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PROJECT REPORT

ON

THE PROCEDURE OF IMPORT AND


EXPORT OF BHARAT FORGE

Submitted for the partial fulfillment of the requirement for the


Award of the degree
Of

Post Graduate Diploma in Import & Export


Management (PGDIEM)

SUBMITTED TO:
MRS. APEKSHA SOMWNSHI
FACULTY

SUBMITTED BY:
ESHAN RASTOGI
PGDIEM

SINHGAD INSTITUTE OF MANAGEMENT


VADGAON(BK), PUNE.
(AFFILIATED TO PUNE UNIVERSITY, PUNE).

ACKNOWLEDEMENT
It has been honour and privilege to do my project on the subject
IMPORT AND EXPORT OF BHARAT FORGE. I take this an
opportunity to communicate my sincere thanks and regards to
everyone who had contribute to my project and helped me
successfully completion.
This project report couldnt have been completed without the
guidance of my project guide PROF. APEKSHA SOMWNSHI.
I express my sincere thanks and gratitude to the above stated person
who have helped in directly and also to those who have helped me
directly.
At last I am thankful to honourable director DR. RUPALI JAIN to
give us an opportunity to experience the concrete reality of the
project.

ESHAN RASTOGI
PGDIEM
SIOM, PUNE

TABLE OF CONTENTS
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CONTENTS
Registered name of company
Mission & Vision Statement
Year Of Establishment
Promoters
Current Turnover
Growth Statistics Over Past Five Year
Major Product Line
Major Brands Offered Under Each Product Line
Operation Location Of Subsidiaries, Branch Office,
Corporate Office
Number of Employees
Recognition/Awards
Market share
Major Competitors
Corporate Strategy
Total Export F.Y 2010 2011
Major Importing/Exporting Countries
List Of Goods/Services Exported By The Company
Future Plans
Export Import Procedures
CSR Activities

BHARAT FORGE LIMITED

REGISTERED NAME OF THE COMPANY


Bharat Forge Ltd., the flagship company of the US $ 1.25 billion
Kalyani Group, is a 'Full Service Supplier' of engine & chassis
components. It is the largest exporter of auto components from India
and leading chassis component manufacturer in the world.
With manufacturing facilities spread over 6 locations - two in India,
three in
Germany and
one in
North
America, the
company manufactures a wide range of safety and critical components
for passenger cars, commercial vehicles and diesel engines. The
company also manufactures specialized components for the railway,
construction equipment, oil & gas and other industries. It is capable of
producing large volume parts in both steel and aluminum. Bharat
Forge has built up a strong capability in design and engineering,
including a full fledged product testing and validation facility, which
gives Bharat Forge a Full Service Supply Capability from product conceptualization to designing to manufacturing
and product testing & validation.

MISSION & VISION STATEMENT


To be a world class organization and a leader in every aspect of
our business
To aggressively grow business by accessing global markets
To deliver products and services of uncompromising quality and
integrity consistent with the Kalyani brand and image
To be committed to listening and responding to the needs of our
customers, associates and business partners and honoring their
individual value
To be committed to an entrepreneurial spirit that fuels the
growth of our companies and increases shareholder value.

YEAR OF ESTABLISHMENT

Bharat Forge Limited established in the year 1961

PROMOTERS

Sr.No

Name the Director

Category

B.N. Kalyani
Chairman & Managing
Director

Promoter, Executive and Managing Director

S.M. Thakore

Non-executive, Independent

S.D. Kulkarni

Non-executive, Independent

P.G. Pawar

Non-executive, Independent

Dr. Uwe Loos

Non-executive, Independent

P.C. Bhalerao

Non-executive Director

Lalita D. Gupte

Non-executive, Independent

P.H. Ravikumar

Non-executive, Independent

Alan Spencer

Non-executive, Independent

10

Naresh Narad*

Non-executive, Independent

11

Dr. T. Mukherjee **

Non-executive, Independent

12

G.K. Agarwal
Deputy Managing
Director

Executive

13

Amit Kalyani
Executive Director

Executive

14

B.P. Kalyani
Executive Director

Executive

15

S.E. Tandale
Executive Director

Executive

16

Sunil Kumar Chaturvedi


Executive
Executive Director

CURRENT TURNOVER
Bharat Forge limited current turnover is 1.3$ million

GROWTH STATISICS OVER PAST FIVE YEAR


Today, Bharat Forge operates in three continents: Europe,
North America and Asia. Over the last four years, the
Company has successfully made several acquisitions: Carl Dan
Peddinghaus and CDP Aluminiumtechnik (in Germany), Imatra
Kilsta AB (in Sweden), and Federal Forge in the USA. BFL also
has a majority stake in a joint venture with First Auto Works
(FAW) called FAW Bharat Forge (Changchun) Company Limited
that operates in China.
These businesses, along with Bharat Forges Indian operations
form the global BFL group whose performance gets
reflected in the consolidated accounts of Bharat Forge
Limited.
The standalone & consolidated financial performance is
detailed below (figures in Rs Million)

