as cross-border trade facilitation and export bans. These actual and perceived problems need to be addressed through more consultations of stakeholders from across the region, backed up by good quality analyses on the issues. (Alessando Vitale1, October, 2011)

2) Authors:-

Ashish Shenoy

Source:-

The Integration of the Indian Wheat Sector into the Global Market, (May 2008)

World food prices have risen rapidly in recent months. The trend has brought up concerns

about how markets in developing nations respond to international conditions. In this

paper, I try to determine whether the price of wheat in India converges to the world level.

Using monthly prices from the United States of America, Canada, Australia, Argentina,

and India over a period of thirteen years, I look for evidence of co integration among the

series. Co integrated series follow a common stochastic process, and thus can be said to

move together. I first test for co integration without restrictions to identify the number of co

integrating vectors and common trends, and then impose restrictions to see how quickly

markets adjust to disequilibria. I find evidence that the world wheat trading centers are

integrated, with Australia being the most dominant. The Indian wheat price does not

converge with the other four. I next use the Granger Representation Theorem to model

the adjustment of the markets to shocks. I find that the Indian market adjusts more slowly

to a new equilibrium, but the total magnitude of adjustment is greater. Possible

explanations include poor infrastructure, regional segmentation within India, and high

levels of government intervention.

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3) Authors:-

Lenis Saweda

Source:-

Nigeria Strategy Support Program (NSSP), NSSP Working Paper No. 21, October 2011

(Page No.24 to 30)

Despite the rapid pace of urbanization taking place in Nigeria, half of Nigerians

(approximately 70 million individuals) still live in rural areas; most of them engaged in

smallholder semi-subsistence agriculture. Agriculture remains a crucial sector in the

Nigerian economy, being a major source of raw materials, food and foreign exchange;

employing over 70 percent of the Nigerian labor force, and serving as a potential vehicle

for diversifying the Nigerian economy. However, there are no rigorous studies that

explain productivity in this sector vis-à-vis the relationship of the sector to food security

and social capital. This review assesses the nature and scope of agricultural

productivity, food security, and social capital in Nigeria, while also laying the

groundwork for investigating the interrelationships among them. The literature reveals

the pervasive inefficiency of Nigerian farmers as most smallholder farmers produce

significantly below their production frontiers. As a result, they produce less than optimal

levels of output as revealed by studies of productivity (mostly land productivity). Also,

while many farming enterprises are profitable, profit margins are generally low. The vast

majority of Nigerians are reported to be food insecure as revealed by studies on

availability, utilization, and access to food. In terms of social capital, most studies are

focused on membership in formal or informal organizations or associations, or by the

access of individuals or associations to formal and informal sources of credit. Evidence

shows that both measures of social capital improve several aspects of social welfare,

particularly poverty reduction, in addition to influencing technology adoption. This review

also identifies the potential pathways through which all three concepts are linked

.Keywords: food security, agricultural productivity, social capital

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3.3 STATEMENT OF PROBLEMS

Being Student aspirant to study international Business , wanted to study export procedure of Vinayak Industries. To analyze financial health of firm, I have tried to get data as much as I can and analyzed through ratio analysis.

3.4 OBJECTIVE OF THE STUDY

To know the Common Import/Export Documents required for business

To understand the process of doing Export & Import from India point of view.

To know the documentation process done by the CHA.

To understand the Inco-Terms used in business

ITC-HS Codes Schedules

Profitability is the profit earning capacity of the business. This can be measured

by Gross profit, Net profit, Expenses and Other ratios.

3.5 Contribution and Learning from the project

It will help to decide the level of maintaining price and quality from competition

world.

It can also help to basic idea of export business procedures to the new exporter.

To provide a effective model for the exporter.

We can find necessity of funds and assets.

It can also help to learn the proportion of assets and liabilities.

