1.

1 Background of the problem task undertaken

IT IS an opportunity to do the summer internship in the FILTERCO Industry

which is manufacture and the exporter of the pressed wool felts.

As we know, exporting is the complex and challenging activity in today’s

dynamic world environment as it involves the performance of operation that
determine existing and potential demand in market. Learning the step-by-
step processes and procedure to be followed in an export contact is a crucial
activity in export procedure.

So, selecting the project on export procedure is an obvious and important

decision.

1.2 Project objective :

a. To understand the FILTERCO Business Processes.

b. To understand the working of the various of department of FILTERCO
contributing towards processing an export order.
c. To understand the role of Merchandisers in FILTERCO.
d. Export Procedure.
e. Export documents.
f. Documents required for negotiation, purchase, discounting.
g. Steps in export letter of credit.
h. Mode of payment.
i. Different ways of consignment.

1
1.3 STATUS OF INDUSTRY:

The textile industry in India occupies a unique position in our economy

contributing to nearly a third of the country’s export earnings. This industry
manufacturers,suppliers,wholesalers and exporters of cotton textiles,
handloom, woolen textiles etc. From the production of textile machinery and
equipment, dyes and raw materials to the delivery of finished textiles, fabric
and garments the textile industry in India has the vast potential for creation
in of employemt.as it Textiles industry is the second major emp;loyer in
India after agriculture, providing employment to 91 million people according
to an ASSOCHAM Eco Pulse study titled ‘India Textile Scenario.’ The
number of textiles manufacture, suppliers, wholsalers and textiles export in
India is counted among the most important sector.

It contributes about 13 per cent in export earning and 4 per cent in India’s
GDP is still suffering the heat of global slowdown as indicated by declining
exports and massive layoffs. Textile exports during April-March 2008-09
registered a decline of 1.71 per cent from USD 22.13 billion in April-March
2007-08 to USD 21.75 billion. Among the maximum hit segments,
handicrafts registered maximum decline of 48.35 per cent in 2008-09, from
USD 3481.14 million in 2007-08 to USD 1797.88 million. sector registered
50 per cent increase in investment during 2008-09 to Rs 49,613 crore from
Rs 31,161 crore in 2007-08. But as compared to the year 2006-07 the sector
registered 48 per cent decline in investment. However, in 2006-07,
Rs.90,369 crore of investment was poured in textile sector. According to the
Chamber, an investment of Rupees one lakh in power loom sector creates
about three jobs, hence the government should create an investment friendly
environment and provide low interest rate loans to investors and should also
provide export profits be made tax-free in slow down period to encourage
the export.

2
How have textile exports performed against this backdrop? Fortunately, after
a period of low activity,the scenario is fast undergoing a change for the
better and in a positive direction leading to higher growth. As Indian textile
industry, which has accelerated to an annual growth of 9 -10 per cent , is
expected to grow at rate of 16 per can in values and reach a level of USD
115 billion by 2012 , UNION MINSTER STATE FOR TEXTILES E V K S
Elangovan said that growth can be fuelled by both exports as well as a rise
in domestic consumption, resulting in India's share in the global textile and
clothing trade moving up from the current three per cent to seven per cent by
2012.

This trend augurs well for India and is a clear indication of a shift in
production base from raw materials to value added products with the
“VALUE” being captured by Indian producers. With all forecasts by
leading analyst , pointing towards greater trade in INTERNATIONAL
MARKETS in processed/ finished goods rather than raw materials, Indian
appears to be positioning itself well to increase its market share in WORLD
trade in merchandise export. The ASSOCHAM has stated that despite
marked improvement in the financial position, the Indian textile continue to
face serious issues involving transaction cost and raw material. The
government should focus on infrastructure facility related to the supply
chain and provide low cost logistics service to the sector.

The sector suffers from high power cost and lack of power supply. Effective
power management system has to be put in place. States should offer power
at low cost on the incentive based system for the new investment made in the
textile industry for commercial production. The sector requires higher
technology upgradation and active involvement of new technology.
ASSOCHAM recommended that government should further increase funds
under the Technology Upgradation Fund Scheme (TUFS) for textile firms
from Rs 3140 crore to Rs 4500 crore and release appropriate funds to clear

3
the existing backlog of subsidy payments and upgrade technology of textile
units.

1.4 OBJECTIVE OF STUDY:

1. To study the registration procedure for the export.

2. To find out the international business Scenario.
3. To study the export procedure and documentation for FILTER CO.
4. To find out the procedure for the membership in export promotion
council and DGFT.
5. To find out the difficulties in export procedure and documentation.