STANDALONE FINANCIAL PERFORMACE OF


THE LAST 5 YEARS

FY 2011

FY 2010

FY 2009

FY 2008

FY 2007

Total Income

29,935.47

18,887

21,064

22,849

19,453

EBIDTA

7,623.18

4,693

4,075

6,105

5,485

PBT

4,476.08

1,807

1,577

3,970

3,598

PAT

3,105.67

1,270

1,033

2,736

2,410

FINANCIAL PERFORMANCE
(CONSOLIDATED)
FY
2011

FY 2010

FY 2009

FY 2008

FY 2007

FY 2006

Total Income

51,544.41

33,787

48,427

47,516

42,752

30,851

EBIDTA

8,522.34

3,896

5,214

8,038

7,433

5,889

PBT after
4,444.80
Exceptional Item

(645)

1,107

4,498

4,363

3,925

PAT after
2,899.06
Minority interest

(634)

583

3,015

2,906

2,505

MAJOR PRODUCT LINE

Closed Die Forging


Crankshaft
Front Axle Beams
Steering Knuckle
Connecting Rods
Rocker Arm
Transmission Parts
Hubs
Oil & Gas
Open Die Forging

MAJOR BRANDS OFFERED UNDER EACH


PRODUCT LINE

OPEN DIE FORGINGS


The company currently has one 1600T double column pull-down type
press with material handling, heat treatment facilities and supporting
machining facilities to address the forging needs of the following
sectors.
Sugar Industry (Fully /Semi Machined)
Steel Plants
Mining
Fan and Pump
Tools & Plastic Injection Moulding
Cement Industry
Gear Manufacturing and Material Handling
Marine
Oil & Gas
Forging Industry
Wind Energy

The company is currently expanding its Open Die forging capabilities


by installing a 4000T press line with material handling and heat
treatment facilities.

SUGAR INDUSTRY
Fully / Semi-Machined

Mill Roller Shafts


Pinion Shafts
Tail Bars
Shredder Shafts
Cane Cutter Shafts
Fibrizor Shafts

STEEL INDUSTRY

Blooming Mill Rolls


Universal Couplings
Wobblers
Roll blanks for Cold Rolling Mills
Hardened Hot Rolling Mill Rolls for slab, plate mills, etc.
Trunnioms

GEAR INDUSTRY

Gear Blanks / Rims


Excavator Axles
Excavator / Shovel Components
Wheel and Gear Shafts

FANS AND PUMPS INDUSTRY

Integral Flange Shaft


Pump Casing
Stainless Steel Pump Shafts
Fluid End

OIL & GAS

Shafts
Casing / Tubing Spools
Open Forge Valve Body / Well Head Blocks
Tube Sheets
Interconnecting Blocks

TOOLS & PLASTIC INJECTION MODULING

P-20 Blocks for Plastic Injection Moulding


H-13 Tool Steel Blocks for Pressure Casting Tools

FORGING INDUSTRY

Die Blocks (DIN 2714 grade)


Crankshafts for upsetters
Container Assembly for Aluminium extrusion
Ready to assemble Hammer Spares like Rams / Tups / Sow
Blocks

SEAMLESS TUBE INDUSTRY

Piercing Mill Rows


Mandrel Bars and other toolings

WIND ENERGY
Wind Mill Shaft

CEMENT INDUSTRY

Pinion & Pinion Shafts


Kiln Support Rollers
Tie Rods
Crusher Shafts

MINNING

Conveyor Shafts
Pinions

MARINE

Propeller Shafts
Rudder Stock

OPERATIONS LOCATION OF SUBSIDIARIES,


BRANCH OFFICE, CORPORATE OFFICE

GLOBAL LOCATION

Branch (India)

BFL Corporate / Head Office - Pune

BFL Delhi

BFL Kolkata

BFL Jamshedpur

BFL Mumbai

BFL Bangalore

BFL Chennai

BHARAT FORGE OFFICES


Headquarters - India
Pune Cantonment
Mundhwa
Pune - 411 036
INDIA
Tel: +91-20-26702777
Fax: + 91-20-26822387
Email: info@bharatforge.com
Plant at Daun
CDP Bharat Forge GmbH
Julius Saxler - Str.4
D-54550 Daun / Vulkaneifel
Phone: ++ 49 (0) 6592 - 9501- 0
Fax: ++ 49 (0) 6592 - 9501 -11
Plant at Ennepetal
CDP Bharat Forge GmbH
Mittelstr. 64
D-58256 Ennepetal
Phone: ++ 49 (0)2333-796-0
Fax: ++ 49 (0)2333-796-388
E-mail: info@cdp-bharatforge.de
Plant at Brand - Erbisdorf
Bharat Forge Aluminiumtechnik GmbH
& Co. KG
Berthelsdorfer Str. 8
09618 Brand-Erbisdorf (Germany)
Tel. 0049 37322 16389
Fax 0049 37322 16333
Email: info@cdp-at.de

