pawan vaishnav project report
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A
PROJECT REPORT
ON
IMPORT/EXPORT PROCEDURE & DOCUMENTATION
AT
FILTERCO
NEEMUCH
(M.P.)
SUBMITTED TO
UNIVERSITY OF PUNE
BY
PAWAN KUMAR VAISHNAV
PGDIEM(2010-2011)
Sinhgad Technical Education Societys
SINHGAD INSTITUTE OF MANAGEMENT
S. No. 44/1, Off Sinhgad Road, Vadgaon (Bk), Pune 411 041Ph: 020 -2435 8380/2435 8355 Fax: 020-2435 4835 Mob:
S9881742711
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Sinhgad Technical Education Societys
SINHGAD INSTITUTE OF MANAGEMENT
S. No. 44/1, Off Sinhgad Road, Vadgaon (Bk), Pune 411 041
Ph: 020 -2435 8380/2435 8355 Fax: 020-2435 4835 Mob:
9881742711
Email: [email protected]
CERTIFICATE
This is to certifying that Mr. Pawan Kumar Vaishnav of Sinhgad Institute of
Management has successfully completed the project work titled as IMPORT/
EXPORT PROCEDURE & DOCUMENTATION at FILTERCO
NEEMUCH (M.P.) in partial fulfillment of requirement for the award of
PGDIEM prescribed by the SINHGAD INSTITUTE OF MANAGEMENT.
This project is the record of authentic work carried out during the academic year
2010-11.
He has worked under our guidance and direction. His work is found to be
satisfactory and complete in all respect.
Dr. Daniel Penkar Prof. A.C. Panda
(DIRECTOR) (PROJECT
GUIDE)
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PREFACETo manage a business well is to manage its future; and to manage the
Future is to manage information. An expect of management education
is to under go winter training into corporate world and then make an
evolution of it. Companies offer the winter trainees wide varieties of
interesting and challenging project to choose from as well as on the job
training of Export Procedure and Documentation.
Winter training requires that the student attains practical experience in
an industrial organization for a period of about one month. The winter
project investigates some significant aspect of problems of an
organization. It gives students an opportunity to observe a business
organization in operation and sharpen their knowledge and skills byputting them to use.
Winter training enables the students to undergo research work. This
training enables individuals to make a better informed career choice
regarding both functional specializations and type of organization.
Winter project being time bound has a limited scope of looking in depth
the exact working policy of each and every department of an
organization. Yet it is sufficient for the student to apply the management
concept to the real life situations and at the same time enhance our skillsat judgments and creativity.
As a Finance management student, I was exposed to the corporate
world during my winter training at a renowned production company in
india and in the world i.e. FILTERCO. This training help me a lot, as it
was instrumental in making me aware of my strengths as well as
weakness. This training has developed in me the practical and problem
solving result oriented situational approach towards management.
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Table of
C O N T E N T S
Sl. No. Title Page
No.
1. ACKNOWLEDGMENT
2. OBJECTIVE
3. INTRODUCTION
4. INTRODUCTION OF THE COMPANY
5. METHODOLOGY
6. DIFFERENT DEPARTMENTS IN COMPANY
7. EXPORT PROCEDURE IN FILTERCO
8. OBSERVATION
9. FINDINGS
10. RECOMMENDATION/SUGGESTION
11. CONCLUSION
12. BIBLIOGRAPHY
13. ANNEXURES
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ACKNOWLEDGEMENT
I express my deep sense of gratitude, indebtedness and regard to my project guide
Mr. R.K. Sharma (Sr. Dy General Manager, Sales Co-ordination Department,
FILTERCO, NEEMUCH M. P.) for his assiduous guidance and inspiring
suggestions during the project report.
I am also thankful to Pankaj Kumar, (Asst. Manager, Sales Co-ordination Dept.),
FILTERCO for his kind co-operation in this project.
I am also thankful to Mr. Arvind Kumar,(Manager, HRD, ) for his kind co-
operation in this project.
I am also thankful to Filterco for providing some lighter moments and made our
stay pleasurable.At last we are thankful to our honorable director, Dr. Daniel
Penkar, and project guide and co-ordinator Mr. A.C. Panda.
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OBJECTIVE
Project objective:
a. To understand the FILTERCO Business Processes.
b. To understand the working of the various of department of
FILTERCO contributing towards processing an export order.
c. To understand the role of Merchandisers in FILTERCO.
d. Export Procedure.
e . Export documents.
f. Documents required for negotiation, purchase, discounting.
g. Steps in export letter of credit.
h . Mode of payment.
i . Different ways of consignment.
Objective of the study
1. To study the registration procedure for the export.
2. To find out the international business Scenario.
3. To study the export procedure and documentation for FILTER
CO.
4. To find out the procedure for the membership in export
promotion council and DGFT.
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5. To find out the difficulties in export procedure and
documentation .
SCOPE:
1. The scope encircle export procedure and documentation of
FILTER CO
2. Pre-shipment and post shipment documentation in export are
studied in detail.
3. The tribulation faced by FILTER CO .
4. Study of area of exporting new market and diversification of the
product.