4
1.5 SCOPE :

1. The scope encircle export procedure and documentation of FILTER

CO
2. Pre-shipment and post shipment documentation in export are studied in
detail.
3. The tribulation faced by FILTER CO .
4. Study of area of exporting new market and diversification of the
product.
5. Study of international buying behavior.

1.6 LIMITATIONS:

1. Export procedure is very vast area and so training program of 50

days is insufficient.

2. As the working place being away from the actual export procedure
transition hence only theoretical aspects of the export procedure
could be covered.

5
2.0 INTRODUCTION OF THE COMPANY

2.1COMPANY PROFILE:

FILTERCO company is a 50 cr US dollar textile conglomerate driving critical

industries. They are century old pioneers in their area of specialization like of
wool felt rolls ,sheets, seals, wicks, gaskets, strips, felt polishing wheels, knife
edge discs, cones, mounted felt bobs etc.

The organization is manufacturing Pressed Wool Felts since 1968. The quality
consciousness, competitive pricing and the capacity to satisfy the customer's
specific requirements have given us a firm footing in marketing their products
successfully at home and abroad. They have complete manufacturing expertise
to manufacture Pressed Wool Felts conforming to all International standards.

They also have their associate Units where they have facilities like Slitters,
Cutters, Hydro-Pnuematic Presses, CNC Kiss cut Press, Hydraulic Presses,
Splitting Machines, Vacuum Impregnation Plants, Adhesive Coating/Lamination
machines and tool room for Die making etc. These facilities enable them to
fabricate the Custom-built parts to suit individual customers requirements.

This organization is made up of four major groups, each led by the best
manufacturing and managerial talent in India. In addition to manufacturing they
have interest in civic utility systems.

6
This unit, multi-products, multi-location conglomerate is built on the plinths of
experience, expertise, quality, innovation & values in the business. Their best
play is successful work & creation of a new industrial order they can provide
tailor made solution to the customers.

At Filterco, listening the customers and his needs is a tradition as old as the
group itself. For it is they who drive us future, make us reach higher & better
solutions. In the customers often unspoken wish for better implements lies the
seed for a new invention, a path-breaking industrial concept.

2.2Company division:

The groups consist of 4-companies from the core of filterco Groups. Each
company is a renowned name in its own area of operation and is respected world
wide for its service & products. For us manufacturing is not just a limited to our
factory premises & our products. It is also about world class services.

 FILTERCO .PVT LTD.

 SEAL WELL.
 BLUE CHIP.
 TEX FELT.

7
2.3 Company’s Achievement:

Reward and recognition

They are awarded for the Highest Exports by the Govt. Of India for the last
6 years in a row which speaks volumes about thier satisfied customers all
over the world

 IN 1986 The CEO Mr. D.S.CHORDIA receiving the Udyog Patra Award
from Mr. M.HIDEYATULLAH,PM of India at FICCI auditorium, NEW
DELHI on 20 t h December 1986.
 In 1992-1993 Certificate of merit in hair belling felts.
 In1992-1993 Award for the highest export performance.
 In 1993-1994 Certificate of merit in hair belling felts.
 In 1994-1995 Award for the highest export performance.
 In 1995-1996 Biggest Export performance
 In 1995-1996 Certificate of merit in hair belling felts..
 In 1996-1997 Biggest Export performance
 In 1997-1998 Award for the highest export performance
 In 1998-1999Award for the second biggest export performance.
 In 1999-2000 Biggest Export performance
 From 2000-2007 Biggest Export performance

8
 2.4 FILTERCO CAPACITIES

SECTION CAPACITIES(monthly) kg

Felts sleeve Roller Covering 80,000

Felt Flap Wheels and discs 110,000

Wool felt polishing Wheels and 90,000

Discs

Felt and Non-Woven rolls 100,000

Industrial felts component : 80,000

Woolen felt Plating Sheet 100,000

2.5 CLIENT COUNTRIES

INTERNATIONAL CLIENT:

9
 CUSTOMER CLIENT
• Technofeltro. • ITALY
• Lampe technical. • HOLLAND.
• Joh.Birkenstack • GERMANY.
• Brand felt. • CANADA.
• Hardy & son’s • ENGLAND
• ACEE auto • AUSTRIALIA
• Ahuja . • AUSTRIALIA
• Ahuja • SINGAPUR
• Ahuja • MALASIA
• British felt . • U.K
• S.A FELT . • SOUTH AFRIACA
• Closeal . • SOUTH AFRICA
• Custom Seal. • SOUTH AFRICA
• Ahuja . • NEWZELAND
• Ahuja • POLAND
• Aypa talstil • TURKEY.

