Summer Internship Report on

“Documentation & Logistics”

With reference to

PRATIBHA SYNTEX LIMITED

In partial fulfillment of PGDM in International Business for the academic year

2012-14

School of Economics, D.A.V.V. Indore

Submitted To Submitted By

Mrs. Ekta Rokde Afrin

Khan
 COMPANY PROFILE

Patibha syntax limited launched it operations in 1997. India’s first vertical

manufacturing set up, it made its foray into organiv farming in the year 1998. It
enetered into knitting dyeing garmenting in the following years.

PRATIBHA’S PLAN
“To be the global leader in sustainable textile products nd practices.”

VISION
Every company has a goal of making profilts, but to make a difference it must have
a higher purpose. Pratibha’s vision articulates that purpose, that it as a company
and individuals, aspire to live upto everyday.

MISSION
• Switch to 100% sustainable materials in productions.
 • 50% reduction in carbon and water footprint till 2015.

• Establish sustainable design and innovation centre in india and Europe.

TURNOVER
Rs 83,971.79

CERTIFICATES

ISO 14001.

The ISO 14000 family addresses various aspects of environmental management. It

provides practical tools for companies and organizations looking to identify and
control their environmental impact and constantly improve their environmental
performance. ISO 14001:2004 and ISO 14004:2004 focus on environmental
management systems.

WRAP:
WRAP is an independent, objective, non-profit team of global social compliance
experts dedicated to promoting safe, lawful, humane, and ethical manufacturing
around the world through certification and education.

OEKO TEX

Oeko-Tex Standard 100 is an independent testing and certification system

for textile products from all stages of production (fibres, yarns, fabrics, ready-to-
use end products, including accessories) along the textile value chain.
FAIR TRADE:

Fairtrade certification is a product certification system that allows people to

identify products that meet agreed environmental, labor, and developmental
standards. Overseen by a standard-setting body, Fairtrade International (FLO), and
a certification body, FLO-CERT, the system involves independent auditing of
producers to ensure the agreed standards are met. Companies offering products that
meet the Fairtrade Standards may apply for licenses to use the Fairtrade
Certification Mark (or, in North America, the applicable Fair Trade Certified
Mark) for those products.

OHSAS 18001:

OHSAS 18001 is a globally recognized occupational health and safety

management system. The standard defines the system for an organization related to
health and safety of the employees and stake holders. The standard considers
Prevention as an approach towards health & safety of employees.
An OHSAS 18001 certificate establishes that your organisation is committed to
safety and health at the workplace. This proactive approach helps the organization
to maintain the better long term relations with employees, contractors.

OE100 (ORGANIC EXCHANGE):

The OE 100 Standard is for tracking and documenting the purchase, handling and
use of 100% certified organic cotton fiber in yarns, fabrics and finished goods.

GOTS: GLOBAL ORGANIC TEXTILE SERVICES

USDA NOP:

USDA's National Organic Program regulates the standards for any farm, wild crop
harvesting, or handling operation that wants to sell an agricultural product as
organically produced.

NPOP: National Programme for Organic Production (NPOP)

The national programme involves the accreditation programme for certification

bodies, norms for organic production, promotion of organic farming. The NPOP
standards for production and accreditation system have been recognized by
European Commission and Switzerland as equivalent to their country standards.
Similarly, USDA has recognized NPOP conformity assessment procedures of
accreditation as equivalent to that of US.

IMO(INSTITUTE OF MARKETCOLOGY)

QUALITY ASSURANCE OF SUSTAINABLE PRODUCT

 CLIENTS
• C&A,

• CARREFOUR,

• PATAGONIA,

• PANTALOONS,

• FRUIT AND LOOM,

• NIKE,

• MOUNTAIN EQUIPMENT COOP,

• ROOTS,

• UMBRO,

• DECATHLON,

• S. OLIVER,

• WOOL WORTHS,

• COOP ITALIA,

• KATHMANDU,

• KATHERINE HAMNETT,

• ESPIRIT,

• WAL- MART,

• HANES.
PRODUCTS
YARN

YARN RANGE:

• COTTON

• ORGANIC COTTON

• FAIR TRADE COTTON

• BMP COTTON

• RECYCLED

• VISCOSE

• MODAL

• LYOCELL

• POLYSTER

• RECYCLED POLYSTER

• TENCEL

• WOOL

• LINEN

CAPACITY

• RING SPINNING
 o 46000 SPINDLES PRODUCING YARN COUNTS FROM NE 4/1
TO 44/ 1 AND NE 10/2 TO 80/2

• OPEN END

o 2952 ROTORS PRODUCING 9720 MT OF YARNS PA

• AIR JET

o 2072 SPINDLES PRODUCING 5800 MT OF MELANGE

o 12624 SPINDLES PRODUCING 2500 MT OF YARN PA

o YARN DOUBLING 1560 SPINDLES

• COTTON RECYCLING

o 5600MT OF SPINNING AND GARMENTS CUT WASTE

RECYCLING.
FABRICS

• KNITTING

o 12000 KNITTED FABRICS, FROM 65 KNITTING MACHINES

INCLUDING WIDER DIAMETER OPEN WIDHT MACHINES
FROM MAYER & CIE, TERROT

• DYEING

o LATES SALT FREE, CREESE FREE, LOW LIQUOR DYEING

TECHNOLOGY REDUCING WASTE WATER GENERATION BY
60% AND ENERGY BY 30%.

o ALL DYESTUFF AND CHEMICALS ARE GOTS CERTIFIED.