5. Study of international buying behavior.
LIMITATIONS:
Export procedure is very vast area and so training program of 50
days is insufficient.
1. As the working place being away from the actual export
procedure transition hence only theoretical aspects of the export
procedure could be covered.
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INTRODUCTION
Background of the problem task undertaken
IT IS an opportunity to do the summer internship in the FILTERCO
Industry which is manufacture and the exporter of the pressed wool
felts. As we know, exporting is the complex and challenging activity
in todays dynamic world environment as it involves the performance
of operation that determine existing and potential demand in market.
Learning the step-by-step processes and procedure to be followed in
an export contact is a crucial activity in export procedures, selecting
the project on export procedure is an obvious and important decision.
STATUS OF INDUSTRY :
The textile industry in India occupies a unique position in our
economy contributing to nearly a third of the countrys export
earnings. This industry manufacturers, suppliers, wholesalers
and exporters of cotton textiles, handloom, woolen textiles etc.
From the production of textile machinery and equipment, dyes
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and raw materials to the delivery of finished textiles, fabric
and garments the textile industry in India has the vast potential
for creation in of employment as it Textiles industry is the
second major employer in India after agriculture, providing
employment to 91 million people according to an ASSOCHAM
Eco Pulse study titled India Textile Scenario. The number of
textiles manufacture, suppliers, wholesalers and textiles export
in India is counted among the most impor tant sector.
It contributes about 13 per cent in export earning and 4 per
cent in Indias GDP is s til l suffering the heat of global
slowdown as indicated by declining exports and massive
layoffs. Textile exports during April-March 2008-09 registered
a decline of 1.71 per cent from USD 22.13 billion in April-
March 2007-08 to USD 21.75 billion. Among the maximum hit
segments, handicrafts registered maximum decline of 48.35 per
cent in 2008-09, from USD 3481.14 million in 2007-08 to USD
1797.88 million. sector registered 50 per cent increase in
investment during 2008-09 to Rs.49,613 crore from
Rs.31,161 crore in 2007-08. But as compared to the year 2006-
07 the sector registered 48 per cent decline in investment.
However, in 2006-07, Rs.90,369 crore of investment was
poured in texti le sector . According to the Chamber, an
investment of Rupees one lakh in power loom sector creates
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about three jobs, hence the government should create an
investment friendly environment and provide low interest rate
loans to investors and should also provide export profits be
made tax-free in slow down period to encourage the export.
How have textile exports performed against this backdrop?
Fortunately, after a period of low activity, the scenario is fast
undergoing a change for the better and in a positive direction
leading to higher growth. As Indian textile industry, which has
accelerated to an annual growth of 9 -10 per cent , is expected
to grow at rate of 16 per can in values and reach a level of
USD 115 billion by 2012 , UNION MINSTER STATE FOR
TEXTILES E V K S Elangovan said that growth can be
fuelled by both exports as well as a rise in domestic
consumption, resulting in India's share in the global textile and
clothing trade moving up from the current three per cent to
seven per cent by 2012.
This trend augurs well for India and is a clear indication of
a shift in production base from raw materials to value added
products with the VALUE being captured by Indian
producers. With all forecasts by leading analyst , pointing
towards greater trade in INTERNATIONAL MARKETS in
processed/ finished goods rather than raw materials, Indian
appears to be positioning itself well to increase its market
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share in WORLD trade in merchandise export. The
ASSOCHAM has stated that despite marked improvement in
the f inancial posit ion, the Indian texti le continue to face
serious issues involving transaction cost and raw material. The
government should focus on infrastructure facility related to
the supply chain and provide low cost logistics service to the
sector.
The sector suffers from high power cost and lack of power
supply. Effective power management system has to be put inplace. States should offer power at low cost on the incentive
based system for the new investment made in the textile
industry for commercial production. The sector requires higher
technology up gradation and active involvement of new
technology. ASSOCHAM recommended that government
should further increase funds under the Technology Up
gradation Fund Scheme (TUFS) for textile firms from Rs 3140
crore to Rs 4500 crore and release appropr iate funds to clear
the existing backlog of subsidy payments and upgrade
technology of textile units.
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INTRODUCTION OF THE COMPANY
COMPANY PROFILE:
FILTERCO company is a 50 cr US dollar textile conglomerate
driving critical industries. They are century old pioneers in their
area of specialization like of wool felt rolls ,sheets, seals, wicks,
gaskets, strips, felt polishing wheels, knife edge discs, cones,
mounted felt bobs etc.The organization is manufacturing Pressed
Wool Felts since 1968. The quality consciousness, competitive
pricing and the capaci ty to sat isfy the customer' s specific
requirements have given us a firm footing in marketing their
products successfully at home and abroad. They have complete
manufacturing expertise to manufacture Pressed Wool Felts
conforming to all International standards.
They also have their associate Units where they have facilities
like Slitters, Cutters, Hydro-Pnuematic Presses, CNC Kiss cut
Press, Hydraulic Presses, Splitting Machines, Vacuum
Impregnation Plants, Adhesive Coating/Lamination machines and
tool room for Die making etc. These facilities enable them to
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fabricate the Custom-built parts to suit individual customers
requirements. This organization is made up of four major groups,
each led by the best manufacturing and managerial talent in India.
