A PROJECT REPORT ON

POTENTIAL OF HINDUSTAN ZINC IN INTERNATIONAL BUSINESS.

PREFACE

A good conceptual fame work of Account is a backbone for any organization of national Importance. HINDUSTAN ZINC LIMITED indeed is a prestigious establishment of its kind. IT needs such framework of the account and financial statement to tackle the financial strategies. All such concept starts from the analysis of the data of preceding years, which are available in the accounts and financial statement of the company. So the conceptual framework of the accounting process has vital importance. I have prepared this report in partial fulfillment of requirement of the degree of MBA. It should remain document of academic interest only and should not be used for another purpose unless permitted by organization.
The study comprises of five chapters in all. The first & second chapter throws sample light on the growth & development, nature, size & functioning of industry selected.

 COMPANY PROFILE
HZL

Welcome to Hindustan Zinc Limited Introduction of HZL Vision Mission Key Objective Introduction of Vedanta Group Operating Units Debari Zinc Smelter Global Scenario Production process of various

department Export and Import Documentation and

procedure of HZL

SWOT analysis of HZL Segmentation,Targeting,positioning of

HZL

Report on inland container depot and

container freight station

Hindustan Zinc is Indias only integrated producer of zinc and lead and is among the worlds leading integrated zinc and lead producers. Its metal production capacity is currently 754,000 tones per annum. The smelters are situated at Chanderiya, Debari and Visakhapatnam and the mines are situated at Zawar, Dariba and Rampura Agucha. Hindustan Zinc has about 6,400 employees. The company is a subsidiary of Sterlite Industries (India)) Limited.

WELCOME TO HINDUSTAN ZINC LIMITED

Current achievement:

(a) Mr. Anil Agarwal rewarded as Entrepreneur of the year 2010 by economic times (b) Currently acquired Canadian aluminum firm Asarco (c) Best financial result in metal sector during the downturn and continue the expansion plan (d) Second best recruiter in India

INTRODUCTION

Hindustan Zinc Limited

 Hindustan Zinc Ltd. was created from the erstwhile Metal Corporation of India (MCI) on 10th January 1966 as a Public Sector Undertaking in the mining industry. Industrial policy Resolution 1956 kept the extraction of ferrous and non-ferrous mineral resources in the core sector keeping the right of extracting the same exclusive to the government. Nationalization of Metal Corporation of India is to been seen in the context. The authorized and paid up capital of the company at the time of nationalization was Rs. 422.53 crore equally divided into 422531900 equity shares of Rs. 10 each. At the time of nationalization the company was having one mining unit i.e. Zawar Mines, in the State of Rajasthan, one smelting unit i.e. Tundoo Lead Smelter in the State of Bihar and another smelting unit is under construction i.e. Debari Zinc Smelter in the State of Rajasthan in its hand. The initial production capacity of Zawar Mines unit was 500 TDP and that of the Lead Smelter 500 TPA. After nationalization the government of Indias first task was the completion of the Debari Zinc Smelter under construction and its commissioning. The company has gradually increased its production capacity so as to match the demand supply position of lead and zinc. Today the Companys market share is about 70% and it is continuously striving for making the country a surplus one in respect of these two metals. In April 2002, Sterlite acquired a 46% interest in HZL from the Government of India and the open market, and it became a part of the Sterlite group. Since then HZL has been growing from strength to strength. In August 2003, Sterlite acquired a majority state in HZL by acquiring another 18.9% interest from the Government of India.

 HZL produces Zinc, Lead and by-products viz. Cadmium, Sulphuric Acid and Silver. HZL achieved an all-time high production output of 81046.94 MT of Zinc concentrate during 2007-08 Today HZL is Indias leading Zinc producer mine. It is one of India's leading base metal producers, and is unique in the context of its technological versatility coupled with vertical integration in several metals. HZL had entered into a Memorandum of Understanding (MOU) with the Council of Scientific and Industrial Research (CSIR) for setting up a nickel technology proving plant of 10 tones per day. The technology is for extracting nickel from overburden of chromite at the Sukhinda Mines in Orissa. It has also signed an MOU with BHP Minerals, Australia, and is working on a joint venture project for exploration of base and precious minerals in Rajasthan. The company has entered into yet another MOU with Vigego, Vietnam and LaSource, France, for exploration at Pac-Lang for gold prospecting in Vietnam. HZL has also entered into an arrangement with Broken Hill of Australia for grassroots exploration of zinc, lead and other minerals in Rajasthan. HZL was negotiating with another Australian company, Pasminco, for exploration in the Ajmer district. The company has completed exploration for evaluation of Gossan resource in parts of agpura. The Company has been declared a "Mini Ratna". Its Zinc Smelters are situated in Chanderiya, Debari and Visakhapatnam. It has lead-zinc mines in Dariba, Rampura Agucha, and Zawar. It has nearly 6400 employees. Hindustan Zinc Limited with its world-class mines and smelter has now become world-renowned lead zinc major. With the present tempo of work, the companys dream of making India a surplus country in respect of these two non-ferrous metals, no doubt, will soon become reality.

THE VISION: -

Be a world-class zinc company, creating value, leveraging mineral resources and related core competencies Change environment in India and the rapid development in the world we have Profound implications on Hals operations and future growth, requiring adoption of pro-acting strategies. The corporate planning group (CPG) in the process of formulation of the corporate plan for the period 2007 2012 conducted situation analysis be scanning socio political economy and technology environment and adopted the VISION as:

 Be a major natural resources company with diversified businesses leveraging the competitive advantage offered by its mineral resource portfolio and competencies, including best management practices based on efficiency. TQM concept and trust

 Be a world class Zinc Company, creating value, leveraging mineral and core competencies. To put India on the world metals and mining map by becoming a fortune 500 company. To build an organization having world class capabilities and high performance culture by attracting, developing and retaining talented people. To have relentless focus on execution using best in class processes. Explore and develop additional mining resources.

THE MISSION

To produce 1 Million MT p.a. of Zinc metal and 200,000 MT p.a. of Lead metal by 2012 Be a lowest zinc producer on a global scale, maintaining market leadership . To double per capita consumption of copper, aluminum and zinc through application To explore and develop mineral reserves by 2011, for the subsequent 15 years in To set up CPPs/ captive sources for entire power requirement. To develop value and added products such as CGG alloys, zinc sheet etc. To become a significant global producer of Zinc and to remain as the dominant market leader of zinc and lad in India.

 To avail opportunity to diversify into other businesses, synergy with its competencies. To maximize satisfaction of its stakeholders.

KEY OBJECTIVE: -

To increase smelting capacity so as to maintain and enhance market. To locate world-class lead and zinc deposits by grass-root exploration either independently or through joint venture. To diversify, into other mineral based industries and precious metals and important infrastructure sector like power. To attain international levels of productivity and quality standard through HRD efforts and intense R&D and technology up gradation in mining, beneficiation, and smelting. To utilize technologies for optimizing energy consumption. To adopt the best international practices for environment protection and safety. To maximize generation of nitration of internal resources for financing its expansion and diversification activities. To strengthen the image as the organization with commitment to excellent amongst all concerned.