• FABRICS

o PERFORMANCE FABRICS, COTTON RECYCLED FABRICS,

BASICS FABRIC, BLENDED FABRICS

o FINISHES: ANTI MICROBIAL, ANTI- STATIC, WRINKLE

RESISTANT, U-V RESISTANT, STAIN RESISTANT, ENZYME
AND ALOEVERA.
GARMENTS

• CAPACITY

o 3500 SEWING MACHINES across 3 facilities capable of producing

55 million garments p/a

• Capabilities

o Inner wear: 40 million pieces p/a

o Active wear: 6 million

o Casual/ street wear: 6 milion

o Hi- fashion: 3 million

• Printing

o 450,000 pieces printed p/m

 o Use of GOTS certified ecofriendly ink

• Embroidery

o Capacity of approx 104 million pcs p/a

 PROJECT UNDERTAKEN BY PRATIBHA

VASUDHA

• OVERVIEW

o Founded by pratibha in 1999 with 475 farmers and 5000 acres the
Vasudha project aimed to expand the organic culture farming in India
and lead the wave of sustainable change through SEED initiative.
Today Vasudha have 30,000 farmers covering 475 villages, in four
states of india, covering 1,30,000 acres of farmland including organic,
fair trade, BCI, and transitional cultivation.

• SEED(Socially inclusive, economically empowering, environmentally

driven development)

o Values
  Integrity- of its people and systems

 Creativity- in the workplace

 Sustainability- of product, processes and environment

 Passion- infuse passion

 People- nurture people

 Performance- enhance performance

o Policies

 Environment

 Health safety

AWARDS

• Niryat Shree Puraskar Presented by Indian Council For Small and Medium
Exporters

• Export Performance Award for 1993-1994 by Canara bank, Banglore

• Niryat Shree Award for 1997-98 by Federation of Indian Export

Organization.
 • Niryat Shiromani Puraskar by Indian Council of Small and Medium
Exporters(ICSME)

• Raj Bhawan Aizwal Shield presented by His Excellency The Governor of

Mizoram- Shri Amolak Rattan Kohli

• Best performance award for 1998-99 by concor, icd, pithampur

• Sanjivani Kosh award by State bank of indore for social work

• ICMF’s award for excellence for 2002-03

• Udyog Ratna award by PHD Chamber of Commerce and Industry centenary

celebration.

EXPORT

India has a mission to capture 2% of the global share of trade by 2010, up from the
present level of less than 1%. Export is one of the lucrative business activities in
India. The government also provides various promotional schemes to the exporters
for earning valuable foreign exchange for the country and for meeting their
requirements for importing modern technology and essential inputs. Besides, the
income from export business is also exempted to the specified extent under the
Income Tax Act, 1961, Refund of Central Excise and Custom Duty on export is
also made under the Duty Drawback Scheme of the Government. There is no Sales
Tax on products meant for exports.

Exports can be of goods which can be moved physically from one country to
another or can be of service rendered. Detailed list of services are given in the
Foreign Trade Policy covering more than 160 items e.g. Insurance, Hospital, Postal
and Telecommunication etc.

TWO CLASSES OF EXPORTS:

Physical Exports: If the goods physically go out of the country or services are
rendered outside the country then it is called as physical export. Deemed Exports:
When the goods do not go out of the country physically they can be termed as
deemed exports. This will be subject to certain conditions as prescribed by the
DGFT. Under Deemed Exports, the goods may be supplied to the manufacturer
exporter who ultimately export a finished product of which this supply forms a part
and ultimately go out of the country. E.g. Supply of fabrics to the garment exporter
who exports the garments made out of the said fabric.

The government may announce from time to time the types of supplies that may be
considered as deemed export. The Foreign Trade Policy gives the list of supplies
considered under the Deemed Export Category. The policies and procedures are
different for Physical Exports and Deemed Exports as also the benefits available.
In a nutshell, Deemed Exports do not enjoy all the benefits that are available under
Physical Export. The Foreign Trade defines exports as taking out of India any
goods by land, sea, air.

TYPES OF EXPORTERS:
Exporters can be basically classified into two groups

• Manufacturer Exporter: As the exporter has the facility to manufacturer

the product he intends to export and hence he exports the products
manufactured by him.
• Merchant Exporter: An exporter who does not have the facility to
manufacture an item. But, he procures the same from other manufacturers or
from the market and exports the same.

An exporter can be both a manufacturer exporter as well as a merchant exporter, he

can export product manufactured by him or he can export items bought from the
market.

Once it is decided to export, it is mandatory on your part to follow certain

procedures, rules and regulations as prescribed by various regulatory authorities
such as DGFT, RBI, and Customs. These procedures, rules and regulations are laid
down in the Exim Policy 2004-09, Exchange Control Manual, Customs Act etc.
Accordingly Export documents are required to be prepared keeping in view of the
requirement of the foreign buyers and our regulatory authorities.

