ON THE JOB TRAINING

REPORT

ON

EXPORT MANAGEMENTIN

RANA POLYCOT LIMITED

(IN THE PARTIAL FUFILLMENT OF REQUIREMENT OF THE

DEGREE OF BACHELOR OF COMMERCE-II IN

FOREINGN TRADE PRACTICE AND PROCEEDURE)

SESSION – 2009-2010

UNDER THE GUIDANCE OF: - SUBMITED BY:-PROF. J.K.GUPTA VIKRANT SINGLA(HOD) B.COM IICOMMERCE DEPARTMENT Roll No. 2052 S .A. JAIN (PG) COLLEGE

SUBMITTED TO:-

S.A. JAIN (PG) COLLEGEAMBALA CITY

KURUKSHETRA UNIVERSITY, KURUKSHETRA

CERTIFICATE

This is to certify that Vikrant Singla student of B.Com.II

(Vocational) is a bonafide student of the college. He has completed his on

the job training report on the topic "Export Management" at Rana Polycot

Limited under our supervision. This training report being submitted in the

partial fulfillment of the requirement of examination of B.Com.II.

In our opinion the report fulfill the requirement laid down by the

Kurukshetra University, Kurukshetra. It may be send for evaluation.

GUIDED BY: SUPERVISED BY:Prof. J.K. Gupta Mrs. Neetu BansalH.O.D. Assistant Professor(Commerce Deptt.) (Commerce Deptt.)S.A. Jain College,Ambala City

ACKNOWLEDGEMENT

Preservation, inspiration and motivation have always played a key role in the

success of any venture. In the present world of competition and success, project is like a

bridge between theoretical and practical working. Willingly I prepared this particular

project report. First of all I would like to thank the supreme power, the almighty god,

who is obviously the one who has always guided me to work on the right path of my life.

I am heartily thankful to Dr. Pardeep Sharma (Principal of S.A. Jain (PG)

College, Ambala City), who gave me permission, undersigned letter to allow me to go in

Rana Polycot Limited to learn with practical knowledge and also gave me admission to

learn, and also to my teacher Mrs. Neetu Bansal who gave me such a learning task, now,

I feel myself as a winner.

I am also grateful to Prof. J.K. Gupta, Head of Commerce who extended all

facilities and his professional practical knowledge at every step.

I also express my sincere thanks to Dr.Sudhir Chouhan, G.M (P&A) for

allowing me to complete my training firm and who played an important role in brining

this to fruition.

I am deeply indebted to all the empolyes of RPL for their guidance and

encouragement. Special thanks to Mr. Parmod Sharma (Vice Persident of

Commercial Deptt.) who are guide for this project and training incharge Mr.O.P.

Sharma (Labour Officer). It has been a pleasure working with him and I could learn the

characteistics of an efficient corporate professional. I got necessary parctical knowledge

and information about the Export procedure.

I am very thankful to Mr. Gurnaib Singh (Senior Asstt.), Mr. Vivek Thakur

(Asstt.) and Mr. Raman Deep Singh (Asstt.) and all members of commerce department

who have been with me whenever I need their help.

I am beholders to the RPL LTD. Management for being transparent sharing their

views and company related information which all has given me a holistic approach in

doing the project work.

(VIKRANT SINGLA)

PREFACE

Theory and practices are the two broad aspects of management education and in

order to produce an executive, the two have to be interwoven. Realizing the importance

of such practical exposure, the university has made it compulsory for all students to

undergo a vocational training in some concerns, which import or export their products. I

have done my training in Rana Polycot Ltd. situated on the Alamgir, Ambala-Chandigarh

Highway near Lalru, Distt. Patiala, PB 140501(INDIA). It was of one month vocational

training.

During my project, I have tried to concentrate on the various workings, functions

of supply chain management and possible gaps therein. There can be no successful action

in isolation unless it is incompatible with the company’s system and efforts. It has been

reflected in the report submitted herewith.

During my training, I got an opportunity to see myself as an executive. I observed

how the export manager works, how he deals with the buyers and staff. Really, I

observed how organization functions for the achievement of its goal.

My subject of training was “Export Management”. A concern goes for

international trade and has to fulfill a lot of formalities i.e. it has to produce a numbers of

documents. Without these documents export/import does not possible during my training

period learnt a lot about these documents.

Though care has been taken in the preparation of the report as to reflect the true

steps of operation. Yet my sincere apologies for my mistakes, which might have crept in.

I hope that this report should be able to add value to the reader and the organizations.

INDEX

I. Certificate of the CompanyII. Certificate of CollegeIII. AcknowledgementIV. Preface

CONTENTS

CHAPTER DESCRIPTION PAGE NO. NO.

I COMPANY PROFILE (07-17)

History 7

Present Status 7

Objectives of the Study 9

Organisation Structure of Rana Polycot Ltd. 13

Reason For Selecting Rana Polycot Ltd. 17

II. EXPORT MANAGEMENT (19-44)

Introduction 19

Foreign Market Selection 21

Method of Payment in Export Market 22

SWOT Analysis 24

Registration of Export 26

Export Pricing 31

Export Documentation 34

Export Pre-Shipment Finance 38

Export Postshipment Finance 41

III. EXPORT MANAGEMENT OF RPL (46-85)

Introduction of Export in Rana Polycot Ltd. 46

Starting Export Business 51

Market Communication Mix 54

Selecting Overseas Agent 57

SWOT Analysis in Rana Polycot Ltd. 61

Pre-Requisite For Export/Import 63

Export Pricing of Rana Polycot Ltd. 65

Label, Marking & Packing System in Rana Polycot Ltd. 67

Export Documentation of Rana Polycot Ltd. 68

IV. FINDINGS AND SUGESSTIONS (87-89)

Findings 87

Suggestions 89

CONCLUSION ( 90 )

BIBLIGRAPHY

ANNEXURES

CHAPTER -1

COMPANY PROFILE

HISTORY

Rana group of companies began in mid 1980’s when Mr. Rana Gurjeet Singh,

MD of Rana Group set-up, Agro Board Limited-a Kraft papers unit in Punjab.

Rana group’s commitment to add value to agro product lead to incorporation of

Rana Sugar. Rana Sugars, situated in district Amritsar, Punjab is an integrated sugar

company with a capacity to crush around 5000tons of sugarcane per day to utilizes the

waste the company has set up a baggage based power generation unit.

Getting success in its sugar venture and continuing with commitment to agro

based industry, the group entered into the field of spinning by setting up Rana Polycot

Limited.

PRESENT STATUS

Rana Polycot Limited is leading and recognized name in the Textile Industries in

India.

Rana Polycot Limited situated in the Delhi-Chandigarh Highway in Punjab State.

It is 200kms away from Delhi. Keeping an eye in growing textile export and catering to

one of the basic needs of human being, the company has 50000 spindles running on

100% cotton yarn.

Company imports the latest generation state of the art machinery from the Rieter,

Schlafhorst, Zelleweger-Uster and Savio & Luwa the pioneering textile machinery

companies out of India.

100% EXPORT ORIENTED UNIT

Rana Polycot produced at present producing 100% cotton yarns in the count range

from 16/1 to 40/1, combed for hosiery as well as Weaving. The Company is totally

dedicated to offer best quality yarns to its overseas buyers, our yarns meet the top 5-10%

user standards.

Company yarns meet the most stringent requirements of high quality conscious

customers in the overseas market like South Africa, Koria, France, Tunisia, Mauritius,

Malaysia, Hong-Kong, Belgium, Bangladesh, Mexico, Vietnam, Czech-Rep. Jakarta, etc.

Rana Polycot Ltd.’s yarns based on high quality mixing system viz. Bale

Management. Company purchase the raw material i.e. bale from its domestic market and

also import high quality viscose as on special export.

Company also sale the cotton wastes to its domestic buyers. A cotton waste mean

that cotton which is eliminates by the machinery during the production process and that is

not suitable for export product quality.

Rana Group’s commitment to add value to agro products led to incorporation of

Rana sugars. A Rana sugar, situated in district Amritsar, Punjab is an integrated sugar

company with a capacity to crush around 5000 tons of sugarcane per day. To utilize the

waste the company has set up biogases based power generation plant. Having tasted

sweet success in its sugar venture and continuing with commitment to agro based

industry, the group ventured into the field of spinning by setting up Rana Polycot

Limited. Success of this maiden venture was duly recognized by apex. State owned

industrial Promotion Corporation and this led to joint ventures of Rana group with

different state owned corporation

RPL is situated in the cotton heartland of India, almost 200kms. From Delhi on

Delhi-Chandigarh highway, Rana Polycot limited is a 100% export oriented unit based on

35000 spindles. Keeping an eye in growing textile exports and catering to one of the

basic needs of human being, the unit has 75000 spindles running on 100% cotton.

The plant has got the latest generation state of the art machinery from Reiter,

schlafhorst, zelleweger-uster, Savior & Luwa the names to reckon within textile industry.

Rana Polycot is presently producing 100% cotton yarns in the count range of NE 16/1 –

NE 40/1, combed & carded for hosiery as well as weaving. The company is totally

dedicated to offer best quality yarns to its discerning overseas buyers, our yarns meet the

top 5-10% ester standards.

Our yarns are based on rich and uniform mixing based on quality system viz., bale

management to produce consistently high quality yarns. Our yarns meet the most

stringent requirements of highly quality conscious customers in markets like South

Korea, Singapore, Hong-Kong, Mauritius, Malaysia, Israel, Philippines, Tunisia, Mexico,

United Kingdom, Hungary, Bangladesh, Belgium, Jakarta, Czech Republic and Vietnam,

etc. We are committed to offer the best products and services to our demanding

customers spread around the world. In the financial year 2006-07, export of Rana Polycot

Ltd. is above Rs. 140 crores.

RANA GROUP OF COMPANIES

Rana Sugar Limited

Rana Polycot Limited

Rana Textile (P) Ltd.

Global Trade (P) Ltd.

Rana Infomatics Ltd.

Guru Teg Bhadhur Forest Ltd.

Rana Fund and Investment (P) Ltd.

BOARD OF DIRECTORS

Sh. Ramesh Inder Singh IAS (Chairman)

Rana Ranjeet Singh (M.D.)

Rana Gurjeet Singh

Sh. S.K. Duggal

Sh. D.S. Dhaliwal

Sh. A.S. Pooni

Mohanjeet Singh Pooni

Sh. B.K. Malhotra

Sh. S.A.S. Bajwa

Mrs. Rajbans Kaur

Sh. B.K. Batra

AUDITIORS

KANSAL SINGH & ASSOCIATIONChartered AccountantsSEO. 111-15,Sector 22-B,Chandigarh--160018

BANKERS

CANARA BANK, Sector 17- C, Chandigarh—160018

ANDRA BANK, Sector 17-B, Chandigarh—160018

REGD. OFFICE

SCO 49-50, Sector 8-C

Madhya Marg, Chandigarh---160018

PRODUCTION

Rana Polycot Limited

Village---Alamgir, Post Office, Lalru, District Mohali, Punjab

Ph--- 01762-2506751-756, Fax---01762-506750

ORGANISATION CHART

GM(Technical) V.P.(commercial) DGM ( P&A)

Manager Manager Manager Manager(Eng.) (Production) (R&D) (Mainte.)

Manager(SPG) Asstt. Scurit Manager -y

Personn el officer

Electronices (Asstt.Egr.) (A/C) (Manager worker costing) (EDP)

ORGANIZATION CHART OF RANA POLYCOT LTD.

