A

SUMMER INTERNSHIP PROJECT REPORT

On

STUDY OF EXPORT PROCEDURE &

DOCUMENTATION AT VINAYAK INDUSTRIES
AT

Prepared by
Nikunj J. Selarka
MBA SEM-III
Enrollment no
138270592113
Batch
2013-2015
Guided by
Ms. Falguni Shelani
Assistant Professor
Submitted to
Gujarat Technological University
Ahmedabad.
IN PARTIAL FULLFILLMENT OF DEGREE OF MBA

MARWADI EDUCATION FOUNDATION GROUP OF INSTITUTE

Affiliated with GTU- MBA Programme
1

COLLEGE CERTIFICATE

COMPANY CERTIFICATE

DECLARATION

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

that this project report is my own work and it has been carried out by me, in well reputed
company VINAYAK INDUSTRIES under the supervision of MS. FALGUNI SHELANI
Assistant

Professor

of

MARWADI

EDUCATION

FOUNDATION

GROUP

OF

INSTITUTIONS.

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

Students

Date:
Sign.

Place: Rajkot
Nikunj J. Selarka

PREFACE

Knowledge is one of the most important Treasures for any person. The amount of the
knowledge in this world is a doubling every five years and with the end of the 21st
century it is now expected to double every two years. So if I plan to be in this knowledge
explosion means that I would be facing with unprecedented challenges and
opportunities. How well I address that I would depend upon, in large part on my ability to
adapt to the continuing changes. Journal work like this gave an exposure to the
practical and real life experience of the modern market.
Theories dont teach unless accompanied by the working in original situation. This
project report was carried out according to the course of MBA.

Moreover in modern world practical knowledge has given more importance than
theoretical knowledge enables the student to get some experience of management,
affairs of course, theoretical knowledge is essential as a sound base.

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

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

ACKNOWLEDGEMENT

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

is the most valuable in commerce field. This is a great opportunity for me to present my
first report of the industrial unit that I have visited.

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

I am also highly obliged to Ms. Falguni Shelani

for her sincere attention valuable

guidance and providing suggestion and thus guiding me all the way in my efforts to
prepare this report.

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

providing me the permission to visit this unit and giving me chance to study the
company for a particular subject and helping me to collect all such information.

During my training period, I have not only learnt the Shipping documentation& How to
do Export but also learned about shipping industries scenario and growth of exportimport. The various department of the organization work in close co-ordination with
each other in order to achieve a common end.

Again I am heartily thankful to all those who directly or indirectly contributed their
valuable time and helped me for preparing this report.

EXECUTIVE SUMMRY

As a partial fulfillment of MBA all students are required to undergone project for 2
months. With respect to that I have prepared this project report on on Export
Procedure & Documentation.

I have selected this topic to know about procedure of Export and Documentation. This
report also tells about present scenario of Indian export industries and how to foreign
trade. Another objective is to know Documentation process done by CHA (Clearing
House Agent) to clear the goods from custom.

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

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

In the final objective a brief summary of all the export documents used at Vinayak
Industries for legalizing an export order is given. Further the documents regarding pre
and post shipment procedure are discussed.

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

Contents

Sr. No.

Particulars
Part-I : General information

10

Industry overview
1.1 History
1.2 Growth & Development
1.3 Market player in the industry
Company overview
2.1 Introduction and history
2.2 Company profile
2.3 Organization chart
2.4 Certificate & Awards of the company

11
11
12
13
13
13
14
15
16

2.5 Product

17

2.6 Valuable customer

17

2.7 Vision & mission

18

2.8

18

SWOT analysis
Part-I I: Research work

Pg. No.

20

Introduction of study

21

3.1

Background of the study

21

3.2

Review of literature

21

3.3

Statement of study

24

3.4

Objective of study

24

3.5

Contribution & learning from the project

24

Research methodology

25

4.1

Research design

25

4.2

Sources of data

26

4.3

Data collection method

26

4.4

Data collection instrument

26

Analysis & interpretation of data

8

27

5.1

Ratio analysis

27

5.2

Export documents

33

5.3

a) Export company legal documents

34

b) Export goods documents

36

c) Other documents

59

Inco-terms

60

5.4 Terms of payment

65

5.5

68

Export procedure

Findings

72

Suggestion

73

Limitation of the study

73

Conclusion

74

10

Bibliography

75

10

1. INDUSTRY OVERVIEW
1.1

HISTORY

Wheat is the second most important staple food after rice in India and generally
provides about 50% of the calories and protein requirement to a vast Majority of the
Indian population.

Food ministry officials said the next tender, for the export of 210,000 tones, would be
floated on December 12. The wheat would be exported from the KANDLA, MUNDRA,
VISAKHAPATNAM and PIPAVAV ports.

Earlier, the government had to reduce the base price for export from $300 a tones to
$260 a tones, after its attempt to export 0.15 mt was cancelled, as the bids received
were much lower than the base price.

1.2

GROWTH & DEVELOPMENT

We expect to get a good price in the coming months, too, said a senior government
official. We were hoping to get a price of $270-275 a tones, but the price quoted (about
$290 a tones was unexpected, which showed Indian wheat had started commanding a
premium in international markets. He said the price received was even more than that
quoted for Black Sea wheat, one of the most valuable wheat brands in the world.
In the coming months too, the trend is expected to be maintained because according to
information, the Australian wheat crop is not as good as expected. This will enable us to
11

sell more in foreign markets, he said. Exporting wheat was more profitable for the
government than selling it domestically, as at an average price of $285 a tones, the
government was expected to earn about Rs 18,000 a tones, while in India, it had to sell
at Rs 16,000 a tones, he added.
In 2012-13, the government had earned $1.4 billion by exporting 4.2 mt of wheat
through public sector undertakings. Last financial year, Indian wheat had fetched an
average price of $311.38 a tones.

