Arshad Project

7/30/2019 Arshad Project

1/46

PROJECT REPORT ON

EXPORT PROCEDURE & DOCUMENTATION

PREPARED BY

SHAIKH ARSHAD NAZIR HUSSAIN

SUBMITTED TO PUNE UNIVERSITY IN

PARTIAL FULFILLMENT OF THE REQUIREMENT

FOR THE AWARD OF

PGDIEM

ACADEMIC YEAR

2013 - 2014


2/46

DECLARATION

I Mr. SHAIKH ARSHAD NAZIR HUSSAIN , HEREBY DECLARE THAT I HAVE COMPLETED THIS PROJECT

ON EXPORT PROCEDURE AND DOCUMENTATION IN THE ACADEMIC YEAR 20122013. THE

INFORMATION SUBMITTED IS TRUE AND ORIGINAL TO THE BEST OF MY KNOWLEDGE.

DATE:

PLACE: (SIGNATURE OF THE STUDENT)


3/46

CERTIFICATE

I HEREBY CERTIFY THAT Mr. SHAIKH ARSHAD NAZIR HUSSAIN OF SINHGAD INSTITUTE OF BUSINESS

ADMINISTRATION AND COMPUTER APPLICATION , HAS COMPLETED THE PROJECT ON EXPORT

PROCEDURE AND DOCUMENTATION IN THE ACADEMIC YEAR 2012 2013. THE INFORMATION

SUBMITTED IS TRUE, ORIGINAL AND AUTHENTIC TO THE BEST OF MY KNOWLEDGE.

SIGNATURE OF PRINCIPAL SIGNATURE OF PROJECT GUIDE


4/46

ACKNOWLEDGEMENT

IT IS THE MATTER OF GREAT PLEASURE AND PRIVILEGE TO BE ABLE TO PRESENT THIS

PROJECT REPORT ON EXPORT PROCEDURE AND DOCUMENTATION.

THE COMPILATION OF THE PROJECT IS A MILESTONE IN THE LIFE OF THE MANAGEMENT

STUDENT AND ITS EXECUTION IS INEVITABLE WITH THE CO-OPERATION OF THE PROJECT GUIDE. I

WISH TO RECORD A DEEP SENSE OF RESPECT AND GRATITUDE TO MY PROJECT GUIDE, PROF.

MONA FOR HER ENCOURAGEMENT TO COURSE OF MY WORK. IT IS DUE TO THE ENDURING

EFFORT

I ACKNOWLEDGE MY INDEBTNESS TO VARIOUS AUTHORS FOR MAKING USE OF VALUABLE

INFORMATION LIBERALLY.

IT IS MY PROUD PRIVILEGE TO EXPRESS MY DEEP SENSE OF APPRECIATION AND

GRATITUDE TO MY PARENTS AND FRIENDS FOR THEIR SUPPORT AND CO-OPERATION IN THE

COURSE OF THE PROJECT EITHER DIRECTLY OR INDIRECTLY INVOLVED IN TIME WITH THEIR

VALUABLE CONTRIBUTION.


5/46

CONTENTS

ABOUT COMPANY

Company origin

Introduction

Company profile

Vision & Mission

Board of directors

Milestones

Our customers

Awards/Recognition

Products overview

Units of AVTEC

OBJECTIVESMETHODOLOGY

INTRODUCTION OF TOPIC

STUDY OF THE TOPIC

Export documentation

Objectives of documentation

Essential documents

Import documentation

Custom procedure for import

BENIFITS OF THE STUDY

LIMITATIONS OF THE STUDY

RECOMMENDATIONS & CONCLUSION

REFERENCES


6/46

COMPANY ORIGIN

AVTEC

One stop shop for powertrain

& precision engineered components

The story of evolution revolves around the wheel, the

single important invention that propelled mankind towards the

Bronze Age and beyond. The wheel itself did not evolve too

much since then there was no need for it to. However, it

became the pivotal point for most machines thereafter.

At AVTEC, we approach our business in the same way.While our core values have not changed, we apply them to our

innovations on a regular basis. And our challenge is to perfect

them in the shortest possible time. We move forward, never

resting, in search of the next best thing for our customer. This

has, in turn, made us the chosen supplier for the worlds best

automobile manufacturers.AVTEC, the largest independent manufacturer of power

trains and transmissions in India is a part of the C. K Birla

group. The group spans four continents and has a global

revenue of over USD $1.8 billion with interests in major

industrial segments including automobile, bearings,

powertrain for auto and off highway, paper, cement, buildingproducts, electrical products and information technology.


7/46

INTRODUCTION

The C.K Birla Group was established by the late Mr.

Braj Mohan Birla, a great visionary. The group has a track

record of successful partnerships and collaborations with

global technology leaders.

The group has over the years promoted and established alarge number of industrial undertakings. We manufacture a

diverse range of products and employ a massive trained work

force. Backed by vast manufacturing experience, in-house

research and selective collaborations, the group has developed

a range of relevant and proven technologies that have been

applied in the implementation and management of industries

in four continents.

AVTEC is the largest independent manufacturer of

engines and transmissions, supplying critical auto components

to reputed global original equipment manufacturers including

GM, Ford, Mahindra & Mahindra, Caterpillar, BEML,

Hindustan Motors, Tata Motors, Daimler, AllisonTransmission, Eicher and export to F.G. Wilson (USA/UK.