In addition to manufacturing they have interest in civic utility
systems. This unit, multi-products, multi-location conglomerate is
built on the plinths of experience, expertise, quality, innovation &
values in the business. Their best play is successful work &
creation of a new industrial order they can provide tailor made
solution to the customers. At Filterco, listening the customers and
his needs is a tradition as old as the group itself. For it is they
who drive us future, make us reach higher & better solutions. In
the customers often unspoken wish for better implements lies the
seed for a new invention, a path-breaking industr ial concept.
COMPANY DIVISION:
The groups consist of 4-companies from the core of filterco Groups. Eachcompany is a renowned name in its own area of operation and is respected
world wide for its service & products. For us manufacturing is not just a
limited to our factory premises & our products. It is also about wor ld class
services.
FILTERCO .PVT LTD.
SEAL WELL.
BLUE CHIP.
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TEX FELT.
Companys Achievement:
Reward and recognition
They are awarded for the Highest Exports by the Govt. Of India for the
last 6 years in a row which speaks volumes about their satisfied
customers all over the world.
IN 1986 The CEO Mr. D.S.CHORDIA receiving the Udyog Patra
Award from Mr. M.HIDEYATULLAH,PM of India at FICCI
auditorium, NEW DELHI on 20 t h December 1986.
In 1992-1993 Certificate of merit in hair belling felts.
In1992-1993 Award for the highest export performance.
In 1993-1994 Certificate of merit in hair belling felts.
In 1994-1995 Award for the highest export performance.
In 1995-1996 Biggest Export performance
In 1995-1996 Certificate of merit in hair belling felts.
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In 1996-1997 Biggest Export performance.
In 1997-1998 Award for the highest export performance.
In 1998-1999Award for the second biggest export
performance.
In 1999-2000 Biggest Export performance.
From 2000-2007 Biggest Export performance.
FILTERCO CAPACITIES
SECTION CAPACITIES(monthly) kg
Felts sleeve Roller Covering
80,000
Felt Flap Wheels and discs 110,000
Wool felt polishing Wheels and
Discs
90,000
Felt and Non-Woven rolls 100,000
Industrial felts component 80,000
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Woolen felt planting sheet 100,000
CLIENT COUNTRIES INTERNATIONAL CLIENT:
CUSTOMER CLIENT
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Technofeltro.
Lampe technical.
Joh.Birkenstack
Brand felt.
Hardy & sons
ACEE auto
Ahuja .
Ahuja
Ahuja
British felt .
S.A FELT . Closeal .
Custom Seal.
Ahuja .
Ahuja
Aypa talstil
ITALY
HOLLAND.
GERMANY.
CANADA.
ENGLAND
AUSTRIALIA
AUSTRIALIA
SINGAPUR
MALASIA
U.K
SOUTH AFRIACA SOUTH AFRICA
SOUTH AFRICA
NEWZELAND
POLAND
TURKEY.
DOMESTIC CLIENT
Customer Client
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B.R.wool agency .
Modern wollen.
Sarvesh wool tax .
Kamal Industries .
Marutex wool
Industres.
LUDHIYANA
BHILWARA
.LUDHIYANA
.BIJAYNAGAR
LUDHIYANA
PRODUCT PROFILE
Although wool felt is the Worlds oldest textile structure and it has
been pract ically in every industry, generations of engineers and
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materials science/specifiers are growing up without knowing much
about much about this remarkable material.
Over 130 years of continuous industrial development has demonstrated
the versatility of wool pressed felt as a material that has far surpassed
any other textile material in the depth and breadth of its applications.
FELTS is a textile structure composed entirely of fibers physically
interlocked and consolidated by the uti l ization of mechanical work,
chemical action and moisture without the use of weaving, knitt ing,
stitching, thermal bonding or adhesives. it composed wholly of anyone or a combination of new or recycled wool fibers. Part wool felts,
is a felt composed of any one or combination of new recycled wool
fibers mixed with one or more man- made fibers, vegetable fibers, etc.
FELT SPECIFICATION NUMBERS :
Felts are governed, in India, by Speen. IS 1719.In the Internationalmarket , these are governed by SAE specificat ion F-1 to F-55,DIN
specification , No.61200,Fedral speen.CF 206 , British Speen, No.BS-
4060 and U.S.S.R. Speen.No.Gost 6308-71.