(Source: www.dgft.gov.in )

1.3

MARKET PLAYERS

RIDHIMA INTERNATIONAL
R.K.AGRO PEARLS & COMPANY
12

 CHREOTECHNICS INC
SAMUEL & SAMUEL INTERNATIONAL TRADE

2. COMPANY OVERVIEW
2.1 INTRODUCTION AND HISTORY:
Vinayak Industries, based in Rajkot-Gujarat is a leading international trading company,
specialized in the processing and trading of various Agri commodities from India.

Established in 2001, we are leading exporters of Wheat directly from the growing
region. In international Market, the company has earned goodwill in products like
Wheat, Wheat Flour, Rice, Millet and Maize.

We are one of the leading exporters of Wheat and other Agri products. We also produce
world class Machine Clean Wheat required in Human Consumption in India and Abroad
In Brand Name of Khandan No.1 & Golden Harvest Wheat Our Milling Wheat is
exported widely and has a large number of satisfied customers throughout the country
and abroad.

We source our raw materials from farmers and local traders in the growing region bring
the produce to our factory / warehouse for further processing/packing.

We offer a solid combination of high-quality products at the best prices and our
expertise in sourcing products. Every day, we help our clients by providing them market
information and expertise from local as well as global knowledge.

Our products are popular throughout the country and our present in Malaysia, Srilanka,
Burma, Vietnam, Taiwan, Indonesia, Singapore and Philippines.

13

We can assure you of our quality products and long term association for supply of our
highly popular and hygienic food products listed above that are manufactured under
strict quality control in our ultramodern plant in Rajkot.

Being situated in the nearest port Mundra, kandla and Pipavav and well connected to
the entire world easily we are able to supply our products anywhere within short notice.

2.2 COMPANY PROFILE

Name of company

Vinayak Industries

Address

11-K, Kuvadva GIDC,

Rajkot-Ahmedabad Highway,
Village: Kuvadva Dist.: Rajkot-360 023

Phone

+91-281-6580280, 2784185

E-mail

nayanvinayak@gmail.com

Website

www.vinayakindustries.biz

Name of Partner

Mr. Nayanbhai Raithatha

Mr. Bhavinbhai Raithatha

Establishing year

2001

Bankers

Axis Bank Limited

Type of Product

Wheat, Rice, Wheat Flour, Millet, Maize.

Accounting Year

April to March

Annual Turnover

Rs. 250 Crores(Approx.)

Factory Area

6000 Square meter

Auditors

Pabari & Co.

14

Size of Org.

Medium Scale Industry

Form of Org.

Partnership

2.3 ORGANISATION CHART

CEO
(MR.MAHENDRABHAI PANOT)

GENERAL MANAGER
(Mr.H.R.Nandva)

HR
MANAGER

MARKETING
MANAGER

PURCHASE
MANAGER

EXPORT
MANAGER

FINACEL
MANAGER

QUALITY OFFICER

ASSI. EXPORT
MANAGER

ACCOUNT
OFFICER

LABORATORY
ASSISTANCE

EXPORT
EXPORT
EXECUTIVE

MANAGER
PLANT OPERATOR

BOILER OPERATOR

DOCK
SUPERVISOR

WORKER
S

WORKERS

WORKERS

15

CLERK

COMPUTER
OPERATOR
STORE
KEEPER

WORKERS

WORKERS

2.4 CERTIFICATES & AWARDS OF THE COMPANY

Export Import License certificate

Agricultural & Processed Food Products

Export Development Authority.

Food Safety and Standards Authority of

India.

AWARD: Rajkot Chamber of Commerce &

Industries Best 2013 Industries in Rajkot.

16

2.5 PRODUCTS

INDIAN EXPORTER EXPORTING MANY AGRICULTURAL PRODUCTS,

BUT SOME OF THEM VINAYAK INDUSTRIES MOSTLY EXPORTING
BELOW PRODUCTS:

PRODUCTS NAME

HS CODE

WHEAT

:: 10019010

MAIZE

:: 11042300

WHEAT FLOUR

:: 11010000

RICE

:: 10063010

MILLET

:: 10082920

2.6 VALUABLE CUSTOMER

VINAYAK INDUSTRIES doing most of deal in agri products with below buyer:
1) PT CARGILL - INDONESIA
2) AGROCROP INTERNATIONAL
3) PG ANG & SONS, INC - PHILIPPINES
4) EMMSONS ASIA PTE LTD - SINGAPORE
5) FWUSOW INDUSTRY CO., LTD. - TAIWAN
6) AGRO RESOURCES WORLDWIDE SDN BHD.- SINGAPORE
7) EXPORT TRADING COMMODITIES PTE LTD, SINGAPORE.

17

2.7 VISION & MISSON

To supply consistently high quality wheat to our customer at the lowest cost in all
market conditions.
We continuously strive to be premier and diversified agricultural produce
exporters, delivering a commitment of quality, price and a level of customer
service that no one can match, in a culture that is performance-driven.
Our mission is to enter in Star Trading Export House. For Star Trading Export
House, yearly turnover is required more than Rs. 500cr.

2.8 SWOT ANALYSIS

SWOT analysis of any company is shows the internal strength and weakness and
external opportunity and threat for the company. In the SWOT analysis includes the
following:

S- Strengths:

We have latest Buhler sortex cleaning plant at factory.

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

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

Direct material purchasing from farmers, ensure our products price

advantage.