We execute value engineering projects as well from our R&D

for all existing customer products to cut down the cost. We

are also in the business of sourcing of automotive components

mainly related to engine and transmission.

The group has a track record of successful partnershipsand collaborations with global technology leaders.


8/46

In addition to this, we have world class facilities for

engine/transmission testing and validation. Our prestigious

clients like GMI and FIL rely on our dynamometers/test rigs

for their regular production and new development of engines

and transmissions. With our experience in managing the

homologation activities with the Indian certifying agencies,

we are able to support our customers for homologation

activities in India as well.

Finally, we have launched an engineering services

organization to serve our customers and to make a presence in

the global engineering design outsourcing market. Our team

of experienced engineers are ready to take-up assignments

with skill and confidence.


9/46

VISION &MISSION

VISIONWe shall create a value proposition for our customers, shareholders, business partners and employees through becomingfirst choice supplier in Powertrain and Precision Engineeredproducts & services.

MISSIONWe aim to grow with profitability and continuously improveproduct quality and services through employee involvement,adoption of best-in-class manufacturing systems andprocesses. By forging mutually beneficial relationship with allstake holders we want to achieve

Customer confidence Benchmark level of Return on Investment Growth in revenue in line with our long term strategy


10/46

BOARD OF DIRECTORS

Mr. Chandra Kant BirlaCHAIRMAN

Mr. Prabhakar Kadapa-- CEO&MANAGINGDIRECTOR

Mr. A. Sankaranarayanan

Mr. Naresh Chandra

Mr. Amal Ganguli

Mr. Haigreve Khaitan

Mr. J. M. Trivedi

Mr. Steven Enderby

Mr. Prabir Talati


11/46

COMPANY PROFILE

Basic Information

Company Name: AVTEC Limited

Business Type: Manufacturer

Product/Service

(We Sell):

Auto Engines and Transmissions, AutoComponents, auto Gears, Shafts

Address: Pithampur Sector 3, Sagore , DistrictDhar

Number of

Employees: 501 - 1000 People

Ownership & Capital

YearEstablished: 1987

Legal

Representative/

Business Owner: Mr. Sudhir Rao

Trade & Market

Main Markets:

orth AmericaSouth AmericaWestern EuropeEastern EuropeEastern AsiaSoutheast AsiaMid East

AfricaOceania


12/46

Total Annual

Sales Volume: US$50 Million - US$100 Million

Factory Information

No. of R&D

Staff: 21 - 30 People

Contract

Manufacturing: OEM Service Offered


13/46

MILESTONES

1984

Power Unit Plant set up at Indore to manufacture Power

Units and Auto components

Technical Collaboration with Isuzu Motors, Japan

1985

The Power Products Division was formed at Hosur near

Banglore. This division entered into an agreement withAllison Transmission (Division of General motors

Corporation) to manufacture CL(B)T series of Hauling

Transmissions & CRT series of cycling Transmissions in

India

1988

PUP Indore started assembling Power Units

PPD Hosur tied up with Twin Disc Inc. Of USA to

manufacture T(R)T 2000 series of cycling transmissions

1994

PUP Indore received the coveted ISO 9001 Certification

1996

The first Transmission was exported from PPD Hosur

1997

PUP Indore implemented the concept of Manufacturing

Systems Engineering (MSE)


14/46

2000

PUP Indore got the coveted ISO 14001 Certification

2003

PUP Indore got the TPM excellence award by JIPM

2006

PUP Indore entered into an agreement with Tata Motors

for manufacturing gear box components for their small

car project

2008

AVTEC Kharagpur plant established to focus on manual

transmission components for small cars and Planetary

Gears for heavy trucks

2009

Commercial Production for small cars started from

AVTEC Kharagpur plant

2010

Commercial Production for heavy vehicles started from

AVTEC Kharagpur


15/46

OURCUSTOMERS


16/46

AWARDS /RECOGNITION

AVTEC has now beencertified as a Q1 supplier,once again demonstratingthe high quality of itsproducts Ford ranks as oneof the worlds largestautomotive manufacturerswith locations in North

America (Ford), Europe(Ford, Volvo, Land Rover,Jaguar and Aston Martin)and Asia (Mazda). In orderto guarantee a uniformlyhigh production andquality standard throughoutthe world, Ford hasestablished its own qualitysystem that aims to ensurethat suppliers meet thesestandards. This system isknown asQ1.

Quality Policy / Processes

Disposal of Sewage and ETPDischarge through a SewageTreatment Plant (STP).Conversion of Kitchen andDining Hall Waste to usefulmanure through a Wormi-culture Process.

Pre-Treatment of IndustrialEffluents in ETP before dis-charging into a Sewage LineDisposal of Sewage and ETPDischarge through a SewageTreatment Plant.


17/46

AVTEC has been awarded the Export House certificate by theOffice of the Joint Director General of Foreign Trade, Ministry OfCommerce & Industry, Government of India.