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4. RESEARCH METHODOLOGY

RESEARCH DESIGN:

Research design is the based framework, which provides guidelines for the research

process. It is a map or blue print according to which the research is to be conducts. The

research design specifies the methods for data collection & data analysis determine the

source of data. Most specifically it was a kind of "Descriptive conclusive research" who

takes care of who, when, where, what, how and why aspects of the investigation further

the researcher used the statistical method to serve the purpose of project, it permitted

the research to derive more accurate generalization whose reliability could be

measured.

RESEARCH DESIGN

EXPLORATORY

TOOL USED

TELEPHONE AND E-MAIL, Observation

RESEARCH TECHNIQUE

QUALITATIVE

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SOURCES OF DATA:-

Primary data collection :-

E-mail

Telephone

Invoice

Packing list

Secondary data collection:-

Invoice

Packing list

Shipping bill

Internet

DATA COLLECTION METHOD:-

Observational Method

DATA COLLECTION INSTRUMENT:-

Personal Observation

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ANAIYSIS & INTEEPRETATION OF DATA

5.1RATIO ANALYSIS

A relationship between various accounting figures, which are connected with each

other, expressed in mathematical terms, is called accounting ratios.

According to Kennedy and Macmillan, "The relationship of one item to another

expressed in simple mathematical form is known as ratio."

Ratio analysis is one of the techniques of financial analysis to evaluate the financial

condition and performance of a business concern. Simply, ratio means the comparison

of one figure to other relevant figure or figures.

ANALYSIS AND FINDINGS

The profitability analysis by ratios is important for measuring the financial performance

and financial conditions or position of the company. The profitability analysis by ratios

includes mainly following ratios.

Gross profit ratios.

Net profit ratios.

Return on total assets ratios.

Return on fixed assets ratios.

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GROSS PROFIT RATIO:

Gross profit ratio is one of the primary ratios to analyze the profitability of the company.

Gross profit ratio is a ratio expressing the relationship between gross profits earned to

net sales of the company. The gross profit ratio shoes whether markup obtained on cost

of production id sufficient or not. Hence it is related with the operation of the company.

Gross profit ratio of the company can be found by using the following formula.

Gross profit ratio = Gross profit × 100

Net sales

The calculation of gross profit can be described as under:-

For The Year 2010-11

Gross profit ratio= 3.13%


Gross profit ratio= 2.33%


Gross profit ratio=4.71%

INTERPRETATION:

The highest gross profit is in the year 2012-13 which is 4.71%, it happens due to

increase in the sale of the company. In the year 2012-13 the gross profit ratio is high

compare to above year.

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NET PROFIT RATIO:

Net profit of the company is valuable for the purpose of ascertaining the overall

profitability of the business and shows the efficiency otherwise of operating the

business. The net profit shows the overall performance of the company during the

particular year.

Net profit ratio indicates what portion of sales revenue is left to the proprietors i.e. the

shareholders of the company after all operating expenses and other expenses are met.

Net profit ratio of the company can be found out by using the following formula:

Net profit ratio = Net profit × 100

Net sales

The calculation for 5 years net profit ratio is as under:

For the year 2010-11:-

Net profit ratio = 0.19%





INTERPRETATION:

From the Figure we can see that the net profit ratio is high in the year 2010-11 while in

the year 2012-13 it reduces to 0.176% which is low. It may be happened due to more

reserve transferred.

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EXPENSES RATIO:

Expenses are very important term in the each and every business. Expenses ratio

indicate the relationship of various expenses to the net sales. Here the total expenses

are considered. The objective of expense ratio computation is to provide information

about increase or decrease in the expenses of the firm. Lower expenses ratio is

considered better for the business. The expenses include various administrative

expenses, financial expenses, selling and distribution expenses and other expenses.

The computation of expenses ratio is as under:

Expenses ratio: - Total Expenses ×100

Net sales


Expense ratio = 96.87 %





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RETURN ON TOTAL ASSETS RATIO:

The return on total assets ratio measures a relationship between net profit before

interest, tax and total assets. The objective of computing this ratio is to find out how

efficiency the total assets have been used by the management. Return on total assets

ratio shows the strangeness of the company. Return on total assets ratio can be

calculated as follows:

R.O.T.A.R. = Net Profit before Interest and Tax × 100

Total assets


R.O.T.A.R. = 2.63 %


R.O.T.A.R. = 2.76 %


R.O.T.A.R. = 3.02 %

INTERPRETATION:

The figure clearly shows that in the last year 2012 -13 the return on total assets ratio is

increased up to 3.02% from the 2.76 % which is in the year 2011-12, which shows the

good financial position of the company.