2.5 Domestic client

Customer Client

10
  B.R.wool agency .  LUDHIYANA
 Modern wollen.  BHILWARA
 Sarvesh wool tax .  .LUDHIYANA
 Kamal Industries .  .BIJAYNAGAR
 Marutex wool Industres.  LUDHIYANA

2.6 Product profile

Although wool felt is the World’s oldest textile structure and it has been
practically in every industry, generations of engineers and materials
science/specifiers are growing up without knowing much about much about
this remarkable material.

Over 130 years of continuous industrial development has demonstrated the

versatility of wool pressed felt as a material that has far surpassed any other
textile material in the depth and breadth of its applications.

“FELTS” is a textile structure composed entirely of fibers physically

interlocked and consolidated by the utilization of mechanical work, chemical
action and moisture without the use of weaving, knitting, stitching, thermal
bonding or adhesives. it composed wholly of any one or a combination of
new or recycled wool fibers. Part –wool felts, is a felt composed of any one

11
or combination of new recycled wool fibers mixed with one or more man-
made fibres, vegetable fibres, etc.

FELT SPECIFICATION NUMBERS :

Felts are governed, in India, by Speen. IS 1719.In the Iternational market,

these are governed by SAE specification F-1 to F-55,DIN specification ,
No.61200,Fedral speen.CF 206 , British Speen, No.BS-4060 and U.S.S.R.
Speen.No.Gost 6308-71.

2.7 Different forms of wool felts :

A. Felts sleeve Roller Covering

12
B. Felt Flap Wheels and discs

C. Wool felt polishing Wheels and Discs

D. Felt and Non-Woven rolls:

13
E. Industrial felts component :

14
F.Woolen felt Plating Sheet :

15
2.8 Pressed Wool Felt Stocking Grid

Stock = In Stock
S/O = Special Order

More
Product 1/16" 3/32" 1/8" 3/16" 1/4" 3/8" 1/2" 5/8" 3/4" 1"
than 1"
F-1 - - stock stock stock stock Stock stock stock stock S/O
F-2 - - S/O S/O S/O S/O S/O S/O S/O S/O S/O
F-3 - - stock stock stock stock Stock stock stock stock S/O
F-5 - - stock stock stock stock Stock stock stock stock S/O
F-7 - - stock stock stock stock Stock stock stock stock S/O
F-10 - - stock stock stock stock Stock stock stock stock S/O
F-11 - - stock stock stock stock Stock stock stock stock S/O
F-13 - - stock stock stock stock Stock stock stock stock S/O
F-50 stock stock - - - - - - - - -
F-51 stock stock - - - - - - - - -
F-55 stock stock - - - - - - - - -

Special Orders normally require a 3-4 week lead time and a manufacturing
minimum. Items designated as in-stock are normally inventoried, but may
occasionally be in the process of being produced, thus requiring a 3-4 week
lea

2.9 BASIC FUNCTION OF WOOL FELTS AND SOME CURRENT

APPPLICTIONS

POLISHING AND Finishing optical and opthalmic lenses;

DE-BURRING polishing plate glass plastics,felt

16
 hats,etc;buffing wheels for shoe machinery.
Storing, Wicking, Felt-nib marking pens and ink reservoirs,
Syphoning, Transferring Stamp pads,Journal lubricating wicks for
liquids, Lubricating armature shafts, spindles and many other
inaccessible machie part,Wicking material for
copying machines, Cosmetics Transfer rollers,
Wiping devices.
Spacing-Washers Gaskets, Gaskets for auto , arc and flood light.Gaskets
packing. in home clothes dryers, refrigerators,Glass
covered electric meters.Gland packing for
fuel and supply pumps. Washer in nuclear
reactor epuipment.
Sealing Rotating/oburating bands for gunlaunched
projectiles, plain and laminated felt seals to
protect ball and roller bearings.Weather
stripping.
Surfacing, Padding and Covers for bases of lamps , fan and trays, etc
Cushioning Card table covers.Lining and in soles for
shoes, wadding boots.Saddle pads,Cushioning
material in mechanical processes. Padding
under batteries in vechles.Corn and callous
foot pads. Knee pads for horses.Display
.Jewellery silverware and other cases.