18/46

PRODUCTS OVERVIEW

AVTEC manufactures Engines, Transmissions and

precision components for our customers in the segments givenbelow

Automotive Segment

Passenger Car Commercial Vehicles

Non Automotive Segment

Mining and Construction Equipment Material Handling Oil Field Applications Railways Wind Mill Genset Applications

COMPETENCIES

At AVTEC, we have developed the capacity and capabilityfor future growth and projects by adopting LeanManufacturing Concept. This allows us to maintain the best

manufacturing cost and keep our business competitive in theindustry. We offer the following key services to our customers

Design and development of powertrain assemblies Contract manufacturing of customer designed powertrain

systems Manufacturing and supply of critical and precision

engineered components


19/46

To enable this AVTEC is equipped with

Excellent machining facilities for all critical castings andforgings

Superior gear manufacturing and inspection facilities thatensure quality

Heat treatment facilities Tool designing facilities to match specific job

requirements

Diesel Engines

We are engaged in manufacturing of diesel engines. Ourrange of diesel engines are manufactured from high qualitycomponents. These engines are widely used in automotiveindustries and various other industries. Our diesel enginesand portable diesel engines give better mileage.

Diesel Engine (2.0L) Diesel Engine (3.9L) Turbo Diesel Engine

(2.0L)

Engine Components

We offer a complete range of engine components like CoverRear, Housing Piston, drive gear, lay shaft, Shifter Sleeve,sliding cluth etc. Our range of diesel/petrol engine

components are made from highly quality materials. Theseengine components are highly demanded by our clients.


20/46

Collar Countershaft Gear Cover Rear

Drive Gear Housing Piston Reverse Idler Gear

Petrol Engines

We design and provide an exclusive range of PetrolEngine/Diesel Engine in Cut Section. Widely used inautomobile and engineering industries. Our range of petrolengines are pass through the strict quality parameters andthus ensure complete satisfaction to our clients. We alsooffer these products at affordable prices in the market.

Petrol Engine (1.3L) Petrol Engine (1.6L) Petrol Engine (1.8L)


21/46

UNITS OF AVTEC

POWER UNIT PLANT-

PITHAMPUR

AVTEC PUP-Pithampur plants business is categorizedinto two streams consisting of contract manufacturing andproprietary products.

The Power Unit Plant has state-of-the-art manufacturing

facilities which are intelligently designed and adhering tostringent Quality Management Systems. Our quest for higheroperational efficiency and best cost performance has madethis plant a specialized entity to produce various componentsincluding cylinder heads, cylinder blocks, crankshafts,connecting rods for engines and gears, sleeves, shafts andtransmission cases, apart from dedicated product specific

assembly live.

In its aim of maintaining stringent quality standards, AVTECmaintains

Dedicated facilities for each customer Product validation facilities

NABL accredited laboratories Capabilities for Product Engineering

POWER PRODUCT DIVISIONHOSUR

The Power Products Division in Hosur manufactures

off-highway hauling transmissions (both automatic and power

shift), in technical collaboration with Allison Transmission

Inc and cycling transmissions for off-highway, material


22/46

handling and locomotive segments which are designed in-

house.

It also manufactures, on a contract basis, transmission forglobal automobile manufacturers and can contract

manufacturers for off-highway major aswell.

UNIT PLANT

KHARAGPUR

AVTEC Kharagpur plant was established in 2008 to

focus on Manual Transmission Components for small cars and

Planetary Gears for heavy trucks.

The Kharagpur plant offers manufacturing facilities for a

wide range of transmission components required for small

cars to heavy trucks. It features state-of-the-art machines such

as Gleason Gear Grinding, ECM Vacuum Carburizing,Cinamatic Laser Welding, etc. to cater to customer

requirement and to achieve the best quality in its class.

UNIT PLANT

MEPZ CHENNAI

The Plant in the Madras Export Processing Zone (MEPZ)was commissioned with a view to export transmissions and

Components. The first transmission was exported from this

unit in August 2006. The facility has since then expanded

with state-of-the-art machinery to machine Castings and

Forgings for meeting global customers requirements.


23/46

OBJECTIVES

Training is must in any professional course as student along

with theoretical knowledge get aware of its practical

application alsoThe objective is :

1.To understand about International Business procedure.

2.To understand Trade procedure.

3.To understand documentation in foreign trade.

4.To make Controlling and Repeatable processes.

5.To identify relevant document for each activity.


24/46

METHODOLOGY

ANALYSIS OF WORKING PROCEDURE OF

INTERNATIONAL BUSINESS in AVTEC

It includes:

1.Searching of exporters and importers with the help of

Tele calling.

2.Analyze the exporter/importer Profile .It can be fake or

not.

3.To manage all requirements of according to sale contract.

4.Submission of Export / import document in Banking.

5.For Import, Applying for Letter of credit.


25/46

INTRODUCTION OF THE TOPIC

Documentation is a general term for a multiplicity of

documents in a chosen mix of media and with a certaincollection. Purpose of documentation is the use to support atool or a process.

Classical documentation is a set of documents printed onpaper. Documentation (to document) also refers to the processof providing evidence.

Documentation may include

written information for any read, projection or technicalperforming,

data media of any format and for any reproduction, other content.

Common types of documentation include user guides, white

papers, on-line help, quick-reference guides. It is lesscommon to see hard-copy (paper) documentation.Documentation is distributed via websites, software products,and other on-line applications.