INTRODUCTION OF VEDANTA GROUP

 Vedanta an over US $ 8.2 billion, Vedanta Resources plc (Vedanta) is a London listed FTSE 100 diversified metals and mining major. The group produces aluminum, copper, zinc, lead and iron ore and also commercial energy. Vedanta has operations in India, Zambia and Australia and a strong organic growth pipeline of projects. With an empowered talent pool of 30,000 employees globally, Vedanta places strong emphasis on partnering with all its stakeholders based on the core values of entrepreneurship, excellence, trust, inclusiveness and growth. Chairman Mr. Anil Agarwal Deputy Chairman Mr. Navin Agarwal Chief Executive Officer Mr. Kuldeep Kumar Kaura National presence Hindustan Zinc Limited (HZL) Sterlite Industries (India) Ltd (SIIL) Bharat Aluminum Company Ltd (BALCO) The Madras Aluminum Company Ltd (MALCO) Vedanta Aluminum Ltd. (VAL) Lanjigarh Sesa Goa Limited Sterlite Energy Limited Global presence Copper Mines of Tasmania, Tasmania Konkola Copper Mines, Zambia Sterlite Group has also strong presence in Optical cables business through Sterlite Optical Technologies Ltd. (a non Vedanta Company)

INTRODUCTION OF STERLITE INDUSTRY

Sterlite Industry India Ltd (SIIL), a part of Anil Agarwal Group is one of the major players in Copper Industry. Twin star Holdings Ltd, Mauritius is the parent company of the SIIL by holding 51% Equity in the later. SIIL in turn controls Bharat Aluminum Ltd (BALCO) and Hindustan Zinc Ltd (HZL). The company had in its Rs.551.5 cr bid for 51% stake of Balco. It plans to make Balco the lowest cost aluminum producer over the next three years. The company makes the substantial investment to make balco a world-class benchmark producer. Companys vision to acquire Balco is to convert it into a platform to move on and take on the International Market. Hindustan Zinc Limited was incorporated from the erstwhile Metal Corporation of India on 10th January 1966 as a Public Sector Undertaking. In April 2002, Sterlite Industries (India) Limited made an open offer for acquisition of shares of the company consequent to the disinvestment of Government of Indias stake (26%) including management control to Sterlite and pursuant to the regulations of SEBI Regulations 1997 acquired additional 20% of shares from public. In August 2003, Sterlite Industries acquired additional shares to the extent of 18.92% of the paid up capital from Government of India (GOI).

Milestones (Post Disinvestment) 2007 Chanderiya Hydrometallurgical Zinc Smelter (Hydro II) commissioned 63.2 MW Wind Energy Project commissioned 2006 Chanderiya Ausmelt Lead Smelter commissioned. Sindesur Khurd Mine began production. 2005 Chanderiya Hydrometallurgical Zinc Smelter (Hydro I) commissioned along with a 154 MW coal based captive power plant. 2003 Sterlite Industries acquires 18.92% stake in Hindustan Zinc from Government of India

 2002 Sterlite acquired 26% stake in Hindustan Zinc from the Government of India. Consequent to disinvestment a further 20% is bought from market through open offer.

OPERATION UNIT

MINES:

Today HZL is operating three mines and three smelters in two states (Rajasthan, Andhra Pradesh) as under:

ZAWAR MINES -:

Zawar group of mines, located some 40 Kms. South of Udaipur, Rajasthan comprises of four operating underground mines viz Mochia, Balaria, Zawarmala & Baroi. The lead Zinc is mineralization, extending over a strike length of 20kms. These million tones as on march duction of 4000 tpd.

RAJPURA DARIBA MINES -:

Rajpura dariba lead Zinc mines is located some 90kms north east of Udaipur, Raj. This underground currently produces 2400 tpd ore.

RAMPURA AGUCHA MINES-:

The Rampura Agucha lead-zinc mine is the third largest in the world. It counts among the lowest-cost zinc mines in the world.

It contains high-grade reserves- about 13% zinc and 2% lead- with a resource base of 96.7 million tones as on March 31, 2009.

SMELTERS

Debari Zinc smelter: (ZSD)

ZSD is some 14 km away from Udaipur, Raj. Electrolytic extraction process is adopted to produce Zinc cadmium, sulphuric acid etc.

ZINC- LEAD SMELTER VISHAKHAPATNAM:

In the Zinc lead smelter at in Andhra state, electrolytic extraction process is adopted to produce Zinc, cadmium, sulphuric acid etc.

CHANDERIYA ZINC LEAD SMELTER:

Chanderiya Zinc lead smelter is located 12 km away from chittorgarh in Raj. Imperial smelting furnace (ISP) Technology is being adopted for extraction of Zinc, lead & other by products.

PRODUCTS AND PRODUCTION CAPACITY OF MINES AND SMELTERS OF HZL

MINES: -

 S.NO. 1. Zawar group of mines (Raj.) 2. Rajpura Dariba mines (Raj.)

PRODUCTS Zinc, lead, silver ores and concentrates Zinc, lead, silver ores and concentrates

RESERVES 5.8 million tons 9.4 million tons

 3. Rampura agucha mining complex (Raj.)

Zinc, lead, silver ores and concentrates

53.4 million tons

SMELTERS: -

S.NO.

PRODUCTS Zinc ingot Sulphuric Cadmium Zinc dust Zinc Lead Sulphuric Cadmium Zinc: Lead Cadmium Sulphuric Silver Bismuth

1. Zinc smelter Debari (Raj.)

acid 2.Vizag Zinc lead smelter, Visakhapatnam, acid Andhra Pradesh 3.Chanderiy a Zinc lead smelter, Rajasthan acid

ANNUAL CAPACITY (tpa) 88,000 397312 250 3600

56,000 40,000 90,996 115 525000 85,000 350 700000 375 1,76,000

DEBARI ZINC SMELTER

INTRODUCTION:

Debari Zinc Smelter, a premier Smelter of Hindustan Zinc Limited is engaged in the production of high grade Zinc metal other by products like Sulphuric acid and cadmium since from 1968. It is some 14 Km. away from Udaipur, Rajasthan. Electrolytic extraction process is adapted to Zinc, cadmium Sulphuric acid etc.

SALIENT FEATURES:
1. Annual production capacity: (a) Zinc: 88,000 MT (b) Sulfuric acid: 397312 MT

(c) Cadmium:

250.00 MT

(d) Zinc dust: 3600 MT 2. Maximum power demand: 44 MW

PERFORMANCE:

Zinc smelter Debari has achieved an impressive growth pattern and continuous endeavors are being made to impressive production as well as productivity. Emphasis is given for energy conservation, improvement in recovery efficiency and reduction in process consumption, which are prime factors in controlling the cost of production. The performance of Debari Zinc smelter for the last 3 years is tabulated below: (A) Production performance: (B) Productivity Performances: Particula 20 200 200 20 200 rs 04-05 5-06 6-07 07-08 8-09 Zinc 96. 96.2 96. 95 96. recovery 25% 5% 21% .97% 13% Efficienc y%

 Industria l water 69 Consump tion (M3\MT)

14. 3

14.2 04

15.

14 .08 20

14.

GLOBAL SCENARIO
Hindustan Zinc can boast being the second largest integrated zinc producing company in the world holding mines and smelters for the production of zinc also as one of the largest zinc-producing firms of the country Zinc itself is a very important metals.

Expansion plans update:

The company has recently announced a list of new project in mining,smelting and captive power plant,which will be made operational by 2010.These are

1.MINING:Expansion from 5.0 million tones per annum

to 6.0 million tones per annum at Rampura Agucha;expansion from 0.3 million tones per annum to 1.5 million tones per annum at Sindesar Khurd;and a new mine with an initial capacity of 0.3 million tones per annum at Kayar in Rajasthan

2.SMELTING:Set a 2,10,000 tonnes per annum Zinc

hydrometallurgical plant and a 1,00,000 tonnes per annum lead plant at Rajpura Dariba. 3.CAPTIVE POWER:To meet the energy requirements for these operations,the company will also add 2*80MW captive power plants at Rajpura Dariba.

 Completion of these projects will take our annual mining capacity to more than 1 million tones (1,065,000 tonnes)per annum making Hindustan Zinc the worlds largest Zinc producer by 2010,with fully integrated mining and captive power generation capabilities. In addition to the above,we also expected to progressively increase our silver production from the current levels of 2.8 million ounce per annum to a level of approximately over 16.1 million ounce per annum.

WORLD ZINC PRODUCERS

GROWTH OF ZINC

Zinc consumption is linked to economic growth and leveraged to emerging markets China is leading the way but some are yet to take off.

SCOPE FOR FUTURE DEVELOPMENT

HZL a leading producer of 85000 tones Lead & 669000 of Zinc per annum besides silver and other by products has ever been seeking new markets for its expansion &development.

 The company is trying to achieve new melting & smelting capacities at various other prospective areas in order to attain higher level of productivity at lower cost of inputs. It is trying to explore new Zinc mines at kayar near Ajmer.