Regulating Bodies:

In India, all the activities related to import are handled by the Directorate General
of Foreign Trade (DGFT), a government organisation that also controls the export
business in India. DGFT and all its regional offices work under the Ministry
Commerce and Industries, Department of Commerce, Government of India. All the
procedure and policies in matter related to the import is announced by the DGFT
through its notification, appendices and forms.

Export Sales & Contract Terms & Conditions

Very often exporters do not enter into any formal contract and finalize the trade
deal through the exchange of letters, cable, telex etc. It is, however, expedient that
the parties (exporters & importers) incorporate all important terms & conditions of
their trade deal in a separate document or contract that will avoid disputes arising
out of uncertainty or ambiguity. Export contract may be sent in duplicate along
with the Proforma Invoice to the overseas buyer.

Nature of International Trade Contracts:

There are certain, peculiar characteristics of international trade contract which are
not present in those for sales of goods in the domestic market

Entering Into An Export Contract

In order to avoid disputes, it is necessary to enter into an export contract with the
overseas buyer. For this purpose, export contract should be carefully drafted
incorporating comprehensive but in precise terms, all relevant and important
conditions of the trade deal.

There should not be any ambiguity regarding the exact specifications of goods and
terms of sale including export price, mode of payment, storage and distribution
methods, type of packaging, port of shipment, delivery schedule etc. The different
aspects of an export contract are enumerated as under:

• Product, Standards and Specifications

• Quantity

• Inspection

• Total Value of Contract

• Terms of Delivery

• Taxes, Duties and Charges

• Period of Delivery/Shipment

• Packing, Labelling and Marking

• Terms of Payment-- Amount/Mode & Currency

• Discounts and Commissions

• Licenses and Permits

• Insurance & Guarantee

• Documentary Requirements

• Force Majeure of Excuse for Non-performance of contract

• Remedies

• Arbitration clause

Terms of Shipments used in pratibha syntex

The INCOTERMS (International Commercial Terms) is a universally recognized

set of definition of international trade terms, such as FOB, CFR & CIF, developed
by the International Chamber of Commerce(ICC) in Paris, France. It defines the
trade contract responsibilities and liabilities between buyer and seller. It is
invaluable and a cost-saving tool. The exporter and the importer need not undergo
a lengthy negotiation about the conditions of each transaction.
EXW {+the named place}

Ex means from. Works means factory, mill or warehouse, which are the seller’s
premises. EXW applies to goods available only at the seller’s premises. Buyer is
responsible for loading the goods on truck or container at the seller’s premises and
for the subsequent costs and risks.

FCA {+the named point of departure}

Free Carrier: The delivery of goods on truck, rail car or container at the specified
point(depot) of departure, which is usually the sellers premises, or a named
railroad station or a named cargo terminal or into the custody of the carrier, at
seller’s expense. The point(depot) at origin may or may not be a customs clearance
centre. Buyer is responsible for the main carriage/freight, cargo insurance and
other costs and risks.

FAS {+the named port of origin}

Free Alongside Ship: Goods are placed in the dock shed or at the side of the ship,
on the dock or lighter, within reach of its loading equipment so that they can be
loaded aboard the ship, at seller’s expense. Buyer is responsible for the loading fee,
main carriage/freight, cargo insurance, and other costs and risks In the export
quotation, indicate the port of origin(loading)after the acronym FAS, for example
FAS New York and FAS Bremen. The FAS term is popular in the break-bulk
shipments and with the importing countries using their own vessels.

FOB {+the named port of origin)

Free on Board: The delivery of goods on the board the vessel at the named port of
origin (Loading) at seller’s expense. Buyer is responsible for the main
carriage/freight, cargo insurance and other costs and risks.

FOB Origin means the buyer is responsible for the freight and other costs and
risks. FOB Destination means the seller is responsible for the freight and other
costs and risks until the goods are delivered to the buyer’s premises which may
include the import custom clearance and payment of import customs duties and
taxes at the buyer’s country, depending on the agreement between the buyer and
seller.

CFR {+the named port of destination}

Cost and Freight: The delivery of goods to the named port of destination
(discharge) at the seller’s expenses. Buyer is responsible for the cargo insurance
and other costs and risks. Cost, Insurance and Freight: The cargo insurance and
delivery of goods to the named port of destination (discharge) at the seller’s
expense. Buyer is responsible for the import customs clearance and other costs and
risks.

CPT {+the named place of destination}

Carriage paid To: The delivery of goods to the named port of destination
(discharge) at the seller’s expenses. Buyer assumes the cargo insurance, import
custom clearance, payment of custom duties and taxes, and other costs and risks.

CIP {+ the named place of destination)

Carriage and Insurance Paid To: The delivery of goods and the cargo insurance to
the named place of destination (discharge) at seller’s expense. Buyer assumes the
importer customs clearance, payment of customs duties and taxes, and other costs
and risks.