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RETURN ON FIXED ASSETS RATIO

Every company has decided some level of fixed assets. At that level the company has

to take fixed assets. Fixed assets include company’s building, equipments, tools,

machineries, vehicles, etc… The return on fixed assets ratio shows that at what level

company can get the return on their fixed assets. The return on fixed assets ratio is

also help for deciding the size of the organization.

Those assets can be said as fixed assets which are permanent or fixed in the company

and cannot be easily converted into cash. If management of fixed assets is not proper it

can be affect the business defectively.

The return on fixed assets ratio can be calculated as follows:

R.O.F.A.R. = Net Profit before Interest and Tax × 100

Total Fixed assets


R.O.F.A.R. = 68.78 %

For the yea 2011-12:-

R.O.F.A.R. = 51.07%


R.O.F.A.R. = 33.29%

INTERPRETATION:

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The return on fixed assets ratio is high in the last year 2010-11 i.e. 68.78% while in the

year 2011-12 it is 51.07 % and in the year 2012-13 it is very low i.e. only 33.29%.

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5.2 EXPORT DOCUMENTS

a) EXPORT COMPANY LEGAL DOCUMENT

COMPANY REGISTRATION:

First of to choose the name of company and registered the firm in

government, Like a partnership, private limited, entrepreneurship, etc.

PAN COPY:

Whatever name chooses when we become export than we need the PAN

No. that useful to open Bank Account and also Issue IEC No. So, that

PAN No. is mandatory to Issue.

BANK A/C:

In export business when we establish the business the objective of the

business to earn money. So, all transaction banks will play crucial role for

that necessary to open Bank.

IEC CERTIFICATE :

For obtaining IEC number apply in the prescribe form along with the

documents listed above to Regional Licensing Authority (Office of the

Regional DGFT). The registered office or the head office may apply for

allotment of IEC No. IEC code no.10 digit no. from DGFT Whenever, there

is a change in the name, address or constitution of the holder of IEC No.

such change should be intimated within 30 days to the concern

authorities. If person wrong to do act than DGFT or custom detain IEC and

thereafter that person wants to do than that commodity export license is

necessary.

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CHAMBER OF COMMERCE REGISTRATION:

Mostly case in export buyer wants to Certificate of origin. Chamber of

Commerce, Trade association or export promotion council will issue the

certificate of origin. Register member simply get the certificate but

unregistered also take the certificate but they should one nominee of

register member guarantee and paying high fees.

SERVICE TAX REGISTRATION:

Registration Goods that are to be shipped out of the country for export are

eligible for exemptions from both Sales Tax and Central Sales Tax. For

this purpose, exporter should get himself registered with the Sale Tax

Authority of is state after following the procedures prescribed under the

Sales Tax Act applicable to his state. For excise exemption ARE-1 form

filled.

RCMC CERTIFICATE:

For benefit of foreign trade policy and promotion to excise so RCMC

Registration is beneficial for exporter. Exporter have a valid RCMC is a

Register Exporter.

RCMC issued by export promotion council for different commodity. Many

type of export promotion council working for export For example, APEDA,

FIEO, GAFTA and etc. RCMC issued for five years. Paid some specified

fees early. If we don’t need we will cancel it.

VINAYAK INDUSTRIES Registered in APEDA (Agricultural & Processed

Food Products Export Development Authority).

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b) EXPORT GOODS DOCUMENTS

QUOTATION:

An offer to sell goods and should state clearly the price, details of quality

and quantity, trade terms, delivery terms, and payment terms, destination,

etc.