Vibration isolation Shock Felt pads for heavy textile and other
absorption and sound machinery. HI-FI speaker
absorption enclosure.Computer Isolating sensitives/
delicate instruments from vibration /shock
during shipment or from floor or building
vibrations

17
Filtration Respirators oil fired heating equipment .Air
compressors , Seprating water from gasoline .
filtering electroplating solution , organic
solvent , oils photographic emulsion , etc

Frictional Provides traction to pull strip brass through

the cleaning bath in rolling mills and in
jacking hides in a tannery .Black Board
dusters,Auto windows channels.

Thermal insulation Insulating refrigerators and cold pipng .Boot

lining.Militery Arctic weather boots

Percussion controls Percussion pads , hammers , dampers, back

check, wedges,venners,stops , etc for pianos .
Beater balls for drum stricks, stickers for
chimes.

3.0 METHODOLOGY

Methodology means the source through which the data is collected and
which is necessary or important for the study. There are two sources of this
study :

 Main source

18
  Secondary source

1. Main source :
In primary source, data was collected through interviewing the export
executive and the marketing person. Also I had collected the
information from the other staff.

2. Secondary Source :
Data that is already published in various publication or information
already available is collected and combined and presented earlier by
researches is secondary source.
a) Import and export policy
b) Export procedure handbook
c) International marketing

Secondary data is extensively and intensively used for present research

work. The discussions with various officials in the company have helped to
understand the basic concepts and procedure.

4.0 DIFFERENT DEPARTMENT IN FILTERCO

Company mainly deals in two segment of the felts supply chain i.e. one is
manufacturing of felts and other is manufacturing of non –woven felt.These
two segment are different processes but are very much linked in the supply
chain.The company has different department each having specified function

19
and responsibilities.Description of each department will follow in respect
to how they occur in supply chain.

4.1 Cotton department

Cotton is one of the most important raw material for the wool felts
manufacturing. Company purchase the cotton from different industry and
from some other countries such as WEST AFFARICA and US.Cotton
department is responsible for placing order of cotton to the mills. Their
responsibility is to make sure cotton is order from right supplier ,delivered
in right time with desired quality and maintain stock listing of cotton.Cotton
department is also responsible for checking the quality i.e strength
,colour,and quantity of of cotton department. The decision regarding the
cotton quality,quality and strength is decided by the by PPC i.e.
production,planning and control department.ppc place order one month in
advance.

4.2 Opener department

Opener department is responsible for producing dust free cotton from raw
cotton. In these the opener machine is used so that cotton can get the proper
and perfect density and also the opener is responsible for bunch free cotton
of easy smoothing in the different processes. Felting was originally based
upon the physical characteristic of crimp and scaly surface that cause them
to cling and intermash and allowed them to be pressed into a compact fabric.
the felt is made with or without admixture of another animal fiber, vegetable
fiber,or manmade fiber.opner department receive order from PPC stating
order or style number and quantity of the cotton required.

4.3 Carding department

Carding department has the same responsibility as the opener department
has.but in these there is machine called cardner.where the cotton goes under
the carding machine so that it get free from bunch of bundle.and there is also

20
the Roll carding machine which help in making sheet from the wool as per
prescribed by the PPC.it has been supposed that 5 kg of woolen is of 1mm.

4.4 Washing and dyeing department

The department is responsible for two different stages in wool
manufacturing. For grey(not colored)felts, department is responsible for the
coloration of wool and for dyed (colored) felts,department is responsible for
washing.the process of dyeing is time consuming.The department making
the production plan for dyeing and washing machine based on the order
from the PPC

4.5 Hardener department

Hardener department is responsible for giving the proper hardness and the
density. In this the wool sheets goes under the hardener where it get steam
from the boiler so as to get hard this is done as per the prescribed by the
PPC the hardness can be change according to the demand. there is also
machine called MILLING machine is used where the sulfuric acid and dazzle
powder is mixed so that it get proper hardness and density.

4.6 Cutting department

The department is responsible for the for cutting of sheets into the different
shape and rolls.This department is mainly responsible for cutting and
avoiding waste.To ensure the minimum wastage ,skills employees are their
.the cutting is done according to the density given by the PPC.

4.7 Finishing and packaging department

This is the final stage before the wool felts is ready to shipped. As the wool
felts are already finished, it requires the series of quality check.The felts
goes for check like density test ,hardnesstest ,washing test etc. after which

21
it is steam pressed , labelled ,packed put into the cartoon.Once all the
cartoon are packed and labeled , external quality placed check takes place
and goods are shipped.