Specializing documentation

Marketing Communications (MarCom) MarComwriters endeavor to convey the company's valueproposition through a variety of print, electronic, andsocial media. This area of corporate writing is oftenengaged in responding to proposals.

Technical Communication (TechCom) Technicalwriters document a company's project or service.Technical publication include user guides, installationmanuals, and troubleshooting/repair/replace procedures.
http://en.wikipedia.org/wiki/Marketing_Communicationshttp://en.wikipedia.org/wiki/Marketing_Communicationshttp://en.wikipedia.org/wiki/Technical_Communicationhttp://en.wikipedia.org/wiki/Technical_Communicationhttp://en.wikipedia.org/wiki/Technical_Communicationhttp://en.wikipedia.org/wiki/Marketing_Communications


26/46

Legal Writing This type of documentation is oftenprepared by attorneys or paralegals who could be inprivate practice or retained as corporate council.

Compliance documentationThis type of documentationcodifies Standard Operating Procedures (SOPs), for anyregulatory compliance needs, as for safety approval,taxation, financing, technical approval, etc.

OBJECTIVES OF DOCUMENTATION:

(i) Reduce non-completion risk. Due to this risk,exporters want to keep title to the goods until they arepaid and importers want to wait to pay until they havethe goods.

(ii) Reduce foreign exchange risk.

(iii)All foreign trade involves a time lag, so thedocumentation can free up funds and help in thefinancing.
http://en.wikipedia.org/wiki/Legal_Writinghttp://en.wikipedia.org/wiki/Legal_Writinghttp://en.wikipedia.org/wiki/Compliancehttp://en.wikipedia.org/wiki/Compliancehttp://en.wikipedia.org/wiki/Standard_Operating_Procedureshttp://en.wikipedia.org/wiki/Standard_Operating_Procedureshttp://en.wikipedia.org/wiki/Compliancehttp://en.wikipedia.org/wiki/Legal_Writing


27/46

STUDY OF THE TOPIC

EXPORT DOCUMENTATION

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. This Fast Fact will

describe many of the documents your business will need in

order to export successfully.

Export documents could be classified into two categoriesdepending upon the specific requirements satisfied by them:(1) Regulatory and (2) Operational.

(1) Regulatory Requirements:

An exporter has to follow strictly the regulation of boththe exporting country as well as that of the importing country.For example, there is exchange control in India. Thereforewhen we export goods, we have to give an undertaking to theRBI that we shall realize the foreign exchange in lieu of thegoods exported. We do this by submitting GR form, and it isobvious that we cannot export unless we submit this

document. Then there are certain commodities which aresubject to export regulation. We have to obtain a licence for


28/46

exporting the controlled commodities. Thus, anotherdocument has necessarily to be used. In order to build up animage of Indian goods abroad there is a system of compulsory

pre-shipment inspection and quality control of a number ofexport goods. The exporter has to obtain an inspectioncertificate. This gives rise to still another document. There area number of importing countries which stipulate that theexporter must submit certain specified documents dulycertified by their missions in the exporting country. Thiscondition makes it essential the use of the consular invoice

and in some cases the use of the legalized invoice. There arecountries specially the Commonwealth countries and alsothose developed countries which have offered concessions tothe developing countries under the Generalized System ofPreferences which demand that the exporters must submit acertificate of origin. Thus, the exporter has to submit GRform, export licence inspection certificate, consular invoice,legalized invoice and certificate of origin. These are examplesof regulatory documents.

(2) Operational Requirements:

The customs authorities are charged with theresponsibility of verifying compliance on the part of theexporters with all types of regulations in force in the country.

For their own record purposes, they have devised the Shippingbill. No shipping company or airline will accept any exportcargo unless the customs authorities have granted theirpermission on the shipping bill. Along with the shipping bill,commercial invoices and packing lists are also to besubmitted.


29/46

Essential Documents

The invoice and bill of lading are the two documents

required for every export shipment. As such, you shouldensure that all other documents associated with the shipmentmatch the information on these documents.

(a) Invoices :An invoice orbill is a commercial documentissued by a seller to the buyer, indicating the products,quantities, and agreed prices for products orservices the seller

has provided the buyer. An invoice indicates the buyer mustpay the seller, according to thepayment terms. The buyer hasa maximum amount of days to pay for these goods and issometimes offered a discount if paid before the due date.

TYPES OF INVOICE:-

(i) Pro-forma Invoice: A pro-forma invoice is an invoicesent to the buyer before the shipment, giving the buyer achance to review the sale terms (quantity of goods, value,specifications) and get an import license, if required in theircountry. It also allows the buyer to work with their bank toarrange any financial process for payment. For example, toopen a Documentary Credit (Letter of Credit), the buyersbank will use the pro-forma invoice as a source of

information. The exporter/seller should not send theircustomer a pro-forma invoice unless they fully understandwhat they are offering to the buyer. If no changes are requiredon the pro-forma invoice after the buyer reviews it, theexporter can simply change its date and title and turn it into acommercial invoice.