Board of Directors

Managing Director

Chief Executive

Mechanical Stores

Electrical S.M. Finishing S.M. CivilMaintenance (A)

INFRASTRUCTURE FACILITIES OF RANA GROUP

RANA POLYCOT LTD., (SPINNING DIVISION) LALRU

Company is located in close proximity to the cotton belt of north India. The plant

is located at Lalru, Punjab. The unit was established with scaled to 35,000 spindles in

2000.RPL currently has a capacity of 72,768 spindles.

Ring spinning

Installed capacity72, 768 Spindles 50 tons per day of yarn

The above spindles include spindles of compact yarn and 30000 spindles with

Murata link coners.

VORTEX SPINNING

Latest Murata 4 MVS 861 and

1 MVS 810 machine to produce 3.5 tons per day of Vortex yarn.

RANA POLYCOT LTD., (DYEING DIVISION)

The dyeing unit of RPL is also located in Lalru, Punjab. The dyeing unit

commenced production in 2006 with a capacity of 5 tons/day. The company is proposing

Current capacity - 4.8 tons per day

Expansion planned - 6 tons per day

RANA POLYCOT LTD., (KNITTING DIVISON)

The knitting division was established in 2002 with an initial capacity of 1000

pieces/day. The division has since expanded and now has an installed capacity of 3000

pieces/day.

PRODUCT LINE

The product line includes designer wear garments in Men’s, Ladies $ Kids wear

range. We can make “(in flat knit) intarsia structure, jacquard structure, etc.

MANUFACTURING CAPACITY

Rana Polycot’s Khitting Division can make app.60k-70k units/month.

After setting up garment set up in the year 2001-02 (with a capacity of making

22k-25k units/month), Rana Polycot has increased it’s capacity to the tune of 3 times.

DYED YARN

In order to provide more value added services to its client, RPL set up it dyeing

division that provides package yarn dyeing of 100% cotton yarns. The dyeing division is

supported by its installed capacity of 4.5 tons/day. The plant is equipped to produce high

quality dyed yarns supported by fully automatic processing machines from FONG’S

(HONG KONG). The plant, with its latest technology, dyeing equipment and qualities

staff is able to achieve international quality standards.

KNITTING $ GARMENTS

As a part of its forward integration and diversification program. Company set up a

flat knit unit to manufacture premium quality flat knit garments and sweaters for export

to the international markets. The garments line is based on the latest generation

stitching/linking’s/over locks and finishing machines. The product line includes designer

wear garments in men’s, ladies and kids range. Various types of inputs like cotton, rayon,

lamb’s wool and viscose are used in the design. RPL also specialize in various types of

washes finishes and embellishments.

YARN

Company produce 100% cotton yarn in the count range of Ne 16/1-Ne 40/1 and

TFO doubled yarns in the count range of Ne16/2-Ne 40/2 for hosiery and weaving. RPL

has an installed operating capacity of 48,000 spindles including 10,000 spindles for the

production of compact yarn. RPL also operates five latest Murata Air Jet Vortex Spinning

Machines (MVS) to produce high quality yarn with lesser pilling. The company is totally

dedicated to offer the best yarn to it discerning buyers. Company yarns meet the top 5-

10% uster standards and are based on rich and uniform cotton mixing.

REASONS FOR SELECTING RPL

Rana Polycot Ltd. is one of the famous and recognized companies in India. Its

cotton rings are not only famous in India, but also in the international markets. RPL is the

concern of Rana Groups of Companies having the turnover of Rs. 200 core. RPL is the

100% Export oriented unit (E.O.U.). It is new in this business of cotton and since 1995

when Rana Polycot Ltd. is commencing it production till today constant upward growth

has symbolized and it also capture the highest exports in 2003-04.

Being a B.COM II student, I had curiosity to know how such a big concern

controls, Export procedure manages its different activities and it is always ready to

cooperative its experience to its trainees.

Another reason to select Rana Polycot Ltd. is its set up which is an excellent

blend of a classic and modern concern, RPL is disciplined to its core and is exploiting

strength to his maximum extent and ever growing.

Hence these are enormous opportunities to learn for a student to learn for a

student like me.

For a proper export planning following questions need to be answered.

1. Which products are selected for export development?

2. What modifications, if any, must be made to adapt them for overseas markets?

3. Which countries are targeted for sales development?

4. In each country, what is the basic customer profile?

5. What marketing and distribution channels should be used to reach customers?

6. What special challenges pertain to each market (competition, cultural differences,

and import, Controls, etc.), and what strategy will be used to address them?

7. How will the product's export sale price be determined?

8. What specific operational steps must be taken and when?

OBJECTIVES OF THE STUDY

The main objectives of study are:-

1. To know about mechanisms for reviewing and measuring progress.

2. To study about how company has focused on export management.

3. To study the procedure to get export license.

4. To study the documents required for export of goods.

5. To study the export procedure of the company.

6. To study the government policies related to the export of a particular product.

7. To study the government incentive schemes and tax exemption for exports.

CHAPTER - 2

EXPORT MANAGEMENT

INTRODUCTION

Export in itself is a very wide concept and lot of preparations is required by an

exporter Before starting an export business. A key success factor in starting any export

company is Clear understanding and detail knowledge of products to be exported. In

order to be a Successful in exporting one must fully research its foreign market rather

than try to tackle Every market at once. The exporter should approach a market on a

priority basis. Overseas Design and product must be studied properly and considered

carefully. Because there are Specific laws dealing with International trade and foreign

business, it is imperative that you Familiarize yourself with state, federal, and

international laws before starting your export Business. Price is also an important factor.

So, before starting an export business an exporter must consider the price offered to the

buyers. As the selling price depends on sourcing price, try to avoid unnecessary

middlemen who only add cost but no value. It helps a lot on cutting. The transaction cost

and improving the quality of the final products.

The Government of Indian has defined it, in very simple terms; export may be

defined as the Selling of goods to a foreign country. However, As per Section 2 (e) of the

Indian Foreign Trade Act (1992), the term export may be defined as 'an act of taking out

of India any goods by land, sea or air and with proper transaction of money”. Exporting a

product is a profitable method that helps to expand the business and reduces the

Dependence in the local market. It also provides new ideas, management practices,

marketing

Every company wants to growth and make international image. For this purpose

they entry in the overseas market. Although overseas market is more beneficial and

company expansion strategy but there is lot of risk i.e. different consumers taste,

preference, economic and other factors.

BASIC PLANNING FOR EXPORT

INTRODUCTION

Before starting an export, an individual should evaluate his company’s “export

readiness”. Further planning for export should be done only, if the company’s assets are

good enough for Export. There are several methods to evaluate the export potential of a

company. The most Common method is to examine the success of a product in domestic

market. It is believed that If the products have survived in the domestic market, there is a

good chance that it will also be Successful in international market, at least those where

similar needs and conditions exist. One should also evaluate the unique features of a

product. If those features are hard to duplicate abroad, and then it is likely that you will

be successful overseas. A unique product may have little competition and demand for it

might be quite high. Once a businessman decides to sell his products; the next step is to

developing a proper export plan. While planning an export Strategy, it is always better to

develop a simple, practical and flexible export plan for Profitable and sustainable export

business. As the planners learn more about exporting and Your company's competitive

position, the export plan will become more detailed and Complete.

WHAT IS EXPORTING: -Exporting means sell the products (services) out of national

boundries. When a company sells its products in the one or more than one nation it call

exporting. In briefest term, it is the process of earning money by selling products in

foreign markets.

FOREIGN MARKET SELECTION PROCESS

Step 1: Gather Information on a Broad Range of Markets

Market selection process requires a broad range of information depending upon

the products or services to be exported, which includes:

• The demand for product/service.

• The size of the potential audience.

• Whether the target audience can afford product.

• What the regulatory issues are that impact on exports of product.

• Ease of access to this market – proximity/freight.

• Are there appropriate distribution channels for product or service?

• The environment for doing business – language, culture, politics etc.

• Is it financially viable to export to selected market?

Step 2: Research a Selection of Markets In-Depth

From the results of the first stage, narrow your selection down to three to five

markets and undertake some in-depth research relating specifically to your product.

While doing so, some of the questions that may arise at this stage are:

• What similar products are in the marketplace (including products that may not be

similar but are used to achieve the same goal, e.g. the product in our sample matrix at the

end of this document is a hair removal cream. As well as undertaking competitor research

on other hair removal creams, we would also need to consider other products that are

used for hair removal, i.e. razors, electrolysis, wax).

• What is your point of difference? What makes your product unique? What are the

key selling points for your product?

• How do people obtain/use these products?

• Who provides them?

• Are they imported? If so from which countries?

• Is there a local manufacturer or provider?

• Who would your major competitors be? What are the key brands or trade names?

• What is the market’s structure and shape?

• What is the market’s size?

• Are there any niche markets, and if so how big are they?

• Who are the major importers/ stockiest / distributors / agencies or suppliers?

• What are the other ways to obtain sales/representation?

• What are the prices or fees in different parts of the market?

• What are the mark-ups at different distribution levels?

• What are the import regulations, duties or taxes, including compliance and

professional registrations if these apply?

• How will you promote your product or service if there is a lot of competition?

• Are there any significant trade fairs, professional gathers or other events where

you can promote your product or service?

• Packaging – do you need to change metric measures to imperial; do you need to

list ingredients?

• Will you need to translate promotional material and packaging?

METHODS OF ENTRY INTO FOREIGN MARKETS

There are various methods of entry in the foreign markets. A Company can

choose a method according to their desire. These methods are following.

1. Exporting:- Exporting is three types:-

a) Direct exporting:-When a company sells its products directly in the foreign

market without any middleman helps. In this case companies have its own export

department organization structure.

b) Indirect exporting: - It is opposite direct exporting. Indirect exporting happens

when the firm sells its products in the foreign market via an intermediary located

in the firm home country. The middlemen could be an export management

company (EMC), a trading house or simply a broker.

c) Cooperative exporting: - Companies that are not willing to commit the resources

to set up their own distribution organization but still want to have some control

over their foreign operation should consider cooperative exporting. One of the

most popular forms of cooperative exporting is piggyback exporting. Through

piggyback exporting the company uses the overseas distribution network of

another company (local or foreign) for selling its goods in the foreign market. For

example-Wrigley, the US chewing gum company, enters India by piggy backing

on parry’s a local confectionery firm.

2. Licensing: -licensing is a contractual transaction whereby the firm-the licensor-

offers some proprietary assets to a foreign company -the licensee-in exchange for

royalty fees. Examples of assets that include in contracts are trademarks,

technology known how, production process and patents.

3. Franchising:-It is an arrangement whereby the franchisor gives the franchisee the

right to use the franchiser trade names, trademarks, business models, and know-

how in a given territory for a specific time period, normally 10 years in exchange

of royalty and other fees.

4. Contract Manufacturing: -Contract manufacturing or outsourcing the company

arrange with a local manufacturer to manufacture parts of the products or even the

entire product. The marketing of the products is still the responsibility of the

international firm. Example-Net Steel Electronics (NEL) is one of the leading

global electronics contract manufactures.

5. Joint Venture: -With a joint venture, the foreign company agrees to share equity

and other resources with other partners to establish a new entity in the target

country. The partners typically are local companies, local govt., authorities, other

foreign companies or a mixture of local and foreign players.

6. Wholly owned subsidiaries: -MNCs often prefers to enter new markets with 100/

ownership. In this case company acquisition or purchased other company by

100%ownership or establish a separate 100%owned subsidiary in foreign market.

7. Acquisition and Merger: -In this case company acquisitions foreign company by

100% or management stake. The other strategy is merger .in this strategy a

company amalgamates with other company and share the ownership or

management.

