Hindalco Industries LTD 15112010

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INTRODUCTION OF HINDALCO
INDUSTRIES LTD
ADITYA BIRLA GROUP
A US$ 29 billion corporation, the Aditya Birla Group is in the

League of Fortune 500. It is anchored by an extraordinary force of
130,000 employees, belonging to 30 different nationalities. In the
year 2009, the Group was ranked among the top six great places for
leaders in the Asia Pacific region, in a study conducted by Hewitt
Associates, RBL Group and Fortune magazine. In India, the Group
has been adjudged the best employer in India and among the top 20
in Asia by the Hewitt-Economic Times and Wall Street Journal Study
2007.
Over 60 per cent of the Group's revenues flow from its overseas
operations. The Group operates in 25 countries - India, UK,
Germany, Hungary, Brazil, Italy, France, Luxembourg, Switzerland,
Australia, USA, Canada, Egypt, China, Thailand, Laos, Indonesia,
Philippines, Dubai, Singapore, Myanmar, Bangladesh, Vietnam,
Malaysia and Korea.
Globally the Aditya Birla Group is:
:: A metals powerhouse, among the world's most cost-efficient

aluminium and copper producers. Hindalco-Novelis is the largest
aluminium rolling company. It is one of the three biggest
producers of primary aluminium in Asia, with the largest single
location copper smelter
:: No.1 in viscose staple fibre
:: The fourth-largest producer of insulators
:: The fourth-largest producer of carbon black
:: The tenth-largest cement producer globally, and the largest in
India
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In India:
:: Largest premium branded apparel company

:: The second-largest producer of viscose filament yarn
:: The second-largest in the chlor-alkali sector
:: Among the top five cellular operators
:: Among top 10 Indian BPO companies by revenue size
:: Among the top five asset management and private sector life
insurance companies
:: Among the top three supermarket chains in the retail business
Working in 3,700 villages
ADITYA BIRLA GROUP
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key products and
Locations Capacities Country
brands
Hindalco Industries Ltd.
Alumina Chemicals Renukoot (Uttar 1,160,000 tpa India
Pradesh),
Muri (Jharkhand),
Belgaum (Karnataka)
Primary Aluminium Renukoot, Hirakud 489,000 tpa
(Orissa),
*Taloja
Extrusions Renukoot, Alupuram 27,700 tpa
Rolled products Belur(West Bengal), 200,000 tpa
Taloja(Maharashtra),
Renukoot,
Mauda(Maharashtra)
Wire rods Renukoot, 64,400 tpa
Alupuram(Kerala)
Aluminium foil Silvassa (Dadra & 11,000 tpa
Nagar Haveli),
Kalwa(Maharashtra)
Aluminium Wheels Silvassa (Dadra & 300,000 pcs
Nagar Haveli)
*For Taloja recycling plant
Indal (subsidiary of Hindalco)
Foil Rolling Kollur (Andhra 4,000 tpa
Pradesh)
key products and

Locations Capacities Country
brands
Birla Copper (Hindalco Industries Ltd.)
copper cathodes Dahej (Gujarat) 500,000 tpa India
continuous cast 97,200 tpa
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copper rods
Sulphuric acid 1,670,000 tpa
phosphoric acid 180,000 tpa
gold (Birla Gold) 15 mt
silver (Birla Silver) 150 mt
DAP and complexes 400,000 tpa
(Birla Balwan)
Hindalco Industries Ltd. (Aditya Birla Minerals Resources Pty.
Ltd.)
copper cathodes Nifty mines 25,000 tpa Australia
copper in Mt. Gordon mines 40,000 tpa Australia
concentrate
Power Mt. Gordon mines 28mw Australia
Key products and brands Capacities Country

Grasim Industries Ltd.
white cement Birla White 475,000 tpa India
grey cement UltraTech 13.12 mtpa
Cement
(formerly
Birla Plus),
Birla Super
UltraTech Cement Ltd.
ordinary Portland 17 mtpa
cement, Portland blast
furnace slag cement,
Portland pozzolana
cement and grey
Portland cement
key products and brands Capacities Country

Aditya Birla Nuvo Ltd (Hi-Tech Carbon)
carbon black Birla Carbon 230,000 mtpa India
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Thai Carbon Black Co. Ltd.
carbon black Birla Carbon 220,000 mtpa Thailand
Alexandria Carbon Co. S.A.E
carbon black Birla Carbon 285,000 mtpa Egypt
Liaoning Birla Carbon Co. Ltd.
carbon black Birla Carbon 55,000 mtpa China
key products and brands Capacities Country

Pulp
rayon grade pulp 70,000 tpa India
AV Cell Inc.
softwood / hardwood pulp 122,500 tpa Canada
AV Nackawic Inc.
dissolving pulp 189,000 tpa Canada
Fibre
viscose staple Birla Viscose 270,100 tpa India
fibre (VSF)
Thai Rayon Public Company Ltd.
VSF Birla Viscose 110,000 tpa Thailand
PT Indo Bharat Rayon
VSF Birla Viscose 155,000 tpa Indonesia
Thai Acrylic Fibre
acrylic fibre Texlan 100,000 tpa Thailand
Alexandria Fiber Company, S.A.E
acrylic fibre 18,000 tpa Egypt
Yarn
Aditya Birla Nuvo Ltd.
viscose filament Ray One 16,400 tpa India
yarn
Aditya Birla Nuvo Ltd. (Jaya Shree Textiles)
flax yarns 15,340 spindles India
worsted yarns 25,548 spindles
PT Indo Liberty Textiles
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rayon yarn, 45,120 ring Indonesia
polyester, blended spindles
yarn
PT Elegant Textile Industry
rayon, polyester, 168,088 spindles Indonesia
rayon-polyester
blended spun yarn
PT Sunrise Bumi Textiles
viscose rayon, polyester viscose, 89,376 spindles Indonesia
spun polyester, polyester combed
cotton, anti pill yarn, sewing
thread, high twist yarn, reverse
twist yarn, flame retardant yarn,
rayon cotton blended yarn, micro
denier polyester rayon yarn, rayon
silk yarn, slub yarn, lycra core
spun yarn
Indo Phil Acrylic Manufacturing Corporation
high bulk acrylic dyed yarn, non- 3,700 mtpa Philippines
bulk acrylic dyed yarn
Indo Phil Textiles Mills Inc
poly viscose blended yarn, poly 13,500 mtpa Philippines
cotton blended yarn, polyester
yarn
Indo Phil Cotton Mills Inc
cotton yarn 10,000 mtpa Philippines
Indo Thai Synthetics Co. Ltd.
synthetic yarns 98,568 spindles Thailand
Fabrics
fabric - polyester, viscose, silk 146 looms India
and wool blends
Uncrushables, Ice Touch, Purista, 18 million metres
and CleanFab

Pure Linen and Linen Club 107 looms India
Linen Blends
Flame Retardent Pyroguard
Fabrics
Branded apparel
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Aditya Birla Nuvo Ltd. (Madura Garments)
Ready-to-Wear Louis Philippe, India
Garments Allen Solly
Van Heusen,
Peter England
Key Products and Brands Capacities Country

Indo Gulf Fertilisers Ltd.
Urea Birla Shaktiman 864,600 mt India
Birla Copper (Hindalco Industries Ltd.)
DAP/NPK Birla Balwan 400,000 tpa India
complexes

Caustic Soda 258,000 tpa India
Caustic Soda 82,125 tpa India
Liquid Chlorine 50,340 tpa
Hydrochloric Acid 5,475 tpa
Tanfac Industries Ltd.
Aluminium Fluoride 17,000 tpa India
Hydrofluoric Acid 17,000 tpa
Bihar Caustic and Chemicals Ltd.
Caustic Soda Lye 92,750 mt India
Liquid Chlorine 65,785 mt
Hydrochloric Acid 29,040 mt
Sodium Hypochlorite 1,800 mt
Compressed Hydrogen 17,42,400 nm3
Aluminium chloride 12000 tpa
Captive Power Plant 30 mw
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Aditya Birla Chemicals (Thailand) Ltd.
Sodium Triployphosphates, Polyphos® Thailand
Tetrasodium Pyrophosphate, Epotec
Sodium Hexametaphosphate, Birlasulf-SS,
Sodium Acid Pyrophosphate, Birlasulf-SM,
Monosodium Phosphate, Birlasol 35
Disodium Phosphate,
Trisodium Phosphate,
Speciality Phosphates
Epoxy Resins (bis-a and bis-f),

Diluents, Curing Agents
and Allied Products
Sodium Sulphite, Sodium

Metabisulphite,
Sodium Bisulphite
Epichlorohydrin
Caustic Soda
Chlorine
Thai Peroxide Co. Ltd.

Hydrogen Peroxide, Peracetic Encare, 15,000 Thailand
Acid, Calcium Peroxide Ecare, Aqua- mtpa
x,
Birlox 5,
Birlox 12,
Ocare
PT. Indo Raya Kimia
Carbon Disulfide 50,000 tpa Indonesia

Essel Mining & Industries Ltd
Iron and Manganese Ore 15 million tons India
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Pan Century Surfactants Inc.
Fatty Acids 55000 mtpa Philippines
Fatty Alcohol 30000 mtpa
Glycerin 6500 mtpa

Aditya Birla Insulators
Insulators 38,800 tpa India

PSI Data Systems Ltd. (subsidiary of Aditya Birla Nuvo Ltd.)
IT solutions (banking, finance India
and insurance)

Aditya Birla Minacs Worldwide Limited (subsidiary of Aditya
Birla Nuvo Ltd.)
BPO / ITES 9,089 seats India

Birla Global Finance Company Ltd.
Financial Services India
Birla Sun Life Insurance Company Ltd.
Insurance Solutions India
Birla Sun Life Asset Management Company Ltd.
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Mutual Funds India
Birla Sun Life Distribution Company Ltd.
Investment Planning Services India
Birla Insurance Advisory Services Ltd.
Non-Life Insurance Advisory India
Services

Idea Cellular
Cellular Services Idea 21 million India
subscriber base
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HINDALCO TODAY
Hindalco ranks as one of the largest Aluminium producer in

India and contributes about 35% of the total Aluminium
production of the country. The company’s fully integrated
Aluminium operations consist of the mining of Bauxite,
conversion of Bauxite into Alumina, production of primary
aluminium from Alumina by electrolysis and production of
properzi redraw rods, rolled products and extrusions.
Capacities Present
Power 575 MW
Alumina 4,50,000 MT p.a.
Aluminium 2,42,000 MT p.a.
Rolled products 80,000 MT p.a.
Extrusions 15,000 MT p.a.
Wire rods 50,000 MT p.a.
Foils 5,000 MT p.a.
Co-generation 37 MW
HINDALCO’S STRATEGY
EFFICIENCY FOCUS: To be one of the lowest cost producers
globally.
EFFECTIVENESS FOCUS: To continue to remain the market

leader domestically.
GROWTH FOCUS: To purchase value adding growth opportunities

in aluminium.
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INTRODUCTION
GENESIS:
Aditya Birla Group traces its origin back to the tiny village of Pilani
in the Rajasthan desert, where, late Shri Seth Shiv Narayan Birla
started cotton-trading operations in 1857. Then one visionary – the
late Shri G.D Birla set up India’s first integrated aluminium
manufacturing unit at Renukoot, in 1962, backed by captive power
plant at Renusagar in 1967.
It further evolved under the dynamic leadership of the late Shri
Aditya Vikram Birla – a prominent figure in the Indian industry,
under whose stewardship Hindalco attained its leadership position in
aluminium. Today our Group chairman, Dr. Kumar Manglam Birla has
put together the building blocks to make Indian business a global
force.
HINDALCO-An Overview
Group Today
The Aditya Birla Group is India’s first truly multinational
corporation (MNC), whose over 60% of revenues flow from its
operations across the world.
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Over 75 units in India and overseas as well (in Thailand,
Indonesia, Malaysia, Philippines, Egypt and Canada) and
international trading operations spanning several countries
including Singapore, Dubai, Russia, Vietnam, Myanmar and China
make it India’s first truly multinational conglomerate.
Hindalco Industries Limited, the metals flagship company of the

Aditya Birla Group, is an industry leader in Aluminium and copper.
A metals powerhouse with a consolidated turnover in excess of US$
14 billion, Hindalco is the world's largest Aluminium rolling
company and one of the biggest producers of primary Aluminium in
Asia. Its Copper smelter is the world’s largest custom smelter at a
single location.
Established in 1958, Hindalco commissioned its Aluminium facility

at Renukoot in Eastern U.P. in 1962. Later acquisitions and mergers,
with Indal, Birla Copper and the Nifty and Mt. Gordon copper mines
in Australia, strengthened the company's position in value-added
Alumina, Aluminium and copper products, with vertical integration
through access to captive copper concentration.
In 2007, the acquisition of Novelis Inc. a world leader in Aluminium

rolling and can recycling marked a significant milestone in the
history of the Aluminium industry in India. With Novelis under its
fold Hindalco ranks among the global top five Aluminium majors, as
an integrated producer with low-cost alumina and Aluminium
facilities combined with high-end rolling capabilities and a global
footprint in 12 countries outside India. Its combined turnover of US$
14 billion, places it in the Fortune 500 league.
Hindalco in India enjoys a leadership position in Aluminium and

Copper. The Company's Aluminium units across the country
encompass the entire gamut of operations from bauxite mining,
alumina refining, aluminium smelting to downstream rolling,
extrusions, foils and alloy wheels, along with captive power plants
and coal mines. The Birla Copper unit produces copper cathodes,
continuous cast copper rods along with other by-products, including
gold, silver and DAP fertilizers.
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All of Hindalco's units are ISO 9001:2000, ISO 14001:2004 and
OHSAS 18001 certified. The Renukoot and Taloja units have gone a
step further with an Integrated Management System (IMS),
combining ISO 9001, ISO 14001 and OHSAS 18001 into one Business
Excellence Model.
The company has been accorded the Star Trading House status in
India. Its aluminium metal is accepted for delivery under the High
Grade Aluminium Contract on the LME (London Metal Exchange),
while its copper quality standards are also internationally recognized
and registered on the LME with Grade “A” accreditation.
ALUMINIUM:-
Hindalco’s major products include Standard and Speciality Grade
Aluminas & Hydrates, Aluminium Ingots, Billets, Wire Rods, Flat
Rolled Products, Extrusions, Foil and Alloy Wheels.
The integrated facility at Renukoot, (Uttar Pradesh)

houses an Alumina Refinery and an Aluminium
Smelter along with facilities for production of semi-
fabricated products, namely, Redraw Rods, Flat
Rolled Products and Extrusions. The plant is backed
by a co-generation plant and a 742mw captive power
plant at Renusagar to ensure continuous and
consistent supply of power for smelter and other
operations.
The aluminium alloy wheels plant is located at Silvassa (Dadra and