QUALITY OBJECTIVES

ZSD commits to produce high quality Zinc, cadmium and Sulphuric acid with total customer satisfaction in eco friendly and safe environment. QUALITY STANDARD OHSAS: 18001 ISO: 9002 ISO: 14001 SA: 8000

RESEARCH METHODOLOGY
Research design specifies the methods & procedure for conducting a particular study. In my project company wants to conduct a deep study to find out the changes in sales and Marketing. Management & I gave sufficient thought to framing types of data to be collected & procedure to be used for this purpose. It is economical as more information can be collected per unit.

DATA COLLECTION METHOD

Secondary type of data was collected during my research:

SECONDARY DATA

Information regarding the performance of HZL, which were so relevant to the research project, was obtained through the secondary data research. The profile of HZL & other valuable information like Fix Assets, Current Assets, Net Profit, Turnover, Earning Per Share, and Investments etc. were gathered from HZL. SALES & MARKETING ORGANIZATIONAL CHART (Jr.Exe. Comm.) ANIL KUMAR JAIN Assistant.) (Head Clerk.) (Head Clerk.) (Sr.PATEL D.L. OM SOLANKI UMESH PUROHIT (Jr.Despatcher.) MANGU KHAN
(Mgr. Comm.)

S.C. SHARMA

(Jr.Exe. Comm.) YATISH CHOPRA

(Head Clerk.) R.C. MAKHEEJHA

(Sr. Assistant.) I.L. DOSHI

(Sr. Assistant) MAHVEER SINGH

(Sr. Assistant.) S.L. LOHAR

(Jr.Despatcher.) Mohd. ASLAM KHAN

(Head Helper.) HARI SINGH PAWAR

HANDLING AND DESPATCH OF

FINISHED GOODS

Scope:

Receipt of Zinc Ingot (finished) from Zinc

Electrolysis Plant, Receipt of Delivery Orders, Determination & review of requirement related to the product. Dispatch of finished goods to customers against delivery orders, dispatches to stock points, inter unit transfers and internal consumption at Zinc Smelter, Debari.

References:

(A) Delivery Orders (D.O.)

Stock Transfer Advice (STA) G.R. (Goods Receipt) SIV (Store Issue Voucher) (E) Zinc Material Receipt Report

Definitions:

(A) Delivery Order: Document issued

by H.O. (Mktg)/ Regional Offices (Mktg) wherein payment as well as dispatch particulars of a particular item, its specification, quantity to be delivered and guide lines for preparation of invoices cum delivery challan are given. Stock Transfer Advice: It is a tentative programme given under the authority of Head (Mktg.) giving details of quantity to be dispatched to various stock points during a particular month. Allow Slip: A printed form issued by shift in charge for allowing lorries / tankers into the Factory based on the delivery order/stock transfer programme.

 Loading Slip: A printed form issued by shift in charge to dispatcher mentioning therein details of quantity of Zinc Ingot to be loaded in the truck allowed. Loading Advice: A printed form issued by Shift In charge (based on the Delivery Order) mentioning therein details of quantity of Sulphuric Acid to be filled in the tanker by the Roaster & Acid Plant.

SIV:

A printed Performa issued by shift in charge to

dispatcher duly signed by H.O.D. to Cadmium Plant for delivery of Cadmium Metal as per details mentioned in the SIV.

GR:

Performa for receipt of goods issued by transporter

concerned for taking delivery of the material.

Invoice cum Delivery Challan:

A document

issued against clearance of excisable commodities (Consignment wise) showing details of dispatch particulars viz. Date, Name of Consignee, payment particulars, Quantity, Rate per Unit, Amount, Central Excise Duty, Sales Tax, Gross Amount, D.O. Number, G.R. Number Truck Number / Tanker Number wherein the material is loaded for transportation and name of transporter etc.

Zinc Material Receipt Report:

Report being sent by

Zinc Electrolysis & Melting plant giving details regarding Date of Production, Heat Number, Number of pieces and weight.

Procedure

Determination of requirement of the product

Requirement of customers like Product, Quantity, delivery period and destination etc. are received from various Marketing Offices in the form of Delivery Orders. Based on these DOs pending DO list is prepared. Dispatch plan is prepared considering requirement of major and regular customer, stock transfers, actual user and other buyers and informed to customers/representatives/transporters. Review of requirements related to the Product Any new special requirement (for which development/modification is required) received from the customers is discussed in a group comprising of DGM, MR, and OM and In charge of Sales and Dispatch. For other special requirements like Jumbo Ingots, production department is informed accordingly and follow up is done by In charge of Sales and Dispatch. The Zinc Ingots (finished) is received from the Zinc Electrolysis Plant with proper heat numbers and stacked in Zinc Yard. Zinc Ingots for dispatches /internal consumption are stacked separately. Dispatch of finished goods to customers is done through their authorized representative or authorized transporter. In case of dispatches to stock points, transporter authorized by Materials and Contracts department at Head Office does it. Delivery Order is duly checked by H.O.D. Stock Transfer Advice is received under the authority of Head (Mktg.). Dispatch programme is informed to authorized transporter and maintained in dispatch programme register. Allow slip is issued by Shift In charge, based on delivery order and dispatch programme In case of Zinc and Cadmium, tare weight is taken in presence of Security representative, partys / transporters authorized representative by Weigh Bridge Attendant.

 Dispatch of finished goods to customers is done through their authorized representative or authorized transporter. In case of dispatches to stock points, transporter authorized by Materials and Contracts department at Head Office does it. Loading slip for Zinc and SIV for Cadmium is issued by shift in charge according to Delivery Order / STA to dispatcher on duty, who ensures that correct material is loaded under his supervision by loading contractors labor. In the case of Sulphuric acid, loading advice is issued by dispatcher, which is duly checked and countersigned by the Shift In charge to the Roaster & Acid Plant for filling the tanker by them. For Zinc Ingots, gross weight is taken by Weigh Bridge Attendant in presence of Security representative, Dispatcher on duty and partys / transporters authorized representative. However for Cadmium, the weight as indicated by the Cadmium Plant on SIV is treated as final. For Sulphuric Weigh Bridge Attendant takes acid gross weight in presence of Security representative. For dispatch of finished goods tare weight as well as gross weight is taken on Electronic Weigh Bridge, which is being calibrated by Instrumentation department periodically. Preparation of invoice cum delivery challan by Shift In charge is done strictly on the basis of instructions given in the D.O./as per STA after finalization of Net weight. List of Documents Retention period 1. Allow slip ZSD/S&D/F01 One Year 2. Loading slip ZSD/S&D/F02 One Year 3. Loading Advice ZSD/S&D/F03 One Year 4. Invoice Cum Delivery Challan ZSD/S&D/F04 Five Years 5 Daily Dispatch & Pending Order ZSD/S&D/F06 One Year 6 Monthly Allocation for Dispatch ZSD/S&D/F08 One Year

7 Daily Dispatch Report ZSD/S&D/F09 One Year 8. Delivery orders ZSD/S&D/Zn Five Years Work Instruction for Shift In charge & Dispatcher for Dispatch of Finished goods Shift In charge to Co-ordinate with Zinc Electrolysis plant and give necessary instructions to dispatcher for proper stacking of Zinc lots in the Zinc Yard. At the time of delivery, dispatcher to check quantity and pieces loaded correctly in the truck / wagon / container as per the loading slip issued by Shift In charge. Dispatcher to check Tare weight and Gross weight at the time of delivery at Electronic weighs bridge for Zinc Ingots. Dispatcher to submit weighment slip to shift in charge after weighment and counting of number of pieces by Security representative and signature of concerned agencies for preparation of Invoice cum delivery challan. Verify signature/authority letter / G.R. of the Partys authorized representative / Transporter. Check Delivery Order (D.O.). Issue Allow-slip. Write the details of truck No., D.O. No., G.R. No., Name of party etc. in the register meant for. Issue loading slip to dispatcher in case of Zinc Ingot, Loading Advice for Sulphuric Acid and S.I.V. for Cadmium. Verify loading advice after loading of the truck under the supervision of dispatcher deputed. Verify loading slip and weighment slip. Prepare Invoice cum delivery challan. Obtain signature of party/transporters representative. Handover the Invoice cum delivery challan to Transporter/ Partys representative.