DDP {+ the named point of destination)

Delivered Duty Paid: The seller is responsible for most of the expenses which
include the cargo insurance, import custom clearance, and payment of custom
duties, and taxes at the buyers end, and the delivery of goods to the final point of
destination, which is often the project site or buyers premise. The seller may opt
not to insure the goods at his/her own risk.

DAT – Delivered at Terminal

When the seller covers all the costs of transport (export fees, carriage, insurance,
and destination port charges) and assumes all risk until after the goods are
unloaded at the terminal. The buyer covers the cost of transporting the goods from
the terminal or port to final destination and pays the import duty/taxes/customs
costs.

DAP - Delivered at Place

Whenthe seller pays all the costs of transportation (export fees, carriage, insurance,
and destination port charges) up to and including the delivery of the goods to the
final destination. The buyer is responsible to pay only the import
duty/taxes/customs costs. The buyer also is responsible to unload the goods from
the vehicle at the final destination.

Note:

In context to pratibha syntex it mainly deals in three contractual term i.e.

FOB, CIF & C&F.

Export Procedure
Concept:

Export procedure consists of several commercial and regulatory formalities, which

an exporter is required to complete during the course of export trade transactions.
These formalities are very complex and time-consuming and involve considerable
documentation. Hence, the exporters must possess adequate knowledge of such
formalities. At the same time, it should be ensured that the rules and regulations of
not only exporting country but also of importing country are duly complied with.
Last but not the least, it should be ensured that all the required documents, whether
commercial or regulatory, are prepared and filed with the appropriate authorities.

An export procedure can be studied under the following heads:-

1. Registration Stage

2. Pre-Shipment Stage

3. Shipment Stage

4. Post-Shipment Stage

1. Registration Stage

The exporter is required to register his organization with a number of institutions

and authorities, which directly or indirectly help him in the smooth conduct of
export trade. The registration stage includes:

a) Registration of the Organization

The form of organization selected by the exporter must be registered under

the appropriate Act of the country.

• A joint stock company under the Companies Act, 1956

• A partnership firm under the Indian Partnership Act, 1932

• A sole trader should seek permission from the local authorities, as

required.
b) Opening Bank Account

The exporter should open a current account in the name of the firm or
company with a commercial bank which is authorized by the Reserve Bank
Of India (RBI) to deal in foreign exchange. Such bank also serves as a
source of pre-shipment and post-shipment finance for the exporter.

c) Obtaining Importer-Exporter Code Number (IEC No.)

Prior to 1.1.1997, it was obligatory for every exporter to obtain CNX

number from the RBI. However, since then, the CNX number has been
replaced by IEC number issued by the Director General for Foreign Trade
(DGFT). The application form for obtaining IEC number should be
accompanied by fee of Rs.1000.

d) Obtaining Permanent Account Number (PAN)

Export income is subject to a number of exemption and deductions under

different sections of the Income Tax Act. For claiming such exemptions and
deductions, the exporter should register his organization with the Income
Tax Authorities and obtain the Permanent Account Number (PAN).

e) Obtaining Sales Tax Number

Exportable goods are exempted from sales tax, provided the exporter or his
firm is registered with the Sales Tax Authorities. For this purpose, the
exporter is required to make an application in the prescribed form to the
Sales Tax Office (STO) in whose jurisdiction his (exporter’s) office is
situated.
 f) Registration with Export Promotion Council (EPC)

It is obligatory for every exporter to register with the appropriate Export

Promotion Council (EPC) and obtain the ‘Registration-cum-Membership
Certificate ‘ (RCMC). The benefits provided in the current EXIM Policy are
extended only to the registered exporters having valid RCMC.

g) Registration with ECGC

The exporter should also register with the Export Credit and Guarantee
Corporation of India (ECGC) in order to secure overseas payments against
political and commercial risks. It also helps the exporters in obtaining the
financial assistance from commercial banks and other financial institutions.

h) Registration with other Authorities

The exporter should also register with various other authorities, such as:

- Federation of Indian Export Organization (FIEO),

- Indian Trade Promotion Organization (ITPO)

- Chambers of Commerce (COC),

- Productivity Councils, etc.

2)Pre-Shipment Stage
Pre- shipment stage consists of the following steps:-

a) Approaching Foreign Buyers

In order to secure an export order, a new exporter can make use of one or
more of the techniques, such as, advertising in international media, sales
promotion, public relation, public selling, publicity and participation in trade
fairs and exhibition

b) Inquiry And Offer

An inquiry is a request from a prospective importer about description of

goods, their standard or grade, size, weight or quantity, terms of payments,
etc. on getting an inquiry, the exporter must process it immediately by
making an offer in the form of a proforma invoice.

c) Confirmation of Order

Once the negotiations are completed and the terms and conditions are
finalized; the exporter sends three copies of proforma invoice to the importer
for the confirmation of order. The importer signs these copies and sends
back two back copies to the exporter.
d) Opening Letter of Credit

The documentary credit or letter of credit is the most appropriate and

secured method of payment adopted to settle international transactions. On
the finalization of the export contract, the importer opens a letter of credit in
favour of the exporter, if agreed upon in the contract.