Nagar Haveli). Hindalco was among the first few alloy wheels
companies to have obtained the ISO/TS 16949 certification to meet
the stringent standard of the automobile industry.
A strong presence across the value chain and synergies in operations

has given Hindalco a major share of the domestic value-added
products market. In India, the company enjoys a leadership position
in Speciality Aluminas and Hydrates as well as in Primary
Aluminium and downstream semi-fabricated products. As a step
towards expanding the market for value-added products and services,
Hindalco has launched several brands in recent years. These include
the Aura Aluminium Alloy Wheels for cars, Everlast Roofing Sheets
and Freshwrap and Freshpack household foil for packaging.
Hindalco's Aluminium Galleries in Mumbai and Gurgaon showcase

the versatility of aluminium through a wide range of applications.
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Apart from being a major player in the domestic market, Hindalco's
products are well accepted in international markets. Exports account
for more than 20 per cent of total sales of aluminium products.
Hindalco is a leading domestic player in two metals business

segments — aluminium and copper.
The aluminium division's product range includes alumina chemicals,

primary aluminium ingots, billets, wire rods, rolled products,
extrusions, foils and alloy wheels.
The company has a significant market share in all the segments in

which it operates. It enjoys a domestic market share of 42 per cent
in primary aluminium, 63 per cent in rolled products, 20 per cent in
extrusions, 44 per cent in foils and 31 per cent in wheels.
As a step towards expanding the market for value-added products and

services, Hindalco has launched several brands in recent years,
which include Aura for alloy wheels, Freshwrap for kitchen foil and
Everlast for roofing sheets. Our exclusive showroom, The Aluminium
Gallery, seeks to promote Hindalco products to its customers. It is a
platform for the company to showcase quality products to a quality
audience in an appropriate ambience. The exhibits include products
like windows, doors, furniture, ladder, roofing sheets and ceiling
and cladding panels.
Hindalco's products are well received not only in the domestic
market, but also in the international market. The company's metal is
accepted for delivery under the high grade aluminium contract on the
London Metal Exchange (LME). The company exports about 17
percent of its total sales volume of aluminium.
The company's alumina chemical business is a leader in

manufacturing and marketing of speciality alumina and alumina
hydrate products in the country. It has a major market share in the
country. These speciality products find wide usage in diversified
industries including water treatment chemicals, refractories,
ceramics, cryolite, glass, fillers and plastics, conveyor belts and
cables, among others. The company also exports these alumina
chemicals to over 30 countries covering North America, Western
Europe and the Asian region.
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Birla Copper, Hindalco's copper division at Dahej in
Gujarat, enjoys a leadership position in India, having
built over 40 per cent of the domestic market share
within three years of its commissioning. It has also
made successful forays into the export markets of the
Middle East, Southeast Asia, China, Korea and Taiwan.
The copper plant produces world-class copper cathodes,

continuous cast copper rods and precious metals. Sulphuric acid,
phosphoric acid, di-ammonium phosphate, other phosphatic
fertilizers and phospho-gypsum are also produced at this plant.
SOME RECENT MILESTONES
:: In May 2007, Novelis became a Hindalco subsidiary with the

completion of the acquisition process. The transaction makes
Hindalco the world's largest aluminium rolling company and one
of the biggest producers of primary aluminium in Asia, as well as
being India's leading copper producer.
:: In May 2006, the company signed a MoU with the Government of
Madhya Pradesh for setting up a Greenfield aluminium smelter
and a captive power plant. The company also entered into a joint
venture with Essar Power (M.P.) Ltd. to develop and operate coal
mines at Mahan, Madhya Pradesh. The joint venture will supply
coal to the proposed aluminium smelter and power complex in
Madhya Pradesh
:: In May 2006, the company's copper mining subsidiary Aditya
Birla Minerals Limited (formerly Birla Mineral Resources Pty
Ltd.) came out with an equity offering and subsequent listing on
the Australian Stock Exchange (ASX)
:: In March 2006, the company acquired an aluminium rolling mill
and wire rods facility, from Asset Reconstruction Company
(India) Limited (ARCIL), belonging to Pennar Aluminium
Company Limited
:: In January 2006, the company concluded 4:1 rights issue of its
shares on partly paid basis. It was the largest ever rights issue in
the history of corporate India and first one to issue partly paid
instruments
:: In September 2005, the company split its shares in ratio of 10:1 in
order to enhance liquidity and to encourage participation from
retail investors
:: In April 2005, the company signed an MOUs to establish a world
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class integrated aluminium project in the state of Orissa
:: In April 2005, the company entered into MoUs with the Orissa and
Jharkhand governments for setting up a Greenfield alumina
facility and aluminium facility respectively, in the states
HINDALCO VISION
“To strengthen our position as a premium aluminium company

sustaining domestic
leadership and global competitiveness through Innovation Quality
and Value added growth”
HINDALCO MISSION
“To pursue the creation of value for our customers, shareholders,

employees and society at large”
QUALITY POLICY
We, at Hindalco, shall aim to achieve and sustain excellence in

all our activity.
 We are committed to total customer satisfaction by providing
products and services, which meet or exceed the customer,
expectations.
 Modernization of the manufacturing facilities stress on

technological innovation and training of employee at all level
shall be a continuous process of Hindalco.
A motivated workforce with a sense of pride in the organization

shall us towards total quality.
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HINDALCO VALUES:-
INTEGRETY: Honesty in every action.
COMMITMENT: Doing whatever it takes to deliver, as
promised.
PASSION: Missionary zeal arising out of an emotional
engagement with work.
SEAMLESSNESS: Thinking and working together across
functional silos, hierarchy levels, business and geographies.
SPEED: Responding to stockholders with a sense of urgency.
Hindalco Strategy
 EFFICIENCY FOCUS: To be one of the lowest cost producers
globally.
 EFFECTIVENESS FOCUS: To continue to remain the market
leader domestically.
 GROWTH FOCUS: To pursue value adding growth
opportunities.
Annual results in brief
Mar ' 10 Mar ' 09 Mar ' 08 Mar ' 07 Mar ' 06
Sales 19,536.28 18,219.65 19,201.00 18,313.00 11,396.50
Operating profit 2,949.92 3,035.87 3,401.10 4,015.00 2,605.10
Interest 278.00 336.93 280.60 242.40 225.20
Gross profit 2,931.77 3,335.59 3,613.40 4,142.70 2,623.80
EPS (Rs) 10.01 12.23 18.92 24.59 16.79
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Annual results in details
Mar ' 10 Mar ' 09 Mar ' 08 Mar ' 07 Mar ' 06
Other income 259.85 636.65 492.90 370.10 243.90
Stock adjustment -755.25 520.71 -132.70 -442.50 -1,033.80
Raw material 13,225.68 10,426.28 12,047.40 11,078.30 6,603.40
Power and fuel 1,938.00 2,231.56 1,910.80 1,848.60 -
Employee expenses 877.75 667.55 621.20 519.60 462.70
Research and
development - - - - -
expenses
Expenses
- - - - -
capitalized
Other expenses 1,300.18 1,337.68 1,353.20 1,294.00 2,759.10
Provisions made - - - - -
Depreciation 667.21 645.27 587.80 638.10 521.10
Taxation 462.10 610.88 705.40 940.30 450.20
Net profit / loss 1,915.63 2,079.44 2,320.20 2,564.30 1,655.50
Extra ordinary
- - - - 3.00
item
Prior year
113.17 150.83 540.70 - -
adjustments
Equity capital 191.37 170.05 122.60 104.30 98.60
Equity dividend
- - - - -
rate
Agg.of non-prom.
11345.22 9137.78 8415.23 8455.84 8478.18
shares (Lacs)
Agg.of non
promotoHolding 59.29 53.74 68.58 72.94 73.78
(%)
OPM (%) 15.10 16.66 17.71 21.92 22.86
GPM (%) 14.81 17.69 18.35 22.17 22.54
NPM (%) 9.68 11.03 11.78 13.73 14.22
HINDALCO PRODUCT RANGE
1. 2. 3.
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Primary Aluminium Alloy ingots Billets
Ingots
4. 5. 6.
Slab Aluminium sheet Wire rods sheet
7. 8. 9.
Circle Alloy wheel Watch
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10. 11. 12.
Blister pack Ladder Door
13. 14.
Handle Can
FLAT ROLLED PRODUCTS (FRPs)
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Hindalco is the world's largest Aluminium
rolling company with the acquisition of
Novelis, the global leader in value-added high-
end aluminium flat rolled products and
aluminium can recycling. The combined volume
of sales of flat rolled products in the world
market is about 3 million tonnes and the
market share is more than 20 per cent. Hindalco is now
world No.1 in
Hindalco is the largest manufacturer of the aluminium flat
entire range of flat rolled products in India. It rolled products
enjoys nearly 60 per cent of market share and
its rolled products are widely used in various
segments such as packaging, transportation, building and
construction, electrical, defence and general engineering
applications.
The company's commitment to quality and service along with its

extensive infrastructure has made Hindalco a prime source for best-
selling brands. Continuous improvements in manufacturing,
processes, practices and systems ensure that customers' needs and
expectations are fully met.
Efficiency and product quality are ensured by using state-of-the-art

equipment and a strong research and development set-up, supported
by dedicated and motivated employees and the Oracle ERP system.
Wagstaff Air Slip™ slab casting technology is used to ensure
consistent quality and surface finish of stock feed which in turn
ensures quality finished products. The company's capacity in flat
rolled products at present is 2,00,000 tonnes per annum and new
plans are being implemented to increase the manufacturing capacity.
Of the total production of Hindalco's flat rolled products, around 40

per cent is exported and customers in more than 50 countries are
using the products.
Everlast, a Hindalco brand for aluminium roofing sheets, offers ideal

and economical solutions for all roofing and cladding needs. Colour-
coated and tiled roofing profiles are also offered by Hindalco.
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Basically, there are three kinds of Flat Rolled Products (FRPs)
which is being exported by Hindalco i.e,
1. Cold rolled Coils

2. Cold rolled Sheets
3. Circle
Hindalco's cold rolled coils are precision-finished to match

international standards. They have good shape, high tolerance,
versatility and blemish-free surfaces. They are used in commercial
and general engineering applications such as bus bodies, cladding
and fan blades.
The company meets the demands of its ever-growing clientele with
continuous upgrades and process improvement.
Hindalco's cold rolled sheets are precision-

finished to match international standards for tight
thickness, tolerance, flatness and dimensional
accuracy. Sound metallurgical properties for
further fabrication, anodizing characteristics and
a blemish-free surface make it useful in both
commercial and general engineering applications.
Hindalco offers circles, also known as flat circular

sheets, in a variety of diameters and thickness to
meet specific needs. Extensively used in the
manufacture of pressure cookers, non-stick
cookware, coated cookware, cans, etc they have
earned the trust of many leading brands.
Continuous upgrades and improvement of processes
enable the company to keep pace with the demands
of its ever-growing clientele.
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ROLLED PRODUCT APPLICATIONS
Al-clad sheets / coils

:: Automobile radiators, inter-coolers, air
conditioners
Building sheets
:: Cladding for roofs and walls
:: Industrial buildings, warehouses, aircraft hangers
:: Indoor and outdoor stadiums
:: Insulation and protection of fuel storage tanks
and industrial boilers
:: Wall panels for high-rise buildings
:: Residential roofing
:: Roof-on-roof roofing
:: Exhibition pavilions
:: Poultry farms
Cablewrap stock
:: Telecom cables
Circles
:: Pressure cookers, non-stick cookware and hard
anodised cookware
:: Milk cans
:: Medical cylinders
Closure stock
:: Pilfer-proof caps
:: Vial seals
:: Cream containers and caps
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Cold rolled coils
:: Bus cabins and bodies
:: Insulation
:: Cladding in buildings, aluminium composite
panels, false ceilings and panelling (plain or
colour-coated coils)
:: Electrical busbar ducting, flexibles, transformer
strips, etc
Cold rolled sheets
:: Defence
:: Industrial engineering
:: Transport — road, rail, air, marine
:: Building and construction
:: Fan blades
:: Electrical engineering
Finstock
:: Air conditioners
:: Car radiators
:: Automobile heat exchangers
Flooring sheets / tread plates

:: Flooring for buses, trucks and rail coaches
:: Floors for loading bays, kick plates, stair treads
and catwalks
Foil stock
:: Pharma / confectioneries / cigarette foils
:: Foils
:: Tetrapacks
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Lampcap stock
:: GLS lamps and tube lights
Litho stock
:: Offset printing plates
Pattern sheets
:: Decorative applications like interior panelling
for trucks, cabins, etc
Printed Circuit Boards (PCB) entry sheets

:: Electronic circuit boards
Plates
:: Electrical busbars and ducting
:: Tanks
:: Ships, boats (corrosion-resistant and weldable
plates)
:: Defence and industrial uses (strong alloy plates)
:: Aircrafts
Spiral Finstock
:: Industrial heat exchangers
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FOIL PACKAGING
Hindalco's foil business and packaging division delivers versatile solutions to meet the multi-
pronged needs of customers round-the-clock. Hindalco's packaging solutions and impressive
range of end products are well-accepted all over the world, thus ensuring sustainable growth in
today's intensely competitive and cost-sensitive market.
Applications
Pharmaceuticals
25/30/40-micron thick, soft foil
either laminated to low density
polyethylene or coated with
heat seal laquer (HSL) for
sealing as per customer need.
20/25/30-micron thick, hard foil

coated with heat seal laquer of
varied grammages. Compatible
with PVC.
45-micron foil, laminated on

one side to 25 micron OPA and
60 micron PVC film on the
other side to meet the fast
emerging Alu alu packaging
needs. Hindalco offers a
maximum depth of 9mm.
laminated with paper, films like
polyester (PET), biaxially
oriented polypropylene (BOPP),
polyethylene (poly) and their
combinations. Chiefly used for
pouches and sachets. Offered in
both surface and reverse
printing.
30
Rolled to very fine tolerances
for more closures per tonne of
stock. Closure caps have high
formability, strength, low
earing and printable surfaces.
Widely used for pilfer-proof
bottle caps and vial seals.
Offered in both coated and bare
form.
Dairy
9-micron thick, soft foil
laminated to grease-proof
paper, used for butter chiplets.

coated with heat seal laquers
(HSL), compatible with PS and
PP containers. Used for cheese
spreads, yoghurts and mineral
water.
7/9-micron thick, soft foil

laminated to polyester and poly
with reverse printing on
polyester.
House foil and semi rigid containers
31
Household foil is available in a
range from 10 micron upwards.
Widths can vary as per market
requirements. Semi rigid
containers are available in a
range of sizes and shapes.
Processed food and beverages

with printing on one side and
heat seal laquer (HSL) coating
or polythene lamination on the
other. Also offered as a
laminate of 9-micron foil with
paper and wax.
9-micron thick, soft foil with
printing on foil surface,
laminated to paper and further
coated with wax. Also 7-micron
foil printing on foil surface,
laminated to paper and further
coated with wax.
Polyster, foil and polythene
laminates for packing coffee.
7-micron foil with printing on

foil surface and poly laminated
to paper.
Cigarette foil
32
Cigarette foil for inner packing
of cigarettes is offered in 7-
micron thick soft foil laminated
to paper. Foil can be silver or
gold lacquered in matte of
bright finish as per customer
requirements.
Personal products
Flexible laminated tubes that
utilise 12/20-micron thick soft
aluminium foil laminate.
Extensively used in toothpastes,
cosmetics, ointments, cream and
foodstuffs.

laminated to board with
adhesive or polythene as per
customer demand.
9-micron thick, soft foil or

BOPP and heat seal laquer
(HSL) coated or co-polymer
laminated as per customer
demand.
Surgicals
The laminates have two
components, top — paper, 40
micron foil, co-polymer
structure and bottom — coated,
50 micron foil, co-polymer
structure
Heating ventilation and air conditioning (HVAC)
33
80-160-micron thick foil, soft
or partially annealed temper,
offered bare as well as with
hydropholic and hydrophobic
coatings in blue or gold colour.
The coated foil enhances the
life of the air conditioner and
improves cooling.
80-160-micron thick foil, soft
or in partially annealed temper,
offered bare as well as with
hydropholic and hydrophobic
coatings in blue or gold colour.
The coated foil enhances the
life of the radiator and
improves cooling.
34
35
HINDALCO’S EXPORTS
WHAT IS EXPORT
1. Export is an any goods or commodity, transported from one

country to another in trade. Export is an important part of
international trade.
2. The process of carrying or sending goods to another country.
3. Export means an actual shipment, transfer of items out of a
country, a transfer of goods shipped or transfer to another
country.
4. Shipment of goods to a foreign country.
WHAT IS EXPORT MANAGEMENT
Export management is the application of managerial process to the

functional area of exports. It is a form of management which is
required to bring about coordination and integration of all those
involved in an export business.
MAIN OBJECTIVES OF EXPORT MANAGEMENT
1. To secure export orders.

2. To ensure timely shipment of goods as per prescribed norms of
quality and other specifications including terms and conditions
agreed to between the exporter and the importer.
CLASSIFICATION OF EXPORTS
1) Merchandise exports
2) Services exports
3) Project exports
4) Deemed exports
Merchandise exports: - It refers to the export of physical goods,

for example; readymade garments, engineering goods, furniture etc.
36
Services exports: - It refers to the export of goods that do not
exist in physical form that is, professional, technical or general
services. Examples include export of computer software, engineering
etc.
Project exports: - It refers establishment of a project by a

business firm in another country. The term’ project’ has been
defined as “non-routine, non-repetitive normally with discrete time,
financial and technical performance goals.
Deemed exports: - It refers to those “transaction in which the

goods supplied do not leave the country and the payment for such
goods are made in India, by the recipient of the goods”.
WHY A COUNTRY SHOULD EXPORT
There are many reasons for a country to export, some of these are:
 It provides valuable foreign exchange to country.

 It is one of the measures of country’s economic growth.
 To control over balance of payments.
 For employment generation.
 For poverty alleviation.
 It provides shield against demand fluctuations in domestic
market.
 For import of capital goods at 0% duty.
 Prepares ourselves for duty free regime.
 For capacity utilization.
 To get the working capital loan at low rate of interest.
 In line with company’s & country’s image.
HOW A COUNTRY SHOULD EXPORT
1) Name of the company/type of the company.