 Company to perform and coordinate its marketing functions effective. Also this enhances convenience to customer. NORTH ZONE: For this zone the regional are in the state of Haryana, UP, Punjab, Hibachi Pradesh, and Delhi. The stock points in the region are Gaziabad, Sahibabad, Faribabad, and jagadhari, Chandigarh. Delivery orders through Delhi office. CENTRL ZONE the regional marketing offices are located at New Delhi, Hyderabad, Kolkata, Mumbai, Bangalore, Jaipur and Udaipur. HZL has opened a large number of stock points spread all over the country: KOLKATA JAMSHEDPUR MUMBAI DAMAN SILVASSA GAZIABAD FIRIDABAD NAGPUR PUNE 10.CHENNAI 11.CHANDIGARH 12.AHMEDABAD 13.HYDERABAD

PRICING STRATEGY

Hindustan Zinc uses different pricing strategy for better grip on the market and to face stiff competition and also to achieve maximum net sales realization multi dimensional pricing approach helps Hindustan zinc to stand in market different types of pricing strategies are elaborated and supported by graph wherever required.

Competitors parity Pricing:

 Hindustan Zinc mainly price the product with the strategy of competitors price parity prices of the competitors play the major role in the strategy price of the zinc ingots is kept near to the price of the competitors

End use pricing

End use pricing is that pricing method in which prices are decided by company not by the LME because the prices of LME are higher ,if the customer wants to buy capital goods then he prefer this policy

Day Settlement pricing

Sometime the customer need to buy the product according to the day to day price, in that case LME decides the price according to the day to day settlement.

MONDAY TO THURSDAY PRICING POLICIES

LME decides the average price weekly from Monday to Thursday and also from Monday to Saturday.

Contract pricing

 Hindustan Zinc follows the contract pricing policy for longterm contract in order to achieve the continuous selling of sulfuric acid since sulfuric acid is the by product in preparation of ZINC and is produced in large quantity as compared to the production of ZINC also being a hazardous waste makes it necessary to sell off sulfuric acid. Sometimes the prices are lower than the production cost that is when the demand is very less so to avoid this loss company goes in for the long term contract of duration from 6 months to 1 year. Although nowadays there is a huge demand in the market therefore prices are high but when prices are low revenue generated from these long-term contract keep the boat on water.

Short Term Contract Pricing

Too much dependency on long-term contract cannot be done, as there are some drawbacks of long-term contract like mostly keeping the prices lower then the average market price due to the bulk buying of sulfuric acid. Also too much market volatility may cause the uncertainty in revenue generation therefore Hindustan Zinc has undergone the shorter format for the contract viz. short term contract under this contract scheme customers or the retailers are covered for contract under 15to 30 days for a fixed prices this not only dilutes the effect of market volatility but also makes a good will among the customer as prices may change too much during a fortnight or a month. This pricing was started from June 2008 by Hindustan zinc.

Spot pricing

 Many a times the customer approach the firm for urgent requirement for the product Hindustan Zinc facilitates these customers with pricing method of spot pricing customer are allowed to fill in a form through e-sales mate programme on company website where they can fill in the required quantity the product major advantage of this method are fast execution of the trade and pricing irrespective of the constraints of future demand the days price are then given by the company if the customer agree on the price the he can take the product from any of the plant location of the firm.

PLACE

Hindustan Zinc supplies zinc from its three plant locations Viz. Debari Zinc Smelter Udaipur, Rajasthan, Chanderiya Lead Zinc Smelter Chittorgarh, Rajasthan, and Vishakhapatnam Zinc Smelter, Vishakhapatnam, Andhra Pradesh. Although the positions are not spread all over the country but strong logistic department facilitates Hindustan Zinc Limited to penetrate to every part of the country Strong logistic operation makes it possible for Hindustan Zinc Limited to deliver the goods to every part of the country. For the international market Hindustan Zinc Limited do the frequent export threw JNPT port and Mundra port. Hindustan Zinc has its own transport system for port and export purpose. China is hub for metal market and Chinese are highest importer of Zinc and lead around the world. China has 52% shares in total zinc consumption around world. Hindustan zinc has a long-term relationship with some Chinese traders. Mainly, Hindustan zinc targeted the developing nations for export and expansion of export programme. Most of Asian countries are in developing phase so we get good opportunities in Asian market. Asia itself is major consumer of zinc.

So for trade purposes our main places for businesses are: China Taiwan Singapore UAE
Belgium

We already have a good relationship with our custom house agent and we have long term contract with some of big shipping lines so do export threw that. For the domestic market we have customers threw all over India and we have 13 depots around country and we manage our logistic and supply system. Our depots are: Hyderabad Bangalore Vizag Chennai Tarapur Nagpur Baroda Raipur Indore Kolkata Jalandhar Udaipur

Chittorgarh

Threw this depots we manage our business network and it help us to overcome the problem of geographical barrier.

PRODUCT

Main products:

1. ZINC INGOTS: Special high grade-99.99% High grade -99.95% Premium grade-99% 2. ZINC UNWROUGHT: 3. LEAD: 4. CADIUM; 99% 5. SILVER 6. SULPHURIC ACID; 98% INTERMEDIATE PRODUCTS: 1. CALCINE 2. ZINC SULPHATE 3. ZINC DUST B PRODUCT:SCRAP AND WASTAGE

 EXPORT IMPORT Documentation And Procedure In Hindustan zinc Ltd.

1.Duty Drawback Scheme:

Under Duty Drawback Scheme relief of Customs and Central Excise Duties suffered on the inputs used in the manufacture of export product is allowed to Exporters. The admissible duty drawback amount is paid to exporters by depositing it into their nominated bank account. Section 75 of the Customs Act, 1962 and Section 37 of the Central Excise Act, 1944, empower the Central Government to grant such duty drawback. Customs and Central Excise Duties Drawback Rules 1995 have been framed outlining the procedure to be followed for the purpose of grant of duty drawback (for both kinds of duties suffered) by the Customs Authorities processing export documentation.

 2. Under Duty Drawback Scheme, an exporter can opt for either All Industry Rate (AIR) of Duty Drawback Scheme or brand rate of Duty Drawback Scheme. Major portion of Duty Drawback is paid through AIR duty Duty Drawback Scheme that essentially attempts to compensate exporters of various export commodity for average incidence of customs and Central Excise duties suffered on the inputs used in their manufacture. Brand rate of duty drawback is granted in terms of rules 6 & 7 of Customs and Central Excise Duties Drawback Rules, 1995 in cases where the export product does not have any AIR or duty drawback rate, or where the AIR duty drawback rate notified is considered by the exporter insufficient to compensate for the Customs/Central Excise duties suffered on inputs used in the manufacture of export products. For goods having an AIR the brand rate facility to particular exporters is available only if it is established that the compensation by AIR is less than 80% of the actual duties suffered in the manufacture of the export goods. 3. Duty Drawback facilities on re-export of duty paid goods is also available in terms of Section 74 of Customs Act, 1962. Under this Scheme part of the customs duty paid at the time of import is remitted on re-export of the goods subject to identification and prescribed procedure being followed.

A.

Scheme for All Industry Rate (AIR) of

Duty Drawback
4. AIR of Duty Drawback for a large number of export products are notified every year by the Government after an assessment of average incidence of Customs and Central Excise duties suffered on Inputs utilized in the manufacture of export products. This facility is generally availed by the exporters, as no proof of actual duties suffered on inputs used is required to be produced.