(ii) Commercial Invoice:A commercial invoice is preparedby the seller/exporter and addressed to the buyer/importer,

and is one of the first documents prepared when a transaction
http://en.wikipedia.org/wiki/Commercehttp://en.wikipedia.org/wiki/Saleshttp://en.wikipedia.org/wiki/Buyerhttp://en.wikipedia.org/wiki/Product_%28business%29http://en.wikipedia.org/wiki/Pricehttp://en.wikipedia.org/wiki/Service_%28economics%29http://en.wikipedia.org/wiki/Payment_termshttp://en.wikipedia.org/wiki/Payment_termshttp://en.wikipedia.org/wiki/Service_%28economics%29http://en.wikipedia.org/wiki/Pricehttp://en.wikipedia.org/wiki/Product_%28business%29http://en.wikipedia.org/wiki/Buyerhttp://en.wikipedia.org/wiki/Saleshttp://en.wikipedia.org/wiki/Commerce


30/46

has been agreed upon. The invoice identifies the buyer andseller, describes the goods sold and all terms of sale, includingIncoTerms, payment terms, relevant bank information,

shipping details, etc. An invoice may be itemized to show costof goods, freight, and insurance, or other special handling.The invoice may be numbered and have multiple purchase

order numbers. U.S. Customs does not actually need a copyof the invoice, unless requested, but the information includedis used to prepare other documents.

(iii) Consular invoice:A consular invoice is the commercialinvoice stamped or notarized by the consulate or embassy ofyour customers country, if required. For example, if you areexporting to Egypt and your buyer requires a consular invoice,the Egyptian embassy in Washington, D.C. will do this for asmall fee. Usually a freight forwarder will offer this service,but an exporter can send the original invoice to the consulate,have it notarized/legalized as required, pay the fee, and have

the documents returned or forwarded on. It is important tounderstand that consular invoices are required in the buyers

country, so you need to add the time/costs associated withobtaining one to the price of the goods you are shipping.

(b) Material Handling

(i) Packing List: A packing list is prepared by the shipperand is a detailed break down of the items within a shipment. Itmay also include any special marks for identification. Forexample, the customer may want ABC XX in blue letters on

the side of the packaging. For insurance claims and trackingpurposes, it helps to describe what is in each package. The

packing list should also reference the customers purchase

order number and destination. Often, a packing list is taped topalletized cargo or on the main carton/box of a shipment sothat the importers customs agency or any transportation


31/46

handlers can have easy access to it to know what the goodsare and their destination. The quantity and items listed on thecommercial invoice must match with the packing list, but not

necessarily match the pro-forma invoice. Some companiesprepare a packing list that is identical to the commercialinvoice, minus the prices and other monetary details.

(ii) Dock (or Warehouse) Receipt: The dock or warehousereceipt is issued by a warehouse supervisor or port officer andcertifies that the goods have been received by the shippingcompany. This document is used to transfer accountabilitywhen goods are moved by the domestic carrier to the port ofembarkation and left with the international carrier. At thistime, the carriers Bill of Lading is also signed by both parties

and copies are issued accordingly.

(c) Bills of Lading (B/L) : A Bill of Lading is issued bythe carrier to the shipper for receipt of the goods, and is a

contract between the owner of the goods and the carrier todeliver the goods. Sometimes the B/L acts as title to the goodsso an Original B/L is issued- usually a set of three. Whoeverpresents one of those Original, Negotiable B/L can takepossession of the goods. A B/L can be either negotiable ornon-negotiable.

TYPES OF BILLS OF LADING :-

(i) Non-negotiable (or straight) B/L: Indicates that theshipper will deliver the goods to the buyer and that title of thegoods has not beentransferred to the shipper (i.e., the buyer orseller owns the goods while they are being shipped). Thistype of B/L is often used when payment for the goods has

already been made in advance.


32/46

(ii) Negotiable (or shippers order ) B/L: Serves as atitle document to the goods, issued to the order of a party,usually the shipper, whose endorsement is required to effect

its negotiation. It can also be issued to the order of thebuyers bank as part of a documentary credit/letter of creditstipulation so that when the buyers bank receives the Original

B/L, they can endorse it over to the buyer at the time ofpayment for the buyer to clear the goods at customs.Sometimes the negotiable B/L may be consigned To Order

without reference to a company. A negotiable B/L can be

bought or traded while the goods are in transit, whereas aStraight B/L is non-negotiable and is consigned to thebuyer.

The B/L is frequently electronically manifested by theshipping line company using the data sent by the shipper or itsagent. Bills of Lading also include a notify party (usuallythe buyer or their agent) so that when the vessel arrives at theport of destination, the carrier can notify the party that thegoods are available, are in need of customs clearing, or areready for pick up. Usually the importer can pick up the goodsafter customs clearance and duties are paid. Freight Collect

means the consignee pays the freight charges as well. FreightPrepaid means the shipper pays the freight charges, but not

customs clearance unless the terms are delivered duty paid.

If payment is due to the exporter before the importer receives

the goods, advance charges can be added to the bill so theimporter pays for the goods along with the other charges. Twochecks should be received so the carrier can forward onecheck to the exporter for the cost of goods.

(iii) Inland Bill of Lading:Issued by the trucking companyand/or the railroad line for taking the goods from the

exporters facility to the port of embarkation or consolidationfacility.


33/46

(iv) Ocean Bill of Lading (OBL): The Ocean B/L is aninvoice, and may be issued as a clean bill of lading,meaning the carrier certifies that the goods have been received

without visible damage. An On-Board B/L may be issuedwhen the goods are received into the carriers port facility,

basically confirming the cargo will be sailing.