Prompt reaction to clients requirement with rich information.

18

 W-Weaknesses :

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

For the raw material company have to depend on the supplier and in
delivery may not on time then they have to stop the production.

O-Opportunities:

Government also supports for the export in the many countries, like
service tax refund, no duties, country focus, etc. So that is the opportunity
for the company.

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

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

T-Threats:

In the market there are many importers from the china at the low price so
there company have to compete them in the market.

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

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

and price fluctuation.

19

20

3. INTRODUCTION OF STUDY

3.1 BACKGROUND OF THE STUDY

This project gives idea about Ratio analysis and export procedure &
documentation.
Ratio anaysis is widely used of financial analisis.
Ratio analysis is define as the systematic use of ratio to interpret the financial
statements so that strenths and weakness of a firm as well as its historical
performance and current financial condition can be determined.
It includes all details about the export what was conducted for gathering
information about international market.
It gives estimation about scope of expanding business in competitive world.

3.2 REVIEW OF LITERATURE

1) Authors:-

Alessandro Vitale1, Jamie Morrison, Ramesh Sharma

Source:The east African community common external tariff on cereals:

an analysis of stakeholder perceptions ( October 2011 ), ( Page-14 to 20 )
This study analyses the perceptions of various stakeholders on the appropriateness of
the Common External Tariff (CET) on cereals in the East African Community (EAC).
The issues being debated are both the statutory level of the CET and its temporary
adjustments. Field interviews were undertaken in three of the five EAC countries to
solicit stakeholder views. It was found, as anticipated, that stakeholders do hold
different views on these two elements of the CET. These differences are found to be
linked to the sizes of the producing and processing sub-sectors, in the case of individual
countries ,and to the perceived gains and losses in the case of stakeholders within
countries. Stakeholders associate the appropriate CET on maize to food security
concerns, but with some arguing for high CET (for self sufficiency)and others for low
CET (for low consumer price). For rice and wheat, import dependency is large and so
there is some convergence in views towards a lower CET, but with differences among
21

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

2) Authors:Ashish Shenoy
Source:The Integration of the Indian Wheat Sector into the Global Market, (May 2008)

World food prices have risen rapidly in recent months. The trend has brought up concerns
about how markets in developing nations respond to international conditions. In this
paper, I try to determine whether the price of wheat in India converges to the world level.
Using monthly prices from the United States of America, Canada, Australia, Argentina,
and India over a period of thirteen years, I look for evidence of co integration among the
series. Co integrated series follow a common stochastic process, and thus can be said to
move together. I first test for co integration without restrictions to identify the number of co
integrating vectors and common trends, and then impose restrictions to see how quickly
markets adjust to disequilibria. I find evidence that the world wheat trading centers are
integrated, with Australia being the most dominant. The Indian wheat price does not
converge with the other four. I next use the Granger Representation Theorem to model
the adjustment of the markets to shocks. I find that the Indian market adjusts more slowly
to a new equilibrium, but the total magnitude of adjustment is greater. Possible
explanations include poor infrastructure, regional segmentation within India, and high
levels of government intervention.

22

3) Authors:Lenis Saweda
Source:Nigeria Strategy Support Program (NSSP), NSSP Working Paper No. 21, October 2011
(Page No.24 to 30)

Despite the rapid pace of urbanization taking place in Nigeria, half of Nigerians
(approximately 70 million individuals) still live in rural areas; most of them engaged in
smallholder semi-subsistence agriculture. Agriculture remains a crucial sector in the
Nigerian economy, being a major source of raw materials, food and foreign exchange;
employing over 70 percent of the Nigerian labor force, and serving as a potential vehicle
for diversifying the Nigerian economy. However, there are no rigorous studies that
explain productivity in this sector vis--vis the relationship of the sector to food security
and social capital. This review assesses the nature and scope of agricultural
productivity, food security, and social capital in Nigeria, while also laying the
groundwork for investigating the interrelationships among them. The literature reveals
the pervasive inefficiency of Nigerian farmers as most smallholder farmers produce
significantly below their production frontiers. As a result, they produce less than optimal
levels of output as revealed by studies of productivity (mostly land productivity). Also,
while many farming enterprises are profitable, profit margins are generally low. The vast
majority of Nigerians are reported to be food insecure as revealed by studies on
availability, utilization, and access to food. In terms of social capital, most studies are
focused on membership in formal or informal organizations or associations, or by the
access of individuals or associations to formal and informal sources of credit. Evidence
shows that both measures of social capital improve several aspects of social welfare,
particularly poverty reduction, in addition to influencing technology adoption. This review
also identifies the potential pathways through which all three concepts are linked
.Keywords: food security, agricultural productivity, social capital

23

3.3 STATEMENT OF PROBLEMS

Being Student aspirant to study international Business , wanted to study export

procedure of Vinayak Industries. To analyze financial health of firm, I have tried
to get data as much as I can and analyzed through ratio analysis.

3.4 OBJECTIVE OF THE STUDY

To know the Common Import/Export Documents required for business
To understand the process of doing Export & Import from India point of view.
To know the documentation process done by the CHA.
To understand the Inco-Terms used in business

ITC-HS Codes Schedules

Profitability is the profit earning capacity of the business. This can be measured
by Gross profit, Net profit, Expenses and Other ratios.

3.5 Contribution and Learning from the project

It will help to decide the level of maintaining price and quality from competition
world.
It can also help to basic idea of export business procedures to the new exporter.
To provide a effective model for the exporter.
We can find necessity of funds and assets.
It can also help to learn the proportion of assets and liabilities.