Bharat Forge America


2807 South Martin Luther King Jr. Blvd
Lansing, MI 48910
Telephone: 517.393.5300
Fax : 517.393.6256
Bharat Forge Scottish Stampings Limited
Neptune Works, East Park Road,
Ayr Scotland KA8 9HR
Telephone: ++ 44 (0) 1292 613400
Fax : ++ 44 (0) 1292 6134333
Bharat Forge Kilsta AB
P.O. Box 428, SE-69127 Karskoga,
Sweden
Telephone: ++ 46 58663200
Fax : ++ 46 58663209
FAW Bharat Forge (Changchun) Company Ltd
118-1 Dong Feng Da Jie
Changchun Municipality
Jilin Province
PRC

BHARAT FORGE OFFICES IN INDIA


Chennai (Madras)
Bharat Forge Limited
Fagun Mansion 3rd Floor
26, Ethiraj Salai
Chennai- 600 105
Tel : +91-44-28272116
Fax: +91-44-28270921
Email : bflmds@vsnl.com
New Delhi
Bharat Forge Limited
Antriksh Bhavan, 14th Floor
22 Kasturba Gandhi Marg
New Delhi-110 001
Tel : +91-11-3312484 / 3312946
Fax: +91-11-3357083
Email:bfldelhi@bol.net.in /
bhaforge@bol.net.in
Mumbai
Bharat Forge Limited
Mittal Towers, B Wing
15th Floor, Opp. New Council Hall
Nariman Point,
Mumbai - 400 021
Tel : +91-22-22830317/22830523
Fax: +91-22-22040053
Email : bharatforgemumbai@vsnl.com

Kolkata (Calcutta)
Bharat Forge Limited
20 Netaji Subash Road
Kolkata - 700 001
Tel : +91-33-22305976 / 22306592
Fax: +91-33-28500017
Email : bflcal@vsnl.net
Jamshedpur
Bharat Forge Limited
61-A , Rajendra Nagar
Sakchi
Jamshedpur - 831 001
Tel / Fax : +91-657-2426732
Email : jsr_bfljsr@sancharnet.in
Bangalore
Bharat Forge Limited
23/2, 2nd Floor
Kammanahalli Main Road
Next To Vinayak Temple
Opp Libetrty Shoe Mart
St Thomas Town Post
Bangalore 560084
Tel: (080) 25806570
Fax: (080) 25806570
E-mail: bharath_forge@dataone.in

NUMBER OF EMPLOYEES

Employee Strength is over 10,000

RECOGNITION /AWARDS
2011
Bharat Forge receives the prestigious Golden Peacock Innovative
Product / Service Award 2011
Bharat Forge Limited wins the 6th Annual CIO Awards 2011
ITI Khed awarded Educational Excellence Award
Bharat Forge receives the Golden Peacock Award for Best HR
Practices 2011
Baba Kalyani receives the highest French civilian award : "Chevalier
de lOrdre de la Legion dHonneur
Bharat Forge receives India Shining Star CSR Award
Chairman, Mr. B N Kalyani honored with the Udyog Ratna Award
for 2010-11
2010
Bharat Forge Limited honoured with the INS Industrial Excellence
Award
Bharat Forge receives the EEPC India National Award for Export
Excellence 2009 - 2010
BABA KALYANI DECORATED WITH COMMANDER FIRST
CLASS OF THE ROYAL ORDER OF THE POLAR STAR
2009
Bharat Forge receives National Award for Best HR Practices 2009
Bharat Forge receives the Golden Peacock Award for Occupational
Health and Safety 2009

2008
Mr B N Kalyani, Chairman & Managing Director, Bharat Forge
honoured with the Prestigious Padma Bhushan Award
2006
Mr B N Kalyani, Chairman & Managing Director, Bharat Forge
honoured with the 7th Annual Ernst & Young Entrepreneur of the
Year Award Manufacturing - 2005
Bharat Forge receives the IGCC Award for the Year 2005
Mr B N Kalyani, Chairman & Managing Director, Bharat Forge
Limited awarded the Global Entrepreneur of the Year Award.
Mr. B N Kalyani Chairman and Managing Director, Bharat Forge
receives the Rashtra Bhushan Puraskar
2005
Bharat Forge awarded with the Outstanding Organization Award
2004
Bharat Forge receives the Best Value Creator Company Award at the
Third Annual Outlook Money Awards 2004
Mr B N Kalyani, Chairman & Managing Director, Bharat Forge
receives the Business Standard CEO of the Year 2004
Bharat Forge included in Forbes 'Best under a Billion' list for the
third consecutive year
2004
Bharat Forge included in Forbes Best under a Billion list for the
second consecutive year