SALES CONTRACT:

An agreement between the buyer and seller stipulating every details for

transaction. It is a legally binding document. It is therefore advisable to

seek legal advice before signing the contract.

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PROFORMA INVOICE:

Proforma Invoice provided by Exporter 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 licence/permit or arranging foreign

currency or other funding purposes.

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COMMERCIAL INVOICE :

It is defines name of seller and buyer, quantity, price, delivery term,

payment term, port of loading and destination, container no. and seal no.,

cont. wise quantity. Buyer makes payment as per commercial invoice. It is

also used for the customs clearance of goods and sometimes for foreign

exchange purpose by the importer.

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PACKING LIST:

A list with detailed packing information of the goods shipped like container

no. and weight, seal no., etc.

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BILL OF LANDING

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.

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CERTIFICATE OF ORIGIN :

This certificate to certify the place of manufacture, the nature /quantity /

value of the goods.

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FUMIGATION CERTIFICATE:

A pest control certificate issued to certify that the concerned products have been undergone the

quarantine and pre-shipment fumigation by the approved fumigation service providers. It is

mainly required by many countries and very useful in Agri cultural products.

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PHYTO CERTIFICATE :

Phytosanitary certification is used to attest that consignments meet

phytosanitary import requirements and is undertaken by an NPPO

(National Plant Protection Organization). A phytosanitary certificate for

export or for re-export can be issued only by a public officer who is

technically qualified and duly authorized by an NPPO.

Phytosanitary certificates are issued to indicate that consignments of

plants, plant products or other regulated articles meet specified

phytosanitary import requirements and are in conformity with the certifying

statement of the appropriate model certificate. Phytosanitary certificates

should only be issued for this purpose.

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SURVEYOR REPORT:

Surveyor takes sample from goods and they analyzing in their laboratory and makes one report

and they mention all details like weight, quality, name of goods, destination, container no., result

of specific cargo. It is necessary because if arises quality problem then surveyor report defines

actual quality

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INSURANCE POLICY :

An insurance policy is an insurance document evidencing insurance has

been taken out on the goods shipped, and it gives full details of the

insurance coverage. An insurance certificate certifies that the shipment

has been insured under a given open policy and is to cover loss of or

damage to the cargo while in transit.

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1

NON GMO CERTIFICATE:

Genetically Modified Organisms (GMOs) are plants or animals that have

been genetically engineered with DNA from bacteria, viruses or other

plants and animals. These experimental combinations of genes from

different species cannot occur in nature or in traditional crossbreeding.

Meanwhile, a growing body of evidence connects GMOs with health

problems, environmental damage and violation of farmers’ and

consumers’ rights. NON-GMO certificate certifies that product is free from

GMO.

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HEALTH CERTIFICATE:

Document issued by the competent country when agricultural or food

products are being exported, to certify that they comply with the relevant

legislation in the exporter's country and were in good condition at time of

inspection, prior to shipment and fit for human consumption.

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FORM-AI:

The ASEAN-India Free Trade Agreement came into force on 1 January

2010 for ASEAN and India. This is an important agreement for ASEAN as

India is emerging as an important trading partner as well as a market for

Malaysian exports. This certificate defines buyer and seller, quantity,

products name, fob value. Parties which accept this form for the purpose

of preferential tariff treatment under the ASEAN-INDIA Free Trade

Agreement (AIFTA):

BRUNEI DARUSSALAM, CAMBODIA, INDONESIA, INDIA, LAOS,

MALAYSIA, MYANMAR, PHILIPPINES, SINGAPORE, THAILAND,

VIETNAM.

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PAST FORM:

A mandatory document that requires filled by producer or exporter from

country of origin for the fresh agricultural products (plant products) are

exported to Indonesia.

1

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SHIPPING BILL:

Shipping Bill/ Bill of Export is the main document required by the Customs

Authority for allowing shipment. Usually the Shipping Bill is of four types

and the major distinction lies with regard to the goods being subject to

certain conditions which are:

Export duty/ cess;

Free of duty/ cess;

Entitlement of duty drawback;

Entitlement of credit of duty under DEPB

Scheme; Re-export of imported goods

DOCUMENTS REQUIRED FOR THE PROCESSING OF THE SHIPPING

BILL:

SDF/GR forms (in duplicate) for shipment to all the countries.