2) A current account with a bank authorized to deal in foreign
exchange.
3) An RBI code number granted by the Reserve Bank of India.
4) An IEC (Importer-Exporter code) number granted by the
regional licensing authority.
5) A Registration cum Membership certificate (RCMC) of export
promotion council.
37
WHAT ARE THE ADVANTAGES OF EXPORT
 The income from export business is exempted to the specified

extent under the Income Tax Act, 1961.
 Refund of central excise and custom duty on export is also
made under the Duty Drawback Scheme of the Government.
 There is no sales tax on products meant for exports.
 Duty free import of raw materials is allowed under various
schemes of Ministry of Commerce.
 Foreign exchange regulations have been substantially
liberalized for exporters.
 Liberal release of foreign exchange is made available for travel
abroad.
 Norms for establishing offices abroad by the exporters have
been eased.
 Export credit is also available to the exporters at confessional
rates of interest.
 Transport subsidy is given for export by air as well as rail.
 Import policy has also been liberalized substantially for export
oriented importers.
PROCESS OF EXPORT MANAGEMENT
The process of export management is essentially the process of

planning, scheduling and controlling the complex of non-routine
activities that must be completed to secure the export orders and to
ensure the timely shipment of goods. The managerial process
involved in export management relates to the following three
activities (Fig.1):
1. Planning
2. Scheduling, and
3. Controlling
Schedulin
Planning g
Controlling
Process of Export Management
38
1. Planning
Planning refers to taking various decisions involved in export
business. This relates to procurement of export orders and their
timely and successful execution. Planning for export order would
involve making concerted efforts supported by proper market entry
strategies to get the export order.
2. Scheduling
Scheduling refers to deciding the logistics for execution of
export order. This is primarily concerned with implementation and
monitoring of export order. This involves defining in detail the
various jobs/activities, the nature of those jobs/activities (parallel
or sequential), expected time frame for completion of those
jobs/activities and fixing responsibility for completion.
3. Controlling
It seeks to ensure whether the activities planned have been
completed on time or not and whether the various schedules drawn
up for execution of those orders have been followed or not. A system
of reporting should be developed and implemented in every export
organization to ensure proper control of various activities involved
in execution of export orders.
EXPORT CYCLE
The various activities/stages involved in planning and execution of

an export order are performed in a sequential manner. Therefore, the
activities/stages are viewed as different links in the chain of a cycle
called export cycle. The export cycle is divided into three phases
(Fig.2):
a. Planning for exports
b. Implementation and monitoring of an export order
c. Post export follow up action.
Planning for
Exports
Co-
ordination
Post-export follow-up Implementation &
action Monitoring of Export order
39
Export Cycle
a. Planning for Exports

Planning for exports involves the following activities namely,
1. Understanding the international trade environment
2. Setting up an export firm/organization structure
3. Identification of export opportunities
4. Procurement of export order, negotiation and confirmation.
b. Implementation and Monitoring of Export Order

This represents the second phase in the export cycle and involves the
following activities:
1. Development of logistics for execution of export order
2. Export financing arranging pre-shipment finance
3. Labeling, packaging, packing and marking
4. Pre-shipment inspection
5. Pre-shipment documentation
6. Shipment of good-central excise and customs clearance and
transportation
c. Post Export Follow-up Action

Once the shipment of goods has been sent, export manager should
take the necessary follow-up action. This would involve the
following steps:
1. Negotiation of documents with the bank to realize payment
against the port shipment,
2. Arranging post shipment finance
3. Claiming incentives/facilities
4. Maintaining liaison with the importer
5. Settlement of disputes, if any.
DEVELOPING EXPORT MARKETING PLAN
An export marketing plan is step-by-step guide to strategy

implementation. It addresses strategic issues and outlines the
corresponding operational action to be taken. It specifies targets for
each step. The plan should answer all questions on how the export
firm’s strategy is to be implemented and direct the enterprise in
attaining the strategic objective.
A typical export marketing plan focuses on the following aspects:
40
1. Marketing objectives
2. Market segmentation and positioning,
3. Market research,
4. Characteristics of the product line,
5. Export pricing,
6. Distribution channels, and
7. Promotional strategies.
SOME PRACTICAL SUGGESTIONS
• The exporters should innovate new product designs, strategies

and promotional policies to improve the level of exports. This
helps them to make ‘value rich offers’ that are better than the
best.
• The exporter should aim at a Market Niche rather than at the
mass market.
• Exporters should know the key buyers in the target market.
• Exporters should choose their markets carefully. The choice of
market can make the difference between success and failure in
exporting.
• Exporters should clarify their motives for exporting and set
their objectives at the outset. They should know why they want
to export and set their goals.
• Exporters should consider export market development a long-
term investment. Sustained efforts are essential in export
marketing.
• Planning and strategy development are essential for success in
the long run in export trade.
• The export firm should have the requisite technical expertise,
in addition to careful planning and suitable products.
• No enterprise should seek entry an export market until it is
ready. Any attempt at exporting without experience in domestic
marketing is bound to fail.
• The responsibility for the export effort should be assigned to a
key staff member, usually known as export manager.
TIPS FOR EXPORT MARKETING
1. Select the product and the target market on the basis of desk
research even before considering to export.
2. Once a market has been decided upon, the entrepreneur should
carry out in-depth study of the target market.
41
3. The aim of the first visit to foreign market should not be to do
business or looking for orders. Rather, the visit should be used
to improve the preparation for entering the market.
4. Evaluate all the information collected and then formulate a
marketing strategy and develop a marketing plan.
5. Gaining foothold in foreign markets can only be effective on a
long term basis. Thus, the entrepreneur should have the strong
financial base.
6. The foreign buyers can’t afford to loose face and credibility by
deterioration in quality or alternatives to price and/or late
deliveries. It is important to understand the requirement of the
foreign buyers before marketing commitments.
7. In exports, consumers are quality and price conscious in a
market which enjoys large and varied supplies. Success or
failure in business will depend upon understanding this
sensitivity of the foreign buyer. The entrepreneur should adopt
a consumer oriented approach to manufacturing and selling.
8. International markets are trend sensitive. Designs frequently
change and products may not remain in demand. It is therefore,
necessary to be aware of this trend and efforts should be made
to keep up-to-date with the market trends.
9. Foreign markets, particularly in the developed countries, are
often highly segmented into different age and income groups.
The exporter should select the right market segment and
accordingly position the product in the market.
EXW-EXPORT WORKS
The seller’s obligation to the deliver the goods under this term is
complete when he passes the goods at the disposal of the buyer at his
own premises and other places named therein, i.e. works, factory,
warehouse etc. not cleared for export and not loaded on any
collecting vehicle. This term thus enjoys the minimum for the seller.
The buyer has to bear all the cost and risks. This term should
therefore not be used if buyer cannot carry out the export formality
himself.
FCA-FREE CARRIER
Here the seller’s obligation to deliver the goods is complete when he

delivers to the carrier nominated by the buyer at the named place
cleared for export. If the chosen place is the exporter’s premises
42
then the seller is responsible for loading. If it occurs at any other
place, the seller is not responsible for unloading.
FAS-FREE ALONGSIDE SHIP
Under this term the seller delivers the goods by placing them
alongside the vessel at the named port of shipment. The buyer bears
all the cost and risk of loss of or damage to the goods from that
moment. This term can be used only of sea or inland waterway
transport.
FOB-FREE ON BOARD
Under this term, the seller fulfills his obligation of delivery when
goods pass the ship’s rail at the named port of shipment. Form that
point onwards buyer bears all costs and risks. The seller clears the
goods for export. If the intention is not to deliver the goods across
the ship’s rail, FCA terms should be used.
CFR-COST AND FREIGHT
In CFR also, obligation of delivery is fulfilled when the goods pass

the ship’s rail at the port of shipment. The only addition is that the
seller also pays the freight necessary to bring the goods to the
named port of destination but the risk of loss of or damage to the
goods and also additional costs occurring after the time of delivery
are transferred from seller to the buyer. Under this term the seller
clears the goods for export. This term can be used only for the sea or
inland waterway transport. If the parties do not intend to deliver the
goods across the ship’s rail, the term should be used.
CPT-CARRIAGE PAID TO
It denotes that seller delivers to the carrier nominated by him. If

subsequent carriers are used, the risks pass when the goods have
been delivered to the first carrier. The must in addition pay the cost
of carriage to bring the goods to the named destination. The buyer
bears all the risks and any cost occurring after the goods have been
so delivered. Here too, obtaining the export clearance is the
responsibility of the seller. It can be used for any mode of transport
including multi-modal transport.
43
CIF-COST, INSURANCE AND FREIGHT
Here again the delivery point is the goods passing the ship’s rail in
the port of shipment. The seller however paid the cost and freight
necessary to the named port of destination and contracts for
insurance and pays the insurance and pays the insurance premium
and the risk of loss of or damage to the goods and additional costs
occurring after the time of delivery at transferred from the seller to
the buyer. The seller obtains the insurance only for the minimum
cover. If the buyer whishes to have a greater cover, he would either
need to agree with the seller expressly or to make his own extra
insurance arrangements. Clearance of goods for export is the
responsibility of the seller under this term as well. It can be used
for sea and inland waterway transport. If the parties do not intend to
deliver the goods across the ship’s rail, the CIP terms should be
used.
CIP-CARRIAGE AND INSURANCE PAID TO
The term corresponds to CPT except that under CIP the seller also
to procure insurance against risk of loss of or damage to the goods
during the carriage. The seller therefore has to obtain the insurance
and pay the insurance premium for a minimum cover. For any
additional cover, the buyer needs to either have express
arrangements with the seller or make his own arrangement. Here
again if subsequent carriers are used, the risks passes when the
goods have been delivered to the first carrier and clearance of goods
for export is the responsibility of the seller. The term can be used
for any mode of transport including multi-modal transport.
DES-DELIVERED EX SHIP
This term applies that the seller delivers the goods by placing them
at the disposal of the buyer on the board, the ship not cleared for
import at the named port of destination. The seller bears all the cost
and the risk involved in bringing the goods to the named port of
destination before their discharge. If the parties intend the seller to
bear the cost and risk of discharging goods then the DEQ term
44
should be used. This term can be used for sea or inland waterways or
multimode transport on a vessel in the port of destination.
DAF-DELIVERED AT FRONTIER
Under this term the seller delivers the goods by placing them at
disposal of the buyer on arriving means of transport not unloaded,
cleared for export but not cleared for imports at the named
point/place at the frontier but before the custom border at the
adjoining country. Since the term frontier includes the frontiers of
the country of export naming the point and the place in the term is
of vital importance. For making the seller responsible for the
unloading of the goods and to bear the risk and cost therefore
explicit working to this effect need to be included in the contract.
The term can be used for any mode of transport when goods are to be
delivered at the land frontier. When the delivery is to take place in
the port of destination on board, a vessel or on the quay, the DES or
DEQ terms should be used.
DEQ-DELIVERED EXPORT QUAY
The point of delivery at this term moves to the quay not cleared for
export at the named port of destination. The seller bears the cost of
discharging the goods in quay in addition to the cost of risk involved
as per the term DES. The term DEQ has been modified in the
incoterms 2000 and is a total reversal from the previous incoterms
version. Under the modified DEQ term the buyer clears the goods for
imports and pays all formalities, duties, taxes and other charges. If
the buyer still wants the seller to undertake import clearance, it
should be made clear by adding an explicit warning. This term can
be used only when the goods are to be delivered by sea or inland
waterways or multimode transport on discharging from a vessel onto
the port of destination.
DDP-DELIVERY DUTY PAID
Under the term the seller delivers the goods to the buyer cleared for
imports but not unloaded from any arriving means of transport at the
named place of destination. Thus all cost and risk involved in
bringing the goods there to including, wherever applicable, any duty
for import in the country of destination. Thus the term represents
minimum obligation to the buyer and maximum obligation to the
45
seller. It should, therefore not be used if the seller is unable to
obtain the import clearance. It the parties wish the buyer to bear all
risks and costs of import the DDU term should be used.
DDU-DELIVERED DUTY UNPAID
This term can be used irrespective of the mode of transport, but

when the delivery is to take place in the port of destination on
board, the vessel or on the quay, the DES or DEQ terms should be
used. Under DDU, the seller delivers the goods to the buyer not
cleared for import, not unloaded from any arriving means of
transport at the named place of destination. The seller bears the cost
and the risk involved in bringing goods there to other than, where
applicable, any duty of import in the country of destination. The
term duty includes the responsibility for and the risk in the carrying
out the customs formalities, the payment of such formalities, custom
duties, taxes and other charges. Such duty has to be borne by the
buyer, so also any costs and risks caused by his failure to clear the
goods for import in time. If the intention is to make the seller carry
out customs formalities and bears the risks resulting there from as
well as some of the costs payable upon import of goods. This should
be made clear by adding explicit wording to this effect in the
contract of sale. The responsibility, risks and costs for unloading or
reloading of the buyer or the seller.
46
PROCESSING OF AN EXPORT ORDER
EXPORT ORDER: - Export order is a document communicating

decision of the foreign buyer to purchase certain items from the
exporter. It specifies the description of the items, their quantity and
quality specifications, unit price, delivery terms, shipping marks,
insurance required, requirement as regards labeling, packaging and
packing, payment terms, pre-shipment inspection requirements,
documents required and so on. The export order represents an ‘offer
to sell’ made by the exporter and its ‘acceptance’ by the foreign
buyer.
EXPORT AGREEMENT:- Export agreement refers to the offer by

the exporter and its acceptance by the buyer. It is defined as
exchange of promises by the parties to the agreement i.e, every
promise and every set of promise forming consideration for each
other. In case of an export agreement, the promise of the exporter is
to supply the goods as per the quality specifications and other terms
and conditions negotiated with the buyer of the goods. The promise
of the buyer is to make payment to the exporter when he / she
supplies the goods as per the terms and conditions of the export
order. The exporter conveys this promise when he / she sends the
‘offer to sell’ to the buyer. The buyer conveys his / her promise by
conveying his / her acceptance to the offer and communicating it to
the exporter. Thus, the exchange of offer by the exporter and its
acceptance by the buyer represents conclusion of an agreement
between the exporter and the buyer. This agreement is called the
export agreement.
EXPORT CONTRACT:- Export contract can be understood of the

terms contract as defined under the contact law. Contract is defined
as an agreement enforceable by law.
47
PROCESS OF SECURING EXPORT ORDER
The process of obtaining the export order follows the sequence of

the steps given below:
1. The exporter locates a trade enquiry i.e, he / she comes across

the details of a foreign buyer who is willing to import the
items.The exporter may get these details through any of the
following ways:
a) Web sites of the import firms.

b) Visit to the exporter’s web site by an interested foreign buyer.
c) Participation in a trade fair / visit to a trade fair by the
exporter.
d) Business promotion visit to a foreign country.
e) Contact with the overseas marketing agent.
f) Contact with a buying agent in the exporter’s country.
g) Exporter’s own retail outlet in the foreign country.
h) Circulation of the trade enquiry by the trade promotion body in
the exporter’s country.
2. On receipt of the trade enquiry, the exporter sends his / her

company profile, product profile and the promotional literature
of his / her product range to know the interest of the buyer.
3. The buyer may like to have the details of a certain product of
his / her choice from the exporter.
4. The exporter sends the quotation in respect of the product of
interest to the buyer. This quotation contains the basic details
like its FOB price, mode of payment, photograph of item along
with its specifications and the likely delivery time.
5. On receipt of this basic information, the foreign buyer puts
forward his / her requirements as regards the design, size,
finish or other specifications of the product.
6. The exporter sends the proforma invoice to the foreign buyer
setting out in details the terms and conditions negotiated
between the two parties.
7. The importer conveys his / her ‘acceptance’ of ‘offer to sell’ to
the exporter on the proforma invoice originally sent by the
exporter.
48
TERMS AND CONDITIONS OF AN EXPORT ORDER
The terms and conditions of an export order would vary from

order to order depending on the nature of product, parties
involved and so on.
But the following are the standard clauses of an export order:
1. Product and its description