MARKET SHARE

SYMBOL

NAME

BHARATFORST.BO BHARAT
FORGE
BHARATFORG.BO BHARAT
FORGE
LTD
BHARATFOR.NS
BHARAT
FORGE
LTD
BHARAT_a.NS
BHARAT
FORGE CO
LTD
BHARATFOQF.BO BHARAT
FORGE

LAST TYPE EXCHAN


TRADE
GE
283.15

STOCK BSE

322.65

STOCK BSE

322.80

STOCK BSE

326.00

STOCK BSE

320.40

STOCK BSE

MAJOR COMPETITORS

v Aditya Forge Ltd


v Ahmednagar Forgings Ltd
v BCL Forgings Ltd
v EL forge Ltd
v Hilton Metal Forging ltd
v Kalyani Forge Ltd
v LGB Forge Ltd
v M M Forgings Ltd
v Mahindra Forgings Ltd
v Micro Forge ( India) Ltd
v Patheja Forgings & Auto Parts Manufactures Ltd
v Pradeep Metal Ltd
v Rajkumar Forge Ltd
v Pamkrishna Forgings Ltd
v SS Forging & Engineering Ltd

CORPORATE STRATEGY

At the Kalyani Group, the key to successful marketing is a thorough


understanding of the environment in which your business operates,
your position in the market place, products and service opportunities,
competition, and most of all changing customer need.
With a business experience of 27 years, Group Chairman, Mr B N
Kalyani believes that the ability to innovate and change is critical to
the ongoing success of any business. Anticipating what the future may
bring and predicting the needs of customers in a fast changing
marketplace can be extremely difficult; yet that really is the basis of
any strategy.
POSITIONING
Kalyani Group Companies are positioned No.1 or No.2 in all main
businesses in the Indian Market and are also exporting to international
OEMs

1 in Forging & Machined components

1 in Axle Aggregates in India

1 in Wheels in India

1 in Alloy Steel

TOTAL EXPORT F.Y 2010 2011


Topline growth ahead of estimates: Bharat Forge (BFL) reported
26.6% YoY growth in its top-line at Rs9.1bn (PLe-Rs8.7bn) on
account of an improvement of 57.6% YoY in export revenues at
Rs4.3bn (Rs3.8bn in Q1FY12). Tonnage production for the quarter
grew by 16.5% YoY to 53,740MT (52,959MT in Q1FY12). EBITDA
was in line with our estimate at Rs2.0bn, whereas EBITDA margin
declined by 60bps QoQ to 23.7%. However, EBITDA/kg grew by
6.2% YoY to Rs40.1/kg (Rs39.4/kg in Q1FY12), thereby, leading to a
growth of 23.7% YoY in absolute EBITDA. Due to lower interest
expenses, PAT (adjusted for Rs65m one-time other income) grew by
46.6% to Rs1bn (PLe: Rs949m).

NonAuto revenues increased by 51.3%: Driven by higher


contribution of the new non-auto facilities at Baramati, which grew by
86.4% YoY in revenues at Rs1.8bn (Rs1.6bn in Q1FY12), the overall
non-auto business grew by 24.1% YoY to Rs 3.3bn (Rs2.8bn in
Q1FY12). Non-auto contribution in standalone revenues now stands
at ~40%.

Overseas subsidiaries margins expand 170bps YoY: Top-line, on


a consolidated basis, grew by 25.3% YoY, with EBITDA
performance improving by 29.2%. Overseas subsidiaries reported a
top-line growth of 23.4% YoY to Rs6.5bn, with an EBITDA margin
of 5.9% for the quarter. Adj. PAT, on a consolidated basis grew
by 52.6% YoY at Rs1bn (Rs1bn in Q1FY12).