(v) Air Way Bill (AWB):The Air Way Bill is a form of billof lading used for the air transport of goods. AWBs are non-

negotiable, mainly because of the short amount of time thatthe goods are in transit. The original AWB is rarely needed by

the importer at the other end of the shipment to prove

ownership of goods. A house airway bill is issued by a

freight forwarder on behalf of the actual carrier, which is the

case when a freight forwarder has a contract rate with an air

cargo service to expedite the documentation.

(d) Letters of Credit (L/C): A letter of credit is a document

issued by a bank committing to pay the seller/exporter a stated

amount of money on behalf of the buyer/importer as long as

the specific terms and conditions are met. Of all shipping

documents, errors or making changes to the L/C are the most

costly and time consuming because of the risk of payment inerror.

TYPES OF LETTER OF CREDIT:-

(i) Irrevocable :An irrevocable letter of credit can neither beamended nor cancelled without the agreement of all parties tothe credit. All letters of credit are deemed to be irrevocable

unless otherwise stated. Here, the importer's bank gives a


34/46

binding undertaking to the supplier provided all the terms andconditions of the credit are fulfilled.

(ii) Unconfirmed : The advising bank forwards anunconfirmed letter of credit directly to the exporter withoutadding its own undertaking to make payment or acceptresponsibility for payment at a future date, but confirming itsauthenticity.

(iii) Confirmed :A confirmed letter of credit is one in whichthe advising bank, on the instructions of the issuing bank, hasadded a confirmation that payment will be made as long ascompliant documents are presented. This commitment holdseven if the issuing bank or the buyer fails to make payment.The added security to the exporter of confirmation needs to beconsidered in the context of the standing of the issuing bankand the current political and economic state of the importer'scountry. A bank will make an additional charge for

confirming a letter of credit. In many cases, the confirmingbank is located in Beneficiarys country.

Confirmation costs will vary according to the countryinvolved, but for many countries considered a high risk willbe between 2%-8%. There also may be countries issuingletters of credit, which banks do not wish to confirm - theymay already have enough exposure in that market or not wish

to expose themselves to that particular risk at all.

(iv)Standby Letters of Credit :A standby letter of credit isused as support where an alternative, less secure, method ofpayment has been agreed. They are also used in the UnitedStates of America in place of bank guarantees. Should theexporter fail to receive payment from the importer he may

claim under the standby letter of credit. Certain documents arelikely to be required to obtain payment including: the standbyletter of credit itself; a sight draft for the amount due; a copy


35/46

of the unpaid invoice; proof of dispatch and a signeddeclaration from the beneficiary stating that payment has notbeen received by the due date and therefore reimbursement is

claimed by letter of credit. The International Chamber ofCommerce publishes rules for operating standby letters ofcredit - ISP98 International Standby Practices.

(v) Revolving Letter of Credit :The revolving credit is usedfor regular shipments of the same commodity to the sameimporter. It can revolve in relation to time or value. If the

credit is time revolving once utilised it is re-instated forfurther regular shipments until the credit is fully drawn. If thecredit revolves in relation to value once utilised and paid thevalue can be reinstated for further drawings. The credit muststate that it is a revolving letter of credit and it may revolveeither automatically or subject to certain provisions.Revolving letters of credit are useful to avoid the need forrepetitious arrangements for opening or amending letters ofcredit.

(vi) Transferable Letter of Credit :A transferable letter ofcredit is one in which the exporter has the right to request thepaying, or negotiating bank to make either part, or all, of thecredit value available to one or more third parties. This type ofcredit is useful for those acting as middlemen especially

where there is a need to finance purchases from third partysuppliers.

(vii) Back-to-Back Letter of Credit :A back-to-back letterof credit can be used as an alternative to the transferable letterof credit. Rather than transferring the original letter of creditto the supplier, once the letter of credit is received by the

exporter from the opening bank, that letter of credit is used assecurity to establish a second letter of credit drawn on the


36/46

exporter in favour of his importer. Many banks are reluctantto issue back-to-back letters of credit due to the level of risk towhich they are exposed, whereas a transferable credit will not

expose them to higher risk than under the original credit.

Certificates

(i) Certificate of Origin (C/O):A document prepared by theoriginal manufacturer and certified by a quasi-official

authority - such as a Chamber of Commerce - stating the

items country of origin. Most countries that require a C/O

will accept a generic C/O as long as all of the required data

elements are given. However, some countries, like Israel, have

a special green C/O form that must be used. To take

advantage of duty free provisions in a U.S. Free Trade

Agreement, be sure to use the particular C/O that addresses

the rules of origin criteria for each country.

(ii) Certificate of Insurance: This document indicates thetype and amount of insurance in force on a particularshipment for loss or damage while in transit. It is sometimesreferred to as Marine insurance, but may cover the entirevoyage.

(iii) Certificate of Inspection:Some customers will requirea pre-shipment inspection to satisfy their own requirementsor local regulations, according to an industry, government, orcarrier specification. Neutral organizations specialize in thesetypes of certifications, whereby an inspector checks the goodsin question prior to shipment. Sometimes an inspector canlook at a sample, but other times inspection must occur when

the goods are packaged to issue a certificate.