e) Arrangement of Pre-shipment finance

On securing the letter ofcredit the exporter procures a pre-shipment finance

from his bank for procuring raw materials and other components, processing
and packing of goods and transfer of goods t the port of shipment.

f) Production or Procurement of goods

On securing the pre-shipment finance. From the bank, the exporter either
arranges for the production of the requirement goods or procures them from
the domestic market as per the specification of the importer.

g) Packing and Marking

Then the goods should be properly packed and marked with necessary
details such as port of shipment and destination, country of origin, gross and
 net weight, etc. if required assistance can be taken from Indian institute of
Packing (IIP)

h) Pre-shipment Inspection

If the goods to be exported are subject to compulsory quality control and

pre-shipment inspection then the exporter should contact the export
inspection agency (EIA) for obtaining an inspection certificate.

i) Central Excise Clearance

The exporter is totally exempted from the payment of central excise duty.
However, the exemption should be claimed in one of the following ways:

- Export under rebate

- Export under bond

j) Obtaining Insurance Cover:

The exporter must take appropriate policies in order to ensure risks.

- ECGE policy in order to cover credit risk.

- Marine policy, if the price quotation price agreed upon is CIF

k) Appointment of C&F agent

 Since exporting is a complex and time-consuming process, the exporter
should appoint a clearing and forwarding (C&F) agent for the smooth
clearance of goods from the Customs and preparation and submission of
various export documents.

2. Shipment Stage

Export cargo can be exported t the overseas buyer by sea, air or land. However,
shipment by sea is the most popular and generally resorted to, as it is
comparatively cheaper. Besides, the ship’s capacity is far greater than other modes
of transportation. Nevertheless, transportation by air is utilized for export of
expensive items like, diamonds, gold, etc. the shipment stage includes the
following steps:

a) Reservation of Shipping space

Once the export contract is finalized, the exporter reserves the required
space in the vessel for shipment. On accepting the exporter’s request, the
shipping company issues a shipping order. The original copy of the shipping
order is given to the exporter and a duplicate is sent to the commanding
officer of the ship. The shipping order is an instruction by the shipping
company to the commanding officer of the ship that the goods are as per the
details given should be received on board.

b) Arrangement of internal transportation upto the port of shipment

The exporter makes necessary arrangements for transportation of goods to

the port either by road or railways. On loading goods into the railway
 wagon, the railway authorities issue a ‘railway receipt’, which may be either
‘freight paid’ or ‘freight to pay’. It serves as a title to the goods. The
exporter endorses the railway receipt in favour of his agent to enable him to
take delivery of the goods at the port of shipment.

c) Preparation and Processing of Shipping documents

As the goods reaches the port of shipment, the exporter should issue the
detailed instructions to the C&F agent for the shipment of cargo along with a
complete set of documents listed below.

- Letter of credit along with the export contract or export order.

- Commercial invoice (2copies)

- Packing list or packing note

- Certificate of Origin

- GR Form (original and duplicate)

- ARE- 1 form

- Certificate of Inspection, where necessary (original copy)

- Marine insurance policy.

d) Customs Clearance

The cargo must be cleared from the customs before it is loaded on the ship.
For this, the above mentioned documents along with the five copies of
shipping bill, are to be submitted to the customs appraisal at the customs
 house. The customs appraisal ensures that all the formalities relating to
exchange control, quality control, pre-shipment inspection and licensing
have been complied with by the exporter. After verification, all the
documents, except the original GR, original copy of shipping bill and one
copy of commercial invoice, are returned to the C&F agent.

e) Obtaining ‘Carting Order’ from the port trust authorities

The C&F agent, then , approach the superintendent of concerned Port Trust
for obtaining the ‘Carting Order’ for moving the cargo inside the dock. After
obtaining the ‘Carting Order’ the cargo is physically moved into the port
area and stores in the appropriate shed.

f) Customs Examination and Issue of ‘Let Export Order’

The Customs Examiner at the port of shipment physically examines the

goods and seals the packages in his presence. The same can be arranged for
at the factory pr warehouse of the exporter by making an application to the
assistance collector of Customs. The Custom examiner, if satisfies, issues a
formal permission for the loading of cargo on the ship in the form of a ‘Let
Export Order’.

g) Obtaining ‘Let Ship Order’ from the Customs Preventive Officer

‘Let Export Order’, must be supplemented by a Let Ship Order’ issued by

the customs preventive officer. The C&G agent submits the duplicate copy
 of sipping bill, duly endorsed by the Customs Examiner, to the Customs,
Preventive officer who endorse it with thse ‘Let Ship Order’.

h) Obtaining Mate’s Receipt and Bill Of Lading:

The goods are then loaded on board the ship for which the mate or the
captain of the ship issues mate’s receipt to the port superintendent. The port
superintendent on receipt of port duties, hands over the mate’s receipt to the
C&F agent, the C&F agent surrenders the mate’s receipt to the shipping
company for obtaining the boll of lading. The shipping company issues two
to three negotiable and two to three non-negotiable copies of bill of lading.