REGISTRATION OF EXPORTERS

Registration with Reserve Bank of India (RBI)

Registration with Director General of Foreign Trade (DGFT)

Registration with Export Promotion Council

Registration with Commodity Boards

Registration with Income Tax Authorities

Once all the research and analysis is done its time to get registered with the

various government authorities. Registration with Reserve Bank of India (RBI) Prior to

1997, it was necessary for every first time exporter to obtain IEC number from Reserve

Bank of India (RBI) before engaging in any kind of export operations. But now this job is

being done by DGFT.

Registration with Director General of Foreign Trade (DGFT)

For every first time exporter, it is necessary to get registered with the DGFT

(Director General of Foreign Trade), Ministry of Commerce, Government of India.

DGFT provide exporter a unique IEC Number. IEC Number is a ten digits code required

for the purpose of export as well as import. No exporter is allowed to export his good

abroad without IEC number.

However, if the goods are exported to Nepal, or to Myanmar through Indo-

Myanmar boarder or to China through Gunji, Namgaya, Shipkila or Nathula ports then it

is not necessary to obtain IEC number provided the CIF value of a single consignment

does not exceed Indian amount of Rs. 25, 000 /-. Application for IEC number can be

submitted to the nearest regional authority of DGFT.

Application form which is known as "Aayaat Niryaat Form - ANF2A" can also be

submitted online at the DGFT web-site: http://dgft.gov.in.

While submitting an application form for IEC number, an applicant is required to

submit his PAN account number. Only one IEC is issued against a single PAN number.

Apart from PAN number, an applicant is also required to submit his Current Bank

Account number and Bankers Certificate. A amount of Rs 1000/- is required to submit

with the application fee. This amount can be submitted in the form of a Demand Draft or

payment through EFT (Electronic Fund Transfer by Nominated Bank by DGFT.

Registration with Export Promotion Council

Registered under the Indian Company Act, Export Promotion Councils or EPC is

a non-profit organization for the promotion of various goods exported from India in

international market.

EPC works in close association with the Ministry of Commerce and Industry,

Government of India and act as a platform for interaction between the exporting

community and the government. So, it becomes important for an exporter to obtain a

registration cum membership certificate (RCMC) from the EPC. An application for

registration should accompanied by a self certified copy of the IEC number. Membership

fee should be paid in the form of cheque or draft after ascertaining the amount from the

concerned EPC.

The RCMC certificate is valid from 1st April of the licensing year in which it was

issued and shall be valid for five years ending 31st March of the licensing year, unless

otherwise specified.

Registration with Income Tax Authorities

Goods exported out of the country are eligible for exemption from both Value

Added Tax and Central Sales Tax. So, to get the benefit of tax exemption it is important

for an exporter to get registered with the Tax Authorities.

EXPORT LICENSE

Introduction

An export license is a document issued by the appropriate licensing agency after

which an exporter is allowed to transport his product in a foreign market. The license is

only issued after a careful review of the facts surrounding the given export transaction.

Export license depends on the nature of goods to be transported as well as the destination

port. So, being an exporter it is necessary to determine whether the product or good to be

exported requires an export license or not. While making the determination one must

consider the following necessary points:

• What are you exporting?

• Where are you exporting?

• Who will receive your item?

• What will your items will be used?

Canalization

Canalization is an important feature of Export License under which certain goods

can be imported only by designated agencies. For an example, an item like gold, in bulk,

can be imported only by specified banks like SBI and some foreign banks or designated

agencies.

Application for an Export License

To determine whether a license is needed to export a particular commercial

product or service, an exporter must first classify the item by identifying what is called

ITC (HS) Classifications. Export license are only issued for the goods mentioned in the

Schedule 2 of ITC (HS) Classifications of Export and Import items. A proper application

can be submitted to the Director General of Foreign Trade (DGFT). The Export

Licensing Committee under the Chairmanship of Export Commissioner considers such

applications on merits for issue of export licenses.

Exports free unless regulated The Director General of Foreign Trade (DGFT)

from time to time specifies through a public notice according to which any goods, not

included in the ITC (HS) Classifications of Export and Import items may be exported

without a license. Such terms and conditions may include Minimum Export Price (MEP),

registration with specified authorities, quantitative ceilings and compliance with other

laws, rules, regulations.

How to take export licence? What type of documentation is required?

An export license is a document issued by the appropriate licensing agency after

which an exporter is allowed to transport his product in a foreign market. The license is

only issued after a careful review of the facts surrounding the given export transaction.

Export license depends on the nature of goods to be transported as well as the destination

port. So, being an exporter it is necessary to determine whether the product or good to be

exported requires an export license or not. While making the determination one must

consider the following necessary points:

(1) What are you exporting?

(2) Where are you exporting?

(3) Who will receive your item?

(4) What will your items will be used?

Canalization is an important feature of Export License under which certain goods

can be imported only by designated agencies. For an example, an item like gold, in bulk,

can be imported only by specified banks like SBI and some foreign banks or designated

agencies.

To determine whether a license is needed to export a particular commercial

product or service, an exporter must first classify the item by identifying what is called

ITC (HS) Classifications. Export license are only issued for the goods mentioned in the

Schedule 2 of ITC (HS) Classifications of Export and Import items. A proper application

can be submitted to the Director General of Foreign Trade (DGFT). The Export

Licensing Committee under the Chairmanship of Export Commissioner considers such

applications on merits for issue of export licenses.

For every first time exporter, it is necessary to get registered with the DGFT

(Director General of Foreign Trade), Ministry of Commerce, Government of India.

DGFT provide exporter a unique IEC Number. IEC Number is a ten digits code required

for the purpose of export as well as import. No exporter is allowed to export his good

abroad without IEC number.

However, if the goods are exported to Nepal, or to Myanmar through Indo-

Myanmar boarder or to China through Gunji, Namgaya, Shipkila or Nathula ports then it

is not necessary to obtain IEC number provided the CIF value of a single consignment

does not exceed Indian amount of Rs. 25, 000 /-.

Application for IEC number can be submitted to the nearest regional authority of

DGFT. Application form which is known as "Aayaat Niryaat Form - ANF2A" can also

be submitted online at the DGFT web-site: http://dgft.delhi.nic.in

While submitting an application form for IEC number, an applicant is required to

submit his PAN account number. Only one IEC is issued against a single PAN number.

Apart from PAN number, an applicant is also required to submit his Current Bank

Account number and Bankers Certificate.

A amount of Rs 1000/- is required to submit with the application fee. This amount

can be submitted in the form of a Demand Draft or payment through EFT (Electronic

Fund Transfer by Nominated Bank by DGFT.

The RCMC certificate is valid from 1st April of the licensing year in which it was

issued and shall be valid for five years ending 31st March of the licensing year, unless

otherwise specified.

Commodity Board is registered agency designated by the Ministry of Commerce,

Government of India for purposes of export-promotion and has offices in India and

abroad. At present, there are five statutory Commodity Boards under the Department of

Commerce. These Boards are responsible for production, development and export of tea,

coffee, rubber, spices and tobacco.

Goods exported out of the country are eligible for exemption from both Value

Added Tax and Central Sales Tax. So, to get the benefit of tax exemption it is important

for an exporter to get registered with the Tax Authorities.

EXPORT PRICING AND COSTING

Pricing and costing are two different things and an exporter should not confuse

between the two. Price is what an exporter offer to a customer on particular products

while cost is what an exporter pay for manufacturing the same product. Export pricing is

the most important factor in for promoting export and facing international trade

competition. It is important for the exporter to keep the prices down keeping in mind all

export benefits and expenses. However, there is no fixed formula for successful export

pricing and is differ from exporter to exporter depending upon whether the exporter is a

merchant exporter or a manufacturer exporter or exporting through a canalizing agency.

Determining Export Pricing

Export Pricing can be determined by the following factors:

Range of products offered.

Prompt deliveries and continuity in supply.

After-sales service in products like machine tools, consumer durables.

Product differentiation and brand image.

Frequency of purchase.

Presumed relationship between quality and price.

Specialty value goods and gift items.

Credit offered.

Preference or prejudice for products originating from a particular source.

Aggressive marketing and sales promotion.

Prompt acceptance and settlement of claims.

Unique value goods and gift items.

EXPORT COSTING

Export Costing is basically Cost Accountant's job. It consists of fixed cost and

variable cost comprising various elements. It is advisable to prepare an export costing

sheet for every export product. As regards quoting the prices to the overseas buyer, the

same are quoted in the following internationally accepted terms which are commonly

known as Inco term.

PACKAGING AND LABELING

Introduction

An important stage after manufacturing of goods or their procurement is their

preparation for shipment which involves packaging and labeling of goods to be exported.

Proper packaging and labeling not only makes the final product look attractive but also

save a huge amount of money by saving the product from wrong handling the export

process.

Packaging

The primary role of packaging is to contain, protect and preserve a product as

well as aid in its handling and final presentation. Packaging also refers to the process of

design, evaluation, and production of packages. The packaging can be done within the

export company or the job can be assigned to an outside packaging company. Packaging

provides following benefits to the goods to be exported:

• Physical Protection – Packaging provides protection against shock, vibration,

temperature, moisture and dust.

• Containment or agglomeration – Packaging provides agglomeration of small objects

into one package for reason of efficiency and cost factor. For example it is better to put

1000 pencils in one box rather than putting each pencil in separate 1000 boxes.

• Marketing: Proper and attractive packaging play an important role in encouraging a

potential buyer.

• Convenience - Packages can have features which add convenience in distribution,

handling, display, sale, opening, use, and reuse.

• Security - Packaging can play an important role in reducing the security risks of

shipment. It also provides authentication seals to indicate that the package and contents

are not counterfeit. Packages also can include anti-theft devices, such as dye-packs, RFID

tags, or electronic article surveillance tags, that can be activated or detected by devices at

exit points and require specialized tools to deactivate. Using packaging in this way is a

means of loss prevention.

LABELING

Like packaging, labeling should also be done with extra care. It is also important

for an exporter to be familiar with all kinds of sign and symbols and should also maintain

all the nationally and internationally standers while using these symbols. Labeling should

be in English, and words indicating country of origin should be as large and as prominent

as any other English wording on the package or label.

Labeling on product provides the following important information:

Shipper's mark

Country of origin

Weight marking (in pounds and in kilograms)

Number of packages and size of cases (in inches and centimeters)

Handling marks (international pictorial symbols)

Cautionary markings, such as "This Side Up."

Port of entry

Labels for hazardous materials

Labeling of a product also provides information like how to use, transport,

recycle, or dispose of the package or product. With pharmaceuticals, food, medical, and

chemical products, some types of information are required by governments.

It is better to choose a fast dyes for labeling purpose. Only fast dyes should be

used for labeling. Essential data should be in black and subsidiary data in a less

conspicuous colour; red and orange and so on. For food packed in sacks, only harmless

dyes should be employed, and the dye should not come through the packing in such a

way as to affect the goods.

EXPORT DOCUMENTATION

COMMERCIAL INVOICE

Commercial Invoice document is provided by the seller to the buyer. Also known

as export invoice or import invoice, commercial invoice is finally used by the custom

authorities of the importer's country to evaluate the good for the purpose of taxation.

The invoice must:

Be issued by the beneficiary named in the credit (the seller).

Be address to the applicant of the credit (the buyer).

PACKING LIST

Also known as packing specification, it contains details about the packing

materials used in the shipping of goods. It also includes details like measurement and

weight of goods.

The packing List must:

Have a description of the goods ("A") consistent with the other documents.

Have details of shipping marks ("B") and numbers consistent with other

documents

SHIPPING BILL / BILL OF EXPORT

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

Authority for allowing shipment. A shipping bill is issued by the shipping agent and

represents some kind of certificate for all parties, included ship's owner, seller, buyer and

some other parties. For each one represents a kind of certificate document.