37/46

(iv) Certificate of Free Sale: This form may be required bythe importing country to ensure that the goods offered forentry comply with domestic requirements for sale in the U.S.

It is often required for agricultural, medicinal, or cosmeticproducts and can be issued by the VEDP or U.S. FDA.

(v) Certificate of Authentication (Apostille): An originaldocument that has been notarized may requireauthentication by the Secretary of the Commonwealth. An

Apostille certificate will be issued according to the country(language) of destination, confirming the status of the notarywho has witnessed the original document.

(vi) Phytosanitary Certificate: Primarily a documentrequired to import goods into the U.S., confirming compliancewith phytosanitary safety regarding agricultural and animalhealth standards.

Special Documents

(i) Declaration of Dangerous Goods (DGD): A DGDdeclares the nature, quantity, and quantity of hazardousmaterials and reports the proper classification for each item.

(ii) ATA Carnet: A Carnet, sometimes referred to as amerchandise passport, is used for shipping goods tocountries on a temporary, duty-free basis only. For a fee, thispassport allows a company to ship needed materials to foreigntrade shows or conduct repairs overseas. Within a year, thematerials must return to the U.S. in order to avoid a hefty fine.

(iii) Mate Receipt: A mate receipt is a receipt issued by the

commanding office of the ship when the cargo is loaded onthe ship, and contains information about the name of the


38/46

vessel, berth, date of shipment, description of packages, marks

and number, condition of the cargo at the time of receipt on

board the ship etc.

(iv) Challan: A challan is a document handed to the

transporter carrying the goods to the port of dispatch along

with one copy of invoice in order to give a proof that the good

carrying is for export purpose and valid. It contains all detail

of goods and consignee etc.

Export documentation advise the federal agencies thatoversee it, should include:

_ Correct valuation_ Correct classification_ Accurate of written statements and affirmations_ Verified license requirements

_ Correct SED information_ Accurate reporting of of Denied Party status_ Legitimate claim of export readiness


39/46

IMPORT DOCUMENTATION

An essential feature of all import sales transactions is

import documentation. There are various categories ofdocuments required in international trade transactions. This

section lists the basic documentation required for an import

shipment. Not all the documents listed below are required for

every import transaction; many of them are applicable to

specific products or circumstances.

Instruction Documents

(i)Forwarder's instruction: Most freight forwarders havea printed forwarder's instruction form, but the requiredinformation may also be printed on the exporters companyletterhead. Information required includes instructions forbooking of cargo, information for completing transport

documents, description of goods as per the letter of credit etc.

(ii) Shipping instruction: Where a shipping company has acomputerised bill of lading system, it provides pre-printedshipping instruction forms which must be completed by theexporter/freight forwarder. The bill of lading is drawn up fromthe information provided on this form. If the exporter/freightforwarder prepares the bill of lading independently, then ashipping instruction must be attached. However, manyindependent shipping lines do not insist on the shippinginstruction document.

(iii) Bank instruction: When the exporter is selling on thebasis of a letter of credit, the instructions stipulated in theletter of credit must be followed. However, if selling on the

basis of sight or usance draft under documentary collection,bank instructions must be generated to secure payment for the


40/46

goods. Information supplied would include description ofcargo, name of vessel, date of shipment etc; a detailed list ofall documents submitted; payment method etc.

Transport Documents

(i)Air waybill: This transport document serves as:

documentary evidence of the conclusion of a contract ofcarriage

proof of receipt of the goods for shipment

an invoice for the freight a certificate of insurance guide to airline staff for the handling, dispatch and

delivery of the consignment.

The document consists of three originals and nine copies

and is only issued in a non-negotiable form. The first original

is intended for the carrier and is signed by the shipper; the

second original, the consignee's copy, is signed by the shipper

and accompanies the goods; the third original is signed by the

carrier and is handed to the shipper as a receipt for the goods

after they have been accepted for carriage. The copies are

dispatched by the airline authorities as required to on-carriers,

airport authorities, etc or they serve as delivery receipts,

invoices etc. The standard IATA air waybill applies to the

carriage of goods over any distance and by as many airlines as

are required to convey the goods to their final destination.

(ii) Road waybill :There is no standard transport documentfor road haulage. Road hauliers usually design their ownwaybills which serve as evidence of a contract of carriage and

as receipts for consignment of goods.


41/46

Payment Documents

(i) Commercial invoice (c/i): This should be virtually thesame as the pro-forma invoice and should contain all the finaland accurate details relating to a particular order. The importlicence number and the l/c number should all be stated on thecommercial invoice. Also the price and the delivery termshould be consistent with the sales contract. The commercialinvoice need not be signed unless a signature is specificallycalled for in the l/c.

(ii) Certificate of origin (c/o): if it is a required document

(iii) Packing declaration: The packing list indicates thenumber of packs involved, the contents of each pack and theindividual weights, dimensions and HS numbers. This listenables the customer to check that the correct number of unitshas been received. Customs authorities can also easily identify

a specific pack they wish to inspect.Customs Procedure for Imports

All goods declared for consumption must be landed andentered within 7 days after the arrival of the importing ship orwithin such additional time as the Secretary for Customs mayallow. Failure to do so will result in them being conveyed to a

custom warehouse. If the goods are not properly entered andall duties and charges are not paid within 3 months after thegoods have been placed in a customs warehouse, they may besold at public auction.