3. Post-Shipment Stage

The post-shipment stage consists of the following steps:-

a) Submission of Documents by the C&F agent to the Exporter

On the completion of the shipping procedure, the C&F agent submits the
following documents to the exporter:

- A copy of invoice duly attested by the Customs

- Drawback copy of the shipping bill

- A full set of negotiable and non- negotiable copies of bill of lading

- The original L/C, export order or contract.

- Duplicate copy of the ARE-1 form

b) Shipment Advice to Importer

After the shipment of goods, the exporter intimates the importer about the
shipment of goods giving him details about the date of shipment, the name
of the vessel, the destination, etc. he should also send one copy of non-
negotiable bill of lading to the importer.

c) Presentation of Documents to Bank for Negotiation

Submission of relevant documents to the bank and the process of getting the
payment from the bank is called ‘Negotiation of the Documents’ and the
documents are called ‘Negotiable Set of the Documents’. The set normally
contains:

- Full set of Bill of Lading or Airway Bill

- Original letter of credit

- Customs Invoice

- Commercial Invoice including one copy duly certified by the

Customs

- Packing List

- Foreign exchange declaration forms, GR/SOFTEX/PP forms in

duplicate

- Exchange control copy of the Shipping Bill

 - Certificate of Origin, GSP or APR Certificate, etc.

- Marine Insurance Policy, in duplicate

- Bill of Exchange, Sigh Draft or Usance Draft

d) Dispatch Of Documents

The bank negotiates these documents these documents to the importer’s

bank in the manner as specified in the L/C. Before negotiating documents,
the exporter’s bank scrutinizes them in order to ensure that all formalities
have been complied with and all documents are in order. The bank then
sends the Bank Certificate and attested copies of commercial invoice to the
exporter.

e) Acceptance of the Bill of Exchange

Bill of Exchange accompanied by the above documents is known as the

Documentary Bill of Exchange. It is of two types:-

• Documents against Payment (Sight Drafts): In case of sight draft,

the drawer instructs the bank to hand over the relevant documents to
the importer only against payment.

• Documents against Acceptance (Usance Draft): In case of usance

draft, the drawer instructs the bank to hand over the relevant
documents to the importer against his ‘acceptance’ of the bill of
exchange.

f) Letter of Indemnity
 The exporter can get immediate payment from his bank on the submission of
documents by signing a letter of indemnity. By signing the letter of
indemnity the exporter undertakes to indemnity the bank in the event of non-
receipt of payment from the porter along with accrued interests.

g) Realization of Export Proceeds

On receiving the documentary bill of exchange, the importer releases

payment in case of sight draft or accepts the usance draft undertaking to pay
on maturity of the bill of exchange. The exporter’s bank receives the
payment through importer’s bank and is credited to the exporter’s account.

h) Processing of GR Form

On receiving the export proceeds, the exporter’s bank intimates the same to
RBI by recording the fact on the duplicate copy of GR. The RBI verifies the
details in duplicate copy of GR with the original copy of GR received from
the Customs, if the details are found to be in order then the export trans
action is treated to be completed.

i) Realization of Export Incentives

If the exporter is eligible for export incentives, then he should submit claim
for the same accompanied by the bank certificate to the appropriate
authority.
 PROCEDURE AT PRATIBHA

• Though Pratibha exports yarn, but it also manufactures on contract

basis for its customers, according to their requirements, and send the
manufactured product after thorough internal and external
examination, to exporte, using a 3rd party logistic system.

• The idea behind using logistic companies who provide for C&F’s role
too, is to concentrate on its central capacity of textile manufacturing.

• Pratibha usually opts for a wide range of logistic service providers, so

as to ignore the monopoly, of service providers, thereby saving a huge
cost.

• As the work after manufacturing and packing is carried by logistic

companies it deals with, the whole procedure confines to negotiating
delas with prospective buyer, procuring material, manufacturing,
inhouse inspection, excise clearance, where the area inspector checks
the goods, sign the pre filled forms, and let the goods in hands of
logistic companies.

Aligned Documentation System:

Aligned Documentation System (ADS) is based on the UN layout key. Under this
system, different forms used in the international trade transaction are printed on
paper of the same size and in such way that the common items of information are
given the same relative slots in each of the documents.
For the purpose of Aligned Documentation System documents, have been
classified as under:

a) Commercial Documents- Commercial documents are required for effecting

physical transfer of goods and their title from the exporter to the importer and the
realization of export sale proceeds. Out of the 16 commercial documents, in the
export documentation framework as many as 14 have been standardized and
aligned to one another. These are proforma invoice, commercial invoice, packing
list, shipping instructions, intimation of inspection, and certification of inspection
of quality control. Insurance declaration, certificate of Insurance, mate’s receipt,
bill of lading or combined transport document, application for certificate origin,
certificate of origin, shipment advice and letter to the bank for collection or
negotiation of documents.

However, shipping order and bill of exchange could not be brought within the fold
of the aligned documentation system

b) Regulatory Documents- Regulatory pre-shipment export documents are

prescribed by the different government departments ant bodies in order to comply
with various rules and regulations under the relevant laws governing export trade
such as export inspection, foreign exchange regulation, export trade control. ,
customs, etc. out of 9 regulatory documents 4 have been standardized and aligned.
These are shipping bill or bills of export, exchange control declaration (GR Form),
export application, dock challan or port trust copy of shipping bill and receipt for
payment of port charges.