Outlook and Valuation: Operating leverage, coupled with higher


utilization at the new non-auto facility in FY13E, will lead to
EBITDA margins of ~25% on a standalone basis by FY13E. We
value the company on SOTP basis, with standalone business valued at
Rs309/share and subsidiaries/JVs valued at Rs26/share. With
improving ROE and strong cash flows, we reiterate our Accumulate
rating on the stock

MAJOR IMPORTING / EXPORTING


COUNTRIES

v France
v India
v Ireland
v Singapore
v United Kingdom
v Spain
v United States
v Venezuela
v Netherlands
v Germany
v Dubai
v Madrid
v Houstan
v Oklahoma C
v Mara Caibo
v Amsterdam

LIST OF GOODS/SERVICES EXPORTED BY


THE COMPANY
TOP EXPORT PRODUCT INFORMATION OF BHARAT
FORGE LIMITED
HS Code Product Description
72249009 Alloy Steel Forging (rough)sion Sr No 36 1 Plug Forging
10 1500
72249099 Sion Sr.no.c 1001 Connecting Rod Forging S
72284000 M/c Bonnet 2 9/16 10k Part No 140058-01-70-02
(epcgLic No.03500 )
73181500 Hexagonal Socket Bolt
73261100 Alloy Steel Forging (rough) 2bonnet Nut 011775-09
Sion Sr No C 361

TOP IMPORT PRODUCT INFORMATION OF BHARAT


FORGE LIMITED
HS Code Product Description
27100029 Gear Oil Zx-15 Lubricating Oil
27101119 Lubricants Ar-1ep Grease (walt
34039900 Graphite Based Die Lubricant (220 Kg Per Barrel)
ga 32/cdp
34039901 Graphite Die Lubricnt Sinolga

FUTURE PLANS
Bharat Forge, the Pune based forging firm, plans to invest Rs 1,2001,500 crore in its non-automotive sector business over the next threeand-a-half years.
This would mark the beginning of the companys second phase of
expansion in the non-automotive sector, primarily aerospace, marine
and nuclear power plants.
In the last two years, the company has invested nearly Rs 400 crore
for expanding in the non-automotive business, and in the coming
years we will invest an additional Rs 1,200-1,500 crore to mainly
manufacture forgings of up to 500 tonnes needed for large power
plants and nuclear power plants, Baba Kalyani, chairman and
managing director, Bharat Forge, said at the inauguration of ring
rolling facility at Baramati on Monday.
The company, which currently manufactures forgings of 40-50
tonnes, is targeting 40% of its total sales from the non-automotive
sector by 2012 from the present 22%.
The first phase of the non-automotive sector expansion included
setting up of a 4,000 tonnes open die press facility at Pune and the
Centre for Advanced Manufacturing at Baramati which includes an 80
metric tonne counterblow hammer facility and the ring rolling facility.
The proposed Rs 1,200 crore investment would be for expansion at
Baramati and Pune and towards facility for making power plant
equipment at Mundra in Gujarat under a joint venture with Alstom.
The facility will manufacture 300-800 mw subcritical and
supercritical equipment with an annual capacity of 5,000 mw.
The joint venture will also explore possibilities of manufacturing
turbines and generators for gas-based plants and nuclear applications.
Apart from this, Bharat forge would set up two more facilities at
Baramati. While the first one to be inaugurated by June this year
would make crankshafts of about 5 metre long and 4 tonne weight for

heavy locomotive industry,the second unit to be opened by end of


2010 would make 12 metre and 35 tonne crankshafts, mainly to be
usedfor large marine applications and aerospace industry.
The Baramati facilithas been set up to primarily cater to the nonautomotive sector.
India is still lagging behind in heavy industry component
manufacturing to such an extent that we are highly dependent on
overseas companies for critical components. Therefore, in future we
would require facilities which can manufacture supercritical and ultrasupercritical technologies and Bharat Forge through its expansion is
making a move in that direction, Kalyani said

EXPORT IMPORT PROCEDURERS

1. SALES CONTRACT
An agreement between the buyer and the seller stipulating every
details of the transaction. It is a legally binding document. It is
therefore advisable to seek legal advice before signing the contract.

Legally, there are four basic elements of a sales contract.


o What is being sold.
Description of each item.
o At what price.
Unit and total price.
Clearly specify the currency.
o In what quantity.
o Of what quality.
New, used, premium, standard, etc.

You may write up a formal contract of sale, or you may use:


o A purchase order signed by the buyer.
o An order acknowledgment countersigned by the buyer.
o A pro forma invoice

An order acknowledgement should supplement a purchase


order by:
o Confirming terms and conditions of the sale not
covered by the purchase order.
Delivery schedule
Product warranty
Payment schedule

A pro forma invoice is a document prepared in advance of a


sale to provide evidence of the final form and amount of
invoice.
o It is a form of a quotation.
Specify a time limit for the validity of the offer.
o A pro forma invoice should be printed on letterhead
stationery.
o A pro forma invoice should contain:
Description of each item
Quantity of each item
Unit and total price
Terms of sale
Shipping and packing charges
Net and gross weight

A pro forma invoice should contain enough detail to help the


buyer to:
o Open a letter of credit.
o Obtain an import permit.
o Calculate the duty on the items.