4.8 Production,Planning and control department

The department is responsible for making plan for the entire organization
i.e.all the department.PPC is the centre of all the department also control
functionally. The PPC send production plan to different department on
weekly basis and daily for any amendments.The PPC keeps check on
different departments by requesting planning and production report for
every day.PPC only recives order from the top management.with order
quantity and dispatch date.it does the planning for the product cycle. The top
management is continues contact with PPC

The PPC link with other department

22
4.9 Merchandising department

The department act as a liaision between the buyer and manufacturing

division . on one hand, the department is responsible for the notifying in the
product to the PPC and also to make sure that the article is produced as per
planning by the PPC and within dispatch time limt.On the other hand it has

23
to continually update buyer with planning and production status.The
department is also to take care of all corresponds with buyer and is
responsible for comminuting it to PPC.the department is also responsible
for the necessary sampling such as proto, size set and final which is
necessary prior to production.

Merchandising

The company’s marketing team endeavor to enhance its share of business

with existing customer as well as the customer base.The company receives
order from customer by

 Growth in business for existing customer

 New customer developed through cold calls, trade fare meeting
 Walk –in-customer

The company’s marketing team has been able to diverse different strategies
to suit the need both existing and new buyer. For the existing buyer,the
company prime project is to expand the product base and enhance volume
.By leveraging the long standing relationship with the buyer, the company
strives to preferred partner to the buyer. For the new buyer , based on
understanding of their product range and brand identity/ customer identity,
the company present to them to their entire project range.This give them
good idea of areas of the company’s expertise and capability. Sometimes
the buyer comes to FILTERCO with their thought on different size and
density, where they offer their suggestion on modification. In case where
they come to FILTERCO with predetermined size requirement, they also try
to add value for suggesting modification to enhance functionality or to
reduce cost while retaining the existing size.FILTERCO’s skilled worker
gives the desired size and density along with the sampling department
provide the client with prototypes, which undergoes various alteration till
the client finalize the size.Once the size and density is finalized it is
translated into sample size as quickly as possible because the entire season’s

24
business depend on timely delivery of sample. The costing exercise is done
concurrently at this stage.FILTERCO’s manufacturing scale and efficiency
and global sourcing ability enables .FILTERCO’s to compete with
international vendors effectively. This is proven by the growth of the
Company in non-quota categories, where competition has already been open
without any quota related barriers. Quality and ability to deliver the required
products on time and competitive pricing enables to enhance share with
customers

5.0 To understand the Export Procedure in FILTERCO Industries.

It is essential that a person engaged in international trade be aware of the

various procedures involved. The business of exports is heavily document-
oriented & one must get acquainted with the entire procedure. Failure to
comply with documentary requirement may lead to financial loss.

25
5.1 Pre-Shipment Procedure

 On receiving the requisition & purchase order from merchant,

documentation department issues an invoice. Two invoices are
prepared i.e. commercial invoice & custom invoice. Commercial
invoice is prepared for the buyer & Custom invoice is prepared for the
Custom authorities of both the countries.

 Packing list is prepared which details the goods being shipped.

 GSP certificate is prepared if the consignment is exported to EU or

countries mentioned in the GSP list.

 Buying house inspects the goods & issues an inspection certificate.

 Certificate of origin is also issued and attached, if required.

 Following documents are given to Customs for their reference:

 Custom Invoice
 Packing list
 IEC certificate
 Purchase Order or L/C, if required.
 Custom annexure

 On receipt of above documents, customs will issue clearance

certificate.

26
  After custom clearance a set of documents with custom clearance
receipt are sent along with the consignment to the forwarder.
Forwarder books the shipment & as per the size of the cartons
calculates CBM & decides which container to be used.

 Following documents are sent to buying house for their reference, as

per buyer’s requirement:

 Invoice
 Packing List
 GSP (if exports to Europe)
 Certificate of Origin (if required)
 A copy of FCR/ Airway Bill/ Bill of Lading

Buying house then intimates the buyer about the shipment & gives the
details regarding it. Buying house will send a set of these documents to the
buyer.

 Buyer collects the consignment from the destination port by showing

the following documents:

27
  Invoice

 Packing List

 Bill of lading/ FCR/ Airway Bill

 On shipment of goods, exporter will send the documents to the

importer’s bank.

5.2 Post-Shipment Procedure

 A foreign buyer will make the payment in two ways:

 TT ( telegraphic transfer) i.e. Wire Transfer – (Advance payment, as

per the clause – 50% advance & remaining 50% on shipment)

 Letter of Credit

 If the payment terms are a confirmed L/C then the payment will be
made by the foreign bank on receiving the following documents:

28
 Invoice

 Packing list

 B/L

 Any other required by the buyer or the country of import.