2. Product specifications as regards its quality
3. Price : FOB / CFR / CIF etc., per INCOTERMS 2000
4. Quantity
5. Payment Terms: D/A. D/P, Letter of Credit, Advance Payment
etc.
6. Delivery Schedule: Time period; partial / complete dispatch
7. Mode Shipment: Air / Sea / Road / Post
8. Type of shipment : Direct / Transshipment
9. Inspection Labeling, Packaging, Packing and Marketing
requirements
10. Insurance : By exporter / importer
11. Documents required
12. Escalation clause : Sharing of increase in cost
13. Force Majeure Clause : Clause providing for excuse of
non-performance due to acts of goods
14. Arbitration Clause: Clause for settlement of dispute
15. Fines / Penalties
16. Applicability of Law
49
EXPORT PROCESS
Enquiry
Quotation
Order confirmation
Letter of Credit
Production planning
Production of material
Dispatch
Preparation of Pre-shipment documents
Arrival at port
Shipment
Preparation of Post-shipment documents
Document negotiation with bank
Payment realization
50
51
SWOT ANALYSIS OF HINDALCO
STRENGTH
• A global leader in value-added high-end aluminium flat rolled
products and aluminium can recycling.
• It is the largest manufacturer of the entire range of flat rolled
products in India & enjoys nearly 60 per cent of market share.
• The company exports about 17 per cent of its total sales volume
of aluminium.
• The company has been accorded the Five Star Trading House
status in India.
• The company's metal is accepted for delivery under the high
grade aluminium contract on the London Metal Exchange (LME).
WEAKNESS
Since I had done my project in Renukoot plant then the only
weakness which I found here in Renukoot plant is that Marketing
process is very difficult from here due to its remote location and it
is also very far from ports.
52
OPPORTUITIES
• Takeover of Indal is taking Hindalco to the way of increased
production to meet the Importer’s requirements without any delay
in time and it also giving the opportunities to export marketing
department to secure as much export order due to increased
capacity of production.
• Acquisition of Novelis giving the opportunities to the Hindalco
to expand more its global market, since, Novelis has the
unrivaled capability to provide its customers with a regional
supply of technologically sophisticated rolled aluminium
products throughout Asia, Europe, North America and South
America.
THREATS
Due to high International Inflation rate, price of the Aluminium is
increasing in the International Metal Market. As a result, the
Aluminium, which was said as the product of poor peoples, now it
has been gone far from the hands of a middle class people. Now, it
becomes a product of high class society.
So, poor and middle class peoples are searching and getting the
alternatives of the Aluminium metal i.e. Iron and Steel which is low
in cost as comparison to Aluminium now-a-days.
53
54
RESEARCH OBJECTIVE
The objective of study is to find answer of the some questions,
which are important to clearly understand the importance, procedure
and role of export documentation for Aluminium & Aluminium
products in smooth Export working.
The main objectives of doing this project are as follows:-
• To study the Export Documentation Process.
• To understand the global Aluminium industry trends in the
major demand and supply center of the world.
• To understand the global marketing of Hindalco products.
• To understand the Export Market Plan.
• To study the Export Process from Order Booking to Shipment.
• To understand the overall process involved in the Export
Management System of the Hindalco Industries Ltd.
• To understand the overall process used by the Hindalco to
establish the Export Documentation Process.
• To understand the benefits and incentives given by the
government to the exporter for boosting up the Indian Export.
55
PROCEDURE FOR EXPORT
There are various steps involved for the proper procedure of export
of a product. These are as follows:
• RECEIPT OF AN ENQUIRY.
• CHECK ON RESTRICTIONS ON FOREIGN EXCHANGE AND
IMPORT IN THE IMPORTER’S COUNTRY.
• SCRUITINISE THE ORDER.
• ACKNOWLEDGEMENT OF THE ORDER.
• ARRANGING FOR GOODS.
• EXPORT LICENSE.
• CENTRAL EXCISE CLEARANCE.
• APPLY TO EXPORT INSPECTION COUNCIL OF
INSPECTION.
• APPLY FOR MARINE INSURANCE POLICY, IF IT IS A
C.I.F. QUOTATION.
• ISSUE INSTRUCTIONS TO THE CLEARING AND
FORWARDING AGENT.
• CLEARING AND FORWARDING AGENTS ROLE FOR
SHIPPING AND CUSTOMS AT PORT.
• DOCUMENTS RETURNED BY THE FORWARDING AGENTS.
• SHIPPING ADVICE TO IMPORTER.
• PRESENTATION OF DOCUMENTS BY THE BANK.
• CENTRAL EXCISE REBATE.
• DUTY ENTITLEMENT PASSBOOK SCHEME
56
STEP 1: RECEIPT OF AN ENQUIRY
It is not possible to attend personally to all of these enquiries, as it

would not be economical to do so. The best way to do this is to ask
the enquirers themselves to supply information about their business.
If the enquirer is well established, he will be glad to give the

information asked for, but if he refuses to do so than it is fair
evidence that his intensions are not good.
The exporter after having satisfied himself that the enquirer abroad
is a fit person and is capable of meeting his obligations should give
him the details of his business.
STEP 2: CHECK ON RESTRICTIONS ON FOREIGN EXCHANGE

AND IMPORT IN THE IMPORTER’S COUNTRY.
When the order is received its first decision is based upon the
approval of credit. For example: War or any other disturbances in
the buyer’s country could lead to the restriction of transaction.
Therefore if the exporter is dealing with a well experienced importer

the latter will furnish full information with reference to foreign
exchange restrictions and import Licenses while placing the initial
order.
STEP 3: SCRUITINISE THE ORDER
The exporter should carefully scrutinize and check the contents of an

export before its confirmation. If should be broadly in accordance
with the ‘elements of contract’ which might have been conveyed to
the overseas buyer, received along with the duplicate copy duly
signed of export contract. The export should be scrutinized on the
following aspects:
• Terms of payment
• Documents
57
• Delivery schedule
STEP 4: ACKNOWLEDGEMENT OF ORDER
In this step the order is to be acknowledged. The order must be

acknowledged before the exporter states that whether he would be
able to fill it or not.
The acknowledgement should contain the essential features
concerning the shipment which the exporter should know.
STEP 5: ARRANGING THE GOODS
As soon as the export order has been confirmed or finalized,

preparations are made for the production or procurement of goods to
be exported.
STEP 6: EXPORT LICENSE
If the item being exported requires an export License, the exporter

from the Licensing authority, i.e., chief Controller of imports and
Exports should procure the same.
STEP 7: CENTRAL EXCISE CLEARANCE
The excisable goods can be exported outside India either under claim
for rebate of excise duty or under bond.
STEP 8: APPLY TO EXPORT INSPECTION COUNCIL FOR

INSPECTION
Exporter should apply to EIC for pre-shipment inspection. Under the

EIC an inspector will carry out the quality control and inspection for
exportable products.
After carrying out inspection the consignment is found to confirm to
the prescribed specification.
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STEP 9: FOR MARINE INSURANCE POLICY, IF IT IS A C.I.F.
QUOTATION STEP 8: APPLY
As soon as the goods are ready for export, the exporter has to apply
to insurance company for an insurance cover/policy as the case may
be. The policy would be for C.I.F. value plus 10% to cover expenses.
STEP 10: ISSUE INSTRUCTIONS TO THE CLEARING AND

FORWARDING AGENT
A detailed note is prepared for the clearing and forwarding agent,

giving instructions regarding the shipment of the consignment.
STEP 11: CLEARING AND FORWARDING AGENT’S ROLE FOR

SHIPPING AND CUSTOMS AT THE PORT
The clearing and forwarding agent then prepares the shipping bill
and presents them along with the above documents to the export
department of the customs house.
STEP 12: DOCUMENTS RETURNED BY THE FORWARDING

AGENT
The master document is returned by the clearing and forwarding

agent to the exporter along with:
• Shipping bill
• Original L/C
• AR-4/AR-4A form in duplicate
• Full set of clean-on-board of lading together with required
number of non-negotiable copies.
STEP 13: SHIPMENT ADVICE TO IMPORTER
An intimation is sent to the imports, indicating the date of dispatch

of goods and the name of ship by which they have been sent.
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STEP 14: PRESENTATION OF DOCUMENTS BY THE EXPORTER
OF THE BANK
The following documents are presented by the exporter for

negotiation/collection.
• Master Document
• GR-1 form
• Full set of clean-on-board bill of lading
• Original L/C
• Bank certificate in prescribed form
• Marine Insurance Policy
• Export Contract/Order
• Bill of Exchange
STEP 15: PROCESSING OF DOCUMENTS BY THE BANK
Bank examines the documents with reference to the terms and

conditions of the original order and also of the letter of credit. The
exporter’s bank screens the above documents and sends a set of the
following documents to the importer’s bank:
• Master Document
• Marine Insurance Policy
• Negotiable Bill of Lading
• Bill of Exchange
STEP 16: CENTRAL EXCISE REBATE
A claim is filled by the exporter with the concerned maritime

collector of Central excise for rebate on central excise duty.
STEP 17: DUTY ENTITLEMENT PASSBOOK SCHEME
The exporter should file an application to the Licensing authority for

an advance License/special License in accordance with export/import
policy of the country at point of time.
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FLOW OF LOGISTICS PROCESS
Logistics is the management of the flow of goods, information and

other resources, including energy and people, between the point of
origin and the point of consumption in order to meet the
requirements of consumers (frequently, and originally, military
organizations). Logistics involve the integration of information,
transportation, inventory, warehousing, material-handling, and
packaging.
Logistics management
Logistics management is that part of the supply chain which plans,

implements and controls the efficient, effective forward and reverse
flow and storage of goods, services and related information between
the point of origin and the point of consumption in order to meet
customers' requirements. A professional working in the field of
logistics management is called a logistician.
Logistics Management Software
Software is used for logistics automation which helps the supply

chain industry in automating the work flow as well as management of
the system. There are very few generalized software available in the
new market in the said topology. This is because there is no rule to
generalize the system as well as work flow even though the practice
is more or less the same. Most of the commercial companies do use
one or the other custom solution.
But there are various software that are being used within the
departments of logistics. Few department in Logistics are namely,
Conventional Department, Container department, Warehouse, Marine
Engineering, Heavy haulage, Etc.
In Hindalco, all the departments are interconnected with

computer network system and the software on which these
department works is on the Oracle 11i platform. This software is
connected with Internet and the working in any department in any
region of Hindalco will make effect in all over India.
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Business logistics
Logistics as a business concept evolved only in the 1950s. This was

mainly due to the increasing complexity of supplying one's business
with materials and shipping out products in an increasingly
globalized supply chain, calling for experts in the field who are
called Supply Chain Logisticians. This can be defined as having the
right item in the right quantity at the right time at the right place
for the right price and is the science of process and incorporates all
industry sectors. The goal of logistics work is to manage the fruition
of project life cycles, supply chains and resultant efficiencies.
In business, logistics may have either internal focus (inbound

logistics), or external focus (outbound logistics) covering the flow
and storage of materials from point of origin to point of consumption
(see supply chain management). The main functions of a qualified
logistician include inventory management, purchasing,
transportation, warehousing, consultation and the organizing and
planning of these activities. Logisticians combine a professional
knowledge of each of these functions so that there is a coordination
of resources in an organization. There are two fundamentally
different forms of logistics. One optimizes a steady flow of material
through a network of transport links and storage nodes. The other
coordinates a sequence of resources to carry out some project.
Production logistics
The term is used for describing logistic processes within an

industry. The purpose of production logistics is to ensure that each
machine and workstation is being fed with the right product in the
right quantity and quality at the right point in time.
The issue is not the transportation itself, but to streamline and

control the flow through the value adding processes and eliminates
non-value adding ones. Production logistics can be applied in
existing as well as new plants. Manufacturing in an existing plant is
a constantly changing process. Machines are exchanged and new ones
added, which gives the opportunity to improve the production
logistics system accordingly. Production logistics provides the
means to achieve customer response and capital efficiency.
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A Brief Description of the Flow of Logistics
Importer
Export
Office Planning Dept.
Export
Control
Finished Goods Head
Warehouse Production
Process
Packaging
Flow of Logistics in Brief

First of all Customer or Importer place their order to the company.
This is done in the following two ways:
1. Through Export Office
2. Directly to Planning Office
1. Through Export Office

For placing their order, Customer or Importer contacts to their
respective Export Office. There must be one Export Control Head
who can deal with that order. Export Control Head sends the
information about the order to the Planning department. Planning
dept. can make a plan to execute that order and sends the
information about the amount of production to the Production Plant.
After production, the product is being sent for packaging. There
packaging should be done according to the demand of the customer.
When the product is being packed, it is being sent to the Finished
Goods Warehouse for storage. When the finished product reaches to
the warehouse, it can be informed to the Export Control Head that
the product is ready for the delivery to the customer. From
warehouse the product reaches to the Export office and from there it
reaches to the respective Importer’s destination.
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2. Directly to Planning Office
The second option for the customer to place their order is that they
can place their order directly to the planning office of the company.
Rest all the process after planning till warehousing is same as
through Export office process. In this process the product is being
delivered to the importer from the Finished Goods Warehouse
directly.
Following diagram shows the subdivision of export logistics

process:
Logistics
Warehouse Inland Transportation Sea Transportation
Storage of Stuffing of By Sea By Air

Finished Goods Finished Goods
By Roadways By Railways
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FLOW OF EXPORT LOGISTICS PROCESS IMPLEMENTED
BY HINDALCO
Confirmation of the Export Order
Container Indenting Process
Arrange empty Containers at ICD, Kanpur/Kolkata port based on Export Order
Indent Container in advance based on Production Schedule.
Inform Finished Goods Warehouse for segregating of material as per container load.
Inform Finished Goods Warehouse with details of the Order.
Pre-shipment Export Documentation & stuffing of materials in containers.
Excise Clearance (Filling ARE-1 form & Excise Invoice, Verification of exporting
consignment by Excise Clearance Authority).
Arrival of consignment at Dry Port.
Custom Clearance.
Shipment.
Post-shipment Documentation.
Document Negotiation
Payment Realization
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Step 1: First of all, order is being confirmed.
Step 2: Container Indenting Process
• Order for the container is given to the Shipping Line
according to the Production schedule.
• Container comes via ICD, Kanpur in case of Mumbai
Shipment and directly via roadways or railways in case of
Kolkata Shipment.
• A particular number is being allotted in the ICD or Kolkata
port before sending it to the factory.
• Information is being sent to the warehouse about the
availability of containers for the stuffing of containers.
Step 3: According to the information, materials is being segregated
as per container load in the Warehouse.
Step 4: Stuffing of material in the containers is being done as well
as Pre-shipment documents is being made in this step.
Step 5: After the stuffing of material, Excise Clearance office is
being informed to do the Excise clearance process. In this stage
ARE-1 form and Excise Invoice is being filled by the exporter.
Step 6: After the completion of Excise clearance process, stuffed
containers is being sent to the respective port according to their
destination.
Step 7: After the arrival of export consignment at the port, Custom
Clearance process is being done by the Custom clearing authority.
Step 8: Shipment is being done after the Custom process is cleared.
Step 9: Post-Shipment documents is being made by the exporter after
the shipment of the consignments.
Step 10: When the post-shipment documents are made, these
documents are being sent to the bank for the negotiation.
Step 11. After negotiation, the documents are cleared for making
payments which exporter receives. This stage is called Payment
Realization stage.
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SHIPPING THE PRODUCT
When shipping a product overseas, the exporter must be aware of
packing, labeling, documentation, and insurance requirements. It is
important that exporters ensure that the merchandise is:
• Packed correctly so that it arrives in good condition;
• Labeled correctly to ensure that the goods are handled properly
and arrive on time at the right place;
• Documented correctly to meet U.S. and foreign government
requirements, as well as proper collection standards; and
• Insured against damage, loss, pilferage and delay.
. Following are the ways by which Sheets, Coils and Circles are
packed by Hindalco:
COILS
The coils are packed in eye-to-sky or eye-
to-wall position, wrapped in HDPE and
hardboard, strapped with hoop iron and
placed on wooden pallets. Moisture
protection is provided by silica gel packets.
SHEETS
Cold rolled sheets are wrapped in HDPE and
placed on wooden pallets which have runners
along and across the length of the sheet. An
angle board is attached to the edges for edge
protection, plyboard is placed on the top and
bottom of the stack and the package is
strapped with hoop iron straps. Silica gel
packets are used for moisture protection.
Documentation
Exporters should seriously consider having the freight forwarder
handle the formidable amount of documentation that exporting
requires as forwarders are specialists in this process. The following
documents are commonly used in exporting; but which of them are
necessary in a particular transaction depends on the requirements of
the U.S. government and the government of the importing country.
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• Air freight shipments are handled by air waybills, which can
never be made in negotiable form.
• A bill of lading is a contract between the owner of the goods

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

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

countries. It describes the shipment of goods and shows
information such as the consignor, consignee, and value of the
shipment. Certified by the consular official of the foreign
country stationed here, it is used by the country's customs
officials to verify the value, quantity, and nature of the
shipment.
• A certificate of origin is a document that is required in certain

nations. It is a signed statement as to the origin of the export
item. Certificate of origin are usually signed through a
semiofficial organization, such as a local chamber of
commerce. A certificate may still be required even if the
commercial invoice contains the information.
• A NAFTA certificate of origin is required for products traded

among the NAFTA countries (Canada, the United States, and
Mexico).
• Inspection certification is required by some purchasers and

countries in order to attest to the specifications of the goods
shipped. This is usually performed by a third party and often
obtained from independent testing organizations.
• A dock receipt and a warehouse receipt are used to transfer

accountability when the export item is moved by the domestic
carrier to the port of embarkation and left with the ship line for
export.
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• A destination control statement appears on the commercial
invoice, and ocean or air waybill of lading to notify the carrier
and all foreign parties that the item can be exported only to
certain destinations.
• A Shipper's Export Declaration (SED) is used to control

exports and act as a source document for official U.S. export
statistics. SEDs must be prepared for shipments through the
U.S. Postal Service when the shipment is valued over $500.
SEDs are required for shipments not using the U.S. Postal
Service when the value of the commodities, classified under
any single Schedule B number, is over $2,500. SEDs must be
prepared, regardless of value, for all shipments requiring an
export license or destined for countries restricted by the Export
Administration Regulations. SEDs are prepared by the exporter
or the exporter's agent and delivered to the exporting carrier
(for example, the post office, airline, or vessel line). The
exporting carrier will present the required number of copies to
the U.S. Customs Service at the port of export. Often, the SED
is prepared as a by-product of another document, the Shipper's
Letter of Instructions, as shown in.
• An export license is a government document that authorizes the

export of specific goods in specific quantities to a particular
destination. This document may be required for most or all
exports to some countries or for other countries only under
special circumstances.
• An export packing list considerably more detailed and

informative than a standard domestic packing list. It itemizes
the material in each individual package and indicates the type
of package, such as a box, crate, drum, or carton. It also shows
the individual net, legal, tare, and gross weights and
measurements for each package (in both U.S. and metric
systems). Package markings should be shown along with the
shipper's and buyer's references. The list is used by the shipper
or forwarding agent to determine the total shipment weight and
volume and whether the correct cargo is being shipped. In
addition, U.S. and foreign customs officials may use the list to
check the cargo.
• An insurance certificate is used to assure the consignee that

insurance will cover the loss of or damage to the cargo during
transit.
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EXPORT DOCUMENTATION
Documentation plays a very crucial role in the execution of an

export contract. In fact, the process of documentation begins when
the order is placed by the foreign buyer with the exporter. The
formalities as regards various documents relate to pre- shipment
inspection, origin of the goods, central excise, exchange control and
customs clearance is known as pre- shipment export documentation.
The documentation in relation to negotiation of documents for
realization of export proceeds is referred to as post- shipment export
documentation.
Need for Export Documentation
An exporter is required to deal with various documents both at the

pre- shipment and post- shipment stages for export transaction.
These documents are important because of:-
1. As an evidence of shipment and title of goods.