24

4. RESEARCH METHODOLOGY

RESEARCH DESIGN:
Research design is the based framework, which provides guidelines for the research
process. It is a map or blue print according to which the research is to be conducts. The
research design specifies the methods for data collection & data analysis determine the
source of data. Most specifically it was a kind of "Descriptive conclusive research" who
takes care of who, when, where, what, how and why aspects of the investigation further
the researcher used the statistical method to serve the purpose of project, it permitted
the research to derive more accurate generalization whose reliability could be
measured.

RESEARCH DESIGN
EXPLORATORY
TOOL USED
TELEPHONE AND E-MAIL, Observation
RESEARCH TECHNIQUE
QUALITATIVE

25

 SOURCES OF DATA: Primary data collection :

E-mail

Telephone

Invoice

Packing list

Secondary data collection:

Invoice

Packing list

Shipping bill

Internet

DATA COLLECTION METHOD:Observational Method

DATA COLLECTION INSTRUMENT:Personal Observation

26

ANAIYSIS & INTEEPRETATION OF DATA

5.1RATIO ANALYSIS
A relationship between various accounting figures, which are connected with each
other, expressed in mathematical terms, is called accounting ratios.
According to Kennedy and Macmillan, "The relationship of one item to another
expressed in simple mathematical form is known as ratio."
Ratio analysis is one of the techniques of financial analysis to evaluate the financial
condition and performance of a business concern. Simply, ratio means the comparison
of one figure to other relevant figure or figures.

ANALYSIS AND FINDINGS

The profitability analysis by ratios is important for measuring the financial performance
and financial conditions or position of the company. The profitability analysis by ratios
includes mainly following ratios.
Gross profit ratios.
Net profit ratios.
Return on total assets ratios.
Return on fixed assets ratios.

27

 GROSS PROFIT RATIO:

Gross profit ratio is one of the primary ratios to analyze the profitability of the company.
Gross profit ratio is a ratio expressing the relationship between gross profits earned to
net sales of the company. The gross profit ratio shoes whether markup obtained on cost
of production id sufficient or not. Hence it is related with the operation of the company.
Gross profit ratio of the company can be found by using the following formula.
Gross profit ratio = Gross profit 100
Net sales

The calculation of gross profit can be described as under: For The Year 2010-11
Gross profit ratio= 3.13%

For The Year 2011-12

Gross profit ratio= 2.33%

For The Year 2012-13

Gross profit ratio=4.71%

INTERPRETATION:
The highest gross profit is in the year 2012-13 which is 4.71%, it happens due to
increase in the sale of the company. In the year 2012-13 the gross profit ratio is high
compare to above year.

28

 NET PROFIT RATIO:

Net profit of the company is valuable for the purpose of ascertaining the overall
profitability of the business and shows the efficiency otherwise of operating the
business. The net profit shows the overall performance of the company during the
particular year.

Net profit ratio indicates what portion of sales revenue is left to the proprietors i.e. the
shareholders of the company after all operating expenses and other expenses are met.

Net profit ratio of the company can be found out by using the following formula:
Net profit ratio = Net profit 100
Net sales
The calculation for 5 years net profit ratio is as under:

For the year 2010-11:Net profit ratio = 0.19%

For the year 2011-12:Net profit ratio = 0.058%

For the year 2012-13:Net profit ratio = 0.176%

INTERPRETATION:
From the Figure we can see that the net profit ratio is high in the year 2010-11 while in
the year 2012-13 it reduces to 0.176% which is low. It may be happened due to more
reserve transferred.
29

 EXPENSES RATIO:
Expenses are very important term in the each and every business. Expenses ratio
indicate the relationship of various expenses to the net sales. Here the total expenses
are considered. The objective of expense ratio computation is to provide information
about increase or decrease in the expenses of the firm. Lower expenses ratio is
considered better for the business. The expenses include various administrative
expenses, financial expenses, selling and distribution expenses and other expenses.
The computation of expenses ratio is as under:

Expenses ratio: - Total Expenses 100

Net sales

For the year 2010-11:Expense ratio = 96.87 %

For the year 2011-12:Expense ratio = 97.90 %
For the year 2012-13:Expense ratio = 97.80 %

30

 RETURN ON TOTAL ASSETS RATIO:

The return on total assets ratio measures a relationship between net profit before
interest, tax and total assets. The objective of computing this ratio is to find out how
efficiency the total assets have been used by the management. Return on total assets
ratio shows the strangeness of the company. Return on total assets ratio can be
calculated as follows:

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

Total assets
For the year 2010-11:R.O.T.A.R. = 2.63 %
For the year 2011-12:R.O.T.A.R. = 2.76 %
For the year 2012-13:R.O.T.A.R. = 3.02 %

INTERPRETATION:

The figure clearly shows that in the last year 2012 -13 the return on total assets ratio is
increased up to 3.02% from the 2.76 % which is in the year 2011-12, which shows the
good financial position of the company.

31

 RETURN ON FIXED ASSETS RATIO

Every company has decided some level of fixed assets. At that level the company has
to take fixed assets. Fixed assets include companys building, equipments, tools,
machineries, vehicles, etc The return on fixed assets ratio shows that at what level
company can get the return on their fixed assets. The return on fixed assets ratio is
also help for deciding the size of the organization.

Those assets can be said as fixed assets which are permanent or fixed in the company
and cannot be easily converted into cash. If management of fixed assets is not proper it
can be affect the business defectively.
The return on fixed assets ratio can be calculated as follows:
R.O.F.A.R. = Net Profit before Interest and Tax 100
Total Fixed assets

For the year 2010-11:R.O.F.A.R. = 68.78 %

For the yea 2011-12:R.O.F.A.R. = 51.07%
For the year 2012-13:R.O.F.A.R. = 33.29%
INTERPRETATION:

32

The return on fixed assets ratio is high in the last year 2010-11 i.e. 68.78% while in the
year 2011-12 it is 51.07 % and in the year 2012-13 it is very low i.e. only 33.29%.