Different forms of wool felts:
A. Felts sleeve Roller Covering
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B .Felt Flap Wheels and discs
C. Wool felt polishing Wheels and Discs
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D. Felt and Non-Woven rolls :
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E. Industrial felts component :
F.Woolen felt Plating Sheet :
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Pressed Wool Felt Stocking Grid
Stock = In Stock
S/O = Special Order
Product 1/16" 3/32" 1/8" 3/16" 1/4" 3/8" 1/2" 5/8" 3/4" 1"
More
than
1"
F-1 - - stock stock Stock stock Stock stock s tock s tock S/O
F-2 - - S/O S/O S/O S/O S/O S/O S/O S/O S/O
F-3 - - stock stock Stock stock Stock stock s tock s tock S/O
F-5 - - stock stock Stock stock Stock stock s tock s tock S/OF-7 - - stock stock Stock stock Stock stock s tock s tock S/O
F-10 - - stock stock Stock s tock Stock stock stock stock S/O
F-11 - - stock stock Stock s tock Stock stock stock stock S/O
F-13 - - stock stock Stock s tock Stock stock stock stock S/O
F-50 stock stock - - - - - - - - -
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F-51 stock stock - - - - - - - - -
F-55 stock stock - - - - - - - - -
Special Orders normally r equire a 3-4 week lead time and a
manufacturing minimum. Items designated as in-stock are normally
inventoried, but may occasionally be in the process of being produced,
thus requiring a 3-4 week lea
BASIC FUNCTION OF WOOL FELTS AND SOME
CURRENT APPPLICTIONS:-
POLISHING AND
DE-BURRING
F in is hi ng opt ical and oph thal mi c l enses;
pol ishing plate glass plast ics , felt hats ,etc;
buffing wheels for sho e machinery.
Storing, Wicking,
Syphoning, Transfer ring
liquids, Lubricating
F el t- ni b mar ki ng pens and i nk r es er vo ir s,
S tamp pads, J ournal l ub ri ca ti ng wicks f or
a rmat ur e s ha ft s, s pi nd les and many o ther
inaccessible mashie part ,Wicking material for
copying machines, Cosmetics Transfer rollers ,
Wiping devices.
Spacing-Washers Gaskets,
packing.
Gaskets for auto , arc and flood l ight . Gaskets
in home clothes dryers, ref rigerators , Glass
covered electr ic meters . Gland packing for
fue l and supply pumps . Washer in nuclear
reactor equipment.
Sealing Rotating/ oburating bands for gun launched
projecti les , plain and laminated felt seals to
p ro tect bal l and r ol le r bea ri ngs. Wea ther
stripping.
S ur fa ci ng , Pa dd in g a nd
Cushioning
Covers for bases of lamps , fan and t rays , etc
Car d t ab le cover s. L in ing and i n s ol es f or
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METHODOLOY
Methodology means the source through which the data is collected
and which is necessary or important for the study. There are two
sources of this study :
Main source
Secondary source
1. Main source :
In primary source, data was collected through interviewing the
export executive and the marketing person. Also I had collected
the information from the other staff.
2. Secondary Source :
Da ta tha t i s a lready publ ished in va rious pub li ca tion or
information already available is col lected and combined and
presented earlier by researches is secondary source.
a) Import and export policy
b) Export procedure handbook
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c) International marketing.
Secondary data i s extensive ly and intensive ly used for present
research work. The discussions with various officials in the company
have helped to understand the basic concepts and procedure.
TO UNDERSTAND THE DIFFERENT DEPARTMENT
IN FILTERCO
DIFFERENT DEPARTMENT IN FILTERCO
Company mainly deals in two segment of the felts supply chain i .e.
one is manufacturing of fel ts and other is manufacturing of non
woven felt . These two segment are different processes but are very
much l inked in the supply cha in . The company has di fferen t
depar tment each having speci fied funct ion and responsib il it ies.
Description of each department will follow in respect to how they
occur in supply chain.
Cotton department
Cotton is one of the most important raw material for the wool felts
manufacturing. Company purchase the cotton from different industry
and from some other countries such as WEST AFFARICA and US.
Cotton department is responsible for placing order of cotton to the
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mills. Their responsibility is to make sure cotton is order from right
supplier ,delivered in right t ime with desired quality and maintain
stock l is ting of cot ton. Cotton department is a lso responsible for
checking the quali ty i .e s trength, colour, and quant i ty of cot ton
department. The decision regarding the cotton quality, quali ty and
strength is decided by the by PPC i.e. production, planning and control
department.ppc place order one month in advance.
Opener department
Opener department is responsible for producing dust free cotton from
raw cotton. In these the opener machine is used so that cotton can get
the proper and perfect density and also the opener is responsible for
bunch free cotton of easy smoothing in the different processes. Felting
was originally based upon the physical characterist ic of crimp and
scaly surface that cause them to cling and intermesh and allowed them
to be pressed into a compact fabric. the felt is made with or without
admixture of another animal fiber, vegetable fiber, or manmade fiber.
opener department receive order from PPC stating order or s tyle
number and quantity of the cotton required.
Carding department
Carding depar tment has the same responsib il ity as the opener
department has. but in these there is machine called cardner. where
the cot ton goes under the carding machine so that i t get free from
bunch of bundle. and there is also the Roll carding machine which
help in making sheet from the wool as per prescribed by the PPC. i t
has been supposed that 5 kg of woolen is of 1mm .
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Washing and dyeing department
The depar tment i s responsib le for two d if ferent s tages in wool
manufacturing. For grey(not colored)felts, department is responsible
for the coloration of wool and for dyed (colored) felts, department is
responsible for washing. the process of dyeing is t ime consuming.