2. For obtaining payment.
The shipment is represented by the set of documents once have been

cleared by the customs for their transportation to the importer.
These documents are of vital interests to both the importer and
exporter. The importer needs them to claim peaceful and legal
possession and delivery of the goods in his country; the exporter
needs to hand them over to him to claim payment for the shipment.
Accuracy and completeness are of paramount importance in
documents covering export shipments. Minor discrepancies in the
documents, which look harmless sometimes, assume menacing form
either in the data themselves. If any alteration or addition has been
made by an authority issuing the documents, the exporter should
ensure that the same has been endorsed by it properly under the
signature of the person issuing the documents only.
The main purpose of the documents accompanying a shipment is to
provide a specific and complete description of the goods so that they
can be assessed correctly for duty purpose and meet the import
licensing requirements or import quota restrictions imposed on the
goods for clearance purpose. If there are any discrepancies in the
documents the required documents are not produced, the shipment
70
may not be allowed for import or may even be confiscated by the
customs of the importing country.
SET OF DOCUMENTS REQUIRED FOR EXPORTS
The following documents are generally required for export of

products:
1. Invoice-in 4 copies plus 10 copies for certification.
2. Packing List in4 copies.
3. Mill’s Certificate in 3 copies.
4. Insurance Certificate in duplicate.
5. Certificate of Origin in 3 copies.
6. Bill of Exchange-in duplicate.
7. B/L-full set plus 2 non-negotiable copies.
8. Material Safety Data Sheets/Analysis Report in 3 copies.
9. SDF Form & Custom certified Invoice both in original.
10. Above mentioned L/C in original.
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THE MAJOR DOCUMENTS
Export documentation plays a vital role in international marketing as

it facilitates the smooth flow of physical goods and payments
thereof across national frontiers. Export documentation is however
complex as the number concerned authorities to whom the relevant
documents are to be submitted.
On the basis of the function to be performed export documents can

be classified under four categories:
Trade documents/Commercial documents:
The commercial documents are those by which customs of trade are

required for effecting physical transfer of goods and their title from
the exporter to the importer. On an average there are 16 commercial
documents. The following 16 commercial documents are involved in
the pre-shipment stage:
 Pro-forma invoice
 Commercial invoice
 Packing list
 Shipping instruction
 Intimation inspection
 Certificate of inspection
 Insurance declaration
 Certificate of insurance
 Shipping order
 Mate’s receipt
 Bill of lading
 Application for certificate of origin
 Certificate of origin
 Bill of exchange
 Shipping Advice
 Letter to the bank for collection
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Our of 16 documents 14 have been standardized and aligned to one
another. Two documents namely Shipping order and Bill of exchange
could not be standardized.
Regulatory documents:
These are the documents which are required for complying with
the rules and regulations governing export trade transactions such
as foreign exchange regulations, customs formalities, export
inspection etc. The regulatory documents associated with the pre-
shipment stage of an export transaction are as follows:
 Gate Pass-1/gate Pass-2
 AR-4 form
 Shipping bill/bill of export
 Export application/dock Challan/Port trust copy of
shipping bill
 Receipt for payment of port charges
 Vehicle chit
 Exchange Control declaration (GR/PP) Forms
 Freight Payment Certificate
 Insurance premium payment certificate
Out of the above 9 regulatory documents, 4 have been standardized.
Export assistance documents
These are the documents which are required for claiming assistance
under the various export assistance measures or may be in operation
from time to time. Presently these refer to import replenishment
licenses, cash compensatory support scheme drawback of central
excise & custom duties & packing credit facilities.
Foreign documentation
These are the documents which are required by the importer in order
to satisfy the requirements of his governments. These include:
 Certificate of origin
73
 Consular invoice
 Quality control certificate etc.
Export documents can be classified into two categories depending

upon the specific requirements:
• Regulatory
• Operational
NEED FOR EXPORT DOCUMENTS
Export documents have to be prepared for various purposes:
o Declaration of exports as per exchange control regulation of

the country.
o Transport of the goods.
o Customs clearance of the goods
o Other purposes.
SIGNIFICANCE OF SOME EXPORT DOCUMENTS
Some of the principal documents are discussed as follows:
 Letter of Credit
 Export Invoice
 Packing List
 Certificate of Origin
 Bill of Lading
 Shipping Order/Mate’s Receipt
 Shipping Bill
 Marine Insurance Policy
LETTER OF CREDIT
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Letter of credit is an undertaking by the importer’s bank that if the
exporter exports the goods and produces documents as stipulated in
the letter, the bank would make payment to the exporter. “Letter of
credit” is the most important single document in international trade.
It forms the basis of very large volume of world trade. Letter of
credit provides great security to the exporter. “It is an arrangement
by means of which (issuing bank) acting at the request of a customer
(Applicant), undertakes to pay to a third party (Beneficiary) a
predetermined amount by a given date according agreed stipulation
and against presentation of stipulated documents.”
SALIENT FEATURES
 It is an undertaking by the bank.

 It is an undertaking to make payment.
 It is an undertaking to make on behalf of the person.
 It is an undertaking given to the third party.
 It is an undertaking given to the third person. (A person other
than the one on whose behalf it is given)
 It is a conditional undertaking, payment being subjected to
compliance with some conditions.
PARTIES TO A LETER OF CREDIT
A documentary credit has got four parties, namely:

♦ APPLICANT (opener)
♦ ISSUING BANK
♦ BENIFICIARY
♦ ADVISING BANK
MECHANISM OF L/C
♦ Is to make payment to the order of a third party (the

beneficiary), or is to accept and pay bills of exchange drawn by
the beneficiary; or
♦ Authorizes another bank to effect such payment or to accept
and pay such bill of exchange; or
♦ Authorizes another bank to negotiate, against stipulated
documents, provided that the terms and conditions of the credit
are complied with.
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TYPES OF A LETTER OF CREDIT
• Revocable Letter of credit: It is a credit which can be revoked.

A revocable L/C is the one which can be cancelled or amended
by the issuing bank at any time without prior notice to the
beneficiary. A revocable credit indicate the nature by a
specific clause addressed to the advising bank.
• Irrevocable letter of credit: It is a firm undertaking on the part
of issuing bank and cannot be cancelled or amended without the
consent of the parties to L/C, particularly the beneficiary. An
irrevocable credit constitutes a definite undertaking of the
issuing bank to accept or pay bills drawn on another bank or
make payment.
• Payment credit: It is a credit which will be paid at sight basis

against presentation of requisite documents to the designated
paying bank. In a payment credit, beneficiary may or may not
be called upon to draw a draft.
• Deferred payment credit: It is a usance credit where payment

will be made by designated bank, on respective due dates.
• Acceptance credit: It is similarly to deferred payment credit

except for the fact that in this credit drawing of a usance draft
is a must. Under this credit, drafts must. Under this credit,
drafts must be drawn on the specified bank.
• With recourse without recourse credit
• Revolving letter of credit
• Confirmed letter of credit
• Transferable credit
• Revolving credit
• Transit credit
• Bank to back credit
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• The sight credit
• Usance credit
• The deferred payment credit.
COMMERCIAL INVOICE
It is one of the most important documents issued by the seller in the

standardized format. The invoice is usually made out of the full
realizable amount of the Trader term. The invoice should be strictly
as per the contract of sale and must be signed by the seller or the
person on his behalf.
CONSULAR INVOICE
A consular invoice is required to be prepared in a prescribed format

and it should be signed/certified by the council of the importing
country located in the country of export. The main purpose of
consular invoice is to enable the importer’s country to collect
accurate and authenticated information about the value, volume,
quality, source etc. of the import for assessing Import duties and for
other statistical purposes. It helps the importer to get cleared the
goods through the customs without any undue delay. This document
is required mainly by the Latin American countries like Kenya,
Tanzania, Nigeria, Mauritius, New Zealand etc.
PACKING LIST
Packing list may be shown on invoice or separately and should

contain item by item, the contents of cases or containers or of a
shipment with its weight and description set forth in such a manner
as to permit checks of the contents by the customs on arrival at the
port of destination.
The packing list is a relatively simpler document and the whole

of the information can be reproduced from the master by masking
information not desired on the packing list. Special information, if
any can be given in the blank space in the lower third position of the
document. It is a list showing the details of goods contained in each
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Parcel shipment. Packing list has to be prepared in the Aligned
document from.
BILL OF LADING
A Bill of lading is a document issued by the sipping company or its

agent, acknowledging the receipt of goods for carriage which are
deliverable to the consignee or his assignee in the same condition as
they were received. A bill of lading serves the following purposes:
 It is a receipt of goods received by the shipment company.
 A Contract with the carrier: it contains the terms of contract

between the shipper and the shipping company, between stated
points at a specific charge.
 Evidence of title: It is a certificate of ownership or title to the

goods.
Contents of Bill of lading
The usual form of a bill of lading includes the following

information:
• Name of the shipping company.

• Name of the shipper.
• Name and address of the importer.
• Name and address of the party to be notified on the arrival of
shipment.
• Name of the carrying vessel.
• Name of the ports of loading and discharge.
• Whether freight is payable or whether freight has been paid.
• Number of originals in the set of bill of lading documents.
• Marks and number identifying goods.
• Brief description of the goods (including weights and
dimensions).
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• Number of packages.
• Signature of ship’s master or his agent.
• Date on which goods were received for shipment.
• Signature of the exporter (or his agent) and his designation
applicable.
IMPORTANCE OF BILL OF LADING
o It is a contract between the shipper and the shipping company

for the carriage of goods to the port of destination.
o It is an acknowledgement indicating that the goods mentioned
in the document have been received on the board for the
purpose of shipment.
o It issue for claiming incentives offered by the government to
exporters.
MARINE INSURANCE POLICY
The safe conduct of the goods from the time it leaves the exporter’s
godowns and till it reaches the warehouse of the importer is what all
the parties in the transaction pray for. It depends upon the safety of
the goods during the voyage and safety of the vessel that carries the
goods. Marine insurance Policy offers the desired cover against the
loss or damage of the goods during the transit. It allows a free flow
of international trade. In India Marine insurance is governed by the
marine Insurance act’ 1963. Section 3 of the act defines a contract
of marine insurance as “as agreement in which the insurer undertakes
to indemnify the assured in the manner and to the extent thereby
agreed”.
NATURE OF MARINE CARGO INSURANCE

o Parties
o Insurable interest
o Utmost good faith
o Indemnity
o Assignment
CERTIFICATE OF ORIGIN
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This certificate certifies the place of origin of the merchandise’
Besides the federation of Indian Chamber of Commerce and Industry,
EPC’s and various other trade associations have been authorized
government of India to issue certificate of origin. These certificates
are important in case of shipments to countries which have
preferential rates of tariff for Indian goods.
Certificates of origin are issued by Chamber of commerce on their

own printed forms differing in sizes and layout. The standard
documents in respect of certificate of origin are included in the
series of aligned documents. A Certificate of origin declares the
place of actual manufacture or growth of the goods. A country may
place restrictions on imports from certain countries.
SHIPPING ORDER/MATE’S RECEIPT
When a cargo is loaded on the ship the commanding officer of the

ship will issue a receipt called the mate’s receipt for the goods. The
mate receipt is first handed over the port trust authorities so that all
the port dues are paid by the exporter to the port trust. The bill of
lading is prepared by the shipping agent only after the male receipt
has been obtained.
The aligned shipping order and the mate’s receipt have been
prepared after examining the forms of the two documents issued by
the different shipping companies. The information required in these
documents can be reproduced with great ease from the master. The
issuance of these documents in the standard from will also facilitate
the processing of documents at various stages.
SHIPPING BILL
Shipping bill is required by the customs. It is only after the

shipping bill is stamped by the customs that cargo is allowed to be
carted to the docks. The aligned shipping bill has been prepared
after taking into consideration the requirement of custom’s public
notice no. 39 which suggests a uniform shipping bill for different
categories of exports. Basically shipping bill are of four types:
 Export duty/cess
 Free of duty/cess
 Entitlement to duty drawback
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 Re-export of imported goods.
The format presented for shipping bill is as under :

o White shipping bill.
o Green shipping bill.
o Yellow shipping bill.
o Pink shipping bill.
BILL OF EXCHANGE
A bill of exchange is an instruction by the exporter (drawer) to the

(importer) or the importer’s bank to make payment of the amount
mentioned in it. A bill of exchange is a negotiable instrument and is
governed by the Negotiable Instruments Act in India and by similar
enactments in other countries. The Negotiable Instruments Act
defines a bill of exchange as “an instrument in writing containing an
unconditional order, signed by the maker directing a certain person
to pay a certain sum of money only to or order of a certain person or
to the bearer of instrument. A bill of exchange is also called as draft
contains an order from the credit to the debtor to pay a specified
amount to a person mentioned therein.
There are three parties to B/E.
 The Drawer (exporter) : The person who executes the B/E.

 The Drawee (importer) : The person on whom the B/E is drawn
and who is required to meet the terms of the document.
 The Payee (the exporter’s bank): The party to receive the
payment.
TYPES OF BILL OF EXCHANGE
o Sight and usance bills.

o D/A and D/P bills.
o Inland and foreign bill.
GR FORM
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The RBI to ensure that the foreign exchange receipts in respect of
exports are repatriated to India has prescribed this form. This has to
be prepared in duplicate. The original copy has to be submitted to
the customs authorities at the port of shipment. This is sent to the
RBI directly by the customs authorities. The duplicate copy is
submitted to the negotiating bank along with the other documents
after shipment of goods. The negotiating bank sends the duplicate
copy to the RBI.
COMMON DEFECTS IN DOCUMENTATION
The bank making payment on behalf of its foreign correspondent

must verify that all documents & drafts conform precisely to the
terms & conditions of the L/C. to avoid payment delays, the
beneficiary should prepare & examine all documents carefully before
presenting them to the paying bank. Paying banks find that the
following discrepancies between the documents & the letter of credit
occur most frequently:
1. Drafts are presented after L/C has expired or after time for
shipment has expired.
2. Invoice value or draft exceeds amount available under L/C.
3. Charges included in the invoice are not authorized in the L/C.
4. Amount of insurance coverage is inadequate or coverage does
not include risks required by the L/C.
5. Insurance document is not endorsed and/or countersigned.
6. Date of insurance policy or certificate is later than the date on
bill of lading.
7. Bills of lading are not “clean” that is, they bear notations that
qualify good order & condition of merchandise of its packing.
8. Bills of lading are not marked “On Board” when so required by
L/C.
9. “On Board” endorsement or charges on bills of lading are not
signed by carrier or its agent or initialed by party who signed
bills of lading.
10. “On Board” endorsement is not dated.
11. Bills of lading are not endorsed.
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12. Bills of lading are made out “to order” (Shipper’s order, Blank
endorsed) where L/C stipulates “Straight” (direct to consignee
bills of lading or vice versa.
13. Bills of lading do not indicate, “Freight prepaid” as stipulated
in the L/C.
14. B/L are not marked “Freight prepaid” when freight charges are
included in invoice.
15. Descriptions, marks & nos. of merchandise are not same on all
documents presented or are not as required by L/C.
16. Not all documents required by L/C are presented.
17. Invoice states “used”. “second hand” or “rebuilt” merchandise
when L/C does not authorize such condition.
18. Invoice does not specify shipment terms (C & F, CIF, FOB, etc)
as stated in L/C.
19. Invoice is not signed as L/C requires.
SHIPMENT OF EXPORT GOODS
The exporter should arrange for shipment of the goods as soon as

they have been cleared by the inspection agency from the point of
view of their quality and the distribution logistics has been worked
out. The process of shipment of goods would involve essentially
their clearance by the Central Excise and the Customs Authorities.
The exporter should first plan for the Central Excise Clearance and
then take the help of a custom house agent to obtain the Customs
Clearance of the shipment.
CENTRAL EXCISE CLEARANCE PROCEDURES
All excisable goods can be removed from the factory only after their
clearance by the Central Excise Authorities. The Central Excise
Clearance of goods is governed by Central Excise Act,1944 and
Central Excise(No.2) Rules, 2001.
The procedure for clearance of excisable goods for exports can be
classified into the following two categories:-
1. Procedure for excise clearance in the case of exempted units.