INSURANCE CERTIFICATE

Also known as Insurance Policy, it certifies that goods transported have been

insured under an open policy and is not actionable with little details about the risk

covered. It is necessary that the date on which the insurance becomes effective is same or

earlier than the date of issuance of the transport documents. Also, if submitted under a

LC, the insured amount must be in the same currency as the credit and usually for the bill

amount plus 10 per cent. The requirements for completion of an insurance policy are as

follow:

The name of the party in the favor which the document has been issued.

The name of the vessel or flight details.

The place from where insurance is to commerce typically the sellers warehouse or

the port of loading and the place where insurance cases usually the buyer's

warehouse or the port of destination.

Insurance value that specified in the credit.

Marks and numbers to agree with those on other documents.

CERTIFICATE OF ORIGIN

The Certificate of Origin is required by the custom authority of the importing

country for the purpose of imposing import duty. It is usually issued by the Chamber of

Commerce and contains information like seal of the chamber, details of the good to be

transported and so on. The certificate must provide that the information required by the

credit and be consistent with all other document, It would normally include:

The name of the company and address as exporter.

The name of the importer.

Package numbers, shipping marks and description of goods to agree with that on

other

documents.

Any weight or measurements must agree with those shown on other documents.

It should be signed and stamped by the Chamber of Commerce.

A Certificate of Origin (often abbreviated to CO or COO) is a document used in

international trade. It traditionally states from what country the shipped goods originate,

but "originate" in a CO does not mean the country the goods are shipped from, but the

country where their goods are actually made. This raises a definition problem in cases

where less than 100% of the raw materials and processes and added value are not all from

one country. An often used practice is that if more than 50% of the sales prices of the

goods originate from one country that country is acceptable as the country of origin (then

the “national content” is more than 50%. In various international agreements, other

percentages of national content are acceptable.

BILL OF LADING

Bill of Lading is a document given by the shipping agency for the goods shipped

for transportation form one destination to another and is signed by the representatives of

the carrying vessel.

Bill of landing is issued in the set of two, three or more. The number in the set

will be indicated on each bill of lading and all must be accounted for. This is done due to

the safety reasons which ensure that the document never comes into the hands of an

unauthorized person. Only one original is sufficient to take possession of goods at port of

discharge so, a bank which finances a trade transaction will need to control the complete

set. The bill of lading must be signed by the shipping company or its agent, and must

show how many signed originals were issued.

REGISTRATION

Any exporter who wants to export his good need to obtain PAN based Business

Identification Number (BIN) from the Directorate General of Foreign Trade prior to

filing of shipping bill for clearance of export goods. The exporters must also register

themselves to the authorized foreign exchange dealer code and open a current account in

the designated bank for credit of any drawback incentive.

Registration in the case of export under export promotion schemes:

All the exporters intending to export under the export promotion scheme need to

get their licenses / DEEC book etc.

Processing of Shipping Bill - Non-EDI:

In case of Non-EDI, the shipping bills or bills of export are required to be filled in

the format as prescribed in the Shipping Bill and Bill of Export (Form) regulations, 1991.

An exporter need to apply different forms of shipping bill/ bill of export for export of

duty free goods, export of dutiable goods and export under drawback etc.

PROCESSING OF SHIPPING BILL - EDI:

Under EDI System, declarations in prescribed format are to be filed through the

Service Centers of Customs. A checklist is generated for verification of data by the

exporter/CHA. After verification, the data is submitted to the System by the Service

Center operator and the System generates a Shipping Bill Number, which is endorsed on

the printed checklist and returned to the exporter/CHA. For export items which are

subject to export cess, the TR-6 challans for cess is printed and given by the Service

Center to the exporter/CHA immediately after submission of shipping bill. The cess can

be paid on the strength of the challan at the designated bank. No copy of shipping bill is

made available to exporter/CHA at this stage.

EXPORT PRE-SHIPMENT FINANCE

Pre Shipment Finance is issued by a financial institution when the seller wants the

payment of the goods before shipment. The main objectives behind preshipment finance

or pre export finance are to enable exporter to:

Procure raw materials.

Carry out manufacturing process.

Provide a secure warehouse for goods and raw materials.

Process and pack the goods.

Ship the goods to the buyers.

Meet other financial cost of the business.

Types of Pre Shipment Finance

Packing Credit

Advance against Cheques/Draft etc. representing Advance Payments.

Preshipment finance is extended in the following forms:

Packing Credit in Indian Rupee

Packing Credit in Foreign Currency (PCFC)

Requirement for Getting Packing Credit

This facility is provided to an exporter who satisfies the following criteria

A ten digit importer exporter code number allotted by DGFT.

Exporter should not be in the caution list of RBI.

If the goods to be exported are not under OGL (Open General License), the

exporter should have the required license /quota permit to export the goods.

Packing credit facility can be provided to an exporter on production of the

following

evidences to the bank:

1. Formal application for release the packing credit with undertaking to the effect that

the exporter would be ship the goods within stipulated due date and submit the

relevant shipping documents to the banks within prescribed time limit.

2. Firm order or irrevocable L/C or original cable / fax / telex message exchange

between the exporter and the buyer.

3. License issued by DGFT if the goods to be exported fall under the restricted or

canalized category. If the item falls under quota system, proper quota allotment proof

needs to be submitted.

The confirmed order received from the overseas buyer should reveal the

information about the full name and address of the overseas buyer, description quantity

and value of goods (FOB or CIF), destination port and the last date of payment.

ELIGIBILITY

Pre shipment credit is only issued to that exporter who has the export order in his

own name. However, as an exception, financial institution can also grant credit to a third

party manufacturer or supplier of goods who does not have export orders in their own

name.

In this case some of the responsibilities of meeting the export requirements have

been out sourced to them by the main exporter. In other cases where the export order is

divided between two more than two exporters, pre shipment credit can be shared between

them Quantum of Finance. The Quantum of Finance is granted to an exporter against the

LC or an expected order. The only guideline principle is the concept of Need Based

Finance. Banks determine the percentage of margin, depending on factors such as:

The nature of Order.

The nature of the commodity.

The capability of exporter to bring in the requisite contribution.

DISBURSEMENT OF PACKING CREDIT ADVANCE

Once the proper sanctioning of the documents is done, bank ensures whether

exporter has executed the list of documents mentioned earlier or not. Disbursement is

normally allowed when all the documents are properly executed. Sometimes an exporter

is not able to produce the export order at time of availing packing credit. So, in these

cases, the bank provides a special packing credit facility and is known as Running

Account Packing. Before disbursing the bank specifically check for the following

particulars in the submitted documents"

a. Name of buyer

b. Commodity to be exported

c. Quantity

d. Value (either CIF or FOB)

e. Last date of shipment / negotiation.

f. Any other terms to be complied with

The quantum of finance is fixed depending on the FOB value of contract /LC or

the domestic values of goods, whichever is found to be lower. Normally insurance and

freight charged are considered at a later stage, when the goods are ready to be shipped.

EXPORT POSTSHIPMENT FINANCE

BASIC FEATURES

The features of post shipment finance are:

Purpose of Finance Post shipment finance is meant to finance export sales

receivable after the date of shipment of goods to the date of realization of exports

proceeds. In cases of deemed exports, it is extended to finance receivable against

supplies made to designated agencies.

Basis of Finance Post shipment finances are provided against evidence of

shipment of goods or supplies made to the importer or seller or any other

designated agency.

TYPES OF FINANCE

Post shipment finance can be secured or unsecured. Since the finance is extended

against evidence of export shipment and bank obtains the documents of title of goods, the

finance is normally self liquidating. In that case it involves advance against undrawn

balance, and is usually unsecured in nature. Further, the finance is mostly a funded

advance. In few cases, such as financing of project exports, the issue of guarantee

(retention money guarantees) is involved and the financing is not funded in nature.

Quantum of Finance

As a quantum of finance, post shipment finance can be extended up to 100% of

the invoice value of goods. In special cases, where the domestic value of the goods

increases the value of the exporter order, finance for a price difference can also be

extended and the price difference is covered by the government. This type of finance is

not extended in case of preshipment stage. Banks can also finance undrawn balance. In

such cases banks are free to stipulate margin requirements as per their usual lending

norm.

Period of Finance

Post shipment finance can be off short terms or long term, depending on the

payment terms offered by the exporter to the overseas importer. In case of cash exports,

the maximum period allowed for realization of exports proceeds is six months from the

date of shipment. Concessive rate of interest is available for a highest period of 180 days,

opening from the date of surrender of documents. Usually, the documents need to be

submitted within 21days from the date of shipment.

Financing For Various Types of Export Buyer's Credit

Post shipment finance can be provided for three types of export:

a) Physical exports: Finance is provided to the actual exporter or to the exporter in

whose name the trade documents are transferred.

b) Deemed export: Finance is provided to the supplier of the goods which are

supplied to the designated agencies.

c) Capital goods and project exports: Finance is sometimes extended in the name

of overseas buyer. The disbursal of money is directly made to the domestic

exporter.

Supplier's Credit Buyer's Credit is a special type of loan that a bank offers to the

buyers for large scale purchasing under a contract. Once the bank approved loans to the

buyer, the seller shoulders all or part of the interests incurred.

Payment Collection against:- Bills also known documentary collection as is a payment

method used in international trade all over the world by the exporter for the handling of

documents to the buyer's bank and also gives the banks necessary instructions indicating

when and on what conditions these documents can be released to the importer.

Collection against Bills is published by International Chambers of Commerce

(ICC), Paris, France. The last updated issue of its rule was published on January 1, 1966

and is know as the URC 522.It is different from the letters of credit, in the sense that the

bank only acts as a medium for the transfer of documents but does not make any payment

guarantee. However, collections of documents are subjected to the Uniform Rules for

Collections published by the International Chamber of Commerce (ICC).

ROLE OF VARIOUS PARTIES

EXPORTER

The seller ships the goods and then hands over the document related to the goods

to their banks with the instruction on how and when the buyer would pay.

EXPORTER'S BANK

The exporter's bank is known as the remitting bank, and they remit the bill for

collection with proper instructions. The role of the remitting bank is to:

Check that the documents for consistency.

Send the documents to a bank in the buyer's country with instructions on

collecting payment.

Pay the exporter when it receives payments from the collecting bank.

BUYER/IMPORTER

The buyer / importer are the drawer of the Bill.

The role of the importer is to

Pay the bill as mention in the agreement (or promise to pay later).

Take the shipping documents (unless it is a clean bill) and clear the goods.

IMPORTER'S BANK

This is a bank in the importer's country: usually a branch or correspondent bank

of the remitting bank but any other bank can also be used on the request of exporter. The

collecting bank act as the remitting bank’s agent and clearly follows the instructions on

the remitting bank's covering schedule. However the collecting bank does not guarantee

payment of the bills except in very unusual circumstance for undoubted customer, which

is called availing. Importer's bank is known as the collecting / presenting bank.

The role of the collecting banks is to:

Act as the remitting bank's agent

Present the bill to the buyer for payment or acceptance.

Release the documents to the buyer when the exporter's instructions have been

followed.

Remit the proceeds of the bill according to the Remitting Bank's schedule

instructions.

If the bill is unpaid / unaccepted, the collecting bank:

May arrange storage and insurance for the goods as per remitting bank

instructions on the schedule.

Protests on behalf of the remitting bank (if the Remitting Bank's schedule states

Protest)

Requests further instruction from the remitting bank, if there is a problem that is

not covered by the instructions in the schedule.