 The payment terms can be:

o At Sight

o Within 15 days from Bill of Lading or Airway Bill date.

o Within 30 days from Bill of Lading or Airway Bill date.

o Within 60 days from Bill of Lading or Airway Bill date.

o Within 90 days from Bill of Lading or Airway Bill date.

 After shipment, exporter sends the documents to the buyer’s bank for
payment. As the buyer’s bank receive the documents it will confirm
with the buyer for release of payment. On confirmation, it will make
the payment in the foreign currency. The transaction will be Bank to
Bank.

29
  The domestic branch will credit the exporter’s account, as against the
respective purchase order or invoice, in Indian rupees by converting
the foreign currency as per the current bank rate.

 If the payment is through wire transfer, the payment will be made as

per the terms agreed by the exporter (Advance payment, as per the
clause – 50% advance & remaining 50% on shipment).

5.3 Registration procedure of FILTERCO

Export procedure contains standard step for the business. It can be done
through direct or indirect way. Before starting Export of any product, one
has to get registered itself under IEC & RCMC.

A. Registration under Importer-Exporter Code ( IEC):

Registration under Importer-Exporter code number is basic necessity for
the export business. The registerated office of the applicant shale make
am application for grant of IEC to the licensing authority. Thus
following documents should support dully signed application:

 Bank recepit (in duplication)/DD of Rs.10000/-

30
  Income tax PAN NO.

 Photocopy of RBI’s approval of Non-Residents interest if

any in the form of company.

The licensing Authority concerned shall issue an IEC number. A copy of

such IEC number shall be endorsed to the concerned banker. An IEC no.
alloted to an applicant shall be vallid for all its
branches/division/units/factories as indicated in the format of IEC

5.4 Registration with Export Promotion Council (RCMC):

To obtain benefits under the export-import policy, companies are required to

register with an appropriate promotion agency by obtaining registration cum
membership certificate i.e. RCMC.

5.5 EXPORT DOCUMENTATION AT FILTERCO.

List of documents, which are used at FILTERCO pvt.ltd are as under:

 Invoice
 Packing Slip

31
  Airway Bill or Bill of Lading
 Shipping Bill
 Certificate of origin
 Bill of Exchange
 Generalized System of Preference
 Canada Custom Invoice
 Letter Of credit
 Bank certificate of Export and Realization (BRC)
 Insurance

Following are the detailed elaboration of the above listed export documents:

1. INVOICE:

It is the document, which is compulsorily needed in the export

documentation. It consists of buyer name, notified address, country of the
final destination and origin of goods, term of delivery and payment, place of
delivery, port of loading and discharge. It consists of the items; quantity and
description, which have to be exported with the total, amount in foreign
currency or may be any other currency. At FILTERCO the company used
Dollar as the currency for invoicing. This is the proof of the sale of goods to

32
the buyer. The invoice number is required in each and every document. It is
also used to customs for the clearnce of the goods.

The copy of invoice from FILTERCO is attached in the annexure no. 1.

2. PACKING SLIP:

The pre shipment department prepare packing list. The list is sent to buyer
along with the goods. The packing list contain the details or the description
of the item in each carton. It consist the Invoice Number, Letter Of Credit
no.,total Quality, Total Carton, Carton Dimensions, Net weight and Gross
Weight. The list help the importer to know and identify the item without
opening and counting the goods in the carton and he can also sell the carton
to the buyer without opening the carton, because the style, color, sizes are
mentioned in the particular carton. Thus packing lit contain all the details of
the yarn containing in the carton.

The copy of packing list from Filterco is attached n the Annexure no.2

3. BILL OF LADING OR AIRWAY BILL :

Bill of lading is the receipt given by the transporting company to the

exporting firm. This document state that the payment is made by exporting
company and the good has been received in their hand for forwading the
goods to the destination.

Airway bill is followed only in the case of transportation by the air,

whereas Bill of Lading is used in the case of sea transportation. Bill of
Lading and Airway Bill is Negotiable Instrument.

33
The Bill of Lading or Airway Bill contains the name of exporter, Importer,
Loading Vessel, Port of Loading, and Port of Destination. It also include the
marks and nos. on the carton, description of goods, LC no., Gross and net
weight.

FILTERCO almost 90% transportation was through ship while the sample is
send through Airway. The Bill of Lading is send as per the letter of credit
terms.

The copy of Bill of Lading of FILTERCO is attached in Annexure 3

4. CERTIFICATE OF ORIGIN:

Certificate of Origin is the document in which the authority certifies that the
goods as described as originated in the country in accordance with the
provision in force in the European Economic Community. This certificate is
a statutory proof that the goods produce or the material used or the exporter
or the seller of the good is of a particular state.