2. Procedure for excise clearance in the case of units other than
exempted units.
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EXCISE CLEARANCE PROCEDURE
The exempted units shall prepare an invoice for the goods giving
reference of the exemption letter issued by the Central Excise
Authority in terms of Notification No. 36 / 2001 / Central Excise
(NT). This invoice would serve as a proof of Central Excise
Clearance of the goods.
EXPORT UNDER BOND / LETTER OF UNDERTAKING: RULE 19
In this case the exporter is allowed clearance of goods for export

without payment of the excise duty subject to the execution of bond
with security or surety for a sum equivalent to the duty chargeable
on the goods to be exported. This procedure is called Export under
Bond as provided under Rule 19 of the Central Excise Rules.
Manufacturer – Exporter can submit Letter of Undertaking instead of
bond.
CENTRAL EXCISE CLEARANCE WITH OR WITHOUT

EXAMINATION OF GOODS
The exporter has an option to seek excise clearance of export cargo

without examination or after examination by the Central Excise
Officer. In case the clearance is done after examination of the goods
then the Central Excise Officer draws three samples of the goods.
After clearance of the goods, the export boxes are duly sealed by the
Central Excise Officer who would then hand over two samples of the
goods duly sealed to the exporter for the purpose of handling over
one sample to the customs and the other to be retained by him for
record. The facility of excise clearance with or without examination
is available under both the option i.e, export under claim of Rebate
of Duty and export under Bond / Letter of Undertaking. The Excise
Clearance after examination is also known as export under Central
Excise Seal.
DOCUMENTATION REQUIREMENT FOR CENTRAL EXCISE

CLEARANCE
The basic form used for the purpose of seeking Central Excise
Clearance is called ARE.1 (Application for removal of excisable
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goods for export) – whether by air / sea / post / land. This form is
required to be filled by the exporter in all cases that is :-
Export clearance of his own without examination by the Central
Excise officer whether under claim for rebate or under bond / Letter
of Undertaking.
Export clearance under Central Excise Seal under claim for rebate or
under bond / Letter of Undertaking.
ARE.1 FORM:-
The different copies of ARE.1 are indicated as below :-

1. Original
2. Duplicate
3. Triplicate
4. Quadruplicate
5. Quintuplicate
CLEARANCE UNDER CLAIM OF REBATE WITHOUT

EXAMINATION
The copies of ARE.1 would be disposed as under :-

a. O r i g i n a l a n d d u p l i c a t e : T o t h e e x p o r t e r p r e s e n t i n g t h e m t o
the Customs Officer at the point of export along with export
shipment.
b. T r i p l i c a t e : - T h e t r i p l i c a t e c o p y o f t h e A R E . 1 F o r m i s s e n t t o
rebate sanctioning authority that is Maritime Collector of
Central Excise or the Assistant Collector of Central Excise
declared by the exporter on the ARE.1. This copy on the
request of the exporter may be saled and handed over to the
exporter / his authorized agent for presenting to the rebate
sanctioning authority.
c. Q u a d r u p l i c a t e : - I t i s a n o f f i c e c o p y t o b e r e t a i n e d b y t h e
Central Excise Officer.
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CLEARANCE UNDER CLAIM FOR REBATE UNDER
CENTRAL EXCISE SEAL
a. O r i g i n a l / D u p l i c a t e : - T o t h e e x p o r t e r f o r p r e s e n t i n g t o t h e
Customs Officer at the point of export along with the export
shipment.
b. T r i p l i c a t e : - To the rebate sanctioning authority i.e.

Maritime Collector of Central Excise or the jurisdictional
Assistant Collector of Central Excise, as declared by the
exporter on the ARE.1. The Central Officer may handover
this copy under a sealed cover on exporter’s request.
c. Q u a d r u p l i c a t e : - T o b e r e t a i n e d f o r r e c o r d s .
PROCESSING OF ARE.1 BY THE CUSTOMS OFFICER
The original and duplicate copies of the ARE.1 are presented by

the exporter / his authorized agent to the Customs Officer at the
point of export along with the goods, Shipping Bill / Bill of
Export, and samples sealed by the Central Excise Officer. The
export shipment is checked by the Customs Officer to see whether
the seals are intact and the marks and number tally, and if found
in order, he may allow exports after ensuring that the No. of the
ARE.1 has been indicated in the Shipping Bill or the Bill of
Export, as the case may be . After the goods have been shipped,
the proper officer of Customs makes necessary endorsements in
the Original, and Duplicate copies of the ARE.1 at appropriate
place, and puts his stamp with his name and designation below his
signature.
The copies of ARE.1 are disposed of by him in the following

manner :-
a. O r i g i n a l : - T o b e h a n d e d o v e r t o t h e E x p o r t e r , O r i g i n a l s h a l l
be used for filing rebate claim.
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b. D u p l i c a t e : - T o b e s e n t t o R e b a t e S a n c t i o n i n g A u t h o r i t y
declared on ARE.1. This copy on a request of exporter may
be sealed and handed over to the exporter / his authorized
agent for presenting to the rebate sanctioning authority.
CLAIMING REBATE
Where the export is from any port, airport or post office falling
within the jurisdiction of Maritime Collector of Central Excise,
option is available to file claim of rebate before such Maritime
Collector Of Central Excise. For this purpose, exporters are
required to clearly indicate their option ARE.1 along ith complete
postal address of the authority from whom the rebate shall be
claimed.
Following documents should be filed for claiming rebate :-
I. Application in the prescribed form

II. Original copy of ARE.1
III. Duplicate copy of ARE.1 in sealed cover received from
Customs Officer (optional)
IV. Duly attested copy of the Bill of Lading
V. Duly attested copy of Shipping Bill (Export Promotion Copy)
VI. Disclaimer Certificate ( in case where claimant is other than
the exporter)
On receipt of the documents for claim of Rebate of Duty, the

Maritime Collector of Central Excise or the Assistant Collector of
Central Excise, the authority with whom the claim for rebate has
been filed, shall verify and compare the original copy of ARE.1
with the duplicate copy of ARE.1 received from the Customs
Officer and with the triplicate copy of ARE.1, received from
Superintendent, Central Excise Range and after satisfying himself
that the claim is in order, will sanction the rebate either in whole
or in part.
EXCISE BOND / LETTER OF UNDERTAKING
The central excise clearance of the export shipment without

payment of Central Excise Duty is allowed if the exporter submits
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bond as provided under Rule 19 of the Central Excise Rules as
amended from time to time. The bond is to be submitted in the
form B.1 – General Bond (Surety / Security) as prescribed in
Annexure 1 to Notification No. 42 / 2001 / Central Excise /
(N.T.).
The amount of bond is equal to the duty chargeable on then goods

to be exported.
Bond can be executed with surety or without surety / security.
Exporters of the following categories are allowed to execute the
bond with surety and do not have to furnish any bank guarantee or
cash security.
1. One to Five Star Export House

2. Registered exporters ( Registered with relevant Export
Promotion Council)
3. Manufacturers registered with the Central Excise department.
CLEARANCE OF GOODS UNDER EXCISE BOND WITHOUT

EXAMINATION
I. Original & Duplicate :- To be given to the exporter.
II. Triplicate :- To the authority before whom the bond is

executed and who will accept the proof of export i.e. Maritime
Collector of central Excise or the Assistant Collector of
Central Excise Declared by the exporter on the ARE.1. This
copy on the request of exporter may be sealed and handed over
to the exporter / his authorized agent for presenting to the
authority.
III. Quadruplicate :- Office copy to be retained by the Central

Excise Officer.
CLEARANCE OF GOODS UNDER EXCISE BOND WITH

EXCISE SEAL
The Central Excise Officer shall dispose of the copies of ARE.1 as

under :-
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I. Original & Duplicate :- To be handed over to the exporter
II. Triplicate :- To the authority before whom the bond is

executed and who will accept the proof of export i.e. Maritime
Collector of central Excise or the Assistant Collector of
Central Excise Declared by the exporter on the ARE.1. This
copy on the request of exporter may be sealed in a tamper proof
cover and handed over to the exporter / his authorized agent for
presenting to the authority.
III. Quadruplicate :- Office copy to be retained by the Central

Excise Officer.
CUSTOMS CLEARANCE OF EXPORT SHIPMENT
Every exporter is required to seek customs clearance of the export

goods before sending them to the importer. The exporter can send the
shipment through any one of the following modes of transportation
of the goods:-
1. Shipment by air
2. Shipment by sea
3. Shipment by post
4. Shipment by road
The procedure for customs clearance is essentially the same whether
the shipment is sent by air or sea or post or land route.
DOCUMENTATION REQUIREMENT FOR CUSTOMS

CLEARANCE
The exporter / CHA is required to submit various documents to the

Customs authorities to seek clearance of the shipment and obtain
LET EXPORT order. The documents required depend upon the mode
of shipment.
DOCUMENTS IN THE CASE OF SHIPMENT BY AIR / SEA
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The following documents are required for customs clearance of the
shipment of goods by Air / Sea.
1. Shipping Bill in quadruplicate or Annexure A ( in the case of

computerized processing of export documents)
2. Commercial Invoice
3. Exchange Control Declaration Form GR or SDF as applicable

(original and duplicate)
4. Copy of Letter of Credit / Copy of Export Order / Export

contract duly attested by bank
5. Packing List
6. Certificate of Origin or GSP Certificate of Origin
7. Shipper’s Declaration form for export of goods under

Claim of duty draw back or
Advance License
Without certificate from Export Inspection Agency
8. ARE.1 duly approved by the Central Excise Officer or Invoice

showing clearance of excisable goods.
DOCUMENTATION IN CASE OF SHIPMENT BY POST
In case of shipment by post, the exporter is required to submit the

following documents :-
1. Customs Declaration Form instead of shipping Bill

2. Exchange Control Declaration Form (PP Form)
3. Form D in case the shipment is for export of goods under claim
for Duty Drawback
4. ARE.1 or the Invoice showing clearance of excisable goods
6. Packing List
7. Certificate of Origin / GSP Certificate of Origin
8. Copy of export order / Letter of credit
9. Insurance policy or the certificate of Insurance
10. Export License, if required
11. Pre- shipment inspection certificate
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Any other document that may be required by the Customs / Post
office
DOCUMENTATION IN CASE OF SHIPMENT BY LAND
The following documents are required to be presented to the Land

Customs Station wing of the Customs Department having jurisdiction
over the place through which the consignment moves into the foreign
country :-
1. Bill of Export
2. Exchange Control Declaration Form ( GR / SDF)
3. Drawback Bill
5. Packing List
6. Certificate of Origin / GSP Certificate of Origin
7. Copy of the export order / Letter of credit
8. Pre- shipment Inspection Certificate
9. ARE.1 or Invoice showing clearance of excisable goods
10. Export license if any
11. Any other document that may be required by the customs
APPOINTMENT OF CLEARING AND FORWARDING

AGENT / CUSTOM HOUSE AGENT
The exporter should first of all appoint a Clearing and Forwarding

Agent / Custom House Agent ( CHA) to handle the procedure
involved in the customs clearance of the export shipment. He is
expected to take the following steps for this purpose:-
1. Booking of shipping space with the conference liner or booking

the shipment with the airline. The liner issues shipping order
and the airlines issues the carting order when the shipment is
booked for transportation.
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2. Provide assistance for hiring of the container if the shipment is
proposed to be sent through container.
REGISTRATION OF IMPORTER – EXPORTER CODE NUMBER,

RBI CODE NUMBER
The CHA should apply to the customs authorities on behalf of the

exporter for registration of the details as regards Importer-Exporter
Code Number, RBI Ten digit code number, Authorized Dealer Code
Number of the bank through which the exporter would negotiate the
shipping documents for negotiation / collection, and Current Account
with the designated bank for the purpose of crediting the amount of
duty drawback to the exporter in respect of export shipment.
CUSTOMS CLEARANCE PROCEDURE
The process of customs clearance of the export shipments involves

the following four phases irrespective of the mode of shipment :-
1. Checking of the shipping documents

2. Physical examination of export cargo
3. Loading of the goods
4. Post loading certification
MARINE INSURANCE POLICY
Marine insurance is governed by the Marine Insurance Act, 1963, the

Insurance Act, 1938 and the Insurance Rules, 1939.According to the
Marine Insurance Act, marine insurance is an insurance cover for
marine cargo, air cargo and post parcels The purpose of cargo
insurance is to protect goods against physical or damage during
transit.
Marine Insurance contract is an agreement where by the insurance

company (insurer) undertakes to indemnify the owner (insured) of a
ship or cargo against risks which are incidental to marine adventure.
(Section 3 of the Marine Insurance Act,1963).
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NEED FOR MARINE INSURANCE
The exporter may suffer loss if the cargo is damaged due to an

accident or any other circumstances during transportation of goods
from the port of loading to the port of discharge. The exporter can
protect himself against this kind of loss by taking insurance cover
against such risks arising due to physical damage to the goods. This
kind of insurance is known as marine insurance. The need for this
insurance has arisen due to both the legal and commercial reasons.
RISKS COVERAGE UNDER MARINE INSURANCE
The shipper / exporter can cover his goods against the following
risks depending upon the need and terms of Letter of Credit / Export
Order.
The risks coverage is done in terms of various institute cargo clause
to define the perils / risks covered by the policy.
1. INSTITUTE CARGO CLAUSE A
2. INSTITUTE CARGO CLAUSE B
3. INSTITUTE CARGO CLAUSE C
4. WAR AND STRIKES, RIOTS AND CIVIL COMMOTION (SRCC)

CLAUSE
INSTITUTE CARGO CLAUSE C
This cover is granted by attaching Cargo Clause ( C ) to the policy

of insurance. The policy covers loss or damage to the caused by
a) Fire or explosion
b) Stranding, grounding, sinking or capsizing of the vessel
c) Overturning or derailment of land conveyance
d) Collision or contract of vessel, craft or convenience with any
external object other than water.
e) Discharge of cargo at a port of distress
f) General average sacrifice
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g) Jettison
The cover extends over the entire period of transit from the time
goods leave the warehouse at the place of commencement of transit
and continues during such transit including deviation and terminates
on delivery of the goods warehouse at the destination named in the
policy or on expiry of 60 days after the completion of discharge
from the vessel at the final port.
The policy will not cover the following risks:
a) Loss, damage or expense caused by delay and inherent vice or

nature of the subject matter
b) Loss, damage or expense attributable to willful misconduct of
the insured.
c) Ordinary leakage, ordinarily loss in weight or volume, or
ordinary wear and tear of the subject ,matter insured.
d) Insufficiency or unsuitability of packing.
e) Deliberate damage to or deliberage destruction of the gods.
f) Loss, damage or expense arising from insolvency or financial
default of the owners or operators of the vessel.
g) Loss, damage or expense arising from the use of atomic
weapons or nuclear fission and other like reaction or
radioactive force.
INSTITUTE CARGO CLAUSE (B)
This cover is granted by attaching Institute Cargo Clause (B) to the

policy of insurance.
In addition to the risks covered under Institute Cargo Clause (C),
the following risks are covered:-
a) Loss of or damage to the goods attributable to earthquake,

volcanic eruption or lighting.
b) Washing overboard.
c) Loss of or damage to the goods caused by entry of sea, lake

or river water into vessel, craft, hold, conveyance, container
lift van or place of storage.
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d) Total loss of any package lost overboard or dropped whilst
loading onto, or unloading from, vessel or craft.
EXTRANEOUS PERILS
As the goods in transit are subject to a large number of non maritime

extraneous perils, it is possible to extend the policy issued on
Institute Cargo Clause (B) to cover and or all the following:-
a) Theft, pilferage and non – delivery

b) Fresh and / or rain and / or river water damage
c) Hook, oil, mud, acid and damage by other cargo
d) Heating and sweating
e) Brakeage, denting, chipping, scratching and blending
f) Leakage
g) Bursting and tearing
INSTITUTE CARGO CLAUSE (A)
This cover is granted by attaching Institute Cargo Clause (A) to the

policy of insurance. This policy covers all risks of loss of or damage
to the goods insured and is the widest cover. This policy will not
cover the risks excluded under items (1) above i.e. Institute Cargo
Clause (C).
WAR AND SRCC COVER
The exporter can obtain war, riots, strikes and civil commotion cover
along with all the three types of policies by payment of an additional
payment. The above cover is granted by attaching Institute War
Clause (Cargo) and Institute Strike Clause (Cargo) to the policy of
insurance.
PROCESS INVOLVED IN GETTING EXPORT INCENTIVES
Export Incentives
The Government of India has framed several schemes to promote

exports and to obtain foreign exchange. These schemes grants
incentive and other benefits. The few important export incentives,
from the point of view of indirect taxes are briefed below:
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Free Trade Zones (FTZ)
Several FTZs have been established at various places in India like