EXPORT FINANCE PRE SHIPMENT AND POST SHIPMENT

EXIM Guide to Export Finance offers a wide variety of financial measures to

promote exports. The guide also deals with the role of commercial banks and export

credit agencies and private-sector credit insurance. This complete guide offers

entrepreneurs practical information on how identify the most suitable payment methods

and required credit facilities. The guide also provides information on finance related legal

documentation and models of the most common forms and agreements.

CHAPTER -3

EXPORT MANAGEMENT IN RANA POLYCOT LTD.

The role of export management is very significant. The export management

undertakes the cumbersome but very important task of export marketing and creates the

image of the company and its products in the overseas market. To fully appreciate the

role of Export Management it is necessary to study few point about the company’s

objectives and polices.

COMPANY OBJECTIVES: -

Company objectives are usually broad guidelines, which permit the operation of

the company within certain parameters. The main object of a company is to make a profit

on the capital invested. Other objectives could be the type of business in which the

company wishes to trade.

A Company’s objectives, therefore, lay the foundation of the company’s

managerial thinking and set the pattern for the company’s polices. The Rana polecat Ltd.

all polices are maintained by the company directors.

COMPANY POLICIES: -

Based on the company’s objectives, management prepares its policy by which

company should operate. The policy covers the guidelines for the proposed action to be

taken by the company.

To meet the objectives and maximize profit, the policy may state either to

increase the selling prices, to increase production, or to enter the new export market to

gain an additional outlet for its product rang. If the management has decided to enter the

export market, the policy will merely state “We will export our products from this

September in order to increase sales.” The RPL the policies are maintained under the

export procedure and all the export are regimented management policies.

EXPORT POLICY: -

Within the framework of the company’s objectives and polices, the export

director prepares the export department’s policy which is either short-term or long-term.

The more detailed export policy permits the whole export function to commerce with a

planned structure and could be used as a system and procedure for the department.

The export policy covers the main objectives of the export department and the

strategies by which these objectives will be achieved. The export policy should cover:

Export production policy

Export marketing and sales promotion policy

Export pricing policy

Export distribution and transport policy

Overseas agencies and sales representation policy

Spares and after-sales-service policy

The export executive delegate powers to the departmental managers, for the

operation of the export function within the export policy and departmental policies. The

main duty of the export director is to develop overseas market, increase export sales,

control department and guide the export staff.

Managers play an active part in the running of a company. They control their

departments and supply central management with a vast amount of information to assist

in the control of the whole company. The elements of management, as applicable to the

Export Director, are as follows

Company management Export Director (DGM Marketing) Export policy

Company objectives Policies, planning Export Manager & Strategies Vice President (commercial) Forecasting, Origination Planning, Direction & coordination, Communication, Motivation & control of export actives Export staff / Commercial Staff Performance of export

FORECASTING AND PLANNING:-

The forecast is essential for preparation of export budget and planning the

production. The export director forecasts the expected future of the total export activity

on the information gathered from various sources. Both the forecast and planning may be

either short or long term but are usually both. Based on the forecast, the export director

selects programs and procedures for achieving the forecast.

ORGANIZATION: -

Organization is the practical method of putting the export policy into action. The

export director must plan the detailed organization of the department to achieve the aims

and goals of the export function.

The Export Management of RPL

1. Control and Delegation – The organization should be planned to manage easily

and control effectively. The delegation of authority should be as far down as

possible so that manager can play a collective role in decision making and control

the staff. The span of control of a manager should be in accordance with the type

of work.

2. Unity of Objective – The export staff must contribute towards the overall

objective of the export department. Instructions to one person from two or more

managers should be avoided.

3. Knowledge of the work – Each area of operation is very important and jobs are

specialized in the Export Department. Each staff member should be familiar with

the total function of the department. The changes in personnel or absenteeism

should not disrupt or suffer the function of the department.

4. Human behavior – Good staff relations and management/staff communication is

essential. Personnel management techniques like job specification, job evaluation

and appraisal should be considered when planning the organization.

DIRECTION AND CO-ORDINATION: -

The export executive must be well versed to the departmental activities, export

marketing, export procedures, export documentation, and government’s export policies

and must be able to guide his managers and staff properly. In the export department, each

section is dependent on the other and hence co-ordination among the staff members is

very essential and important. The export procedure and documentation of Rana Polycot

Ltd. are managing by Head office in Chandigarh.

SYSTEM AND PROCEDURE: -

The simple and clear systems and procedures helps the staff members to

procedures helps the staff members to understand the company’s and export department’s

policies and carry out various operations efficiently. A good system prevents duplication

of work and records, ensures a smooth flow of work. When setting up a procedure, it is

necessary to consider actual job is necessary to consider actual job of each individual or

the jobs of a group of individuals, to determine whether specialization is necessary.

CONTROL: -

The performance of different departmental executives, managers and staff

members is assessed and controlled by the company management using various control

techniques. Similarly the export executive/DGM (Marketing of RPL) exercises his

authority and control the function of the export department. He checks whether his plans

are carried out and attend deviations.

STARTING AN EXPORT BUSINESS

Exporting is a scientific activity requiring knowledge of the rules and regulations

relating to export and promotional measures, procedural formalities and documentation

required not only in INDIA, but also in the countries of importation. To fulfill these

requirements exporter will follow the essential steps to start an export business.

The basic requirement for starting an Export Business: -

1. Assess the capability- If concern is already strong in domestic market and want

to start export, then it must assess its production and marketing capability that it

can fulfillment the export order requirement and if a new concern established only

for export business e. g. export house, trading house etc. than it must fulfill the

basic requirement for an export business.

2. Organizing- To start an export business it is first imperative to create the

necessary infrastructure, however modest it may be. It might involve starting a

complete new organization and adding new activities to an existing one.

3. Naming the concern: - There is already some sort of an organization, including a

manufacturing concern, exporting can be started under the same name and style to

set up a new firm, the first essential task is to name the firm. The name and style

should be attractive short and meaning.

4. Trade name and logo: - Moreover the name, symbol or logo chosen should

reinforce the company name and create an image in the customer mind when they

see the (letterhead and business) company product.

5. Business card: -The most important marketing tool is the business card. It is what

others will keep to remember the company by and even more importantly. It

represents the quality of service offered to a potential client.

6. Bank account: - A current account has to be opened in the name of the

organization in whose name it is intended to export, in a deal in foreign exchange.

7. Registration in sales tax Authority-For procurement i.e. purchasing goods from

manufacturers or merchants/traders without payment of sales tax. The exporter

needs to register him with the sales tax department of the state /union territory

within whose jurisdiction he is located obtains TIN NO.

8. Registration in central excise/custom authority: - Every person manufacturing

excisable goods for home consumption or export or both should registered

himself with the central excise dept. for dispatch of goods without payment of

excise duty payment after goods dispatch.

9. Registration in export promotion councils:- Any person applying for 1.a

license to import/export or 2.any other benefit or concession under the Exim

policy’s required to furnish a registration –cum-membership-certificate (RCMC)

number granted to him by the authorities like export promotion councils,

commodity boards, federation of Indian export organization (FIEO) and

Agriculture and Processed food products Export Development Authorities

(APEDA), Marine Product Export Development Authority (MPEDA).

10. Obtain I/E code no.-Every businessman whether an individual or a firm or a

company, importing, exporting goods is required to obtain an I/E Code no from

the regional I/E Licensing authority.

11. Selecting the markets:-Target markets should be selected after carefully

consideration of various factors like political embargo, scope of exporter selected

countries, market penetration by competitive countries and products, distance of

potential market, transport problems, language problems, tariffs and non-tariffs

barriers, distribution infrastructure, demand in the market, expected life span of

market and product requirements, sales and distribution channels.

12. Export commodity selection: -When selecting the commodity for exports, some

following points have to be taken into consideration:-

The exporters manufacturing capacity, if he is a manufacturer of a particular

commodity.

The availability of commodity from other manufacturers when the exporters

desire in act as a, exporters desire to act as a merchant exporter.

The demand for the commodity in the importing country.

The Govt. of India policy and regulations in respect of export of various

commodity.

The foreign Govt. Policy and Regulations respect of importing of various

commodities.

Total profitability of such commodities considering cash incentives available, if

any.

The import replenishment available, if any. Quota fixation, if any, in respect of

such commodities in both the countries.

Knowledge and experience of similar exporters in respect of the respect of such

commodities in various countries.

13. Understanding risk of international trade: -while selling abroad, the exporter

may understand the major risk i.e. Credit risk, Currency risk, Country risk and

Carriage risk.

MARKETING COMMUNICATION MIX

After selecting the target market for the product, company now has to consider

about how to hit that target surely and effectively, how to communicate with it so that the

market knows about the product and is persuaded to buy it.

To achieve the objective of communicating with a target market and creating a demand

for the product, it is necessary to understand the various techniques that can be used.

The major techniques are: -

1. Personal selling-It is selling is predominantly a personal activity. It requires that

the salesperson understand the needs/wants of the customer. The salesperson must

understand local customers well enough to be accepted and the salesperson must

be able to form relationships with the customers.

2. Advertising- It is the latest technique of marketing communication by this

technique, company can make introduce their product to lot of customer in short-

time, but before advertising the product company must understand that country

advertising rules and regulations where company wants to introduce their

products. There are various tools of advertising e.g. T.V., Radio, Newspaper,

Magazines, Posters etc.

3. Direct marketing: It is also a marketing communication technique because by

this technique seller can make the direct contact to their customers and tells about

the existing and potential product features to the customers.

4. Trade fairs and exhibitions: -Trade fairs and exhibition are a vital part of the

communication package for many international businesses –to-business

marketers. The Purpose of trade fairs and exhibitions is to attract the customer to

the exporter. Trade fairs and exhibitions can be a very valuable marketing

communication tool for exporters from developing countries. But before attending

an international trade fairs and exhibition, exporters must understand the potential

customer needs and taste and that country rules and regulations of business.

5. Sales promotion: - Today every concern wants to increase their sales and earn to

maximum profit from their competitors for living ling-time in the business. There

are various tools by which company can promote their sales i.e. contest, rebate,

price back offer, guarantee/warranty, sample, after sales services.

6. Publicity: -Publicity is the process of stimulating a favorable mention in the

media of significance news items about the firm, its products and its activities

without actually paying for it. Publicity is often achieved as a result of public

relation activities.

EXPORT MARKETING MIX OF RANA POLYCOT LTD.

Marketing mix is very important in the overseas business as well as domestic

business .to get the success and lives long-time in the business. Marketing mix state the

company’s business strategy and planing.The businessmen should be awareness and

carefully study of their marketing mix. Marketing mix state about the company’s product,

price, place and promotion. Businessmen can guess competitors strategy with the help of

marketing mix.

Marketing mix is introduce by the famous marketing expert MR.CARTHEY.in

marketing mix includes four P’s i.e.

Product:- Product is the most important element of marketing mix. Because if product

does not fulfill the customers needs than all the business will be fail. In this section a

marketing manager make the product strategy like new product development, product

withdraw, change /improvement in the product, quality etc.

RPL produce many kind of product according to their customer requirement and

order. Actually RPL produce all kind of yarn product i.e.16/1 to 40/1 cotton and viscose.

Viscose is the high quality yarn product. Both type products are export.

Price: - Price means what price will be set for their product. Manager set that price

which is beneficial for the company. The major price effecting factors are company’s

goal, objective and competitors price.

RPL set differenr-2 export price according to their product demand. Export price

set in U.S. dollar and mostly take payment in U.S.dollar.The price lie between US$2.40

to 2.90 per kgs.