Export Documentation

An exporter without any commercial contract is completely exposed of foreign

exchange risks that arises due to the probability of an adverse change in exchange
rates. Therefore, it becomes important for the exporter to gain some knowledge
about the foreign exchange rates, quoting of exchange rates and various factors
determining the exchange rates. In this section, we have discussed various topics
related to foreign exchange rates in detail.

Export from India required special document depending upon the type of product
and destination to be exported. Export Documents not only gives detail about the
product and its destination port but are also used for the purpose of taxation and
quality control inspection certification.

Export documentation is a tedious but necessary process that all exporters must
pay close attention to, as documentation requirements vary considerably by
country, commodity, and situation. Although exporters must fill out and submit
many different forms for each international shipment, most require similar data
elements and can (and should!) be duplicated precisely from one document to the
next. Fortunately, there are software products that capture the primary details of
the shipment and insert them into the necessary documents without flaw.

Export Documents used in PRATIBHA

Commercial Invoice

A commercial invoice is a bill for the goods from the seller to the buyer. These
invoices are often used by governments to determine the true value of goods when
assessing customs duties. Governments that use the commercial invoice to control
imports will often specify its form, content, number of copies, language to be used,
and other characteristics.

Export Packing List

Considerably more detailed and informative than a standard domestic packing list,
an export packing list lists seller, buyer, shipper, invoice number, date of shipment,
mode of transport, carrier, and itemizes quantity, description, the type of package,
such as a box,crate, drum, or carton, the quantity of packages, total net and gross
weight (in kilograms), package marks, and dimensions, if appropriate. Both
commercial stationers and freight forwarders carry packing list forms. A packing
list may serve as conforming document. It is not a substitute for a commercial
invoice. In addition, U.S. and foreign customs officials may use the export packing
list to check the cargo.

Pro Forma Invoice

A pro forma invoice is an invoice prepared by the exporter before shipping the
goods, informing the buyer of the goods to be sent, their value, and other key
specifications. It also can be used as an offering of sale or price quotation.

Transportation Documents used at PRATIBHA are:

Bill of Lading

A bill of lading is a contract between the owner of the goods and the carrier (as
with domestic shipments). For vessels, there are two types: a straight bill of lading,
which is non-negotiable, and a negotiable or shipper's order bill of lading. The
latter can be bought, sold, or traded while the goods are in transit. The customer
usually needs an original as proof of ownership to take possession of the goods.

Certificate Of Origin

Certificate of Origin is an instrument which establishes evidence on origin of

goods imported into any country.These certificates are essential for exporters to
prove where their goods come from and therefore stake their claim to whatever
benefits goods of Indian origin may be eligible for in the country of exports.
There are two categories of Certificate of Origin – (1) Preferential and (2) Non-
Preferential

Document to Claim Drawbacks:

Shipping Bill

Shipping bill is the main custom of document, required by the customs authorities
for granting permission for the shipment of goods. The cargo is moved inside the
dock area only after the shipping bill is duly stamped, i.e. certified by the custom
shipping bill is normally prepared in 5 copies:

• Customs copy
• Drawback copy
• Export promotion copy
• Port trust copy
• Exporter’s copy

It is a customs document used where drawback is claimed, such as on goods

exported or on dutiable goods transhipped or re-exported from a bonded
warehouse. It serves basically as a statistical record.Theshipping bill is main
document required by custom authority for clearance of goods for shipment.

Where the goods are to be cleared by land customs Bill of Export is prepared
instead of Shipping Bill.

Bill Of Export are of 4 types: -

1. White for export of duty free goods.

2. Green for export of goods under claim for duty drawback.
3. Yellow for export of dutiable goods.
4. Pink for export of duty free goods ex - bond.

Shipping Bill is an important document required by custom authorities for allowing

shipment.

It is prepared by exporter and it contains the name of vessel, name of the port of
discharge, country of final destination, Exporter’s name and address, Details about
packages, Numbers, Quantity and details about each case, FOB price, Total
numbers of packages with weight and value and the name and address of importer.

Contents of Shipping Bill

• Name and address of the exporter.

• Name and address of the importer.
• Name of the vessel, master or agents and flag.
• Name of the port at which goods are to be discharged.
• Country of final destination.
• Details about packages, description of goods, marks and numbers, quantity
and details of each case.
• FOB price and real value of goods 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.

Mate's Receipt

Mate's receipt is a receipt issued by the Commanding Officer of the ship when the
cargo is loaded on the ship. The mate's receipt is a prima facie evidence that goods
are loaded in the vessel. The mate's receipt is first handed over to the Port Trust
Authorities. After making payment of all port dues, the exporter or his agent
collects the mate's receipt from the Port Trust Authorities. The mate's receipt is
freely transferable. It must be handed over to the shipping company in order to get
the bill of lading. Bill of lading is prepared on the basis of the mate's receipt.