At FILTERCO is located in Neemuch the certificate is issued by the

MUMBAI chamber of Commerce and Industry.

The copy of the Certificate Of Origin used FILTERCO is attached in

Annexure 4

5. SHIPPING BILL:

Shipping Bill is the document of clearance from the custom department. This
Document helps in getting the green signal to the forwarders to go ahead
with the goods towards its final destination.

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This document consist details as under

i. Exporter’s Name and Address

ii. Consignee
iii. Port of Loading
iv. Port of Discharge
v. Duty Entitlement Pas Book (DEPB) Specification
vi. Duty Drawback Specification
vii. Invoice No. and value
viii. Item Description
ix. Vessel Name

Some port in India follows manual procedure of issuing Shipping Bill while
some of the port follows EDI System. The Electronic Data Input system
(EDI) is located only in some important port. Chennai port follows the EDI
system while the Tutocorin port follows Manual method System.

F. GENERALISED SYSTEM OF PREFERENCE (GSP)

GSP is issued by the Export Inspection Agency. The document is issued as

per the import needs. This document is for the developing countries like
India while exporting goods to the developed countries. The countries that
require the GSP document are as under.

 Australia
 Canada
 Japan
 New Zealand
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  Switzerland
 USA
 Republic of Belarus
 Republic of Bulgaria
 Czech Republic
 Russian Federation
 Denmark
 Germany
 Greece
 Spain
 France
 Ireland
 Italy
 Luxembourg
 Finland
 Sweden
 Luxembourg
 Finland
 Netherlands
 United kingdom

GSP is issued in case of exporting the goals to the above mentioned

developed countries. Due to this certificate the importer’s country give some
benefit to the importer like low import duty and many other benefits. Thus
the incurring cost for procurement becomes low which collectively will be
beneficial for the importer to import from the developing countries like
India. Hence more imports will be taken from India . thus India will enjoy
the increasing number of export of the goods.

There are some general condition to qualify for preference, product must

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 A. Fall within a description of product eligible for preference in the
country of destination. The destination entered on the form must be
sufficiently detailed to enable the product to be identified by the
customer officer examining them.
B. Comply with the rules of origin of country of destination. Each article
in a consignment must qualify separately in its own right and
C. Comply with the consignment condition specified by the country
destination.

Procedure for claiming the GSP

A declaration on the certificate of origin from must be prepared in duplicate

together with the GSP application from to the certifying authority of the
exporting country .The authority after inspection if satisfied then certify the
top copy of the Certificates of origin and return the top copy to the exporter
for the communication with the importer destination .At the same time the
certifying authority returns the duplicate copy of certificates authority
returns the duplicate copy of the certificate of origin but will retain the GSP
application from duly completed and signed by the exporter.

The copy of the GSP of FILTERCO is attached in annexure

G. Canada customer invoice :

The Canada customer invoice is prepared when the goods are to be

export the goods to Canada. This invoice is used as the customer office
of Canada requires the invoice. The Canada customers require the
declaration of the goods in their specified format. The customer in
Canada have their own specified invoice format.

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8. LETTER OF CREDIT :

Letter of credit is the pre-shipment document. This document states that

payment will be made to the exporter by the importers bank if the
required document are presented to the bank within the validity of the
letter of credit. Following is the working of the importer and exporter
regarding the letter of credit.

 The exporter requests the importer to issues of credit in his favor.

 The importer request his bank to open a letter of credit
 The importer bank open letter of credit and forwards to the
exporter’s bank
 The exporters take the possession of the letter of credit
 The exporter supplies the goods and present the full set of
documents along with the draft to the negotiating bank.
 The negotiating bank then scrutinizes the document and if they are
in order makes the payment to the exporter.
 The issuing bank will reimburse the payment to the negotiating
bank

The letter of credit is annexed in which is used in FILTERCO

9. Bank certificate of export and realization:

This is the last document, which s involved in the export documentation

procedure. The bank issues the document. This document completes all the
procedure of export i.e from the order received to goods dispatched. the
bank issues this certificates when all the formalities have been completed
from the export’s side . when the importer inspect that all the legalities and

38
the good have been arrived as per their agreement then importer or buyer
orders his bank to realie the cash to the exporter’s bank .after receiving the
exchange the bank issue this certificate (BRC). BRC includes the
specification

 Date and number of invoice

 Date and number of shipping bill
 Country of destination
 Bill amount
 Freight amount as per bill of lading or air bill
 Date of realization of export

This certificates includes all the necessary of every necessary export

document.