2. COMMERCIAL INVOICE:It is a formal demand note for payment issued by the exporter to the
importer for goods sold under a sales contract. It should give details
of the goods sold, payment terms and trade terms. It is also used for
the customs clearance of goods and sometimes for foreign exchange
purpose by the importer.

3. BILLS OF ENTRY.
A declaration by an importer or exporter of the exact
nature, precise quantity and value of goods that have landed or are
being shipped out. Prepared by a qualified customs clerk or broker, it
is examined by customs authorities for its accuracy and conformity
with the tariff and regulations. See also customs entry.
The different kinds of bills of entry are used for following
purpose:

1. Bills of entry for goods imported for home consumption (white


coloured).
2. Bills of entry for warehouse (yellow coloured).
3. Bills of entry for ex-bond clearance for home consumption(green
coloured).

A bill of entry is a formal declaration describing goods which are


being imported or exported. The bill of entry is examined by customs
officials to confirm that the contents of a shipment conform with the
law, and to determine which taxes, tariffs, and restrictions may apply
to the shipment. This document must be prepared by the importer or
exporter, with many companies hiring a clerk specifically to handle
the process of preparing bills of entry.
A typical bill of entry includes a description of the goods in the
shipment, including details and the quantity of the goods, along with
an estimate of their value. Customs officials reserve the right to
inspect the shipment to determine whether or not it is consistent with
the bill of entry, and discrepancies can be grounds for legal
proceedings. Once a bill of entry has been reviewed and the shipment
has been inspected, it can be cleared for sale or transfer. If there is a
problem, customs may opt to confiscate the goods.

Many nations have specific laws about how bills of entry should be
formatted and presented. It is important to have accurate
documentation, or goods can be held up in customs. This can cause an
inconvenience in some cases, and spoilage or destruction of the goods
in others; a shipment of fruit, for example, will not hold up through a
lengthy retention by customs while details of the shipment are worked
out.

4. PERFORMA INVOICE

An invoice provided by a supplier prior to the shipment of


merchandise, informing the buyer of the kinds and quantities of goods
to be sent, their value, and importation specifications (weight, size
and similar characteristics). This is not issued for demanding payment
but may be used when applying for an import license/permit or
arranging foreign currency or other funding purposes.

Contents of Performa invoice

Name and address of the exporter.


Name and address of the importer.
Mode of transportation.
Name of the port of loading.
Name of the port of discharge and final destination.
Provisional invoice number and date.
Exporters reference number.
Buyers reference number and date.
Name of the country of origin of goods.
Name of the country of final destination.
Marks and container number.
Number and packing description.
Description of goods giving details of quality.
Signature of the exporter with date.

Documentary Letters Of Credit


DOCUMENTARY credit is frequently the agreed method of
settlement for international trade. The buyer's bank reimburses the
seller against presentation of documents drawn in compliance with
conditions stipulated in the documentary credit by the buyer.
There are advantages to both the buyer and seller when settlement is
arranged by documentary letter of credit. First, the buyer knows that
payment will only be made if the documents received comply strictly
with the terms and conditions of the credit as stipulated by the buyer.
Second, the seller knows that payment will be received provided the
terms and conditions of the credit are strictly complied with.
Documentary letter of credit
A documentary credit can be defined as a conditional undertaking of
payment given by a bank. Expressed more fully, it is a written
conditional undertaking issued on behalf of the importer (applicant)
by the issuing bank to the exporter of goods (beneficiary) to pay for
the goods or services, provided the documents submitted conform
strictly to terms and conditions of the credit.
From this definition it can be seen that there are basically three parties
to a documentary credit: a) the buyer/importer, who requires that a
credit be issued in his favour; b) the beneficiary (the supplier of
goods); and c) the issuing bank which issue s the credit at the request
of the buyer or importer. The credit is usually (but not always)
advised to the beneficiary through a bank in the beneficiary's country
(the advising bank).
All documentary letters of credit are subject to the provisions of
Uniform Customs and Practices (UCP) for Documentary Credits,
Brochure No. 500 issued by International Chamber of Commerce,
wherever it is incorporated into the text of the credit as such.

BILLS OF LADING

A legal document between the shipper of a particular good and the


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

CERTIFICATE OF ORIGIN
A Certificate of Origin (often abbreviated to CO or COO) is
a document used in international trade. It is a printed form, completed
by the exporter or its agent and certified by an issuing body, attesting
that the goods in a particular export shipment have been wholly
produced, manufactured or processed in a particular country.
The origin does not refer to the country where the goods were
shipped from but to the country where they were made. In the event
the products were manufactured in two or more countries, origin is
obtained in the country where the last substantial economically
justified working or processing is carried out. An often used practice
is that if more than 50% of the cost of producing the goods originates
from one country, the "national content" is more than 50%, then, that
country is acceptable as the country of origin.
When countries unite in trading agreements, they may allow
Certificate of Origin to state the trading bloc, for example,
the European Union (EU) as origin, rather than the specific country.
Determining the origin of a product is important because it is a key
basis for applying tariff and other important criteria. However, not all
exporters need a certificate of origin, this will depend on the
destination of the goods, their nature, and it can also depend on the
financial institution involved in the export operation.