Four copies of the packing list mentioning the contents, quantity,

gross and net weight of each package.

Four copies of invoices which contains all relevant particulars

like number of packages, quantity, unit rate, total f.o.b./ c.i.f.

value, correct & full description of goods etc.

Contract, L/C, Purchase Order of the overseas buyer.

AR4 (both original and duplicate) and invoice Inspection/

Examination Certificate.

FORMATS OF SHIPPING BILL:

White Shipping Bill in triplicate for export of duty free of goods.

Green Shipping Bill in quadruplicate for the export of goods

which are under claim for duty drawback.

Yellow Shipping Bill in triplicate for the export of dutiable goods.

Blue Shipping Bill in 7 copies for exports under the DEPB

scheme.

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AFLATOXIN CERTIFICATE:

Aflatoxins are toxic metabolites produced by certain fungi in foods and

feeds. Aflatoxins have been associated with various diseases, such as

aflatoxicosis, in livestock, domestic animals and humans throughout the

world. The occurrence of aflatoxins is influenced by certain environmental

factors; hence the extent of contamination will vary with geographic

location, agricultural and agronomic practices, and the susceptibility of

commodities to fungal invasion during pre-harvest, storage, and/or

processing periods. However, the commodities with the highest risk of

aflatoxin contamination are corn, peanuts, and cottonseed. This certificate

issued by surveyor, they makes sample and do laboratory for Aflatoxins.

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c) OTHER DOCUMENTS DOCK RECEIPT / MATE’S RECEIPT:

A receipt to confirm the receipt of cargo on quay/warehouse pending

shipment. The dock receipt is used as documentation to prepare a bill of

lading. It has no legal role regarding processing financial settlement.

AIR WAYBILL:

A kind of waybill used for the carriage of goods by air. This serves as a

receipt of goods for delivery and states the condition of carriage but is not

a title document or transferable/negotiable instrument.

BANK GUARANTEE:

A bank guarantee is a commercial instrument guaranteeing by bank to a

party (parties) on behalf of his customer, assuring the beneficiary to effect

payment on default of obligation.

SWIFT COPY:

SWIFT stands for Society for Worldwide Interbank Financial

Telecommunication.

A SWIFT copy or document is an extract of the electronic payment

document sent to the correspondent bank or beneficiary bank. It acts as a

confirmation of payment made from your bank and informs the beneficiary

of the value date of transaction.

BILL OF EXCHANGE :

A written, unconditional order by one party (the drawer) to another (the

drawee) to pay a certain sum, either immediately or on a fixed date, for

payment of goods and/or services received. The drawee accepts the bill

by signing it, thus converting it into a post-dated check and a binding

contract.

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5.3. INCO-TERMS

Inco terms is an abbreviation for International Commercial Terms. They are a set of

rules which define the responsibilities of sellers and buyers for the delivery of goods

under sales contracts for domestic and international trade. They are published by the

International Chamber of Commerce (ICC) and are widely used in international

commercial transactions.

[A] RULES FOR ANY MODE OR MODES OF TRANSPORT:

1) EXW (Ex Works):

“Ex Works” means that the seller delivers when it places the goods at the

disposal of the buyer at the seller’s premises or at another named place

(i.e., works factory, warehouse, etc.). The seller does not need to load the

goods on any collecting vehicle, nor does it need to clear the goods for

export, where such clearance is applicable.

2) FCA (Free Carrier):

“Free Carrier” means that the seller delivers the goods to the carrier or

another person nominated by the buyer at the seller’s premises or another

named place. The parties are well advised to specify as clearly as

possible the point within the named place of delivery, as the risk passes to

the buyer at that point.

3) CPT( Carriage Paid To):

“Carriage Paid To” means that the seller delivers the goods to the carrier

or another person nominated by the seller at an agreed place (if any such

place is agreed between parties) and that the seller must contract for and

pay the costs of carriage necessary to bring the goods to the named place

of destination.