33

5.2 EXPORT DOCUMENTS

a) EXPORT COMPANY LEGAL DOCUMENT

COMPANY REGISTRATION:
First of to choose the name of company and registered the firm in
government, Like a partnership, private limited, entrepreneurship, etc.
PAN COPY:
Whatever name chooses when we become export than we need the PAN
No. that useful to open Bank Account and also Issue IEC No. So, that
PAN No. is mandatory to Issue.
BANK A/C:
In export business when we establish the business the objective of the
business to earn money. So, all transaction banks will play crucial role for
that necessary to open Bank.
IEC CERTIFICATE :
For obtaining IEC number apply in the prescribe form along with the
documents listed above to Regional Licensing Authority (Office of the
Regional DGFT). The registered office or the head office may apply for
allotment of IEC No. IEC code no.10 digit no. from DGFT Whenever, there
is a change in the name, address or constitution of the holder of IEC No.
such change should be intimated within 30 days to the concern
authorities. If person wrong to do act than DGFT or custom detain IEC and
thereafter that person wants to do than that commodity export license is
necessary.

34

 CHAMBER OF COMMERCE REGISTRATION:

Mostly case in export buyer wants to Certificate of origin. Chamber of
Commerce, Trade association or export promotion council will issue the
certificate of origin. Register member simply get the certificate but
unregistered also take the certificate but they should one nominee of
register member guarantee and paying high fees.

SERVICE TAX REGISTRATION:

Registration Goods that are to be shipped out of the country for export are
eligible for exemptions from both Sales Tax and Central Sales Tax. For
this purpose, exporter should get himself registered with the Sale Tax
Authority of is state after following the procedures prescribed under the
Sales Tax Act applicable to his state. For excise exemption ARE-1 form
filled.
RCMC CERTIFICATE:
For benefit of foreign trade policy and promotion to excise so RCMC
Registration is beneficial for exporter. Exporter have a valid RCMC is a
Register Exporter.
RCMC issued by export promotion council for different commodity. Many
type of export promotion council working for export For example, APEDA,
FIEO, GAFTA and etc. RCMC issued for five years. Paid some specified
fees early. If we dont need we will cancel it.
VINAYAK INDUSTRIES Registered in APEDA (Agricultural & Processed
Food Products Export Development Authority).

35

b) EXPORT GOODS DOCUMENTS

QUOTATION:
An offer to sell goods and should state clearly the price, details of quality
and quantity, trade terms, delivery terms, and payment terms, destination,
etc.
SALES CONTRACT:
An agreement between the buyer and seller stipulating every details for
transaction. It is a legally binding document. It is therefore advisable to
seek legal advice before signing the contract.

36

37

38

 PROFORMA INVOICE:
Proforma Invoice provided by Exporter prior to the shipment of
merchandise, informing the buyer of the kinds and quantities of goods to
be sent, their value, and importation specifications (weight, size and
similar characteristics). This is not issued for demanding payment but may
be used when applying for an import licence/permit or arranging foreign
currency or other funding purposes.

39

 COMMERCIAL INVOICE :
It is defines name of seller and buyer, quantity, price, delivery term,
payment term, port of loading and destination, container no. and seal no.,
cont. wise quantity. Buyer makes payment as per commercial invoice. It is
also used for the customs clearance of goods and sometimes for foreign
exchange purpose by the importer.

40

 PACKING LIST:
A list with detailed packing information of the goods shipped like container
no. and weight, seal no., etc.

41

 BILL OF LANDING
A legal document between the shipper of a particular good and the carrier
detailing the type, quantity and destination of the good being carried. The
bill of lading also serves as a receipt of shipment when the good is
delivered to the predetermined destination. This document must
accompany the shipped goods, no matter the form of transportation, and
must be signed by an authorized representative from the carrier, shipper
and receiver.

42

43

 CERTIFICATE OF ORIGIN :
This certificate to certify the place of manufacture, the nature /quantity /
value of the goods.

44

 FUMIGATION CERTIFICATE:
A pest control certificate issued to certify that the concerned products have been undergone the
quarantine and pre-shipment fumigation by the approved fumigation service providers. It is
mainly required by many countries and very useful in Agri cultural products.

45

 PHYTO CERTIFICATE :

Phytosanitary certification is used to attest that consignments meet

phytosanitary import requirements and is undertaken by an NPPO
(National Plant Protection Organization). A phytosanitary certificate for
export or for re-export can be issued only by a public officer who is
technically qualified and duly authorized by an NPPO.
Phytosanitary certificates are issued to indicate that consignments of
plants, plant products or other regulated articles meet specified
phytosanitary import requirements and are in conformity with the certifying
statement of the appropriate model certificate. Phytosanitary certificates
should only be issued for this purpose.

46

 SURVEYOR REPORT:
Surveyor takes sample from goods and they analyzing in their laboratory and makes one report
and they mention all details like weight, quality, name of goods, destination, container no., result
of specific cargo. It is necessary because if arises quality problem then surveyor report defines
actual quality

47

48

 INSURANCE POLICY :
An insurance policy is an insurance document evidencing insurance has
been taken out on the goods shipped, and it gives full details of the
insurance coverage. An insurance certificate certifies that the shipment
has been insured under a given open policy and is to cover loss of or
damage to the cargo while in transit.