 5. After announcement of Union Budget every year, new AIR of drawback are notified every year usually with effect from 1st June, after factoring in the changes in duty rates effected by the budget. The Directorate of Drawback requests all Export Promotion Councils/Associations, etc. to collect, collate and furnish representative data in respect of the existing export products as also for any new product which the Councils feel have sufficient export from the country. After the announcement of the Budget various Export Promotion Council/Associations are also consulted by the Joint Secretary (Drawback), and their suggestions as well as their requests and justification for suitable enhancement of rates and also any changes sought in the scheme of the Drawback Table or the entries therein are taken note of while finalizing and announcing new AIRs. 6. The AIRs are generally fixed as a percentage of FOB prices of export product. Often very good export prices are obtained for a product or class of products which have no corelation with the actual duties suffered on inputs used which is sought to be refunded to Exporters as drawback. In order to safeguard Government revenue but also be fair to exporters, reasonable duty drawback caps have been imposed in respect of many export products having rates on FOB basis. These caps essentially reflect the average duty incidence suffered on the inputs used in the manufacture of the particular goods exported by several exporters with different prices and they are fixed on the basis of data supplied by the export promotion councils and collected by Directorate from other sources. 7. The duty drawback claim scrutiny, sanction and payment in 23 Custom Houses is now done through the Electronic Data Interchange (EDI) System. This system facilitates credit/disbursal of drawback within 72 hours from the date of shipment and electronic filing of Export General Manifest (EGM) in respect of related aircraft/vessel, directly to the exporters, accounts in the specified bank branches.

 8. Customs notification Nos. 29/2001(NT) dated 1.6.2001 and 30/2001(NT) dated 22.6.2001 refer for ascertaining the details of current All Industry Rates of drawback for various export products.

B.

Brand Rate of Duty Drawback

Scheme
9. In respect of export products where AIR of duty drawback is not notified or where the AIR of duty drawback in considered by the exporter to be insufficient to fully neutralize incidence of duties suffered on the inputs utilized in the production/manufacture of the export product, the exporters opt for Brand Rate Duty Drawback Scheme. Under this Scheme, the exporters are compensated by paying the amount of Customs & Central Excise Duty incidence, which is actually incurred, on the inputs used in the manufacture of export products. For this purpose, the exporter has to produce documents/proof about the actual quantity of inputs utilized in the manufacture of export product along with evidence of payment of duties thereon.

 10. The exporter has to make an application to the Directorate of Drawback in prescribed format along with enclosures (in the form of 3 drawback statements called DBK-I, II & III), within 60 days from the date of export of goods. The application has to be submitted to Directorate of Drawback with copies to the concerned Central Excise Commissionerate that has jurisdiction over the factory of production of export product. The Central Excise Authorities conduct verification of the authenticity/fact of utilization of inputs/payments of duties on the inputs on the basis of records maintained by the factory of the exporter, current production of identical goods, if being affected, etc. A verification report has to be sent to the Directorate of Drawback. The Directorate of Drawback, on the basis of verification report and other relevant documents submitted by the exporter, process and issue drawback Brand Rate Letter to the exporter on the basis of which the concerned Custom House (from where the goods were exported) makes payment of duty drawback. The Brand Rate Letter may be valid for particular export shipment or series of shipment and may also be extended for future shipments for one or more ports on request subject to proof of availability of related raw materials and duty evidence, etc., when verification was carried out.

C. Simplified Scheme of Brand Rate

 11. Under Brand Rate of Duty Drawback Scheme, a "Simplified Scheme" is also available to limited companies and registered partnership firms. Under this Scheme, a rate letter for duty drawback is issued prior to receipt of verification report from the jurisdictional Central Excise Authorities on the basis of application made by the exporter subject to certain certification etc. For this purpose, besides application in the prescribed format along with enclosures, the exporter is also required to submit Chartered Accountant/Chartered Engineers certificate about the authenticity of consumption pattern and duty payments as claimed. An indemnity bond undertaking to pay back the duty drawback being claimed by him if it is found later on verification that the drawback amount paid to him is in excess of the admissible amount, has also to be furnished. In all cases where duty drawback is paid under Simplified Scheme, after receipt of the verification report from jurisdictional Central Excise Authority, the veracity of the application is counter checked with the said verification report and recovery action taken, where ever found necessary.

D. Limitations on Drawback Admissibility:

14. The Customs Act lays down certain limitations and conditions, which exporters claiming drawback have to meet/fulfill. Thus, no drawback is admissible under Section 75 if the market price is less than the amount of drawback claimed. Drawback is also not admitted if the claim is less than Rs.50/- in individual shipments. Government has also powers to deny or admit drawback claim subject to laid down conditions where there is likelihood of goods exported being smuggled back. These powers have been used for exports to Nepal where normal provisions of duty drawback are not applied. The Drawback Rules also further lay down in Rule 8 some further limitations, where rate is less than 1%, and this may be referred to. Government has also powers to deny drawback facility in such cases where export of goods if less than the value of imported material used in their manufacture. If necessary, certain minimum value addition over the value of imported materials can also be prescribed before granting drawback.

 15. It is also pertinent to note that the drawback is permitted to encourage exports and essentially there must be export proceeds repatriation. Though prior repatriation of export realization is not pre-requisite, the law prescribes that if sale proceeds are not received within the stipulated period, the drawback paid will be recoverable by the Government as per procedure laid down in drawback.

E. Procedure for Claiming Drawback:

The drawback on export goods whether under AIR or Brand Rate is to be claimed at the time of export and requisite particulars have to be filled in the prescribed format of shipping bill/bill of export under Drawback. Triplicate copy of the Shipping Bill is treated as claim for Drawback. The claim is also to be accompanied by certain documents as laid down in the Duty Drawback Rules. If the requisite documents are not furnished or there is any deficiency, the claim may be returned after shipment for complying with the requirements and furnishing Requisite information/documents (e.g. Brand Rate letter which may not be available at the time of export but becomes available after shipment).

Duty Exemption Scheme

 17. Duty Exemption Scheme is an export promotion scheme and it enables import of inputs required for export production free of Customs duty. Advance Licenses are issued under Duty Exemption Scheme to allow import of inputs, which are physically incorporated in the export product (after making normal allowance for wastage). In addition, fuel, oil, energy catalysts, etc., which are consumed in the course of their use to obtain the export product can also be allowed under the scheme. Value and quantity of each item permitted duty free import are specified in the Advance License. Standard inputoutput norms (SIONs) notified by the DGFT under para 7.8 of the Handbook of Procedures (Vol.I) or as modified under Para 7.10 of the said Handbook facilitate determination of the proportion of various inputs, which can be used or are required in the manufacture of different resultant products. 18. Advance Licenses are issued for Physical exports, Intermediate supplies and Deemed exports. Advance Licenses are also issued on the basis of annual requirement for exports/supplies. This enables the exporter to plan out his manufacturing/export programme on long-term basis. Advance Licenses for deemed exports are issued to (i) manufacturer exporter or main contractor in case of deemed exports, and (ii) Merchant exporter having supporting manufacturer. 19. All Advance Licenses and/or materials, imported there under are not transferable even after completion of export obligation. Advance Licenses are issued with a positive value addition stipulation. However, for exports for which payments are not received in freely convertible currency, the same are subject to higher value addition.

 20. In order to ensure proper monitoring and utilization of inputs imported against Advance Licenses (except Advance License for deemed exports), a Duty Entitlement Exemption Certificate (DEEC) Book is issued along with the Advance License by DGFT authorities. At the time of import and export against Advance License, entries are made in the DEEC Book by Customs to keep record of the import/export made against it. After completion of export obligation and imports against the Advance License, the DEEC book, Advance License and relevant export/import documents are submitted to Customs for logging (reconciling) of DEEC Book. Thereafter the Advance License, DEEC book and export/import documents are submitted to DGFT authorities for issue of export obligation (EO) discharge certificate. On the basis of EO discharge certificate issued by DGFT, redemption of bond/B.G. filed by the Advance License holder with Customs is allowed. 21. Advance License are issued on pre-export or post export basis in accordance with the Export/Import Policy and procedure in force on the date of issue of license and are subject to the fulfillment of a time bound export obligation as in the license. The Advance License holder fulfils export obligation (EO) by exporting the resultant product specified in the Advance License unto specified quantity/value. In order to ensure fulfillment of such export obligation, the Advance License holder executes a bond with or without Bank Guarantee (B.G) with Customs undertaking to fulfill the specified export obligation. In the event of failure to fulfill the specified EO. the license holder becomes liable to pay differential Customs duty with interest @ 24% per annum on such duty. Exemption from furnishing of bank guarantee is given in the following categories of cases: (i) Where the license holder is a manufacturer exporter having export turnover of Rs.1 crore or above during preceding financial year and he has a clean track record; and (ii) Where the license holder is certified as a super star trading house, star trading house, etc. by DGFT.