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4) CIP ( Carriage And Insurance Paid To):

“Carriage and Insurance Paid to” means that the seller delivers the goods

to the carrier or another person nominated by the seller at an agreed place

(if any such place is agreed between parties) and that the seller must

contract for an pay the costs of carriage necessary to bring the goods to

the named place of destination.

‘The seller also contracts for insurance cover against the buyer’s risk of

loss of or damage to the goods during the carriage. The buyer should note

that under CIP the seller is required to obtain insurance only on minimum

cover. Should the buyer wish to have more insurance protection, it will

need either to agree as much expressly with the seller or to make its own

extra insurance arrangements.”

5) DAT (Delivered At Terminal):

“Delivered at Terminal” means that the seller delivers when the goods,

once unloaded from the arriving means of transport, are placed at the

disposal of the buyer at a named terminal at the named port or place of

destination. “Terminal” includes a place, whether covered or not, such as

a quay, warehouse, container yard or road, rail or air cargo terminal. The

seller bears all risks involved in bringing the goods to and unloading them

at the terminal at the named port or place of destination.

6) DAP( Delivered At Place):

“Delivered at Place” means that the seller delivers when the goods are

placed at the disposal of the buyer on the arriving means of transport

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ready for unloading at the named place of destination. The seller bears all

risks involved in bringing the goods to the named place.

7) DDP (Delivered Duty Paid):

“Delivered Duty Paid” means that the seller delivers the goods when the

goods are placed at the disposal of the buyer, cleared for import on the

arriving means of transport ready for unloading at the named place of

destination. The seller bears all the costs and risks involved in bringing the

goods to the place of destination and has an obligation to clear the goods

not only for export but also for import, to pay any duty for both export and

import and to carry out all customs formalities.

[B] RULES FOR SEA AND INLAND WATERWAY TRANSPORT:

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(Source- www.daigon.co.za)

1) FAS( Free Alongside Ship):

“Free Alongside Ship” means that the seller delivers when the goods are

placed alongside the vessel (e.g., on a quay or a barge) nominated by the

buyer at the named port of shipment. The risk of loss of or damage to the

goods passes when the goods are alongside the ship, and the buyer

bears all costs from that moment onwards.

2) FOB (Free On Board):

“Free On Board” means that the seller delivers the goods on board the

vessel nominated by the buyer at the named port of shipment or procures

the goods already so delivered. The risk of loss of or damage to the goods

passes when the goods are on board the vessel, and the buyer bears all

costs from that moment onwards.

3) CFR (Cost and Freight):

“Cost and Freight” means that the seller delivers the goods on board the

vessel or procures the goods already so delivered. The risk of loss of or

damage to the goods passes when the goods are on board the vessel. the

seller must contract for and pay the costs and freight necessary to bring

the goods to the named port of destination.

4) CIF (Cost, Insurance and Freight):

“Cost, Insurance and Freight” means that the seller delivers the goods on

board the vessel or procures the goods already so delivered. The risk of

loss of or damage to the goods passes when the goods are on board the

vessel. The seller must contract for and pay the costs and freight

necessary to bring the goods to the named port of destination.

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‘The seller also contracts for insurance cover against the buyer’s risk of

loss of or damage to the goods during the carriage. The buyer should note

that under CIF the seller is required to obtain insurance only on minimum

cover. Should the buyer wish to have more insurance protection, it will

need either to agree as much expressly with the seller or to make its own

extra insurance arrangements.”

5.4 TERMS OF PAYMENT

There are many terms of payment in International business. Under general permission,

Under RBI permission & Under Indian Government. Under RBI Open a/c and under

Indian Government one is line of credit and another Barter Deal. But generally Payment

will be Under General permission areas follow.

(1) ADVANCE PAYMENTS:-

When buyer–seller deal finished than one question about terms of

payments seller demand to buyer advance payments. Seller need to

advance money because manufacturing goods and also seller may be

does not know to buyer so they do not believe in buyer so they demand to

advance payments.