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NON GMO CERTIFICATE:

Genetically Modified Organisms (GMOs) are plants or animals that have
been genetically engineered with DNA from bacteria, viruses or other
plants and animals. These experimental combinations of genes from
different species cannot occur in nature or in traditional crossbreeding.
Meanwhile, a growing body of evidence connects GMOs with health
problems,

environmental

damage

and

violation

of

farmers

and

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

GMO.

50

 HEALTH CERTIFICATE:
Document issued by the competent country when agricultural or food
products are being exported, to certify that they comply with the relevant
legislation in the exporter's country and were in good condition at time of
inspection, prior to shipment and fit for human consumption.

51

 FORM-AI:
The ASEAN-India Free Trade Agreement came into force on 1 January
2010 for ASEAN and India. This is an important agreement for ASEAN as
India is emerging as an important trading partner as well as a market for
Malaysian exports. This certificate defines buyer and seller, quantity,
products name, fob value. Parties which accept this form for the purpose
of preferential tariff treatment under the ASEAN-INDIA Free Trade
Agreement (AIFTA):
BRUNEI DARUSSALAM, CAMBODIA, INDONESIA, INDIA, LAOS,
MALAYSIA,

MYANMAR,

PHILIPPINES,

VIETNAM.

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SINGAPORE,

THAILAND,

 PAST FORM:
A mandatory document that requires filled by producer or exporter from
country of origin for the fresh agricultural products (plant products) are
exported to Indonesia.

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 SHIPPING BILL:
Shipping Bill/ Bill of Export is the main document required by the Customs
Authority for allowing shipment. Usually the Shipping Bill is of four types
and the major distinction lies with regard to the goods being subject to
certain conditions which are:

Export duty/ cess;

Free of duty/ cess;

Entitlement of duty drawback;

Entitlement of credit of duty under DEPB

Scheme; Re-export of imported goods

DOCUMENTS REQUIRED FOR THE PROCESSING OF THE SHIPPING

BILL:

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

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

gross and net weight of each package.

Four copies of invoices which contains all relevant particulars

like number of packages, quantity, unit rate, total f.o.b./ c.i.f.
value, correct & full description of goods etc.

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

AR4 (both original and duplicate) and invoice Inspection/

Examination Certificate.

FORMATS OF SHIPPING BILL:

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

Green Shipping Bill in quadruplicate for the export of goods

which are under claim for duty drawback.

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

Blue Shipping Bill in 7 copies for exports under the DEPB

scheme.

54

55

56

57

 AFLATOXIN CERTIFICATE:
Aflatoxins are toxic metabolites produced by certain fungi in foods and
feeds. Aflatoxins have been associated with various diseases, such as
aflatoxicosis, in livestock, domestic animals and humans throughout the
world. The occurrence of aflatoxins is influenced by certain environmental
factors; hence the extent of contamination will vary with geographic
location, agricultural and agronomic practices, and the susceptibility of
commodities to fungal invasion during pre-harvest, storage, and/or
processing periods. However, the commodities with the highest risk of
aflatoxin contamination are corn, peanuts, and cottonseed. This certificate
issued by surveyor, they makes sample and do laboratory for Aflatoxins.

58

c) OTHER DOCUMENTS
DOCK RECEIPT / MATES RECEIPT:
A receipt to confirm the receipt of cargo on quay/warehouse pending
shipment. The dock receipt is used as documentation to prepare a bill of
lading. It has no legal role regarding processing financial settlement.
AIR WAYBILL:
A kind of waybill used for the carriage of goods by air. This serves as a
receipt of goods for delivery and states the condition of carriage but is not
a title document or transferable/negotiable instrument.
BANK GUARANTEE:
A bank guarantee is a commercial instrument guaranteeing by bank to a
party (parties) on behalf of his customer, assuring the beneficiary to effect
payment on default of obligation.
SWIFT COPY:
SWIFT

stands

for

Society

for

Worldwide

Interbank

Financial

Telecommunication.
A SWIFT copy or document is an extract of the electronic payment
document sent to the correspondent bank or beneficiary bank. It acts as a
confirmation of payment made from your bank and informs the beneficiary
of the value date of transaction.
BILL OF EXCHANGE :
A written, unconditional order by one party (the drawer) to another (the
drawee) to pay a certain sum, either immediately or on a fixed date, for
payment of goods and/or services received. The drawee accepts the bill
by signing it, thus converting it into a post-dated check and a binding
contract.

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60

5.3. INCO-TERMS
Inco terms is an abbreviation for International Commercial Terms. They are a set of
rules which define the responsibilities of sellers and buyers for the delivery of goods
under sales contracts for domestic and international trade. They are published by the
International Chamber of Commerce (ICC) and are widely used in international
commercial transactions.

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

1) EXW (Ex Works):
Ex Works means that the seller delivers when it places the goods at the
disposal of the buyer at the sellers premises or at another named place
(i.e., works factory, warehouse, etc.). The seller does not need to load the
goods on any collecting vehicle, nor does it need to clear the goods for
export, where such clearance is applicable.
2) FCA (Free Carrier):
Free Carrier means that the seller delivers the goods to the carrier or
another person nominated by the buyer at the sellers premises or another
named place. The parties are well advised to specify as clearly as
possible the point within the named place of delivery, as the risk passes to
the buyer at that point.
3) CPT( Carriage Paid To):
Carriage Paid To means that the seller delivers the goods to the carrier
or another person nominated by the seller at an agreed place (if any such
place is agreed between parties) and that the seller must contract for and
pay the costs of carriage necessary to bring the goods to the named place
of destination.
61