The department making the production plan for dyeing and w ashing
machine based on the order from the PPC
Hardener department
Hardener department is responsible for giving the proper hardness and
the density. In this the wool sheets goes under the hardener where it
get s team from the boi ler so as to get hard this is done as per the
prescribed by the PPC the hardness can be change according to the
demand. there is a lso machine cal led MILLING machine is used
where the sulfuric acid and dazzle powder is mixed so that i t get
proper hardness and density .
Cutting department
The department is responsible for the for cutt ing of sheets into the
different shape and rolls. This department is mainly responsible for
cutt ing and avoiding waste. To ensure the minimum wastage,skil ls
employees are their .the cutting is done according to the density given
by the PPC.
Finishing and packaging department
This is the final stage before the wool felts is ready to shipped. As the
wool felts are already finished, it requires the series of quality check.
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The felts goes for check like density test ,hardness test ,washing test
etc . after which i t is s team pressed , labeled ,packed put into the
cartoon. Once all the cartoon are packed and labeled , external quality
placed check takes place and goods are shipped.
Production, Planning and control department
The department i s responsible for mak ing plan for the ent ir e
organizat ion i .e . a ll the depar tment.PPC is the cen tre of a ll the
department also control functionally. The PPC send production plan todifferent department on weekly basis and daily for any amendments.
The PPC keeps check on different departments by requesting planning
and production report for every day.PPC only receives order from the
top management. with order quantity and dispatch date. i t does the
planning for the product cycle. The top management is continues
contact with PPC
The PPC link with other department
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Merchandising department
The department act as a liaisons between the buyer and manufacturing
division . on one hand, the department is responsible for the notifyingin the product to the PPC and also to make sure that the art ic le is
produced as per planning by the PPC and within dispatch time limit.
On the other hand it has to continually update buyer with planning
and product ion s ta tus. The depar tment i s a lso to take care of a ll
corresponds with buyer and is responsible for comminuting it to PPC.
the department is also responsible for the necessary sampling such as
proto, size set and final which is necessary prior to production .
Merchandising
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The companys market ing team endeavor to enhance i ts share of
business with existing customer as well as the customer base. The
company receives order from customer by
Growth in business for existing customer
New customer developed through cold calls, trade fare meeting
Walk in-customer
The companys marketing team has been able to diverse different strategies to suit
the need both existing and new buyer. For the existing buyer, the company prime
project is to expand the product base and enhance volume .By leveraging the long
standing relationship with the buyer, the company strives to preferred partner to
the buyer. For the new buyer, based on understanding of their product range and
brand identity/ customer identity, the company present to them to their entire
project range. This give them good idea of areas of the companys expertise and
capability. Sometimes the buyer comes to FILTERCO with their thought on
different size and density, where they offer their suggestion on modification. In
case where they come to FILTERCO with predetermined size requirement, they
also try to add value for suggesting modification to enhance functionality or to
reduce cost while retaining the existing size. FILTERCOs skilled worker gives the
desired size and density along with the sampling department provide the client
with prototypes, which undergoes various alteration till the client finalize the size.
Once the size and density is finalized it is translated into sample size as quickly as
possible because the entire seasons business depend on timely delivery of sample.
The costing exercise is done concurrently at this stage. FILTERCOs
manufacturing scale and efficiency and global sourcing ability enables
.FILTERCOs to compete with international vendors effectively. This is proven by
the growth of the Company in non-quota categories, where competition has already
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invoice is prepared for the buyer & Custom invoice is prepared
for the Custom authorities of both the countries .
Packing list is prepared which details the goods being shipped.
GSP certificate is prepared if the consignment is exported to EU
or countries mentioned in the GSP list.
Buying house inspects the goods & issues an inspection
certificate.
Certificate of origin is also issued and attached, if required.
Following documents are given to Customs for their reference:
Custom Invoice
Packing list
IEC certificate
Purchase Order or L/C, if required.
Custom annexure
On receipt of above documents, customs will issue clearance
certificate.
After custom clearance a set of documents with custom clearance
receipt are sent along with the consignment to the forwarder.
Forwarder books the shipment & as per the size of the cartons
calculates CBM & decides which container to be used.
Following documents ar e sent to buying house for their
reference, as per buyers requirement:
Invoice
Packing List
GSP (if exports to Europe)
Certificate of Origin (if required)
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A copy of FCR/ Airway Bill/ Bill of Lading
Buying house then intimates the buyer about the shipment & gives the
details regarding it. Buying house will send a set of these documents
to the buyer.
Buyer col lects the consignment from the destination port by
showing the following documents:
Invoice
Packing List
Bill of lading/ FCR/ Airway Bill
On shipment of goods, exporter will send the documents to the importers
bank
Post-Shipment Procedure
A foreign buyer will make the payment in two ways:
TT ( telegraphic transfer) i.e. Wire Transfer (Advance
payment, as per the clause 50% advance & remaining 50% on
shipment)
Letter of Credit
If the payment terms are a conf irmed L/C then the payment will
be made by the foreign bank on receiving the following
documents:
Invoice
Packing list
B/L
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Any other required by the buyer or the country of import.