Place:- Place refers the proper distribution of the product in the market .if your product

demand is good in the market and your distribution system is not good or you can not

provide the product in the market on the right time, in this situation, your company’s

product and image will be effected and you may be out of market due to customer deny.

RPL distribute its product in the foreign market through its overseas agent. These agents

make the contact to its wholesalers and distributors and direct customer’s time to time

and makes the proper supply of the product.

Promotion:- Promotion is also play an important role in the marketing. it is a

communication system of product awareness in the target through these channel company

tell about the product quality and other feature that is able to fulfill the customers the

special need and desire. There are various communication channels and manager can

choose the channel according to their requirement.

RPL promote its product in the foreign market through it’s appoint agents. These agents

give the sample to its distributors and search customer’s response towards that product

and sometime give fewer prices than its competitors and give credit period to the

customers.

SELECTING OVERSEAS AGENTS

If a supplier has some success in personal selling to visiting buyers or during sales

visits abroad, he massy feel that the next step in to has someone selling for him in a

selected export market. He may also feel that he needs on the spot help in establishing the

marketing channels, for example, in finding and working with distributions or

wholesalers.

The exporter (supplier) can not spend a great deal of time on export selling

himself because to his responsibilities to the home business. The idea of a full time

traveling sales person may seem attractive at first, but it is probably not economic to

make such an appointment as a first step in exporting. If the supplier appoints one of his

sales executives to handle this, it would tale this executive time before he or she gets to

know the export market well enough to sell successfully. In such situations, it is usual to

appoint an agent.

Who is the agent?

An agent may be a firms person (employee) that handles negotiations on the

suppliers behalf, may be an independently person who active in the export market.

An export agent is simply an agent who in active in the export market and does

works on the commission basis and does not assume any risk but if exporters give some

extra incentive there agents bear a risk on a limited amount.

Finding an Agent: -agent should be active and recognized person in the export market.

When finding an agent following factors must be considered: -

1. They are respectable business representatives.

2. They are not representing a competing firm.

3. They have the organizational structure and the facilities necessary to do the job

4. They have serious ling-term interest in the product and are not handling too many

other products.

5. They are experienced in the type of product and market area and have established

connections.

6. They have good knowledge of export rules and regulations.

Appointing an Agent: -When an agent has been found, it is important to have a clear

writing agreement with him or her. This must cover all the points that are potential

sources of difficulty or disagreement in the future. In this agreement state all the points

like commission, contract period, sales promoting efforts etc.

Finding, Appointing and using an agent need carefully planning. Firstly a list of

the possible agents for this particular product is needed. The supplier’s own embassy

abroad or local chambers of commerce can probably supply that list. Then the supplier

can write to their possible agents, explain his requirements and asks if they are available

to handle the product.

MAJOR PORTS OF RPL

1. NSICT -- 2. JNPT -- (NHAVASHEVA)

3. MUNDRA - (GUJRAT) 4. PIPAVAV -

SHPPING LINES

MUSAK, UDPI, RAJAN, NAVJOT

ORGANIZING EXPORT

To implement its global plans effectively company needs to reflect on the best

organizational setup that enables it to successfully meet the threats and opportunities

posed by the global marketing arena.

Organizational issues that the global marketer must confront cover questions like

what is the proper communication and reporting structure. Who within our organization

should bear responsibility for each of the functions that need to be carried out? Where

should the decision-making authority belong for the various areas?

There are several options of organizational design of export business.

1. International Division: - Most companies that engage in global marketing will

initially start by establishing sales reach a threshold, the company might set up a full –

blown international decisions. This division develop and coordinate the firms global

market. But this option is mostly used when company product line is not too diverse and

does not require a large amount of adaptation to local country needs.

2. Product –Based Structure: -This option used when the company has different

product lines or strategic business units (SBU). Each product decision, being a separate

profit center is responsible for managing worldwide the activities for its products line.

This alternative is especially popular among high-tech companies with highly complex

products or MNCs with a much diversified product portfolio.

3. Geographic Structure: -This is a setup where the company configures its

organization along geographic areas: countries, regions or some combination of these two

levels. Area structures are especially appealing to companies that market closely related

product lines with very similar end user and application around the world.

4. Matrix Structure: - This is an option where the company integrates two

approaches-for instance, the product and geographic dimensions-so, there is a dual chain

of command. With a matrix organization, two dimensions are integrated in the

organization.

EXPORT OF RPL 2000 TO MARCH 2006

Years Value Percentage

2000- 01 944998780.20 4.72%

2001- 02 968862601.20 4.84%

2002- 03 984804386.00 4.92%

2003- 04 995840025.05 4.98%

2004- 05 997076000.00 -------

2005-06 9995496400.00

SWOT ANALYSIS

STRENGTHS

1. Rana Polycot Ltd. has highly modern and sophisticated technology.

2. Good reputation in the market.

3. Have acquired 100% E.O.U.

4. At present, Rana Polycot is market leader in cotton yarn.

5. There is availability of most experienced technical manpower.

6. There have been no major strikes and problem since the birth of RPL.

7. Rana Polycot has great potential for diversification.

8. Extensive use of computers.

9. There is good relation between management and workers.

10. Employees have job security, all the facilities like residential colony, workers

canteen, bus facility another welfare amenities.

11. Good relation in overseas markets.

12. High export quality cotton yarn.

WEAKNESSES

1. Working system lacks teamwork.

2. No. Separate training department is there.

3. Overheads are very high.

4. It is away from the city.

5. There is still need to improve working conditions.

6. More formalities in export procedure & documentation.

OPPORTUNITIES

1. The market is open for export and RPL should increase its export.

2. RPL has 100% EOU facilities in the export.

3. The company should attempt to improve the distribution chain.

4. Should go directly to the end use through their representatives.

5. Techniques being used in the modern firm for better civilization of present

resource.

6. Bring into practice the new business.

7. Step into the readymade market for its growth.

8. Should also prove itself in the domestic market.

9. Huge market for export in international level.

THREATS

1. There is shift in consumer preferences from simple white cotton yarn to dyed yarn

because RPL is only produced simple whit cotton yarn.

2. Threats from competitors like Oswal, Nahar,Jct etc.

3. Globalization makes the competition tough.

4. The company needs to revise its pricing and marketing strategy.

PRE-REQUISITES FOR EXPORT/IMPORT

An exporter should follow the following rules such as Rana Polycot Ltd.

I) Registration in Reserve Bank of India: -

Before 1.1.1997, it was compulsory for every exporter to obtain an exporter’s

code number from the Reserve Bank of India before engaging in export. This has since

been dispensed with and registration with the licensing authorities is sufficient before

commencing export or import.

II) Registration in Regional Licensing Authorities(Obtaining IEC No.) :

Until 31st December, 1997, it was mandatory for every person/firm/company

engaged in export business in India to obtain Exporter’s Code Number from the Reserve

bank of India. The custom authorities will not allow you to import/export goods into or

from India unless you hold a valid IEC number. However, if you are exporting goods to

Nepal or Myanmar through Indo-Myanmar Border area, you not required to obtain IEC

number provided the CIF value of a single consignment does not exceed Indian Rs.

25000/for obtaining IEC number you should apply to regional licensing authority in

duplicate in the prescribed form.

Rana Polycot Ltd. also obtaining import/export codes (IEC) number-2294000854

under the export –import regulation acts.

III) Registration in Export Promotion Councils: -

In order to enable you to obtain benefits/ concession under the export/import

policy, you are required to register yourself with an appropriate export promotion agency

by obtaining registration-cum-membership certificate (RCMC). RPL Company has also

RCMC certification.

IV) Registration in Sales Tax Authorities: -

Goods, which are to be shipped out of the country for export, are eligible for

exemption from sales tax and Central Sales Tax. For this purpose, you should get

yourself registered with the Sales Tax authorities of your state after following the

prescribed under the Sales Tax Act.

V) Registration in Excise Authorities: -

Goods meant for exports are exempt from excise duty. For this purpose the

manufacture and merchant exporter have two options, either they can deposit Excise duty

at the time of clearance from factory and later on take refund or avail the procedure for

export of goods with out payment of duty.

VI) Change of name address or constitution: -

Whenever there is a change in the name, address or constitution of the holder of

an IEC number, such change is required to be intimated within 30 days to the regional

licensing authority concerned, which granted the IEC number.

VII) Identity Cards: -

To facilitate collection of licenses and other documents, identity cards are issued

by the licensing authorities to the authorized employees of the importer/ exporter. An

application for this purpose is required to be made to the Regional Licensing Authority

concerned along with two photographs of the applicant’s nominated representative, duty

attested by the firm/company. The Regional Licensing Authority concerned will deliver

to the holder of the identity card, on the responsibility and risk of the importer/exporter,

all the documents licenses of the importer/ exporter whom he represent. In case of loss of

an identity card, a duplicate card may also be issued by the Regional Licensing Authority

concerned

EXPORT PRICING OF THE COMPANY

Export pricing is the most important factor of export marketing mix, because it is

only one factor which generates the revenue for the company. So the exporter should

carefully decide and the export price depends on the company goal, company cost and

competitors price. In developing countries exporter are price-followers not pricing

setters? There is various export price quotations.

INCOTERMS

Terms of delivery such as ex-work and fob have been developed over many years

to fit particular circumstances there are confusion in this terms due to country culture in

order to clear up the confusion that existed in international trade, the international

chamber of commerce drew up a set of standard terms and definitions on 1 st July, 1990.

These are called Inco term and amendment time to time and these indicate the division of

costs and administrative between the exporter and his customer although internationally

accepted, the terms are still sometimes interpreted differently in different countries so

care and clarification are necessary which using them.

The major price quotes are: -

1. Ex-works (Ex-factory/Ex-Go down): When such a price is quoted, it is

stipulated that the foreign buyer should take delivery of the goods at the

exporter’s premises and all the risks and expenses thereafter should be borne by

him i.e. the exporter is responsible for the delivery of the goods at his factory. The

other cost and risk involved in bringing the goods from the place of bringing the

goods from the place of the exporter to desired destination will be on the buyer’s

account.

2. F.O.R. (Free on Rail/F.O.T. (Free on Truck): F.O.R. term is used when the

goods are to be sent by rail and F.O.T. term is used when the goods are sent by

road. The seller’s obligations are fulfilled as and when the goods are delivered to

the carrier.

3. F.O.B. (Free on Board): Board price is inclusive of Ex- Works price, packing

charges, transportation charges unto the place of shipment, warfare and portage,

custom duties, export duties, cost of checking of any, which an exporter incurs

while delivering the export goods to the foreign buyer on board the ship. In this

type of term the Bill of Lading must carry the wording ‘Shipped on Board’ and it

must bear the signature of the carrier or his authorized representative together

with the date on which goods were ‘boarded’.

4. F.A.S. (Free alongside Ship): This price includes all the costs incurred in

delivering the goods alongside the vessel at the port of export or other place

named, but does not include charges for loading the goods on board the vessel. It

also does not include ocean freight charges and marine insurance premium. The

exporter’s obligations are fulfilled as and when the goods have been placed by

him alongside the vessel and notified to the buyer.

5. C & F (Cost & Freight): This price covers F.O.B. value of the goods plus freight

charges of transporting goods to the port of destination. In this term although the

exporter bears the cost of carriage to the named destination, the risk is already

transferred to the buyer at the port of shipment itself.

6. C.I.F. (Cost, Insurance and Freight): This type of contract includes F.O.B.

price plus cost of ocean freight and marine insurance unto the port of destination.

In this term, the exporter has to obtain insurance at his cost against the risks of

loss or damage to the goods during the carriage.

7. D.A.P. (Delivered at Frontier): This term is used when the goods are to be

carried by rail or road. The seller is responsible to make the goods available to the

buyer the customs border of the country named in the sales contract.