 In such cases a bond is considered sufficient. In all other cases the Advance License holder is required to furnish 100% bank guarantee for the duty difference. 22. Advance License holder for intermediate supply is required to fulfill his export obligation by supplying the intermediate goods, which are required in the manufacture of resultant export product to the advance license holder. In order to ensure such fulfillment of EO the license holder is required to give bond with or without bank guarantee and in the event of failure to fulfill the EO he becomes liable to pay differential Customs duty with interest @ 24% per annum on such duty. 23. Advance License holder for deemed export is permitted import of materials, which are required in the manufacture of resultant product free of Customs duty. The license holder is required to fulfill his EO by supplying the resultant product to the project, specified in the said license, in India and in the event of failure to do so, he is required to pay differential Customs duty with interest @ 24% per annum on such duty 24. All Advance Licenses are normally valid for import of goods up to 18 months from the date of issue and the relevant DGFT authority (who issues the license) is competent to grant revalidation. DGFT authority (who issues the license) is also competent to grant extension of EO period beyond the normal EO period of 18 months. No duty drawback is normally admissible to an Advance License holder. However the license holder is entitled to claim brand rate of duty drawback in respect of inputs, which are not imported against the advance license and on which Customs/excise duty has been paid. 25. Since Advance License Scheme involves technicalities, its operation has been restricted to limited ports, airports, ICDs, etc. which are notified for the purpose. Commissioners of Customs have, however, been empowered to permit export/import under the Scheme from any other place which has not been notified, on case to case basis by making suitable arrangements at such other places.

3. Duty Remission Scheme

Duty Remission Scheme consists of; (a) Duty Free Replenishment Certificate and (b) Duty Entitlement Passbook Scheme.

A.

Duty Free Replenishment Certificate

(DFRC) Scheme:
26. DFRC Scheme was announced on 1.4.2000 under the EXIM Policy 1997-2002. It is an export promotion scheme under which DFRC licenses are issued permitting duty free import of inputs which were used in the manufacture of export product on post export basis as replenishment. 27. Duty Free Replenishment Certificate (DFRC) License is issued to a merchant-exporter or manufacturer-exporter. DFRC licenses are issued only in respect of export products covered under the Standard Input Output Norms (SION) as notified by DGFT. DFRC Licenses are issued for import of inputs, as per SION, having same quality, technical characteristics and specifications as those used in the export product and as indicated in the shipping bills. The validity of such licenses is normally 18 months and relevant DGFT authority (who issues the license) is competent to grant extension of validity period. DFRC license and or the material(s) imported against it are freely transferable.

Duty Entitlement Pass Book (DEPB) Scheme

30. DEPB Scheme was first announced on 1.4.1997 under EXIM Policy 1997-2002. It is an export promotion scheme and envisages grant of DEPB Credit Entitlement to an exporter at the time of export at an ad-valorem rate notified by DGFT, in relation to FOB value of the export product. The DGFT have so far notified DEPB rates for nearly 2000 export products. These rates are based on the computation of Basic Customs Duty suffered by the exporters on the inputs listed in the Standard Input-Output Norms (SION) applicable to the export product. The crucial feature of the DEPB Scheme is that all the inputs listed in the Standard Input-Output Norms are deemed to have been imported and to have suffered Customs duties. DEPB rates are finalized by the DEPB Committee, chaired by Additional DGFT and consist of representative from Ministry of Finance also. Value caps have been imposed on export products having DEPB rates of 15% or more to curb the tendency of unscrupulous exporters to avail most of the runaway benefits by over-invoicing export. 31. The normal validity period of DEPB Scrip is 12 months and DGFT authority (who issues the scrip) is empowered to grant revalidation. These scrips are for a certain amount of DEPB credit and can be utilized for adjusting Customs Duties (Basic or CVD) against import of any products into India, without the necessity of any co-relation between the export product and the import goods, i.e. it is not necessary to import only the relevant inputs corresponding to the export product.

 32. Since DEPB Scheme also involves technicalities like DFRC Scheme, its operation has also been restricted to limited ports, airports, ICDs, etc. which are notified for the purpose. Commissioners of Customs have, however, been empowered to permit import/export under the scheme from any other place which has not been notified, on case-to-case basis. The DEPB and/or the items imported against it are freely transferable. Import against DEPB scrips is allowed at the port specified in the DEPB, which is the port from where exports have been made. Imports from a port other than the port of export are also allowed under TRA (Telegraphic Release Advice) facility as per the terms and conditions of the notification issued by Department of Revenue. 33. No duty drawback is allowed on exports made under DEPB Scheme. However, in cases where CVD is paid in cash on imported inputs, or where indigenous duty paid inputs, not specified in SION, are used in the manufacture of export product, in such cases brand rate of duty drawback is admissible as per circular issued by the Ministry of Finance, provided CENVAT Credit in respect of such duty incidence is not availed.

5. Export Promotion capital Goods (EPCG)

Scheme

 34. Under EPCG Scheme import of capital goods, which are required for the manufacture of resultant export, product specified in the EPCG License is permitted at concessional rate of Customs duty. This Scheme also enables up gradation of technology of the indigenous industry. For this purpose EPCG Licenses are issued on the basis of approval granted by EPCG Committee. The EPCG Committee comprises of officers from DGFT, MOF and concerned Administrative Ministry. At present the EPCG license holder is permitted to import capital goods at 5% or 10% Customs duty. Whereas under 5% duty EPCG Scheme the license holder is required to undertake to fulfill export obligation equivalent to 5 times the CIF value of imported capital goods within a period of 8 years reckoned from the date of issue of license, under 10% duty EPCG Scheme, the license holder has to fulfill export obligation equivalent to 4 times the CIF value of imported capital goods in five years. EPCG licenses are issued to manufacturer exporters and merchant exporter with or without supporting manufacturer, and service providers. The license specifies the value/quantity of resultant export product to be exported against it. In the case of manufacturer/merchant exporters, such Export Obligation (EO) is required to be fulfilled by exporting resultant products manufactured with the help of imported capital goods. In the case of service providers the export obligation is required to be fulfilled by earning foreign exchange through rendering service. In order to ensure fulfillment of specified export obligation, as also to secure interest of revenue, the license holder is required to file bond with or without bank guarantee with the Customs Authority prior to commencement of import of capital goods. Bank guarantee equal to 50% of the differential duty is required to be filed by the license holder excepting the following cases; (i) Where the license holder is a manufacturer exporter having export turnover of Rs.1 crore or above during preceding financial year and he has a clean track record; and (ii) Where the license holder is certified as a superstartrading house, star trading house, etc. by DGFT. In such cases, a mere bond is sufficient.

 35. Capital goods imported under EPCG Scheme are subject to actual user condition and the same cannot be transferred/sold till the fulfillment of export obligation specified in the license. In order to ensure that the capital goods imported under EPCG Scheme are utilized in the manufacture of resultant export product, after importation/clearance of capital goods from Customs, the license holder is required to produce certificate from the jurisdictional Central Excise Authority (CEA) or Chartered Engineer (CE) confirming installation of such capital goods in the declared premises. 36. The normal validity period of EPCG license is 24 months and DGFT authority (who issues the license) is empowered to grant further revalidation. In order to ensure proper accountal of fulfillment of export obligation, the EPCG license holder is required to indicate the EPCG license No/date on the body of the Shipping Bill. After fulfillment of specified export obligation, the license holder submits relevant export documents along with EPCG license to the DGFT authorities for the purpose of obtaining EO discharge certificate. After obtaining EO discharge certificate from DGFT, the license holder produces the same before Customs for the purpose of obtaining redemption of bond/B.G. filed by him. In order to ensure that the license holder maintains a specified level of export obligation throughout the EO period of 5/8 years, in addition to overall EO, yearwise/blockwise EO are also specified. A gestation period of 1/2 year is allowed for the purpose of installation of capital goods and commencement of production. 37. In cases where the EPCG license holder is unable to maintain the specified level of yearwise/blockwise EO or overall EO. extension of yearwise/blockwise EO period up to a maximum of 1 year/block is allowed by DGFT Authority. Similarly in cases where the license holder is not able to fulfill overall EO within specified period, extension of 1 year is allowed. In case of default in EO the license holder has to pay differential Customs duty along with 24% interest per annum on such duty.