The payment terms can be:
o At Sight
o Within 15 days from Bill of Lading or Airway Bill date.
o Within 30 days from Bill of Lading or Airway Bill date.
o Within 60 days from Bill of Lading or Airway Bill date.
o Within 90 days from Bill of Lading or Airway Bill date.
After shipment , exporter sends the documents to the buyers
bank for payment. As the buyers bank receive the documents it
wil l conf irm with the buyer for release of payment. On
confirmation, it will make the payment in the foreign currency.
The transaction will be Bank to Bank.
The domestic branch wil l c redi t the expor ters account , as
against the respective purchase order or invoice, in Indian rupees
by converting the foreign currency as per the cur rent bank rate.
If the payment is through wire t ransfer , the payment wil l be
made as per the terms agreed by the exporter (Advance payment,
as per the clause 50% advance & remaining 50% on shipment).
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Registration procedure of FILTERCO
Export procedure contains standard step for the business. It can be
done through direct or indirect way. Before starting Export of any
product, one has to get registered itself under IEC & RCMC.
A. Registration under Importer-Exporter Code ( IEC):
Regis trat ion under Importer-Exporter code number i s bas ic
necessi ty for the export business. The registered office of the
applicant sha le make am applica tion for grant of IEC to the
l icensing authority. Thus fol lowing documents should support
dully signed application:
Bank receipt (in duplication)/DD of Rs.10000/-
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Income tax PAN NO.
Photocopy of RBIs approval of Non-Residents interest
if any in the form of company.
The licensing Authority concerned shall issue an IEC number. A copy
of such IEC number shall be endor sed to the concerned banker. An
IEC no. allotted to an applicant shall be valid for all it s
branches/division/units/factories as indicat ed in the format of IEC
Registration with Export Promotion Council
(RCMC):
To obtain benefi ts under the export-import pol icy, companies are
required to register with an appropriate promotion agency by obtaining
registration cum membership certificate i.e. RCMC.
EXPORT DOCUMENTATION AT FILTERCO.
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List of documents, which are used at FILTERCO pvt.ltd are as
under:
Invoice
Packing Slip
Airway Bill or Bill of Lading
Shipping Bill
Certificate of origin
Bill of Exchange
Generalized System of Preference
Canada Custom Invoice
Letter Of credit
Bank certificate of Export and Realization (BRC)
Insurance
Following are the detailed elaboration of the above listed exportdocuments:
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INVOICE:
I t i s the document, which i s compulsor ily needed in the expor t
documentation. It consists of buyer name, notified address, country of
the f inal des tina tion and origin of goods , term of del ivery and
payment, place of delivery, port of loading and discharge. It consists
of the items; quantity and description, which have to be exported with
the total, amount in foreign currency or may be any other currency. At
FILTERCO the company used Dollar as the currency for invoicing.
This is the proof of the sale of goods to the buyer. The invoice number
is required in each and every document. It is also used to customs for
the clearance of the goods.
The copy of invoice from FILTE RCO is attached in the annexure no.1.
PACKING SLIP:
The pre shipment department prepare packing list. The list is sent to
buyer along with the goods. The packing list contain the details or the
description of the item in each carton. It consist the Invoice Number,
Letter Of Credit no.,total Quality, Total Carton, Carton Dimensions,
Net weight and Gross Weight. The list help the importer to know and
ident ify the i tem without opening and count ing the goods in the
carton and he can also sell the carton to the buyer without opening the
carton, because the style, color, sizes are mentioned in the particular
carton. Thus packing lit contain all the details of the yarn containing
in the carton.
The copy of packing list from Filterco is attached n the Annexure
no.2
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BILL OF LADING OR AIRWAY BILL:
Bill of lading is the receipt given by the transporting company to the
exporting fi rm. This document state that the payment is made by
exporting company and the good has been received in their hand for
forwarding the goods to the destination.
Airway bill is followed only in the case of transportation by the air,
whereas Bill of Lading is used in the case of sea transportation. Bill of
Lading and Airway Bill is Negotiable Instrument.
The Bil l of Lading or Airway Bil l contains the name of exporter ,
Importer, Loading Vessel, Port of Loading, and Port of Destination. It
also include the marks and nos. on the carton, description of goods,
LC no., Gross and net weight.
FILTERCO almost 90% transportation was through ship while the
sample is send through Airway. The Bill of Lading is send as per the
letter of credit terms.
The copy of Bill of Lading of FILTERCO is attached in Annexure 3
CERTIFICATE OF ORIGIN:
Certificate of Origin is the document in which the authority certifies
that the goods as described as originated in the country in accordance
with the provision in force in the European Economic Community.
This cert if icate is a s ta tutory proof that the goods produce or the
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material used or the exporter or the seller of the good is of a particular
state.
At FILTERCO is located in Neemuch the certificate is issued by the
MUMBAI chamber of Commerce and Industry.
The copy of the Certificate Of Origin used FILTERCO is attached in
Annexure 4.
SHIPPING BILL:
Shipping Bill is the document of clear ance from the cust om
department. This Document helps in gett ing the green signal to the
forwarders to go ahead with the goods towards i ts final destination.