Types of Mate's Receipts

• Clean Mate's Receipt: - The Commanding Officer of the

ship issues a clean mate's receipt, if he is satisfied that the
goods are packed properly and there is no defect in the
packing of the cargo or package.
• Qualified Mate's Receipt: - The Commanding Officer of the
ship issues qualified mate's receipt, when the goods are not
packed properly and the shipping company does not take any
responsibility of damage. to the goods during transit.

Contents of Mate's Receipt

• Name and logo of the shipping line.

• Name and address of the shipper.
• Name and the number of vessel.
• Name of the port of loading.
• Name of the port of discharge and place of delivery.
• Marks and container number.
• Packing and container description.
• Total number of containers and packages.
• Description of goods in terms of quantity.
• Container status and seal number.
• Gross weight in kg. and volume in terms of cubic
meters.
• Shipping bill number and date.
• Signature and initials of the Chief Officer.

G.R Form
GR Form is an exchange controlled document required by the RBI. As per the
exchange control regulations, an exporter has to realize the proceeds of the goods
he has exported within 180 days of their shipment from India. In order to ensure
this, the RBI has introduced the GR procedure.

GR Form is to be submitted in duplicate to the customs at the port of shipment

along with the shipping bill. Customs will give their running serial number on both
the copies after admitting the custom shipping bill. Custom authorities will certif.
the value declared by the exporter on both the copies of the GR Form and the space
earmarked and will also record the assessed value. They will then return the
duplicate copy of the form to the exporter and retain the original transmission to
the RBI. Within 21 days from the shipment of goods, exporter must lodge the
duplicate copy of GR Form together with relative shipping documents with the
authorized dealer named in the GR form for negotiations of export bills.

After the documents have been negotiated, the authorized dealer will report the
transaction to the RBI. The duplicate copy of GR Form together with the copy of
invoice will be retained by the authorized dealer till full export proceeds have been
realized and thereafter, submitted to the RBI.

On the account of introduction of electronic data interchange system at certain

custom offices where shipping bills are processed electronically, the existing
declaration in GR Form has been replaced by a declaration in form SDF (Statuary
Declaration Form)

Shipping order

It is issued by the Shipping/Conference Line intimating the exporter about the

reservation of space for shipment of cargo which the exporter intends to ship.
Details of the vessel, poet of the shipment, and the date on which the goods are to
be shipped are mentioned. This order enables the exporter to make necessary
arrangements for customs clearance and loading of the goods.
A.R.E. 1 form (Central excise)

This form ARE-1 is prescribed under Central Excise rules for export of goods. In
case goods meant for export are cleared directly from the premises of a
manufacturer, the exporter can avail the facility of exemption from payment of
terminal excise duty. The goods may be cleared for export either under claim for
rebate of duty paid or under bond without payment of duty. In both the events the
goods are to be cleared under form A.R.E-1 which will show the details of the
goods being exported, the relevant duty involved and if the duty is paid or goods
being cleared under bond, details of goods being sealed either by the exporter or
Central Excise officials etc.

LOGISTICS
The operating responsibility of logistics is the geographical repositioning of raw
materials, work in process, and finished inventories where required at the lowest
cost possible.

The formal definition of the word ‘logistics’ as per the perception of Council of
Logistics Managementis the process of planning, implementing and controlling the
efficient, effective flow and storage of goods, services and related information
from the point of origin to the point of consumption for the purpose of conforming
to customer requirements.

Logistics is practiced for ages since organized activity began. Without logistics
support no activity can be performed to meet defined goal. The current challenge is
to perform logistics scientifically in order to optimize benefits to the organization.

OVERVIEW OF LOGISTICS:

Logistical History of India:

India was a maritime power since about 300 BC, trading with several countries of
the world bringing prosperity home. Traders of Surat brought riches to the
country by extensive maritime trade. Like many of our excellent practices,
logistical efficiency also faded away over a period of time.

Logistics in context to pratibha:

Inbound logistics is the management of goods and materials which are arriving at
your business premises. It is the opposite of outbound (or 'dispatch') logistics.
It represents one of the major business processes in transportation planning.
Beyond excellence in operations, the main challenge is to plan inbound logistics
jointly with outbound transportation volumes to increase consolidation where ever
possible.
Three major SAP components together form this solution: Planning is done in SAP
APO, SAP R/3 offers the purchasing functionality and controls the execution of the
logistics part, whereas the SAP SCEM delivers to you supply chain visibility.
And Outbound Logisticsis The movement of material associated with storing,
transporting, and distributing goods to its customers.
Outbound Logistics division offers comprehensive services to buyers sourcing
their products from multiple suppliers in multiple countries. It is designed to
facilitate a seamless flow of goods with complete transparency of information from
point to point, to ensure that the products arrive in the marketplace on-time and in
perfect condition.
Freight Systems uses premium airfreight carriers with established routings for
outbound logistics. Many different options are available for the most competitive
and reliable airfreight forwarding service.
This activity has been fine tuned to offer the customer expediting, quality
checking, invoicing, planning, storage and selection of the best Air/Sea mode to
keep up seamless flow of goods and information to meet with the demanding and
time bound schedules of international houses.

OVERIVIEW OF SUPPLY CHAIN AND LOGISTICS SYSTEM AT

PRATIBHA