4) CIP ( Carriage And Insurance Paid To):

Carriage and Insurance Paid to means that the seller delivers the goods
to the carrier or another person nominated by the seller at an agreed place
(if any such place is agreed between parties) and that the seller must
contract for an pay the costs of carriage necessary to bring the goods to
the named place of destination.
The seller also contracts for insurance cover against the buyers risk of
loss of or damage to the goods during the carriage. The buyer should note
that under CIP the seller is required to obtain insurance only on minimum
cover. Should the buyer wish to have more insurance protection, it will
need either to agree as much expressly with the seller or to make its own
extra insurance arrangements.
5) DAT (Delivered At Terminal):
Delivered at Terminal means that the seller delivers when the goods,
once unloaded from the arriving means of transport, are placed at the
disposal of the buyer at a named terminal at the named port or place of
destination. Terminal includes a place, whether covered or not, such as
a quay, warehouse, container yard or road, rail or air cargo terminal. The
seller bears all risks involved in bringing the goods to and unloading them
at the terminal at the named port or place of destination.
6) DAP( Delivered At Place):
Delivered at Place means that the seller delivers when the goods are
placed at the disposal of the buyer on the arriving means of transport

62

ready for unloading at the named place of destination. The seller bears all
risks involved in bringing the goods to the named place.

7) DDP (Delivered Duty Paid):

Delivered Duty Paid means that the seller delivers the goods when the
goods are placed at the disposal of the buyer, cleared for import on the
arriving means of transport ready for unloading at the named place of
destination. The seller bears all the costs and risks involved in bringing the
goods to the place of destination and has an obligation to clear the goods
not only for export but also for import, to pay any duty for both export and
import and to carry out all customs formalities.

[B] RULES FOR SEA AND INLAND WATERWAY TRANSPORT:

63

(Source- www.daigon.co.za)
1) FAS( Free Alongside Ship):
Free Alongside Ship means that the seller delivers when the goods are
placed alongside the vessel (e.g., on a quay or a barge) nominated by the
buyer at the named port of shipment. The risk of loss of or damage to the
goods passes when the goods are alongside the ship, and the buyer
bears all costs from that moment onwards.
2) FOB (Free On Board):
Free On Board means that the seller delivers the goods on board the
vessel nominated by the buyer at the named port of shipment or procures
the goods already so delivered. The risk of loss of or damage to the goods
passes when the goods are on board the vessel, and the buyer bears all
costs from that moment onwards.
3) CFR (Cost and Freight):
Cost and Freight means that the seller delivers the goods on board the
vessel or procures the goods already so delivered. The risk of loss of or
damage to the goods passes when the goods are on board the vessel. the
seller must contract for and pay the costs and freight necessary to bring
the goods to the named port of destination.

4) CIF (Cost, Insurance and Freight):

Cost, Insurance and Freight means that the seller delivers the goods on
board the vessel or procures the goods already so delivered. The risk of
loss of or damage to the goods passes when the goods are on board the
vessel. The seller must contract for and pay the costs and freight
necessary to bring the goods to the named port of destination.
64

The seller also contracts for insurance cover against the buyers risk of
loss of or damage to the goods during the carriage. The buyer should note
that under CIF the seller is required to obtain insurance only on minimum
cover. Should the buyer wish to have more insurance protection, it will
need either to agree as much expressly with the seller or to make its own
extra insurance arrangements.

5.4 TERMS OF PAYMENT

There are many terms of payment in International business. Under general permission,
Under RBI permission & Under Indian Government. Under RBI Open a/c and under
Indian Government one is line of credit and another Barter Deal. But generally Payment
will be Under General permission areas follow.

(1) ADVANCE PAYMENTS:When buyerseller deal finished than one question about terms of
payments seller demand to buyer advance payments. Seller need to
advance money because manufacturing goods and also seller may be
does not know to buyer so they do not believe in buyer so they demand to
advance payments.
Advance Payment made through check, Demand draft, Pay order,
Telegraph, Telecommunication transfer, SWIFT (Society for worldwide
Interbank financial intercommunication), foreign currency note & travel
check.
When advance payment made than transaction will complete or export
within 1 year otherwise payment should be return with interest not if buyer
65

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

Interbank offered rate.)

(2) DOCUMENTS AGAINST PAYMENT AT SIGHT:

The documents are released to the importer against payment. In order of
buyers seller sending the same goods and document sending to buyers
bank and advice to documents given only in behalf of doing payments.
So, this is documents against payment. This method is safe because If
Importer finally refuses to take delivery of goods, than we can find
alternative buyer and sanding them if buyer not find than we can return
our consignment.

(3) T/T PAYMENT:

T/T means telegraphic transfer, or simply wire transfer. It's the simplest
and easiest payment method to use.

T/T payment in advance is usually used when the sample and small
quantity shipments are transported by air. The reason why is that the
documents like air waybill, commercial invoice and packing list will be sent
to you along with the shipment by the same plane. As soon as the
shipment arrives, you can clear the customs and pick up the goods with
the documents. As it's acknowledged, T/T payment in advance presents
risk to the importer if the supplier is not an honest one.

(4) LETTER OF CREDIT L/C:

66

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

terms of payment through L/C decided than Buyer (Importer) request
his/her bank to open Letter of Credit.
Letter of Credit issuer bank its called Issuing bank. Issuing bank sending
L/C to seller bank its bank called Advising bank. Advising bank check the
L/C and proper detail of importer, amount, date and this entire thing and
also check the detail of Issuing bank. If proper than advising bank to
advise to seller you will send the goods. Exporter sending goods after all
documents send to advising bank and collecting money within specific
letter of credit. These documents sending to Issuing bank and get
payment. Issuing Bank endorses the documents and sends to Buyer and
buyer will clear the cargo. Buyer wills payment to Issuing bank specific
duration they will decide.
In International business L/C is most appropriate way to terms of payment.
Mostly when first time deal happened to buyer-seller than mostly use this
term because this terms is very safe.