Kandla, Noida, Cochin, etc. No excise duties are payable on goods
manufactured in these zones provided they are made for export
purpose. Goods being brought in these zones from different parts of
the country are brought without the payment of any excise duty.
Moreover, no customs duties are payable on imported raw material
and components used in the manufacture of such goods being
exported. If entire production is not sold outside the country, the
unit has the provision of selling 25% of their production in India.
On such sale, the excise duty is payable at 50% of basic plus
additional customs or normal excise duty payable if the goods were
produced elsewhere in India, whichever is higher.
Electronic Hardware Technology Park / Software Technology Parks
This scheme is just like FTZ scheme, but it is restricted to units in

the electronics and computer hardware and software sector.
Advance License / Duty Exemption Entitlement Scheme (DEEC)
In this scheme advance License, either quantity based (Qbal) or

value based (Vabal), is given to an exporter against which the raw
materials and other components may be imported without payment of
customs duty provided the manufactured goods are exported. These
Licenses are transferable in the open market at a price.
Export Promotion Capital Goods Scheme (EPCG)
According to this scheme, a domestic manufacturer can import

machinery and plant without paying customs duty or settling at a
concessional rate of customs duty. But his undertakings should be as
mentioned below:
Customs Duty Rate Export Obligation Time

10% 4 times exports (on FOB 5 years
basis) of CIF value of
machinery.
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Nil in case CIF value is 6 times exports (on FOB 8 years
Rs200mn or more. basis) of CIF value of
machinery or 5 times
exports on (NFE) basis of
CIF value of machinery.
Nil in case CIF value is Rs50mn 6 times exports (on FOB 8 years
or more for agriculture, basis) of CIF value of
aquaculture, animal husbandry, machinery or 5 times
floriculture, horticulture, exports on (NFE) basis of
poultry and sericulture. CIF value of machinery.
Undertaking of EPCG
Note:-
• NFE stands for net foreign earnings.
• CIF stands for cost plus insurance plus freight cost of the
machinery.
• FOB stands for Free on Board i.e. export value excluding cost
of freight and insurance.
Deemed Exports
The Indian suppliers are entitled for the following benefits in

respect of deemed exports:
• Refund of excise duty paid on final products

• Duty drawback
• Imports under DEEC scheme
• Special import licenses based on value of deemed exports
The following categories are treated as deemed exports for seller if

the goods are manufactured in India:
• Supply of goods against duty free Licenses under DEEC scheme

• Supply of goods to a 100 % EOU or a unit in a free trade zone
or a unit in a software technology park or a unit in a hardware
technology park
• Supply of goods to holders of License under the EPCG scheme
• Supply of goods to projects financed by multilateral or
bilateral agencies or funds notified by the Finance Ministry
under international competitive bidding or under limited tender
systems in accordance with the procedures of those agencies or
funds where legal agreements provide for tender evaluation
without including customs duty
• Supply of capital goods and spares upto 10% of the FOR value
to fertilizer plants under international competitive bidding
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• Supply of goods to any project or purpose in respect of which
the Ministry of Finance permits by notification the import of
goods at zero customs duty along with benefits of deemed
exports to domestic supplies
• Supply of goods to power, oil and gas sectors in respect of
which the Ministry of Finance permits by notification benefits
of deemed exports to domestic supplies
Manufacture under Bond
This scheme furnishes a bond with the manufacturer of adequate

amount to undertake the export of his production. Against this the
manufacturer is allowed to import goods without paying any customs
duty, even if he obtain it from the domestic market without excise
duty. The production is made under the supervision of customs or
exciseauthority.
Duty Drawback
It means the rebate of duty chargeable on imported material or

excisable material used in the manufacturing of goods in and is
exported. The exporter may claim drawback or refund of excise and
customs duties being paid by his suppliers. The final exporter can
claim the drawback on material used for the manufacture of export
products. In case of re-import of goods the drawback can be claimed.
The following are Drawbacks:
• Customs paid on imported inputs plus excise duty paid on

indigenous imports.
• Duty paid on packing material.
Drawback is not allowed on inputs obtained without payment of

customs or excise duty. In part payment of customs and excise duty,
rebate or refund can be claimed only on the paid part.
In case of re-export of goods, it should be done within 2 years from

the date of payment of duty when they were imported. 98% of the
duty is allowable as drawback, only after inspection. If the goods
imported are used before its re-export, the drawback will be allowed
as at reduced per cent.
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Process Involved Shipping Bill for Export of Goods
under claim for DEPB Scheme is
made after shipment.
BRC is prepared for claiming the

export incentives.
A bunch of 20-25 Shipping Bills

and their respective BRCs has
been made for one application.
Various data regarding export

made are feeded in the Excel
system for the purpose of online
feeding on the DGFT Site.
Necessary application fee in the

form of EFT is made through
system.
The application is digitally signed

and submitted to Jt. DGFT,
Varanasi through the Internet
Site.
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Hard copy of Application form
alongwith E.P. copy of Shipping
Bills & original BRCs has been
sent to Jt. DGFT, Varanasi for
issuing DEPB License.
After receipt of DEPB License,

this License alongwith respective
DEPB copy of shipping bills &
duplicate copy of BRCs & a
statement showing
comprehensive details of claims
has been sent to respective
customs house through the
clearing agents for verification.
Step 1 – First of all, Shipping Bill has been made for claiming the
Export Incentives. It is made as SHIPPING BILL FOR EXPORT OF
GOODS UNDER CLAIM FOR DUTY ENTITLEMENT PASS BOOK
(DEPB) SCHEME. Under this the main things which have been
covered are:--
1. Invoice No. & Date

2. Custom House agent’s Description
3. Nature of Contract
4. Exchange Rate
5. Currency of Invoice
6. Statistical Code & Description of Goods & Exim
Scheme code where applicable.
7. Analysis of Export Value
8. Amount
9. DEPB Rate
10. Rate List Sr. No.
11. Product Group
12. DEPB No.
13. LET Export date Passed for Shipment
There are two copies of this document. 1st one is export promotion
copy & the 2nd one is DEPB copy. These document having the stamp
of Custom & Excise and the signature & seal of Custom Inspector.
Step 2 – When Shipping Bill has been prepared, after that Bank
Realization Certificate (BRC) has been made for negotiation process
in claiming the Export Incentives. This document has two parts; the
1st part contains 17 columns named Invoice no. & date, Shipping Bill
100
no. & date, Description of goods, Bill of Ladings’ no. & date,
Destination, Bill amount, Freight amount, Insurance amount
Commission Paid, FOB value, Date of realization of export proceeds
and No., date & category of applicable License which has been filled
by the exporter. Under these columns Place, Date, Seal & Signature
of the exporter have been mentioned. The 2nd part of this document
contains Bank’s Certificate which has to be filled by the Banker with
their authorization seal & signature.
When the exporter gets this BRC, it means that exporter had got the
exported amount in his bank account.
Step 3 – After getting the BRC from the bank, one application have
been prepared for a bunch of 20-25 Shipping bills and their
respective BRCs. This application is in favor of the Jt. Director
General of Foreign Trade (DGFT). Description of application for
issue of DEPB License, description of EFT towards the application
fee, description of Export Promotion Copy of Shipping Bills & the
description of self-addressed envelop with a relevant amount of
stamp fixed on it have been mentioned in this application.
Step 4 – On the DGFT site, there is an application software for

filling the data regarding export made. For this purpose various data
regarding export made are feeded in the Excel system.
Step 5 – After filling the necessary information regarding export
made in the DGFT site, relevant application fee in the EFT form is
made through system.
Step 6 – After that application is digitally signed & submitted to

DGFT through the Internet.
Step 7 – A hard copy of application form has been made and

alongwith Export Promotion Copy of Shipping Bills & original
BRCs, it has been sent to Jt. DGFT, Varanasi for issuing DEPB
License.
Step 8 – After getting the DEPB License from DGFT, this License
alongwith respective DEPB copy of shipping bills & original BRCs &
a statement showing comprehensive details of claims, it has been
sent to respective customs house through the clearing agents for
verification.
The DEPB License from DGFT which an exporter receives after the
verification of application regarding export made under DEPB
scheme contains the following:
101
1. Authorization Forwarding Letter
2. DEPB License
3. Details of the exported items
4. Application Submission Details
5. DEPB E-Commerce Version, under this
♦ IEC Details
♦ Application Firm Details
♦ Nature of Concern
♦ Type of Exporter
♦ Industrial Registration Details
♦ Service Tax Registration Details
♦ RCMC Registration Details
♦ Status House Details
♦ Excise Details
♦ VAT Details
♦ Past Turnover (Rs. Lakhs)
♦ Name & Address of the exporter
♦ Payment Details
♦ FOB value of Exports
♦ DEPB Claimed
♦ DEPB Applied for
♦ DEPB Entitlement for 100%
♦ DEPB Entitlement after cut
♦ Shipping Bills Details
♦ Declaration/Undertaking
♦ Signature & Description of the applicant
♦ Sign of DGFT
is being covered.
EXPORT BENEFITS
These are meant to take away certain taxes which are present
in the cost, the removal of which is necessary as they are meant only
for goods manufactured for sale within the country and, more than
that, to make the Export product competitive vis-à-vis the products
of other countries.
One is the concessional rate at which the commercial banks

provide pre-shipment and post-shipment finance. The rate is
currently 9.5 per cent per annum. Interest is an important element
and any concession in this will make the product competitive.
102
Removal of Central Excise Duty
Central Excise Duty is levied on all goods manufactured in India and

sold here in this country. They have no relevance to export goods.
So, they have to be eliminated. Then only the price of the export
product will be comparable with the prices of the products of other
countries.
There are two methods here :
1. Exporter removes the goods with the duty paid and

claims rebate later.
2. Exporter removes the goods under bond (without

involving any payment of excise duty).
Export under Rebate of Duty Payment
In this case, the goods are exported and later the excise duty
paid is allowed as a rebate. Important conditions for claiming the
rebate are:
a. Goods are exported not more than 2 years after

removal from the producing factory or within such shorter
period as may be specified.
b. For claiming the rebate of duty, the application

should be made within 6 months, if the export is by sea or
air (6 months from the date of loading or the ship leaving
India). If exports are by land, application should be made
within 6 months from the date on which goods cross the
frontier.
Sealing the goods and examination of dispatch - Rebate scheme
When the Exporter desires to seal the goods at the place of

dispatch, he should approach the Superintendent of Central Excise of
the Range and provide details in quadruplicate in form ARE 1. The
Superintendent will conduct the examination of the goods removed to
the port. Customs
examination at the port is dispensed with on production of a copy of

ARE 1 form with the Excise Superintendent's attestation and when
customs authorities are satisfied that the goods produced at the port
are the same as mentioned in ARE 1 form and the seals are intact and
the goods are exportable as per the laws of the country.
103
Presentation of Claim for Rebate
To get the rebate of excise duty paid, the Exporter should

lodge the original of ARE 1 form with the Excise Superintendent's
attention to the Deputy Commissioner or Assistant Commissioner of
the Range having jurisdiction over the Exporter's factory. This is
examined with the triplicate copy received from the Central Excise
Superintendent and the copy received from the Maritime
Superintendent (verification for the export of goods) and, if
satisfied that the claim is or order, he sanctions the rebate either
whole or in part.
Procedure or Removal of Goods without Payment of Duty -

Clearance Under Bond
(for all countries except Nepal and Bhutan). The procedure is

governed by Rule 19 of the Central Excise Rules 2001. The details
are found in Notification No.42/2001 - CE (NT) dated 26th June
2001.
The conditions are:
a. The Exporter should furnish a General Bond to the Assistant

Commissioner of Central Excise or to the Maritime
Commissioner. The Bond should be for a sum equivalent to the
excise duty payable.
b. The goods should be exported within six months from the date
on which they were cleared from the Exporter's factory.
c. Exporter should obtain a certificate in form CT1 from the

Assistant Commissioner concerned.
d. The Exporter should ensure that there is enough balance in

the bond.
e. Exporter should furnish a letter of undertaking in the

specified form.
The goods will then be sealed on production of ARE 1 Form. The

consignment is then sent to the Port where the Customs authorities
verify with the help of the copies of ARE 1 forms, that the seals are
104
intact and permit the shipment if the goods are exportable as per the
laws of the country.
There is no question of claim for rebate, as no excise duty has been

paid and, instead, a Bond has been provided.
The Bond is generally supported by a Bank guarantee.
Duty Drawback
Duty drawback is the rebate of any duty relating to the inputs that
go into export products. The export product may contain certain
input items purchased by the Exporter which have suffered excise
duty. Or he may have used certain products that have been imported
and which have suffered import customs duty. The excise duty or the
import duty thus suffered has to be eliminated as they have no
relevance to exports and cannot be passed on to the overseas buyer.
The elimination is done through the Duty Drawback Scheme. The
Duty Drawback is an export incentive but it is not meant to be a
source of income or profit for the Exporter.
It is meant to remove the sting due to the presence of excise or

import duty and make the price competitive vis-a-vis products from
other countries.
For claiming duty drawback, the Exporter should use the Shipping
Bill for Drawback. A copy of the Shipping Bill is sent to the
Customs Audit. This section verifies whether the goods have left the
country, the rate applicable and the computation of the drawback
amount. They may require clarifications from the Exporter. If they
are satisfied about the bonafides, the Drawback amount is released.
It is not sent directly to the Exporter but is transferred under
Electronic Data Interchange (EDI) system to a bank account that the
Exporter has been asked to open in a specified bank from which the
Exporter can transfer to his own bank account.
All Industry Drawback Rates
On the basis of the inputs and the duties relevant to them found in
export products, Government of India announce Drawback rates
every year following changes in duty rates. The rate is expressed as
a percentage of the FOB value of the product.
105
Special Brand Rate
Where the All India Drawback rate has not been announced or where
the Exporter fees that the rate is lower than what has been paid, he
may apply for a special brand rate. When he desires to do this, he
should keep samples of the exported product with the Customs and
after export, make application to Ministry of Finance in a specified
form for a special brand rate. The Ministry deputes a competent
person to visit the Exporter's factory, study the composition of the
product and in the sample with the Customs, work out the duty paid
Deemed Exports
Deemed Exports refer to the goods that do not leave the country but
which trigger earning of foreign exchange.
Various categories of goods are coming under Deemed Exports.
a. Supplies of goods against an Advance License.
b. Supply of goods to EOU's, EHTP's
c. Supply of capital goods to a holder of EPCG License.
d. Supply of goods to projects financed by multi-lateral

or bilateral agencies.
e. Supply of goods to any project for which the Ministry

of Finance.
f. Supply of marine freight containers to 100% EOU.
g. Supplies to projects funded by UN funded agencies.
Benefits in Respect of Deemed Exports
Deemed Exports are eligible for any or all of the following benefits.
a. Advance License for intermediate supply
106
b. Refund of excise duty
c. Drawback to the extent permitted.
Export Houses, Trading Houses & Star Trading Houses
Export houses/Trading Houses/Star Trading Houses have been

accorded a special status in the EXIM policy. Certain additional
benefits of import are extended to them with a view to develop
merchandising & manufacturing companies’ activities towards larger
exports. Such companies which are registered as Export
houses/Trading Houses/Star Trading Houses are entitled to
additional foreign exchange to import items not otherwise allowed to
other categories of importers. The policy differs a little for each of
these three categories of exporters and, as such, dealt with here.
These are export organizations that have done and have the potential
for making sizeable exports. In view of the big contribution they
make for the export development of the country, they enjoy a certain
status and some special privileges.
According to the Exim Policy, merchant and manufacturer exporters,

service providers, Export Oriented Units (EOUS), units located in
Special Economic Zones (SEZs), Agri Export Zones (AEZs),
Electronic Hardware Technology Parks (EHTP's), Software
Technology Parks (STPs) and also Bio-technology Parks (BTPs) are
eligible to apply for the status of a star Export House.
Star Export Houses replace the various categories of export

organizations like Export Houses, Trading Houses, Star Trading
Houses and Super Star Trading Houses.
An existing status holder shall be automatically treated to be an
equivalent Star Export House as per the following table.
Erstwhile status under Converted status as per the

Exim Policy 2002 – 2007 Foreign Trade Policy of 2004 -
2009
Export House One Star Export House
107
Trading House
Three Star Export House
Star Trading House
Four Star Trading House
Superstar Trading House
Five Star Trading House
Converted Status of Export houses as per FTP 2004-09
The Criterion for getting recognition as Star Export House will be

the export performance (FOB value) during the current plus the three
previous years as per details given below.
Performance in Rupees
Category
Crores
One Star Export House 15
Two Star Export House 100
Three Star Export House 500
Four Star Export House 1500
Five Star Export House 5000
Criterion for Getting Recognition of Star Export House
Certain organizations have the advantage of double weightage, that

is, even if they do half the stipulated performance they will get the
status. These organizations are:
Manufacturer Exporters in SSI / Tiny Sector, Cottage sectors. Units

registered with KVICs/KVIBs, Units located in North Eastern States,
Sikkim and J&K, Units exporting handloom, handicrafts, hand
knitted silk carpets, exporters exporting to Latin American
Countries, Units having ISO 9000/14000 series, exports of services,
and exports of agro products.
A Star Export House is entitled to the following facilities:
(a) Licenses / CCPs on a self-declaration basis.
(b) Fixation of Input - Output Norms on priority basis within sixty

days.
108
(c) Exemption from compulsory negotiation of documents through
banks (but remittances should come through banking
channel).
(d) They can retain 100% of the remittances received in EEFC

Account.
(e) Enhancement of repatriation period for export bills from 180 to

360 days.
(f) Entitlement for consideration under the Target Plus Scheme.