The bank keep the records of all necessary transactions the company has
maintain against the letter of credit. This certificate also helps the bank to
allow the foreign exchange the company has earned. Thus BRC certify that
the bank have the relevant has earned. Export document and found to be
correct.

10. Bill of exchange

These are unconditional promises drawn by the exporter instructing the

buyer to pay the efface amount of the drafts bank in both the end act as an
intermediary in this processing of shipping document and collection of
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payment. in banking terminology the transaction is called as documentary
transaction . The bill of exchange used.

11. INSURANCE:

To overcome risk we need to insure the good .at the filter co there is the
system of taking the bulk insurance of some amount.then as and when there
is shipment with the CIF terms then the insurance policy is taken with the
notification to the insurance company.

Different ways of consignment methods used in Export Trade in

FILTERCO.

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In order to deliver goods to the clients, traders and suppliers have to choose
among a variety of consignment methods. They generally evaluate a few
aspects before deciding upon the shipping mode.

These aspects are:

i. What’s the Business size

ii. Cost Factor.
iii. Product safety Concern
iv. Product deliverance time
v. Products to be delivered

Mode of consignment can be evaluated by following intrinsic characteristics.

i. Quick delivery

ii. Price Comparison

iii. Product protection

iv. Convenience to client and trader

Different ways have different advantages and limitations. Few are safer,
some actually quick and others have an advantage of being low-cost. You
can decide any of the ways discussed below which suits your necessities.

Air transportation:

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This way is quickest and much safer mode of transportation. Despite of
being secure and rapid, suppliers (especially the small ones) are often
unwilling to use this method, mostly because of high price associated with
it. This should be supportive when transporting some high-value products or
when a rapid delivery is required due to seasonal factors or goods of
perishable nature. In FILTERCO mainly used air transportation for the
samples deilevery.

Sea transportation:

Most probably the oldest way used in export import for foreign supplies. In
olden days traders voyaged by means of sea, carrying numerous products and
items to trade in overseas nations. Economical but fairly slow, certainly not
a fine choice when fast delivery is desired. However, when the time is not a
concern and consignment is fairly big or bulky, naval transport becomes a
usual alternative. Mostly all consignment in FILTERCO is done by the sea
transportation.

Road transportation:

This is the widely used mode, particularly in local trade. Even when water or
air transport is the main source of consignment, road transportation is still
desirable to carry the items from harbors to consumer. Although restricted to
local trade, this way is both time saving and economical and facilitates door
to door delivery by connecting to the sea and airport. FILTERCO used this
transportation for local trade generally.

OBSERVATION

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After studying the companies export procedure and documentation following
observation are made.

1. The procedure of exports and imports is very time consuming since at all
levels govt. and semi govt. agencies are involved. At every stage loss of
time is there which is a great hinderance in the foreign trade.

2. Paper work is very much. There are many step involved in foreign trade
procedure. At every step, paper work has to be done in both exports and
imports, which in turn increase the transaction cost. That’s y now All
documentation is done by software, which lead to quick work.

3. Much time spend on shipment of goods and custom clearance.

4. Firm has to pay losses while receiving cash due to fluctuation in foreign
exchange prices.

5. The client countries also include the countries where lots of

documentation is required.

FINDINGS

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1. Friendly atmosphere

2. Dedication, teamwork and coordination

3. Follows an autocratic cum democratic style of management

4. All higher positions of the company are filled up within the members of
the Filterco family

RECOMMENDATIONS

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1. The company should try to advertise its activities through Internet and
direct mails to its target customers.
2. Prices should be made competitive to match the export standard, which
may be done through Economic of scale in this globalization era.

3. In order to be successful in export one must fully research in market. No

one should ever try to tackle every market at once. Many enthusiastic
persons bitten by the exports bug fail because they bite off more than
they can chew. The fewer intermediaries one has the better, because
intermediary.

4. Deliveries must be done on time.

5. Customers and good must be provided with after sales services, it will
help customers and goods to survive more and better

6. Communication whether internal or external must be far-reaching and

speedy Good communication is vital in export.

7. Risk of failure in export marked can be minimizing by intelligent use of

research.

8. There should be some harmony between the directors and the employees.

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 BIBLOGRAPHY

 www.ieport.com
 www.indiamart.com
 Ministry of textile
 Export procedure.

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 ANNEXURE

A. INVOICE
B. PACKING LIST
C. SHIPPING BILL
D. GSP CERTIFICATE OF ORIGIN
E. INSURANCE CERTIFICATE
F. BILL OF LADING

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