This document consist details as under
i . Exporters Name and Address
i i. Consignee
i ii . Por t of Loading
iv. Por t of Discharge
v. Duty Entit lement Pas Book (DEPB) Specification
vi. Duty Drawback Specification
vii . Invoice No. and value
vii i. I tem Descript ion
ix. Vesse l Name
Some port in India follows manual procedure of issuing Shipping Bill
while some of the port follows EDI System. The Electronic Data Input
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system (EDI) is located only in some important port . Chennai port
fol lows the EDI system while the Tutocorin port fol lows Manual
method System.
D. GENERALISED SYSTEM OF PREFERENCE (GSP)GSP is issued by
the Export Inspection Agency. The document is issued as per the import
needs. This document is for the developing countries like India while
exporting goods to the developed countries. The countries that require the
GSP document are as under.
Australia
Canada
Japan
New Zealand
Switzerland
USA
Republic of Belarus
Republic of Bulgaria
Czech Republic
Russian Federation
Denmark
Germany
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Greece
Spain
France
Ireland
Italy
Luxembourg
Finland
Sweden
Luxembourg
Finland
Netherlands
United kingdom
GSP is issued in case of exporting the goals to the above mentioned
developed countries. Due to this certificate the importers country
give some benefit to the importer like low import duty and many other
benefits. Thus the incurring cost for procurement becomes low which
col lect ively wil l be beneficial for the importer to import from the
developing countries l ike India. Hence more imports will be taken
from India . thus India will enjoy the increasing number of export of
the goods.
There are some general condition to qualify for preference, product
must
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A. Fall within a description of product eligible for preference in the
country of destination. The destination entered on the form must
be sufficiently detailed to enable the product to be identified by
the customer officer examining them.
B. Comply with the rules of origin of country of destination. Each
article in a consignment must qualify separately in its own right
and
C. Comply with the consignment condition specified by the country
destination.
Procedure for claiming the GSP
A declaration on the certificate of origin from must be prepared in
duplicate together with the GSP application from to the certifying
authority of the exporting country .The authority after inspection if
satisfied then certify the top copy of the Certificates of origin and
return the top copy to the exporter for the communication with the
importer destination .At the same time the certifying authority returns
the duplicate copy of certificates authority returns the duplicate copy
of the certificate of origin but will retain the GSP application from
duly completed and signed by the exporter.
The copy of the GSP of FILTERCO is attached in annexure
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Canada customer invoice :
The Canada customer invoice is prepared when the goods are to
be export the goods to Canada . This invoice i s used as the
customer off ice of Canada requi res the invoice . The Canada
customers require the declaration of the goods in their specified
format. The customer in Canada have their own specified invoice
format.
LETTER OF CREDIT :
Letter of credit is the pre-shipment document. This document states
that payment will be made to the exporter by the importers bank if
the required document are presented to the bank within the validity
of the letter of credit. Following is the working of the importer and
exporter regarding the letter of credit.
The exporter requests the importer to issues of credit in hisfavor.
The importer request his bank to open a letter of credit
The importer bank open letter of cr edit and forwards to the
exporters bank
The exporters take the possession of the letter of credit
The exporter supplies the goods and present the full set of
documents along with the draft to the negotiating bank.
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The negotiating bank then scrutinizes the document and if
they are in order makes the payment to the exporter.
The issuing bank will reimburse the payme nt to the
negotiating bankThe letter of credit is annexed in
which is used in FILTERCO
Bank certificate of export and realization:
This is the last document, which s involved in the export
documenta tion procedure . The bank i ssues the document. This
document completes all the procedure of export i .e from the order
received to goods dispatched. the bank issues this certificates when
all the formalities have been completed from the exports side . When
the importer inspect that all the legali ties and the good have been
arrived as per their agreement then importer or buyer orders his bank
to realize the cash to the exporters bank .after receiving the exchange
the bank issue this certificate (BRC). BRC includes the specification
Date and number of invoice
Date and number of shipping bill
Country of destination
Bill amount
Freight amount as per bill of lading or air bill
Date of realization of export
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This certificates includes all the necessary of every necessary export
document.
The bank keep the records of all necessary transactions the company
has maintain against the letter of credit. This certificate also helps the
bank to allow the foreign exchange the company has earned. Thus
BRC cer ti fy tha t the bank have the relevant has earned. Export
document and found to be correct.
Bill of exchange
These are unconditional promises drawn by the exporter instructing
the buyer to pay the efface amount of the drafts bank in both the endact as an intermediary in this processing of shipping document and
collection of payment. in banking terminology the transaction is called
as documentary transaction . The bill of exchange used.
INSURANCE:
To overcome risk we need to insure the good .at the filter co there is the system of
taking the bulk insurance of some amount then as and when there is shipment with
the CIF terms then the insurance policy is taken with the notification to the
insurance company.
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Different ways of consignment methods used in Export Trade in
FILTERCO:
In order to deliver goods to the clients, traders and suppliers have to
choose among a variety of consignment methods. They generally
evaluate a few aspects before deciding upon the shipping mode.