CONTENT OF CERTIFICATE OF ORIGIN

1. Name and the address of the exporter.


2. Name and the address of the consignee.
3. Name and the address of the notify.
4. Name and logo of the chamber of commerce.
5. Name of the port of lading.
6. Name of the port of discharge and place of delivery.
7. Mark and container number.
8. Packing and container description.
9. Total number of container and package.

DATA ANALYSIS
FLOW CHART: Internal procedure from receiving the order till
the final dispatch.

CUSTOMER ENQUIRY

NEGOTIATION

ORDER ACCEPTANCE

INFORM CUSTOMER

PREPARE DOCUMENT

MANUFACTURING

DISPATCH

PAYMENT

PACKING LIST

Itemized list of articles usually included in each shipping package,


giving the quantity, description, and weight of the contents. Prepared
by the shipper and sent to the consignee for accurate tallying of the
delivered goods. Also called bill of parcels, packing slip, or
unpacking note.
The exporter prepares the packing list to facilitate the buyer to
check the shipment. it contents the detailed description of the
goods packed in each case, their gross and net weight etc. the
difference between a packing note and a packing list is that the
packing note contains the particulars of the contents of an
individual pack, while the packing list is a consolidated statement
of the contents of a number of cases or packs. The contents of
packing list and commercial invoice are same but in packing list
number and packing description are mentioned.
Normally, ten copies of the
packing list/note should be prepared. The first is to be sent with
the shipping documents , two copies in advance to the buyer , one
to the shipping agent and the remaining retained by the exporter.

SHIPPING BILL
A shipping list, packing list, waybill, packing slip (also known
as a bill of parcel, unpacking note, packaging slip, (delivery)
docket, delivery list, manifest or customer receipt), is
a shipping document that accompanies delivery packages, usually
inside an attached shipping pouch or inside the package itself. It
commonly includes an itemized detail of the package contents and
does not include customer pricing. It serves to inform all parties,
including transport agencies, government authorities, and
customers, about the contents of the package. It helps them deal
with the package accordingly.
Shipping bill is the main customs documents, required by the
customs authorities for granting permission for the shipment of
goods. The cargo moves inside the dock area only after shipping
bill is duly stamped, i.e., certified by the customs. Shipping bill is
normally prepared in five copies:1.
2.
3.
4.
5.

Customs copy.
Drawback copy.
Export promotion copy.
Port trust copy.
Exporters copy.

Based on the incentives offered by the government, customs


authorities have introduced three types of shipping bills:-

Drawback shipping bill(green)


Dutiable shipping bill (yellow)
Duty-free shipping bill(white)

BILLS OF EXCHANGE

A non-interest-bearing written order used primarily in


international trade that binds one party to pay a fixed sum of
money to another party at a predetermined future date.
An unconditional order issued by
a person or business which directs the recipient to pay a fixed sum
of money to a third party at a future date. The future date may be
either fixed or negotiable. A bill of exchange must be in writing
and signed and dated also called draft.
Bills of exchange are similar to checks and promissory notes.
They can be drawn by individuals or banks and are generally
transferable by endorsements. The difference between a
promissory note and a bill of exchange is that this product is
transferable and can bind one party to pay a third party that was
not involved in its creation. If these bills are issued by a bank,
they can be referred to as bank drafts. If they are issued by
individuals, they can be referred to as trade drafts.

SHIPPING BILL OF EXPORT


Shipping bill of export is the main document by the customs
authority for the allowing shipment. A shipping bill is used by the
shipping agent and represents some kind of certificate.

For all parties, included ships owner, seller, buyer and some
other parties for each one represent a kind of certificate
documents.

PAYMENT
MODE OF PAYMENT

There are different methods of payment in international trade. The


fact that the buyer and seller are located in different counties,
minimizing risk becomes a crucial part of the transaction. Some of
the popular modes of payment are:

Prepayment via telegraphic transfer.


Open account.
Documentary collection.
Document against payment (D/P)- sight.
Document against acceptance (D/A)-after sight.

LETTER OF CREDIT
THE L/C is a guarantee given by the buyers bank that it will pay
for the goods provided the exporter provides a set of documents
such as bill of lading and freight documents . the technical term
for L/C is documentary credit. L/C deals with document , not
goods. Thus it works in favor or both the buyer and the seller.