(5) DOCUMENTS AGAINST ACCEPTANCE AT SIGHT:

The documents are released against acceptance of the Time Draft i.e.
credit allowed for a certain period, say 90 days. However, the exporter
need not wait for payment till bill is met on due date, as he can discount
the bill with the negotiating bank and can avail of funds immediately after
shipment of goods.
In case of D/A as compared to D/P bills, the risk involved is much greater,
as the importer has already taken possession of goods which may or may
not be in his custody on the maturity date of the bill. If the importer fails to
pay on due date, the exporter, will have to start civil proceedings to
receive his payment. So, this is greater risk associated in case of
67

documents

against

acceptance

payments.

68

compared

to

Documents

against

5.5 EXPORT PROCEDURE

69

In India, ships transport more than 90 per cent of the cargo. It therefore interesting to
study the export processed by ship documentation related to it.
Processing of an export order-I.

Exporter operation starts with the receipt of enquiry by the exporter from
importer. Bar on the enquiry exporter submits his offer giving complete details
of products technical spec. price delivery payment terms etc.

II.

After the process negotiations importer sends a purchase order follow by

letter of credit (if applicable).

III.

The exporter manufactures the goods according to the specification given in

purchase order.

IV.

As soon as the goods are ready the exporters invites the representative of
Export inspections agency (EIA) for pre shipment inspection and obtain the
certificate of inspection.

V.

After that, the exporter prepared following documents,

INVOICE
PACKING LIST
A1 FROM EXSICE DEPARTMENT
MARINE INSURANCE POLICY
COPY OF PURCHASE ORDER / L/C

VI.

Above those documentation sends to CHA by exporter.

VII.

Based on these documents CHA agent completes the octroi formalities,

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

VIII.

Custom department check the export cargo on the basis of information

provided on the shipping bill. If satisfy then cargo allow to loaded on the
70

Board of ship.
IX.

The shipping line gives mate receipts to CHA agents after the payment of
Ocean freights and port due obtains the bill of lading.

(B/L) from shipping line .B/L is a proof of dispatch of cargo and also a negotiable
document.
After that, CHA agent send various documents back to exporter which is
Customs attested invoice
Copy of shipping bill
Full set of non board bill of landing
Copy of purchase order or L/C
Copies of AREI form
SDF form
After that the exporter submitted above these documents for negotiation to the
bank which include :--- Commercial invoice
Packing list
Bill Of Lading
Shipping Bill
Certificate of origin
Bill of exchange
Shipment advice
And other All Original Documents.
After that, bank scrutinizes these documents and if found correct make payment to
exporter against documentations.

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6. FINDINGS

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

Expense ratio is decreasing due to increase in expense.

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

Most of the exporters prefer commission rate and Goods packing facility. Other
facilities are also important in the international business.

The documentation paper works are simplified than the previous years.

This has led to the emergence of a business environment, widening both the
scope and scale of opportunities open to sellers

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

vital part in the company.

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

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

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7. SUGGESTION

I undersigned, has no experience and I have tried my best and declare my few
suggestions are no way an attempt to criticize an organization like Vinayak and its
employees but only to serve the indicators of level of my understanding.
They should have to increase the sortex capacity.
They should provide training of employees.
New exporter can find the buyers through exhibition and references easily.
Vinayak Industries for export cargo is such a long procedure so it takes time to
clear, so the employee must be try to make their work on time and quick.
Vinayak can directly contact to the buyers and sell them without interfere of
brokers, So it can increase its profit margin.

8.LIMITATION OF THE STUDY

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

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

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9. CONCLUSION

The study was conducted to know the process involved in an apparel firm and to study
about the various departmental functions which coordinates to complete the export
cycle. The export Procedure of the firm has been seen clearly and other related aspect
has been known. From the analysis it is found that the performance of the company is
satisfactory, but the company is facing problem regarding excess of documents which
muses delay in transportation. Therefore necessary steps should be taken to limit the
number of documents so that the company can make distribution at right for the company
and it helps the company to have competitive advantage over its competitors. There are
signs of good future for VINAYAK INDUSTRIES, because of growing demand for Indian
wheat in the world market.

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9. BIBLIOGRAPHY

Bibliography
(n.d.). Retrieved from www.vinayakindustries.biz: http://in.linkedin.com/pub/vinayak-industriesrajkot/87/7b0/1b2
(n.d.). Retrieved from www.slideshare.net: http://www.slideshare.net/vvikaschauhan/exportprocedure-documentation
(n.d.). Retrieved from WWW.GUIDETO EXPORTANDIMPORTPROCEDURE.COM:
file:///C:/Users/Admin/Downloads/export-procedures-guide.pdf
Alessando Vitale1, J. M. (October, 2011). An Analysis of stakholder perceptions. The east African
community comman external tariff on cereals , 14 to 20.
Hill, C. W. Golobal Business Today.
Kothari, C. R. Research methodology.
Kotler, P. Marketing Management.
Saweda, L. (October, 2011). Food security, Social capital and Agricultural productivity in Nigeria. Nigeria
Strategy Support Program (NSSP) Working Paper No.21 , 24 to 30.
Shenoy, A. (May, 2008). The integration of the Indian Wheat Sector into the Global Market , 9 to 31.

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