Goods may be stored in bond, without payment of duties,in any bonded warehouse or in an unbonded warehouseapproved by the Secretary for Customs. State warehouses are

also available.


42/46

Irrespective of the mode of transport used whenimporting goods, the importer or his freight forwarder isrequired to present the following documents to the customs

authorities:

(i) Bill of entry: Goods may not be imported into SouthAfrica unless a bill of entry is submitted to and accepted bythe customs authorities. An original of the form, a DA500 isrequired by Customs.

(ii) Customs Worksheet:This is a customs document which

details rates of exchange and conversion of rates of theforeign currency amounts into South African Rands.

(iii) Commercial invoice:The commercial invoice must bepresented to customs with the bill of entry as well as relevanttransport documents to be stamped by customs. This enablescustoms to check the validity of the value of a consignment ofgoods as stated in the DA500.

(iv) Import permit (if necessary): This document isrequired for certain goods and commodities only in terms ofimport control regulations. If an import permit is required, theimport permits number and the expiry date should appear onthe DA500.

(v) Special import certificates or permits: Apart fromthose goods requiring an import permit, a number of productsare subject to inspection and/or to the issue of special permitsby certain authorities prior to the goods being imported.

(vi) Transport documents: i.e. the Bill of Lading (sea), theair waybill (air), the freight transit order (rail), and the road'waybill'.


43/46

BENEFITS OF THE STUDY

As far as benefit of the project is concerned, the project

has fulfilled the desired need. The project has shown

documents which will really help AVTEC in export- import.

Some major befits of the project are:

Documented Processes

As now all the processes are properly documented, so thedepartment can have a fully standardized procedure of doing

the things. Now each employee knows there responsibility.

Time Saving

The main asset of todays era is time. How the company is

utilizing time of Human Resources, is a critical parameter.

Because of unstructured processes earlier there used to be a

lot of discrepancies. But now as mapped processes are there

so a number of errors are supposed to get prevented, which

will save time.


44/46

LIMITATIONS OF THE STUDY

Some of the limitations of the study are as follows :

I nteraction with Process Owner/Participants

The one of the major hurdle in the project was interaction

with Process Owner/ Participants. Because all the mangers are

having packed schedule and even the presence of them is not

ensured.

Getting data

It was again a major problem. As there was not a single

repository for the data, so it was a tough job to collect relevant

data. It resulted in wastage of time as well.


45/46

RECOMMENDATION AND CONCLUSION

An agile and changing business can succeed only if its

workforce is equally dynamic, flexible and knowledgeable. Itcalls for continuous learning environmenta workforce that is

given every opportunity to learn, grow and develop skills to

drive the Company towards achieving its business goals.

Various programs are imparted that constitutes latest

emerging technologies and management practices. At AVTEC

they mix and match intensive training with equal thrust on jobskills and behavioural development. Group therapies and

seminars are organized to encourage professional rapport and

keep employee morale running high.

At AVTEC learning is a continuous activity and their

associates have a overabundance of learning programs to

choose from. They have devised programs for all levels, be it

fresh graduates or senior Executives. The needs are addressed

as per the requirements of business and programs are designed

and developed such that they will make their employees

deliver value-for-money to their customers.

Participation in structured training programs & rotational

assignments are encouraged to help employees develop a

wider perspective and gain expertise in manifold functions.

The fully equipped Learning Centre is housed in a

gracious old-world structure, surrounded by leafy trees, lawns,

pathways and flower-beds. It also manages a well-stocked

library of management books and journals.


46/46

REFERENCES

http://www.avtec.in www.exportvirginia.org

http://www.citeman.com/4112-role-of-export-documentation

http://www.outsourcing.org/

Wikipedia

http://www.mbendi.com/import/sa/import_documentation.htm

#Doc2

http://www.mbendi.com/import/sa/import_documentation.htm

#Doc1

Business magazines

http://dictionary.reference.com
http://www.avtec.in/http://www.avtec.in/http://www.exportvirginia.org/http://www.citeman.com/4112-role-of-export-documentationhttp://www.outsourcing.org/http://www.mbendi.com/import/sa/import_documentation.htm#Doc2http://www.mbendi.com/import/sa/import_documentation.htm#Doc2http://www.mbendi.com/import/sa/import_documentation.htm#Doc2http://www.mbendi.com/import/sa/import_documentation.htm#Doc2http://www.mbendi.com/import/sa/import_documentation.htm#Doc1http://www.mbendi.com/import/sa/import_documentation.htm#Doc1http://www.mbendi.com/import/sa/import_documentation.htm#Doc1http://www.mbendi.com/import/sa/import_documentation.htm#Doc1http://dictionary.reference.com/http://dictionary.reference.com/http://www.mbendi.com/import/sa/import_documentation.htm#Doc1http://www.mbendi.com/import/sa/import_documentation.htm#Doc1http://www.mbendi.com/import/sa/import_documentation.htm#Doc2http://www.mbendi.com/import/sa/import_documentation.htm#Doc2http://www.outsourcing.org/http://www.citeman.com/4112-role-of-export-documentationhttp://www.exportvirginia.org/http://www.avtec.in/