Advance Payment made through check, Demand draft, Pay order,

Telegraph, Telecommunication transfer, SWIFT (Society for worldwide

Interbank financial intercommunication), foreign currency note & travel

check.

When advance payment made than transaction will complete or export

within 1 year otherwise payment should be return with interest not if buyer

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wants to interest than interest will be calculated LIBOR system (London

Interbank offered rate.)

(2) DOCUMENTS AGAINST PAYMENT AT SIGHT:

The documents are released to the importer against payment. In order of

buyer’s seller sending the same goods and document sending to buyer’s

bank and advice to documents given only in behalf of doing payments.

So, this is documents against payment. This method is safe because If

Importer finally refuses to take delivery of goods, than we can find

alternative buyer and sanding them if buyer not find than we can return

our consignment.

(3) T/T PAYMENT:

T/T means telegraphic transfer, or simply wire transfer. It's the simplest

and easiest payment method to use.

T/T payment in advance is usually used when the sample and small

quantity shipments are transported by air. The reason why is that the

documents like air waybill, commercial invoice and packing list will be sent

to you along with the shipment by the same plane. As soon as the

shipment arrives, you can clear the customs and pick up the goods with

the documents. As it's acknowledged, T/T payment in advance presents

risk to the importer if the supplier is not an honest one.

(4) LETTER OF CREDIT L/C:

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In International business L/C is very good method of payment. While

terms of payment through L/C decided than Buyer (Importer) request

his/her bank to open Letter of Credit.

Letter of Credit issuer bank it’s called Issuing bank. Issuing bank sending

L/C to seller bank its bank called Advising bank. Advising bank check the

L/C and proper detail of importer, amount, date and this entire thing and

also check the detail of Issuing bank. If proper than advising bank to

advise to seller you will send the goods. Exporter sending goods after all

documents send to advising bank and collecting money within specific

letter of credit. These documents sending to Issuing bank and get

payment. Issuing Bank endorses the documents and sends to Buyer and

buyer will clear the cargo. Buyer wills payment to Issuing bank specific

duration they will decide.

In International business L/C is most appropriate way to terms of payment.

Mostly when first time deal happened to buyer-seller than mostly use this

term because this terms is very safe.

(5) DOCUMENTS AGAINST ACCEPTANCE AT SIGHT:

The documents are released against acceptance of the Time Draft i.e.

credit allowed for a certain period, say 90 days. However, the exporter

need not wait for payment till bill is met on due date, as he can discount

the bill with the negotiating bank and can avail of funds immediately after

shipment of goods.

In case of D/A as compared to D/P bills, the risk involved is much greater,

as the importer has already taken possession of goods which may or may

not be in his custody on the maturity date of the bill. If the importer fails to

pay on due date, the exporter, will have to start civil proceedings to

receive his payment. So, this is greater risk associated in case of

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documents against acceptance compared to Documents against

payments.

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5.5 EXPORT PROCEDURE

70

In India, ships transport more than 90 per cent of the cargo. It therefore interesting to

study the export processed by ship documentation related to it.

Processing of an export order--

I. Exporter operation starts with the receipt of enquiry by the exporter from

importer. Bar on the enquiry exporter submits his offer giving complete details

of products technical spec. price delivery payment terms etc.

II. After the process negotiations importer sends a purchase order follow by

letter of credit (if applicable).

III. The exporter manufactures the goods according to the specification given in

purchase order.

IV. As soon as the goods are ready the exporters invites the representative of

Export inspections agency (EIA) for pre shipment inspection and obtain the

certificate of inspection.

V. After that, the exporter prepared following documents,—

INVOICE

PACKING LIST

A1 FROM EXSICE DEPARTMENT

MARINE INSURANCE POLICY

COPY OF PURCHASE ORDER / L/C

VI. Above those documentation sends to CHA by exporter.

VII. Based on these documents CHA agent completes the octroi formalities,

obtain port permit and prepare shipping bill which is a customs documents.