FACILITIES PROVIDED FOR EXPORT OF
ENGINEERING GOODS
Machinery and Equipment Facilities
To facilitate and assist export production of engineering goods,

facilities for procurement of machinery and equipment, dies, jigs,
tools, etc. are given under various schemes. These schemes, inter
alia, include their arrangement on hire-purchase through NSIC,
special allotment of foreign exchange & arrangement of finance on
concessional rate, lower import duty, etc.
There are two schemes which allow import of Capita/Equipment at

concessional import duty of 15% subject to specified conditions. The
two schemes are:
1. EPCG scheme for all sectors other than Services
Specified CG (Capital Goods) including spares upto 10% of the

value of the CG may be imported at a concessional custom duty
of 15% subject to an export obligation of four times the CIF
value of imports to be fulfilled within a period of 5 years from
the date of issue of the import License. Both new & secondhand
CG may be imported under the scheme. The secondhand CG
shall not be more than seven years old and shall have minimum
residual life of five years.
2. EPCG Scheme for Service sector
Capital equipment (including spares up to 10% of the CIF value

of the capital equipment) may be imported under this scheme,
whether in India or abroad, for rendering of services for which
109
the payment are received in freely convertible currency. There
will be charged a concessional import duty of 15% only with
export obligation of four times the CIF value of the imports, to
be fulfilled within a period of five years from the date of issue
of the import License.
Technical Development Fund Scheme
With a view to assist upgradation and modernization of existing

units, the TDF scheme has been instituted under which foreign
exchange up to Rs. Five crores per unit per year is allotted for
import of:-
a) small value balancing equipment

b) technical know-how,
c) foreign consultancy services,
d) drawing & design, and
e) any other inputs for improving export capability
The ceiling on import is relaxable upto 50% in respect of applicants

exporting more than 10% of total turnover of the company or more
than 25% of the production of the particular item for which the TDF
approval is sought. The scheme covers all industries.
Purpose
The scheme aims at enabling the applicant to quickly improve, in an

integrated manner, the following aspects of their operations:-
a) enhancement of export capability and quality improvement

b) capacity utilization volume, productivity gains
c) technology upgradation
d) cost reduction
e) product-mix rationalization/product diversification
f) modernization & rationalization
g) energy saving
There is no limit on capacity expansion arising out of implementing

modernization proposals under the scheme. It also admits
modernization proposals of those sick industrial units who had
110
reported to BIFR for resolution of their financial health by taking up
forward/backward integration or other suitable measures.
Simplification of Procedure
To facilitate expeditious implementation of the approved projects,

the scheme has introduced the following simplified procedure:-
a) foreign exchange allocation will be simultaneous with the

approval of import and no further procedure of seeking foreign
exchange loan will be necessary:
b) all indigenous clearance will be given by the sponsoring
authority and in appropriate cases indigenous clearance
condition would be waived:
c) decision on application will be given within 45 days.
Import Licenses under this scheme are granted by the CCI&E. the
application which are not approves under this scheme, will be
automatically considered for disposal under the normal procedure. It
is not necessary for the applicant to apply a fresh.
Finance & Credit
Facilities for financing purchase/import of machinery & equipment

are available from different financial institutions, besides the TDF.
Small Scale Units may also approach the National Small Industries
Corporation (NSIC) for getting Capital goods on hire-purchase basis.
Different State Industrial Development Corporations and State
Financial Corporations are the other institutions which could be
approached in this regard.
IDBI’s TDF scheme
The units holding import License under the TDF scheme, and which
can satisfy the IDBI that the proposed import will be improve their
productivity, export, etc. are eligible for assistance from the IDBI
upto Rs. 35 million per unit per annum. In deserving cases, a part of
the import duty and other incidentals may also be financed, subject
to a ceiling of 25% of the c.i.f. value of the import License and
within the overall limit of Rs. 35 million. A concessional rate of
interest is charged. The World Bank shall reimburse 70% of the
sanctioned amount under the scheme.
Raw Material facilities
111
Raw materials both imported and indigenous are made available to
units manufacturing goods for exports, whether exports are effected
by such units themselves or through other exporters/Export Houses,
etc.
This facility is given for production of export products both and

before effecting export i.e. in advance as well as after the shipment
of goods. The policy of advance allocation of different types of raw
materials like iron &steel, chemicals, plastic raw material: drugs,
etc.
Iron & Steel
Specified items manufactured by mills participating the JPC (Joint

Plant Committee) Scheme like pig iron, MS sheets/CR sheets, HR/CR
coils, plates, rounds, etc. are made available on replenishment basis
against their consumption in the goods exported outside the country.
This scheme is, however, applicable to exports of fabricated
engineering goods and not to straight exports of steel.
The facility of priority allotment can be availed of through the EEPC

(Engg. Export Promotion Council).
Plastic Raw Material by IPCL
Specified raw materials like low density polyethylene moulding

powder are supplied by the Indian Petro-Chemicals Corporation Ltd.
Baroda.
Hindalco’s Export
(From Renukoot Plant )
YEAR QTY. (MT)

2003-04 20393
2004-05 32828
2005-06 36559
2006-07 35477
2007-08 39317
Hindalco’s Export in terms of Quantity (MT)
112
113
FINDINGS & RECOMMENDATIONS
FINDINGS
• Hindalco is the leading exporter of Aluminium Semi-Finished

products in India.
• FIEO (Federation of Indian Export Organization) has awarded
Hindalco as a Five Star Trading Houses on their export
achievements.
• Hindalco is following all the norms as per Central Excise &
Customs and other government rules & regulations in the export
process.
• Hindalco is following positive and proactive approach towards
export.
• Hindalco is exporting all over the world, from underdeveloped
countries to advance countries.
114
RECOMMENDATIONS
Hindalco is a reputed Aluminium industry in the world and its

products are well accepted in the market but as we know that there is
always a scope of improvement.
Following are the recommendations in all the three areas; Export
Process, Export Documentations and Export Logistics:
EXPORT PROCESS
• Sometimes 3-4% execution of export order has been delayed due

to rejection of partial quantity of the product due to quality
problems and manufacturing defects. So, it is recommended that
Hindalco should have to keep advance stock or backup products
in their warehouse to overcome this problem and to execute the
order on time.
• Some of the Caster product order is being delayed due to limited
capacity of the Caster Plant. So, it is recommended that Hindalco
should have to increase the capacity of their Caster Plant.
EXPORT DOCUMENTATION
• Hindalco is using Oracle & IVL software system for making

export documents. The working of this software is from Order
management to Shipment. This process is time taking due to
partly adoption of the software system. So, it is recommended
that this software should have been start from Enquiry
management to Shipment. It would ease in making documents in
faster way manual interruption will be minimized.
EXPORT LOGISTICS PROCESS
Hindalco is exporting from Kolkata and Mumbai port both.

Sometimes delay in movement of export consignment occurs due to
logistics problems. The problems and their recommendations are as
follows:
• Sometimes there is unavailability of containers for any particular

destination occurs. This problem have been overcome by helding
a meeting and making a successful negotiation process from the
shipping line companies for the arrangement of empty containers.
115
• Unavailability of tailors due to non-uniformity of production
occurs. This problem should have been solved by the proper
working collaboration of the Marketing & Production department.
The company is working on this process and it is expected that
this problem will be solved shortly.
• Movement of export consignment tailors disturbs due to creation

of problems by the Naxaliets in Jharkhand and Bihar. This
problem will be overcome by the Indian Government only,
company have not any solution of this problem.
116
117
CONCLUSIONS
The above study makes it clear that Hindalco has a well-established

export market for its products. The company is making a rapid
progress, in the various spheres of its business activities. Besides,
the company adopts a favorable attitude towards safety environment
and quality considerations. The company has also been undertaking
various community development programs, in the nearby-located
areas.
It has been learning-exercise to complete this project. Working on

this project I found the practical knowledge about the industrial
organization. It has been an enjoyable and fruitful experience tome.
I certainly gained a lot of practical knowledge while on training.
The study is intended to be concluded with the help of “strength,

Weaknesses, threat”-analysis of Hindalco products, role of export
documentation, which is the matter of prime importance in any
export business & export procedures especially for Aluminium
products, which will present a summarized view of all study.
118
119
BIBLIOGRAPHY
BOOKS:
• Khurana P. K., Export Management, Number of Pages referred from “10-21”,”133-
150” and “333-416”.
• Ram Paras, Export A to Z Documentation & Procedure, Number of Pages referred
from “12-18”, “121-167”and “342-402”.
MAGAZINES:
• Impex Times
• FIEO News
• Aluminium International Today
• Aluminium Times
• Aluminium Now
• Incale 2
• Incale 3
INTERNET:
• http://www.algomtl.com
• http://www.go4worldbusiness.com
• http://www.unzco.com/basicguide
• http://dgftcom.nic.in
• http://www.fieo.org
• http://www.airportsindia.org.in
• http://www.indiandata.com/trade_policy/export_procedures
• http://www.wikipedia.com/logistics
• http://www.google.co.in/
• http://www.hindalco.com/products/rolled_products
• http://www.hindalco.com
• http://www.novelis.com
• http://www.adityabirla.com
120
121
ANNEXTURE
SPECIMEN OF INVOICE
Exporter Invoice no. Exporter’s Ref

& date
Buyer’s order no. & date
Other references
Consignee Buyer
Country of origin of Country of
goods Final
destination
Terms of delivery and payment
Pre-carriage by Place of Receipt by Pre-
carrier
Vessel/Flight Port of lading
No.
Port of Final destination
discharge
Marks and no. No. and Description Quality Rate Amount
of containers kind of of goods
Pkgs.
Signature & date
122
SPECIMEN OF PACKING LIST
Exporter Invoice No. Date

Buyer’s order no. & date
Other reference(s)
Consignee Buyer
Country of origin of Country of

goods Final
destination
Pre-carriage by Place of Receipt by

Pre-carrier
Vessel/Flight Port of lading
No.
Port of discharge Place of delivery
Marks & No.s/ No. and kind of Pkgs. Description Quality Remarks
containers no. of goods
Signature &
date
123
SPECIMEN OF CERTIFICATE OF ORIGIN
Exporter
NAME OF THE
Consignee CHAMBER OF COMMERCE
Pre-carriage by Place of receipt of

Pre-Carrier
Vessel Port of loading
Port of discharge Final destination
No. and kind of Gross weight (kg) Measurement
packages : Description
of goods
Certification : Declaration by Exporter :

It is hereby certified that this declaration We hereby declared that the above
was made before me and that to the best of mentioned goods were produced in the
my knowledge and believe the above Indian Union and are shipped to
mentioned goods are of Indian origin.
Name of the authorized Signatory
Place & date of issue
Signature Secretary
Place and date of issue
Signature
124
SPECIMEN OF BILL OF LANDING
Shipper
B/L NO.
Consignee NAME AND LOGO

OF
SHIPPING LINE
Notify Party
Local Vessel From

Ocean Vessel Port of Lading
Port of Discharge Final Destination (if on
carriage)
Marks & Numbers No. & Kind of Packages; Gross weight(kg) Measurement
Description of goods
125
Freight details, charges, etc
Shipped on board in apparent good order……………
Freight Payable at Place & date of time

No. of Original B/L Signature
Applicable only when document used as through Bill of Lading
126
SPECIMEN OF EXPORT QUOTATION WORKSHEET
127
SPECIMEN OF COMMERCIAL IMNVOICE
1.
EXPORTER
2.
CONSIGNEE,
INTERMEDIATE CONSIGNEE
3. FORWARDING AGENT
4. COMMERCIAL INVOICE NO.
128
5. CUSTOMER PURCHASE ORDER NO.
6. B/L, AWB NO.
a. COUNTRY OF ORIGIN
b. DATE OF EXPORT
c. TERMS OF PAYMENT
d. EXPORT REFERENCES
e. AIR/OCEAN PORT OF
f. EMBARKATION
g. EXPORTING
h. CARRIER/ROUTE
i. PACKAGES
j. QUANTITY
k.NET
WEIGHT/GROSS
WEIGHT
l. DESCRIPTION OF MERCHANDISE UNIT
m. PRICE/TOTAL VALUE
n. PACKAGE MARKS
o. MISC. CHARGES
p. CERTIFICATIONS
129
SAMPLE OF INSURANCE CERTIFICATE
130

Hindalco Industries LTD 15112010

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1

ADITYA BIRLA GROUP

A US$ 29 billion corporation, the Aditya Birla Group is in the

Globally the Aditya Birla Group is:

:: A metals powerhouse, among the world's most cost-efficient

:: Largest premium branded apparel company

ADITYA BIRLA GROUP

key products and

Key products and brands Capacities Country

key products and brands Capacities Country

key products and brands Capacities Country

Aditya Birla Nuvo Ltd.

Key Products and Brands Capacities Country

Key Products and Brands Capacities Country

Epoxy Resins (bis-a and bis-f),

Sodium Sulphite, Sodium

Thai Peroxide Co. Ltd.

Key Products and Brands Capacities Country

Key Products and Brands Capacities Country

Key Products and Brands Capacities Country

Key Products and Brands Capacities Country

Key Products and Brands Capacities Country

Key Products and Brands Capacities Country

Hindalco ranks as one of the largest Aluminium producer in

EFFECTIVENESS FOCUS: To continue to remain the market

GROWTH FOCUS: To purchase value adding growth opportunities

Hindalco Industries Limited, the metals flagship company of the

Established in 1958, Hindalco commissioned its Aluminium facility

In 2007, the acquisition of Novelis Inc. a world leader in Aluminium

Hindalco in India enjoys a leadership position in Aluminium and

The integrated facility at Renukoot, (Uttar Pradesh)

The aluminium alloy wheels plant is located at Silvassa (Dadra and

A strong presence across the value chain and synergies in operations

Hindalco's Aluminium Galleries in Mumbai and Gurgaon showcase

Hindalco is a leading domestic player in two metals business

The aluminium division's product range includes alumina chemicals,

The company has a significant market share in all the segments in

As a step towards expanding the market for value-added products and

The company's alumina chemical business is a leader in

The copper plant produces world-class copper cathodes,

SOME RECENT MILESTONES

:: In May 2007, Novelis became a Hindalco subsidiary with the

“To strengthen our position as a premium aluminium company

“To pursue the creation of value for our customers, shareholders,

We, at Hindalco, shall aim to achieve and sustain excellence in

 Modernization of the manufacturing facilities stress on

A motivated workforce with a sense of pride in the organization

Annual results in brief

Slab Aluminium sheet Wire rods sheet

Circle Alloy wheel Watch

Blister pack Ladder Door

FLAT ROLLED PRODUCTS (FRPs)

The company's commitment to quality and service along with its

Efficiency and product quality are ensured by using state-of-the-art

Of the total production of Hindalco's flat rolled products, around 40

Everlast, a Hindalco brand for aluminium roofing sheets, offers ideal

1. Cold rolled Coils

Hindalco's cold rolled coils are precision-finished to match

Hindalco's cold rolled sheets are precision-

Hindalco offers circles, also known as flat circular

Al-clad sheets / coils

Flooring sheets / tread plates

Printed Circuit Boards (PCB) entry sheets