8. F.O.A./F.O.B. Airport: F.O.B. Airport’ is based on the same principal as the

F.O.B. term. The exporter fulfils his obligation by delivering the goods to the air

carrier at the airport of departure and his obligations with respect to costs and

risks do not extend to the arrival of the goods at the airport of destination.

(i) D.D.U. (Delivered Duty Unpaid): D.D.U. term in export means that the

seller delivers the goods to the buyer, at the port of destination. The seller has to

bear the costs and risks involved in bringing the goods thereto the buyer has to get

the goods unloaded and cleared for import, by playing the applicable duty.

LABEL, MARKING AND PACKING SYSTEM IN COMPANY

Label:- Label means a tag on which write all the product information i.e. type,

price, quantity, excise number etc. RPL used a label that gives all the

information about the product .The label give the major information is:

Count yarn – Type of the product i.e. combed hosiery or carted hosiery or viscose.

Excise number –these numbers given by the excise Deptford a year.

Lot number –which refer the different products.

Marking: - Marking refers the special mark in the product like in RPL used a mark on

their product i.e. on cartons and pallet a special stamp on the product

according to their requirement.

Packing:- Packing means protective covering used for transportation and shipment

of goods. Packing should be in good style, colors, and protective and

easily carry on. RPL pack their cotton product on the paper box which are

2 to 5 ply ranges and this paper cover purchase from its domestic

suppliers.different-2 colors type tape used on these paper box for adhere

and easily check out of the product type.

And the products packed on the cartons and pallets form and cartons and

pallets weight lie between 30 to 51 and 750 to1200 kgs respectably.

EXPORT DOCUMENTATION OF RANA POLYCOT LTD.

Export documentation plays a vital role in the international marketing as it

facilitates the smooth flow of physical goods payment thereof across national frontiers. In

the international exports the documentation are divided in two categories: -

Pre-shipment exports documents.

Post-shipment exports documents.

The documentation both at pre-shipment and post shipment stages is very important

in export trade. The exporter must thoroughly check the details of order/LC received

from the buyer, and obtain all required documents and submit then in time to his banks

for negotiations. A single error in completion of documentation may be delay in the final

payment for goods exported.

Pre-shipment export documents, which are used by RPL LTD. in

manufacturer export:-

i) A.R.E.-1

ii) INVOICE

iii) PACKING LIST

iv) SHIPPING BILL

V) INSURANCE

VI) EXPORT APPLICATION

VII) CERTIFICATE OF ORIGIN

VIII) ANNEXURE C-1

IX) B-17 (Under export without payment of duty)

Post-shipment exports documents.

i) Special Declaration Form (SDF)

ii) Bill of Lading

iii) Letter of Credit

iv) Ep Copy

v) Annexure-19

vi) Others.

Documentation practices in India-in India on an average, about 25 documents are

associated with the Preshipment stage to export transaction. These documents are

classified into two categories namely, commercial and regulatory.

1. The Commercial Documents are those which, by custom of trade, are required

for effecting physical transfer of goods and their title from the exporter to the

importer. These are:-

Pro-Forma Invoice

Commercial Invoice

Packing List

Shipping Instruction

Intimation of inspection

Certificate of inspection/Quality

Control

Insurance Declaration

Certificate of Insurance

Shipping Order

Mate’s Receipt

Bill of Lading /combined

Transport Document

Application for certificate of origin

Bill of exchange

Shipping Advice

Letter to the bank for

collection/negotiation of

Documents.

2. Regulatory Preshipment documents are those which have been prescribed by

different Govt. Departments/Bodies in compliance of the requirements of various

Rules and Regulations under relevant laws like Exchange Control Regulations,

Export Trade Control, Customs, etc.

The major regulatory Preshipment documents are below: -

Gate Pass

AR-4

Shipping Bill/Bill of Export

Dock Challans/Port Trust Copy of

shipping bill

Receipt for Payment of Port charges

Vehicle Chit

Exchange Control Declaration Form

Freight Payment Certificate

Insurance Premium Payment

Certificate

INVOICE

Invoice: - An invoice is the document under cover of which the excisable goods are to

be cleared by the manufacturer or merchant export. This is also the document, which

indicates the assessment of the goods to due. No excisable goods can be cleared except

under an invoice. The invoice is a prima facie evidence of the contract of sale, should be

on the paper of seller, and must be singed by the exporter. The invoice is the

manufacturer own document and through the department has specified the entries

thereon, the format etc is left the manufacturer’s choice.

DETAIL OF THE INVOICE:- Invoice contains different types of information in

detail:-

EXORTER : -There is assigned the whole name and address of the export company.

CONSIGNEE : - There is mentioned the whole address of the consignee or where

exporter sent the goods such as – RPL sent the cotton yarn to M/s DELTA GALIL

IND. LTD. 2 KAUFMAN ST., TELAVIV (ISRAEL).

PRE-CARRIAGE BY : - This column is used for the place of receipt by pre-carrier.

VESSAL : - This column is used for the vessel, flight No. and port of loading. Such

as vessel by air and port of loading New Delhi by the RPL.

PORT OF DISCHARGE : - This column contains the place of final destination.

Such as Israel are the final destinations of the RPL.

COMMERCIAL INVOICE NO. /DATE : - Commercial invoice number assigned

in this column by the exporter that what no of the invoice and what is date.

CUSTOMER PURCHASE ORDER NO. & DATE : - This column contains

customer purchase order No. and date.

EXPORTER’S REF : - Exporter’s ref or IEC (import and export code) are assigned

by the exporter in this column.

COUNTRY OF ORIGIN : - The exporter assigns Country of origin of shipment.

COUNTRY OF FINAL DESTINATION: - There is also mention the final

destination by the exporter in this column.

COMBIN BOX : - It has three columns: -

Term and delivery: - Which make descriptions of the term, conditions and currency

of settlement.

1. Determine the days from date of Invoice.

2. D.D.U Term: - ‘DDU’ means that the seller delivers the goods to the buyer, at the

port of destination. The seller has to bear the costs and risks involved in bringing the

goods thereto. The buyer has to get the goods unloaded and cleared for import, by

playing the applicable duty.

RPL D.T.A. INVOICE: - Company is used two types of Invoice.

1. Overseas exports Invoice.

2. DTA export Invoice.

About the Overseas Invoice we have already discussed.

D.T.A. export Invoice: - This D.T.A.(Domestic trade affairs) is used by RPL for sale

within India sales. This Invoice is filled by the commercial dept. In this form, mention all

information of goods and duty (BED/TCS, Schrage, Ed.cess, CST & VAT, bore charges,

loading charges etc.

It has sixth copies that as following: -

1. White Copy

2. Duplicate Copy

3. Triplicate Copy

4. Quadruplicate Copy

5. Quintuplicate Copy

6. Sixtuplicate Copy

WHERE ARE THESE COPIES USED: - White copy is sent to Buyer Company and

duplicate copy for transport, third copy is sent to excise department and forth copy for

accounts, fifth copy is sales tax purpose and last copy is consisted for record in commerce

department.

Documents sent in D.T.A. export goods with container: -

i) White Invoice

ii) Challan- Inward: - This document is used by exporter in the favors of importer

company under the condition of inter state export in India.

iii) Union operator form (GR)

iv) Gate pass.

MERITS OF INVOICE: -There are following merits of Invoice.

It is used for exporting and made proper for regular billing for goods or services.

Invoice document gives detail of all goods for custom.

Invoice gives detail of all goods for buyer.

It helpful in bank payment because it provide the information to the bank about the

goods details.

It gives detail of all goods for supplier.

Invoice is used for all information about the consignee & consignor and amount or

term of payment.

PACKING LIST

Packing list is shown the packing goods and the weight, quality, rate etc.

information of the goods. Packing list is prepared by RPL Company on the base of the

supplier/agent’s Performa packing list that how many pallet and counts. of yarn carton

and which quality of cotton yarn sent. The packing list document is an extension of the

commercial invoice; as such it looks commercial invoice. The exporter or his agent, the

customs broker or freight forwarder reserves the shipping space based on the gross

weight that is shown it packing list.

DETAIL OF THE PACKING LIST:-

Packing list contains different types of information in detail: -

EXPORTER : - There are assigned the whole address of the exporter.

CONSIGNEE :- In this list is mentioned the whole address of the consignee or where

exporter sent the goods such as RPL sent to France etc.

PRE-CARRIAGE BY :- This column is used for the place of receipt by pre-carrier.

VESSAL :- This column is used for the vessel, flight no., and port of loading such as

– vessel by air and port of loading New Delhi or Mumbai by the RPL.

PORT OF DISCHARE : - This column contains the place of final destination such

as German are the final destination of the RPL Company

COMMERCIAL INVOICE NO. /DATE : - Commercial invoice number assigned

in this column by the exporter that what no. of the invoice and what is date.

EXPORTER’S REF: - Exporter’s ref. or IEC (import & export code) are assigned

by the exporter in this column.

COUNTRY OF ORIGEN : - Country of origin of shipment is assigned by exporter.

COUNTRY OF FINAL DESTIONATION :- There are also mention the final

destination by the exporter in this column.

COMBIN BOX :- It has three type of column:-

I. Term and delivery: - Which make description of the term, conditions and currency

of settlement.

Determine the days form date of invoice.

II. D.D.U. Term: - DDU means that the seller delivers the goods to the buyer, at the port

of destination. The seller has to bear the costs and risks involved in bringing the

goods thereto. The buyer has to get the goods unloaded and cleared for import, by

the playing the applicable duty.

MERITS OF PACKING LIST: - It is most important for different person in export such

as: -

Packing list contain all detail of goods packing for custom.

This list contains all detail of goods packing for suppliers.

This list contains all detail of goods packing for buyer.

This list contains all detail of goods packing for bank.

Packing list are used for know total weight and net weight of the goods.

WHERE IS USED PACKING LIST:- These are also has same procedure such as

invoice, these packing list are used 16 copies in actual procedure of export but the RPL

company are prepare sixth copies for use in export procedure. These sent in this way: -

i) One copy ------------------------------for------------------------------Agent/supplier.

ii) One copy-------------------------------for-----------------------------custom office.

iii) One copy-------------------------------for-----------------------------Buyer.

iv) One copy-------------------------------for-----------------------------Bank.

v) One copy-------------------------------for-----------------------------accounts.

vi) One copy-------------------------------for-----------------------------Head office.

SHIPPING BILL

Shipping bill is an important required by the customs authorities for allowing

shipment. The exporter prepares it and it contains the name of vessel, Master or agents,

flag, port at which goods are to be discharged and country of final destination. Exporter’s

name and address details about packages, number and description of goods, marks and

number, quantity, details of each case, FOB price real value as defined in the sea customs

act. Whether Indian or foreign merchandise to be re-exported, total number of packages

with total weight and value and the name and address of the importer.

Shipping bill is usually of five types: -

i) Duty free shipping bill

ii) Dutiable shipping bill

iii) Drawback shipping bill

iv) Shipping bill for shipment Ex-bond

However, the RPL LTD. is a 100% EOU unit of cotton yarn the duty is free on

export under the bond scheme and the bill is used duty-free.

INSURANCE

Marine Insurance act 1963 U/s sec.(2), in the international trade when the goods

are in transit, they are exposed to marine Perlis. Marine insurance is intended to protect

the insured against the risk of loss or damage to goods in transit due to marine perils.

Marine insurance payment or premium by the insured agrees to indemnify the latter

against loss incurred by him in respect of goods exposed to perils of the sea.