These aspects are:
i. Whats the Business size
ii. Cost Factor.
iii. Product safety Concern
iv. Product deliverance timev. Products to be delivered
Mode of consignment can be evaluated by following intrinsic
characteristics.
i. Quick delivery
ii. Price Comparison
iii. Product protection
iv. Convenience to client and trader
Different ways have different advantages and l imitations. Few are
safer, some actually quick and others have an advantage of being low
cost. You can decide any of the ways discussed below which suits you
necessities.
Air transportation:
This way is quickest and much safer mode of transportation. Despite
of being secure and rapid, suppliers (especially the small ones) are
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often unwil ling to use this method, most ly because of high price
associated with it. This should be supportive when transporting some
high-value products or when a rap id del ivery i s requi red due to
seasonal factors or goods of perishable nature. In FILTERCO mainly
used air transportation for the samples delivery.
Sea transportation:
Most probably the o ldes t way used in expor t im port for foreign
suppl ies. In olden days t raders voyaged by means of sea, carrying
numerous products and items to trade in overseas nations. Economical but fai r ly slow, certainly not a f ine choice when fast del ivery is
desired. However, when the time is not a concern and consignment is
fair ly big or bulky, naval t ransport becomes a usual a l ternative.
Mostly all consignment in FILTERCO is done by the sea
transportation.
Road transportation:
This is the widely used mode, particularly in local trade. Even when
water o r a ir t ransport i s the main sou rce of cons ignmen t, road
transportat ion is s ti l l desirable to carry the i tems from harbors to
consumer. Although restricted to local trade, this way is both t ime
saving and economical and fac il itates door to door del ivery by
connecting to the sea and airport. FILTERCO used this transportation
for local trade generally.
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OBSERVATION
After studying the companies export procedure and documentation
following observation are made.
1. The procedure of exports and imports is very time consuming since
at all levels govt. and semi govt. agencies are involved. At every stage
loss of time is there which is a great hindrance in the foreign trade.
2 . Paper work i s very much. There a re many s tep involved in fore ign
trade procedure. At every step, paper work has to be done in both
exports and imports, which in turn increase the transaction cost. Thats y
now All documentation is done by software, which lead to quick work.
3. Much time spend on shipment of goods and custom clearance.
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4. Firm has to pay losses while rece iv ing cash due to f luc tuat ion in
foreign exchange prices.
5. The client countries also include the countries where lots of
documentation is required.
FINDINGS
1. Friendly atmosphere
2. Ded icat ion, teamwork and coordina tion
3 . Fol lows an au tocrat ic cum democra tic style of management
4. All higher posi tions of the company are f i lled up within the
members of the Filterco family
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RECOMMENDATIONS/SUGGESTION
There should be some harmony between the directors and the
employees. While undergoing the study various flaws regardingdocumentation process , loading point, dispatch area and transportation
was observed. During this period of our study various pit falls and
problems in existing system we found so to provide FILTERCO a better
future various options has been chalked out.
The company should try to advertise its activities through
Internet and direct mails to its target customers.
Prices should be made competitive to match the export
standard, which may be done through Economic of scale in this
globalization era.
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In order to be successful in export one must fully
research in market. No one should ever try to tackle
every market at once. Many enthusiastic persons bitten
by the exports bug fail because they bite off more than
they can chew. The fewer intermediaries one has the
better, because intermediary.
Deliveries must be done on time.
Customers and good must be provided with after sales services, it
will help customers and goods to survive more and better
Communication whether internal or external must be far-reaching
and speedy Good communication is vital in export.
Risk of failure in export marked can be minimizing by intell igent
use of research.
As per our analysis loading cycle time can be reduced by on-line
system entry. As the truck reports the truck no., transporter name
etc. must be entered into the system by the security officer. The
information provided is uploaded by sales dept. The sales dept.then makes the loading advice memo entry in system accordingly
and the dispatch dept. generates this loading memo and starts
further process.
There should be a foolproof system of controlling, approving the
placement of vehicles by logistics section to work under a
committee comprising of 2/3 persons with empowerment to take
decision.
Painting & Printing of the reels should be done well in advance
before the placement of lorry. Also materials should be traced well
in advance.
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There should be a change in layout of loading cycle which creates
some problem for heavy vehicle to weight. This arrangement
should be made easy and straight so that the process involved take
less time. For example the weigh bridge should be placed near gate
no. 3 which surely reduces the time in this period i.e. loading cycleperiod.
There should be some substitute for the weigh bridge in-change in
case if he goes for lunch & other miscellaneous activities
CONCLUSION
After understanding the ground realities of foreign/international trade it is
crystal clear that services are major factor should be kept in mind at any
moment of time. Transparency in work, proper communication, systematic
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preparations of documents, punctuality are some of the major process for a
department which deals with import/export process of a company.
Accuracy in documents is very important. Exporters are required copy of
invoice and packing list. A standard of this document is always preferred as
it helps to understand the information in a correct and broader manner and
which ultimately saves time in the process.
BIBLOGRAPHY
www.ieport.com
www.indiamart.com
Ministry of textile
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Export procedure.
Books
A) The Management Of Business Logistics----COYLE-----BARDI
-----LANGLEY
B) Export Import Procedures And Documentation.
----Dr. Khuspat, S.Jain (Himalaya Publication)
---M. L. Mahajan.
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