Transferable L/C And Non-Transferable L/C


With a transferable L/C, a beneficiary (exporter/seller) has the
right to give the instruction to the paying or accepting bank to
make the credit (funds) available to one or more third parties,
sometimes referred as secondary beneficiaries . A non
transferable L/C is when the bank makes credit available to the
beneficiary only and cannot be transferred to any other party.
Back To-Back Letter Of Credit
The parties involved in a back-to-back L/C are the buyer and his
bank, the seller / manufacturer and his bank and the
manufacturers subcontractor and his bank. This type of credit
transaction is used when a seller/manufacturer has to buy a
component or farm out part of production, but may not have the
cash flow to do so. What is apply to his bank for a L/C, identical
to the original L/C he received from the buyer but of a lesser
value. This second L/C, called a back-to-back, is sent to the
subcontractors bank , assuring the subcontractor of payments.

CSR ACTIVITIES

EDUCATION
As part of its Corporate Social Responsibility, Bharat Forge actively
supports Pratham Pune Education Foundation (PPEF). PPEF helps in
imparting primary education to children of economically challenged
and migrant workers, mainly in the age group of 3-14 years. Mr. B. N.
Kalyani is the Founder and Chairman of PPEF. This initiative is
actively funded by BFL and over the past 4 years, has touched the
lives of over 50,000 children in Pune, and has become an important
catalyst for women empowerment.
PPEF operates through an extensive network of Balsakhis, Balwadis,
Bridge Courses and Outreach Programmes. PPEF's contributions have
resulted in Pune achieving almost 100% literacy.

COMMUNITY INITIATIVE

As a socially responsible employer, the Kalyani Group has a strong


sense of community responsibility, and encourages its businesses to
enhance their relationships with the communities in which they
operate.
Bharat Forge Ltd., sponsors community centres for 250 families in
and around Pune. Of these, 80 employee families are involved in
income-generating activities such as hand-glove stitching, stitching
uniforms and making of incense sticks. After vocational training these
members then use financial assistance from self help groups (SHGs)
to start their own small businesses. BFL is involved in developing
micro credit savings groups within these families. The company

continues to remain engaged with the members for any assistance that
newly formed ventures may need. In addition, BFL also conducts
awareness activities vocational training, personality camps and sociocultural activities for these families, which are greatly appreciated by
them.
The staff at Bharat Forge America, also engage themselves in
community services in the local Lansing community. These efforts
include home rebuilding and refurbishing to help the local disabled
and elderly couples. A group of 18 BFA employees spend an entire
afternoon on a week end replacing doors, repairing roofs and doing
drywall replacement.

ENVIRONMENT

As a corporate entity, we are committed to good environmental


practices and are conscious of our responsibility towards creating,
maintaining and ensuring a safe and clean environment.
All Kalyani Group businesses are at the forefront of improving their
performance while enhancing the environment. They are uniquely
positioned to use their resources to grow their organizations in an
environmentally sound and responsible manner.
We as a group believe that environmental quality is a key ingredient
for long-term profitability. Environmental Best Practices are being
employed increasingly within the group to improve business
productivity, cut waste and reduce costs.
The Group is committed to minimizing any adverse effects of its
activities on the environment, while continuously improving its
environmental performance.
Bharat Forge has invested in Renewable Energy Project generating
Green Energy. Added to this it is buying Green Energy power, which
put together is approx. 30% of Bharat Forge, Mundhwa plant

consumption.
This usage of Green Energy is considered to be a reduction of Carbon
Emission to the extent of approx. 30,000 tons per annum and this is
recognized & certified by United Nations Framework Convention on
Climate Change (UNFCCC) under Kyoto Protocol.
As an active participant in the process of promoting the
environmental awareness and in the process of beautifying and
maintaining the civic infrastructure of Pune, BFL maintains several
gardens across the city.

HEALTH AND SAFETY

The group is committed to having a safe and pleasant working


environment. Health & safety best practices form an integral part of
the
groups
business
activities.
We believe that our employees are the key to our company's success
and it is our moral responsibility to ensure that they have a safe &
healthy working environment Safety is a top priority in all our
operations across the group. All group companies have a safety
committee that meets regularly to provide updates on safety issues,
conduct rehearsals of safety procedures and onsite emergency action
plan and training programs on safety related issues. Our goal is to
drive injuries, occupational illnesses and operational incidents as
close to zero as possible. To realize our zero-accident goal, we are
taking further measures to reduce risks by undertaking risk
assessment of our manufacturing facilities. Operation manuals are
prepared and each operation unit also educates its employees on labor
safety.

The group also continues its drive of 'Keep Fit' which it started in
2002. The purpose of this drive is to reduce absenteeism due to illness
and to encourage individuals to follow a healthy lifestyle. The Keep
Fit drive includes regular health check-ups including health, diet and a
fitness test.