It is the basic instrument in marine insurance. The policy is a contract and legal

document. Its basic function is to serve or evidence of the agreement between the insurer

and assured. The policy must be produced to press a claim in a court of law.

RPL LTD. is give request for insurance, which has detail about goods such as: -

i) Name of the consignee

ii) Brief description

iii) C&F value of consignment

iv) Name of vessel

v) No. of packages

vi) B/L No. and date

vii) port of shipment

viii) port of destination

ix) Invoice No. and date

x) Size of container

WHERE IS INSURANCE DOCUMENT USED: -

Insurance are prepared for claim of goods, it is a legal paper which has a proof for

court when occurred any event. Insurance documents are two copies, these are following:

i) One copy-----------------for------------------------Insurance Company.

ii) One copy-----------------for---------------------RPL company Commercial dep’t.)

iii) One copy-----------------for----------------------Head office.

MERITS OF INSURANCE:- There are following merits of insurance for an exporter.

Insurance is a document for goods protections that give help to RPL when occur any

event in the ship or sea.

Insurance documents are also important for importers.

Insurance documents are prepared by the insurance company on the request of the

RPL. So there we can say that all responsibility is become of the insurance company.

It is important for all exporters take claim of goods.

CERTIFICATE OF ORIGIN

The exporter should obtain a certificate of origin from any recognized chamber of

commerce, Export Promotion council or Government department on payment of small

fee. So the Indian exporter should be obtaining a certificate of origin to the Indian Govt.

Chamber of commerce. This is also a declare certificate which tell that exports are made

what country and avoid to corruption such as Pakistan is not allowed to make trade with

each other. Therefore, we can say that these certificate of origin a proof of exporter,

which avoid him any problems that are checked by GOVT.

WHERE IS USED THIS CERTIFICATE: - There three copies of certificate of origin

is used or sent by RPL in export procedure: -

i) One copy---------------------for-----------------------overseas importer.ii) One copy---------------------for----------------------RPL LTD. (Commercial dept.)iii) One copy-------------------------for-------------------Head office.iv) One copy------------------------for------------------agent(logistic provider)

BILL OF LADING

The bill of lading is a document issued by the shipping company or its agent

acknowledging the receipt of goods mentioned in the bill for shipment on board the

vessel, and undertaking to deliver the goods like order and condition as received, to the

consignee or his order of assignee, provided the freight and other charges specified in the

bill of lading have been duly paid.

Each shipping company has its own bill of lading and as soon as the exporter

obtains the mate receipt, he should prepare the bill of lading in the forms obtained from

the shipping company or its agent. The exporter or his shipping agent has to fill up this

form with relevant details such as the name of the consignor, date and place of shipment,

name and destination of the vessel, the description, quantity and destination of the goods,

marks and numbers, invoice number, GR number, gross and net weight, number of

packages and amount of freight etc.

From the legal point of view, a bill of lading is:

i) A document of title of the goods

enabling the consignee to dispose off the goods by endorsement and delivery of the

bill of lading.

ii) A memorandum of the contract of

carriage, repeating in detail, the terms of the contract which was in fact concluded

prior to the signing of the bill; and

iii) A formal receipt by the ship-owner

or the master of the ship acknowledging that the goods of the stated specifications,

quantity and condition in a certain ship or at least received in the custody of the

shipment.

The exporter should submit the sets of bill of lading together with the mate receipt to

the shipping company, which would calculate the freight amount on the basis of

measurement or weight as certified by the recognized Chamber of Commerce. On

payment of the freight, the shipping company returns the bill of lading duly signed and

stamped. If required the export may prepare additional copies of the bill of lading. If the

contract provides for a Bill of Lading marked ‘Freight paid’, it should be ensured that all

the copies of the Bill of Lading are actually marked ‘Freight Paid’.

EXPORT PROMOTION: -

Export promotion document is prepared for duty free SB and it is prepared same

way as well as DEPB. It also gives all information about product, exporter, and

consignee, Airway bill No. and detail of all items. This copy show all promotion of the

export and it is signed by authorized of custom. This document gives information of

dispatching date of the goods and this document is a part of the shipping bill. Export

promotion copy is sent on the port agent and one copy is used by the export.

BILL OF EXCHANGE: -

When a draft has made in foreign bank, it is known as foreign draft or Bill of

Exchange. Thus, a bill of exchange means, collecting payment from the foreign buyer

through the banking channel. The bill of exchange will be draws on the bank through

which the credit is opened or confirmed. This document is also a good way for payment

so we can say that document is provided facility many ways such as easily payment

through bank. Three copies have been made, one copy for bank, second copy for port

Agent and last copy is used by company.

METHODS OF PAYMENT IN INTERNATIONALTRADE IN RPL

Payments for exporting are more difficult and complex than for merely selling in

the home market because the customer lives in another country where different currency,

language, customs, rules and regulations of business and legal restriction etc. can be

obstacle to the exporter, unless he is aware of the correct procedures and knows when and

how to use them.

Methods of payment: -

1. Cash payment- The ideal form of payment for any exporter is to receive cash

with the order with this method of payment money is received before the goods

are delivered and no risk is involved. but it is unlikely that this method can be

used, unless the product being sold is in heavy demand.

2. Open account- The open account procedure is when the exporter dispatches the

goods, prepares the invoice, send them to the customer and then waits for

payment the exporter should get his money as specified in the terms of payment

but there is a very real risk if total loss this method is used only when parties have

close relationship and good understanding.

3. Shipment on consignment- In a shipment on consignment deal, the exporter

retains title of the goods and agrees to wait for payment until the goods have been

sold in the customer’s country. This method means that the goods are placed in

the foreign market, but the risks involved are considerable. Until the goods are

sold, the customer or consignee may return them at any time.

4. Documentary credit- It is a method of payment, which can ensure that an

exporter gets not when he dispatches his goods and not when they are received by

the customer. It also, ensures that the customer is assured of title to the goods

before he pays for them.

Types of L/C- There are four types of L/C

(1) Revocable- The credit can be revoked at a time and there is no protection for the

exporter. For example, he could ship the goods. Take the documents to the

advising bank, and find that the bank will not accept the documents and pay him

because the L/C has been revoked.

(2) Irrevocable-The opening bank can not revoke the credits the exporter has

reasonable protection. This is the most common type of L/C in use today.

(3) Confirmed-The advising bank guarantees payment, even if there are exchange

difficulties so the exporter is fully protected, provided no circumstances arise to

prevent him from complying with the conditions on the L/C.

(4) Unconfirmed-The advising bank does not guarantee payment, unconfirmed credit

is not so satisfactory to the exporter, but they are cheaper.

(5) Documentary Collection- It is means of ensuring that the goods are only handed

over to the buyer when the amount shown on a bill of exchange is paid or when

the customer accepted the bill as contract to pay by a specified date. A bill of

exchange is accepted by the customer putting his signature across it.

A bill of exchange is simply a written order to a bank to pay to someone on

demand or at a fixed time in the future, a certain sum of money .a bill is addressed by the

exporter to the customer and can be used as money.

There are three parties to a bill of exchange; -

1. The Drawer-The drawer is the person (exporter) who makes out the bill to a

certain person (customer) demanding a certain sum of money.

2. The Drawee- The drawee is the customer, he must sign the bill to indicate that he

has accepted the boll and terms only then he will be handed the shipping

documents, which give him ownership’s of the goods.

3. The Payee-The payee is the third party-the bank.

CHAPTER - 4

FINDINGS

1. Export license are only issued for the goods mentioned in the Schedule 2 of ITC

(HS) Classifications of Export and Import items. A proper application can be

submitted to the Director General of Foreign Trade (DGFT). The Export

Licensing Committee under the Chairmanship of Export Commissioner considers

such applications on merits for issue of export licenses.

2. For every first time exporter, it is necessary to get registered with the DGFT

(Director General of Foreign Trade), Ministry of Commerce, Government of

India. DGFT provide exporter a unique IEC Number. IEC Number is a ten digits

code required for the purpose of export as well as import. No exporter is allowed

to export his good abroad without IEC number.

3. The following documents are required for the export the goods, Air Waybill, Bill

of Lading, Certificate of Origin, Combined Transport Document, Draft or (bill of

exchange), Insurance Policy (or Certificate), Packing List/Specification,

Inspection Certificate, shipping bill/ bill of export, custom declaration form,

dispatch notes, commercial invoice, consular invoice, customs invoice, legalized/

visage invoice, certified invoice, packing list, certificate of inspection, black list

certificate, manufacture certificate, certificate of chemical analysis, certificate of

shipment, Health/ Veterinary/ Sanitary Certification, Certificate of Conditioning,

Antiquity Measurement, Shipping Order, Cart/ Lorry Ticket, Shut out Advice,

Short Shipment Form and other documents which are required by the buyer.

4. After getting the Order from the customer for goods, one copy of invoice will

send to the manufacturing unit and another to the finance department. From the

manufacturing unit goods are supplied by the container as mentioned in the

invoice of packaging. In the container goods are arranged in batch wise. As

mentioned by buyer it will supply by shipment or by air cargo.

5. Container is send by the rules of FOB or CIF or C&F or etc… at the time of

delivery of container shipment documents or air cargo documents are send which

are mentions above. At the port container is checked by customs officer and two

seal are sticker to container, one by customs officer and another by company

export port manager. Finance of goods is done by the company policy. At the time

of delivery of container buyer should check the seal, if seal is proper than he takes

the delivery of container otherwise he must inform to exporter, insurance

company and customs officer. In some country they need the documents first then

deliver the goods at destination.

SUGESSTIONS

1. The company should improve working conditions.

2. The company should have scope to prove itself in the domestic market.

3. More technical employees should be appointed in the company.

4. Target markets should be selected after careful consideration of various factors

like scope of exporters, selected products, demand stability, distance of potential

markets, transport problems, language problems, tariff and non-tariff barriers, and

sale and distribution channel.

5. Goods should be properly delivered to customers because customer does purchase

the products of company considering the price and after sale service.

6. The company should revise its pricing policy and marketing strategy time to time.

CONCLUSION

After discussion, all points of export procedure and documentation of Rana

Polycot Ltd. I come on the conclusion that the export management of RPL is very

effective and better to the legal point of view. Every exporter should follow all the export

procedure and their necessary documents under the condition of export on the

international level. The export management is very necessary for export.

Rana Polycot Ltd. is a 100% E.O.U. so it should be follow all the necessary

requirement procedure of export and maintain necessary documents in the company. And

maintain the combination of export department with the other department.

Export license are only issued for the goods mentioned in the Schedule 2 of ITC

(HS) Classifications of Export and Import items. A proper application can be submitted

to the Director General of Foreign Trade (DGFT). The Export Licensing Committee

under the Chairmanship of Export Commissioner considers such applications on merits

for issue of export licenses.

For every first time exporter, it is necessary to get registered with the DGFT

(Director General of Foreign Trade), Ministry of Commerce, Government of India.

DGFT provide exporter a unique IEC Number. IEC Number is a ten digits code required

for the purpose of export as well as import. No exporter is allowed to export his good

abroad without IEC number.

Certain documentation takes place while exporting from India. Special documents

may be required depending on the type of product or destination. Certain export products

may require a quality control inspection certificate from the Export Inspection Agency.

Some pharmaceutical product may require a health or sanitary certificate for export.

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

allowing shipment and other documents are also needed.

BIBLIOGRAPHY

1. Mahajan, M.L.: Do it your self, Show white Publications, Mumbai

2. Ram, Paras: Exports: What, Where and How? Anupam Publications’, Mumbai.

3. Hand book of Export Import Procedures, Ministry of Commerce, and Government

of India Vols. I & II

4. How to Export: Nabhi Publications