VIII. Custom department check the export cargo on the basis of information

provided on the shipping bill. If satisfy then cargo allow to loaded on the

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Board of ship.

IX. The shipping line gives mate receipts to CHA agents after the payment of

Ocean freights and port due obtains the bill of lading.

(B/L) from shipping line .B/L is a proof of dispatch of cargo and also a negotiable

document.

After that, CHA agent send various documents back to exporter which is—

Customs attested invoice

Copy of shipping bill

Full set of non board bill of landing

Copy of purchase order or L/C

Copies of AREI form

SDF form

After that the exporter submitted above these documents for negotiation to the

bank which include :----

Commercial invoice

Packing list

Bill Of Lading

Shipping Bill

Certificate of origin

Bill of exchange

Shipment advice

And other All Original Documents.

After that, bank scrutinizes these documents and if found correct make payment to

exporter against documentations.

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6. FINDINGS

The gross profit is not in same trend sometime increasing and decreasing due to

change in gross profit and sales.

Expense ratio is decreasing due to increase in expense.

Exhibitions and references are the main sources to enter in international trade.

Most of the exporters prefer commission rate and Goods packing facility. Other

facilities are also important in the international business.

The documentation paper works are simplified than the previous years.

This has led to the emergence of a business environment, widening both the

scope and scale of opportunities open to sellers

Though many documents prevail in documented, only certain documents play a

vital part in the company.

It uses the Inco terms as FOB, EXW and C&F mostly.

From the company's procedure the following has been inferred.

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7. SUGGESTION

I undersigned, has no experience and I have tried my best and declare my few

suggestions are no way an attempt to criticize an organization like Vinayak and its

employees but only to serve the indicators of level of my understanding.

They should have to increase the sortex capacity.

They should provide training of employees.

New exporter can find the buyers through exhibition and references easily.

Vinayak Industries for export cargo is such a long procedure so it takes time to

clear, so the employee must be try to make their work on time and quick.

Vinayak can directly contact to the buyers and sell them without interfere of

brokers, So it can increase its profit margin.

8.LIMITATION OF THE STUDY

Due to storage in the time data was collected form Secondary source.

Many Time Generalized data had to be used for explaining details related to

projects.

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9. CONCLUSION

The study was conducted to know the process involved in an apparel firm and to study

about the various departmental functions which coordinates to complete the export

cycle. The export Procedure of the firm has been seen clearly and other related aspect

has been known. From the analysis it is found that the performance of the company is

satisfactory, but the company is facing problem regarding excess of documents which

muses delay in transportation. Therefore necessary steps should be taken to limit the

number of documents so that the company can make distribution at right for the company

and it helps the company to have competitive advantage over its competitors. There are

signs of good future for VINAYAK INDUSTRIES, because of growing demand for Indian

wheat in the world market.

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9. BIBLIOGRAPHY

Bibliography

(n.d.). Retrieved from www.vinayakindustries.biz: http://in.linkedin.com/pub/vinayak-industries-

rajkot/87/7b0/1b2

(n.d.). Retrieved from www.slideshare.net: http://www.slideshare.net/vvikaschauhan/export-

procedure-documentation

(n.d.). Retrieved from WWW.GUIDETO EXPORTANDIMPORTPROCEDURE.COM:

file:///C:/Users/Admin/Downloads/export-procedures-guide.pdf

Alessando Vitale1, J. M. (October, 2011). An Analysis of stakholder perceptions. The east African

community comman external tariff on cereals , 14 to 20.

Hill, C. W. Golobal Business Today.

Kothari, C. R. Research methodology.

Kotler, P. Marketing Management.

Saweda, L. (October, 2011). Food security, Social capital and Agricultural productivity in Nigeria. Nigeria

Strategy Support Program (NSSP) Working Paper No.21 , 24 to 30.

Shenoy, A. (May, 2008). The integration of the Indian Wheat Sector into the Global Market , 9 to 31.

summer internship project [sip] – 2014 a project report on “a study of customer buying...

Education