 38. Exporter of goods manufactured with the help of Capital Goods imported under the EPCG Scheme is entitled to input duty incidence neutralization benefits like Drawback, DFRC, Advance License, etc. in accordance with the terms of the individual scheme(s) Export Oriented Unit Scheme The Export Oriented Unit (EOU) scheme was introduced in the year 1980 vide Ministry of Commerce resolution dated 31st December 1980. The purpose of the scheme was basically to boost exports by creating additional production capacity. It was introduced as a complementary scheme to the Free Trade Zones/ Export Processing Zone (EPZ) Scheme introduced in the sixties, which had not attracted many units due to locational restrictions. The exporters showed willingness to set up units with long term commitment to exports under Customs bond operations provided they had the freedom to locate them in places of their choice and given most of the benefits as provided to units set up in the Zones. Over the years the Scheme has undergone various changes and its scope also expanded substantially as compared to the initial Scheme, which was basically for manufacturing sector with certain minimum value addition in terms of export earnings. The EOU scheme is, at present, governed by the provisions of Chapter 9 of the Export and Import (EXIM) Policy, (1997-2002) and Chapter 9 of the Handbook of Procedures, Volume-I (HOP). Under this scheme, the units undertaking to export their entire production of goods are allowed to be set up. These units may be engaged in the manufacture, services, development of software, trading, repair, remaking, reconditioning, re-engineering including making of gold/silver/platinum jewellery and articles thereof, agriculture including agro-processing, aquaculture, animal husbandry, biotechnology, floriculture, horticulture, pisciculture, viticulture, poultry, sericulture and granites. The EOUs can export all products except prohibited items of exports in ITC (HS).

 Under the EOU scheme, the units are allowed to import or procure locally without payment of duty all types of goods including capital goods, raw materials, components, packing materials, consumables, spares and various other specified categories of equipments including material handling equipments, required for export production or in connection therewith. Even the goods appearing in the restricted list of the EXIM Policy (1997-02) are permitted to be imported. However, the goods prohibited for import are not permitted. In the case of EOUs engaged in agriculture, animal husbandry, floriculture, horticulture, pisciculture, viticulture, poultry, sericulture and granite quarrying, only specified categories of goods mentioned in the relevant notification have been permitted to be imported duty-free. The Customs exemption notifications for import & related Central Excise exemption notification when the goods are procured from local manufacturing units, prescribe several conditions to be fulfilled by the beneficiaries keeping in view the objective of the Scheme and to prevent abuse. Working in Customs Bond is one of the essential prerequisite-there being few exceptions. They also provide various flexibilities in the matter of taking out the materials for job work, inter-unit transfer. The EOUs are required to achieve the minimum NFEP (Net Foreign Exchange Earning as a Percentage of Exports) and the minimum EP (Export Performance) as per the provisions of EXIM Policy. The NFEP and EP varies from sector to sector. As for instance, the units with investment in plant and machinery of Rs.5 crore and above are required to achieve positive NFEP and export US$ 3.5 million or 3 times the CIF value of imported capital goods, whichever is higher, for 5 years. For electronics hardware sector, minimum NFEP has to be positive and minimum EP for 5 years is US$ 1 million or 3 times the CIF value of imported capital goods, whichever is higher. NFEP is calculated cumulatively for a period of 5 years from the commencement of commercial production according to a prescribed formula.

 The EOUs are licensed to manufacture goods within the bonded premises for the purpose of export. As per the policy, the period of bonding is initially for five years, which is extendable to another five years by the Development Commissioner. On completion of the bonding period, it is for the unit to decide whether to continue under, or to opt out, of the scheme. The imported capital goods are allowed to be warehoused for a period of 5 years. For other goods, the warehousing period is one year, which can be extended further by the Commissioner / Chief Commissioner of Customs. On an application being made by the unit, extension of the time limit is granted in all cases unless there is malafide and diversion of duty free materials. As on 31-3-2001, there is about 1,350 EOUs functioning in the country. Administrative Machinery The EOUs basically function under the administrative control of the Development Commissioner of the Export Processing Zones, whose jurisdiction has been notified by the Ministry of Commerce. In all, there are seven Development Commissioners at Mumbai, Gandhidham, Chennai, Cochin, Vizag, Noida and Calcutta, who supervise the functioning of the EOUs and eight Export Processing Zones/Special Economic Zones in the country. The Development Commissioners of the EPZs /SEZs are the Licensing Authorities in respect of units under the EOU Scheme, as per specified territorial jurisdiction as indicated in the Export and Import Policy. The provisions of the Customs and Central Excise law in respect of the EOUs are administered by the Commissioners of Customs and Central Excise, who work under the control of Central Board of Excise & Customs. The staff of jurisdictional Commissioner of Central Excise handles the work relating to EOUs. However, in the case of EOUs located in port cities/towns or within the municipal limits of port cities/towns, jurisdictional Commissioner of Customs, Seaport, handles the work.

Application Procedure

Paragraph 6.7 of the Exim Policy, (2002-2007), deals with the application for the approval of units under the EOU Scheme. It is provided that the project applications for EOU units except for service sector units satisfying the conditions mentioned in the Handbook of Procedures may be given approval within 15 days by the Unit Approval Committee. In all other cases, the approvals may be granted by the Board of Approvals (BOA) set up for that purpose. Further, the Trade Policy announced on 13-8-1991 included a new package for 100% EOU units. As a result, along with the removal of the industrial licensing requirement for larger segment of industry, a route of automatic approval was introduced for the EOUs falling within a defined parameter. Such proposals were to be cleared within 2 weeks. As per the present policy and procedure, in case the unit is proposed as an EOU, 3 copies of the application in the prescribed Performa are to be submitted to the Development Commissioner concerned. Completed application entitled Application form for Eons must be accompanied by a crossed bank draft for Rs.5000/-. The Development Commissioner will acknowledge the receipt of the application and a reference number will be given. If the application satisfies the specific conditions, the Letter of Approval (LOA)/ Letters of Permission (LOP) shall be issued within 15 days by the Development Commissioner. This shall specify the conditions/parameters and also obligations and conditions under which he unit shall work. The LOP shall specify the items of manufacture/service activity; annual capacity; projected annual export performance for five years in dollar terms; Net Foreign Exchange earnings (NFE); limitation and such other matter as necessary. The LOP shall be construed as a license for all purposes under the scheme, including for the procurement of raw materials and consumables either directly or through designated canalizing agency.

 The LOP shall be valid for 3 years from the date of commencement of production. This period is extendable for a period of further 3 years at a time by the Development Commissioner. Benefits for the unit once registered as an EOU The eligible EOU unit may import without payment of duty all types of goods required by it (other than prohibited goods in the ITC (HS)) for manufacture, production, processing etc. (Customs Duty Exemption) In a parallel to the customs duty exemption notifications enabling the EOUs to import goods for their use without payment of customs duty, there are central excise duty exemptions which exempt the goods procured by the EOUs from domestic manufacturers. Income Tax concessions EOU units can avail the exemption from payment of corporate income tax in terms of Section 10 B of the Income Tax Act, 1961. Under the provisions of the said section, the entire profits of the EOU would be eligible for a deduction for a 10year period from the date of start of commercial production. The deduction is subject to an overall expiry date of March 31, 2010. The CBDT in its Circular no.1 dated January 6, 2005 has clarified that in the case of a unit (engaged in domestic sales), which converts into an EOU, the unit can avail the deduction under section 10B of the Act from the year from which it receives the EOU approval. Given the fact that the CBDT circular recognizes a conversion, it should be possible to claim an income tax exemption post conversion. However, given the provisions of the Act and the circular, any unit which has been set up before April 1, 1999 would not be eligible for the same tax deduction, irrespective of when the conversion happens. The concessions are subject to the fulfillment of the following conditions:

 # The unit should be engaged in manufacturing. # Splitting up or reconstruction of an existing business does not form the unit. # The transfer should not form the unit to a new business of machinery or plant previously used for any purpose. # The sale proceeds in foreign exchange must be received within the period of 6 months or such extended period as may be allowed at the end of the previous period. # With a few exceptions there should be no reorganization of the business and ownership or beneficial interest in the unit must not be transferred. # The profits from exports shall be the amount, which bears the same proportion to the profits of the unit as the export turnover bears to the total turnover of the unit. # A report of the Chartered Accountant in the prescribed form 56 F or 56 G must be submitted along with the return of the income EXISE CALCULATION:- (1) FOB VALUE PLUS Main excise duty :8% (domestic) Education cess :2% Secondary education cess :1% (2) FOR export custom duty :4% Education cess :2% Secondary education cess :1% International tariff and codes :

Lead Lead Concentrate Refined Lead

2607 000 7801 100

Antimonial Lead Alloy

7801 910

Zinc Zinc Concentrate Refined Zinc (>=99.99%) Refined Zinc (>=99.95% but <99.99%)

2608 000 7901 110 7901 121

Refined Zinc (<98.5% but not alloyed)

7901 129

Metal and concentrate market in balance 2009 World balance-2009 (Kmt)

World Refined Zinc Supply and Usage 2004 - 2009 200 4 200 5 200 6 200 7 200 8 20 08 88 4 95 6 91 2 20 09 Jan ct 99 87.8 4 93 008. 3 3 89 64.2 3 2008/2009

000 tones Mine Production Metal Production Metal Usage

970 9 103 92 106 48

101 46 102 24 106 11

104 44 106 55 109 72

111 37 113 56 113 09

117 67 116 92 114 81

O Nov 9 994 .2 1 938 .6 9 896 .8

D ec Jan 1 012. 993. 6 9 9 39.5 933. 0 8 79.2 893. 4

 Mine production Mine production requirement

10,414 10,515

 Concentrates balance

-101

 Zinc smelter production Zinc consumption

10,693 10,605

Zinc balance

88

PRODUCTION ZINC WORLD WIDE: -

Region Asia Europe America

% 54 23 17

Oceania

Industrial Consumption: -

INDUSTRY Galvanizing Alloy Brass and bronze Chemicals Die casting Other

% 47 14 19 9 8 3

ZINC USER AROUND WORLD: Continuous Galvanizers

Arcelor Mittal Siderar Blue Scope Steel Sorevco Corus Spartan Steel (Worthington) Dofasco Inc. SSAB Tunnplat AB Hyundai Steel Co. & Research Steelscape, Inc. Mittal Steel Group SZFG Mittal Steel USA Indiana Harbor Nucor Steel ThyssenKrupp POSCO Industries Rautaruukki (R&D) Voest Alpine Stahl Linz GmbH Severstal NA Inc.

 Zinc Alloyers Dingxin (Ningbo) Metal Alloy Co., Ltd. Metallwerk Dinslaken Eastern Alloys, Inc. Midland Industries, Inc. Genesis Alloys (Ningbo) Ltd. Semco Enterprises, Inc. Industrias Electroquimicas S.A. Zinc Industrias Nacionales S.A. ZINSA Mazak Limited Zinchem (A Division of Zimco, Pty Ltd.) Zinc Chemicals Arch Chemicals Inc. Umicore Hakusui Tech Co. Ltd Zinc Industrias Nacionales S.A. - ZINSA Industrias Electroquimicas S.A. Zinchem (A Division of Zimco, Pty Ltd.) Mazak Limited Zinc Die Casters Cast Products Inc. Foehl China Co. Ltd Dingxin (Ningbo) Metal Alloy Co. Lakeside Casting Solution Dynacast Inc. Stroh Die Casting/Stroh Controls Zinc Energy Storage/Batteries Eveready (Pty) Ltd Power Air Corporation Zinc Metal Suppliers ANI Metal and Chemicals

 Zinc

Richker Metals, Inc. JAM Industrial Group Shanghai Jingsheng Metals Co., Ltd. Metallwerk Dinslaken Zinchem (A Division of Zimco, Pty Ltd.) Rezinal n.v. Zinc Ox Resources plc Zinc Miners/Exploration Companies Acadian Gold Corporation Prairie Downs Metals Limited AIM Resources Limited Solex Resources Corp. Angus & Ross Plc. Strategic Resource Acquisition Corp. Apex Silver Mines Limited Terramin Australia Limited Blue Note Mining United Arabian Mining Co (MANAJEM) Cinkom Zinc Lead Metal & Mining Industry, Inc Ltd Iberian Minerals Corp. ZincOx Resources plc Zinc Oxide ANI Metal and Chemicals Rezinal n.v. Befesa Zinc SLU Umicore Hakusui Tech Co. Ltd Zinc Industrias Nacionales S.A. - ZINSA Industrias Electroquimicas S.A. Zinc National S.A. JAM Industrial Group Zinchem (A Division of Zimco, Pty Ltd.) Metales y Oxidos S.A. ZincOx Resources plc Zinc Sheet

Zeehan

Industrias Electroquimicas S.A. Rheinzink GmbH & Co. KG Jarden Zinc Products Co. Umicore Building Products/VM Zinc NedZink Zinc Traders ANI Metal and Chemicals Ocean Partners USA Inc Glencore Tinfos Nizi S.A. Euromin SA TRAXYS Belgium S.A.

SWOT ANALYSIS OF HINDUSTAN ZINC

LIMITED A.HUGE RESOURCE STRENGTH

Well established infrastructure Established in 10 January 1966 2. HZL have mines and smelters which are more than 20 year old. 3. We upgrade our technical concern of plant with the time like, (a) energy conservation system

 (b) exchange the technology with foreign player (c )establishing new plant and machinery and using them with existing plant for better production(Ex. Roaster 3 in Debari plant) 4. Expanding the process and mine production capacity (Chanderiya and Dariba plant) Promoters holding (vedanta) Vedanta is in top companies of LME ANIL AGRAWAL,rewarded as entrepreneur of year 2008 Vedanta did number of M&A from last five year like, :- ARARCLO in Canada (latest and done in financial crisis period) :-Mines in Australia and Zambia :-Acquisition of HZL,SESA GOA,NALCO,BALCO etc. VEDANTA IS KNOWN AS OPPORTUNITY SEEKER PLAYER IN MARKET

Market leadership

only player in india who have mines and smelters too. Produce 85% of indian consumption Exports is 33% of total production(2009-10 estimated) Biggest threat for international zinc market as a Mines producer(agucha is second largest in world) Chanderiya is biggest in asia second in world HZL will be no. 1 by 2010 as a lead-zinc producer(combined)

Large network
13 depoes around country :Hyderabad,Bangalore,Vizag,Chennai,Tarapur,Nagpur,Baro Raipur,Indore,Kolkata,Jalandhar,Udaipur,Chittorgarh

da

 SEA CONNECTION : we do regular export threw Candla JNPT mundra port We have our customers from EUROPE,USA and various part of Asia Other than that HZL is planning for opening INLAND CONTAINER DEPO in bhilwara Excellent financial condition We havent face lose from the year of establishment Although there is decline in our profit due to financial collapse and price pressure in LME but market targeted us as a good midcap company with better divident and good resrves also Our last financial result was good compare with other companies in our sector good in CSR And HR practices In our annul report of year 2008-09 we declared and defined the work that we did for society and for the areas where we operated Even mewar region (where our major location are located) accept as a good company who is serious about social issue too(data threw public servey)

WEAKNESS
Formal PSU culture Less effective supply chain management system Improper utilization of resources Conventional approach in market field Largely Dependency on domestic market HR issues

Opportunities
Asian market demand of zinc

Developing countries demand Cost reduction programme World wide place in zinc sector Expansion plan for international market

Threats
Import substitution in domestic market Current premium policies Asian low cost zinc producers Ex. Chinese,Korean etc Domestic Demand pattern

SEGMENTATION, TARGETING OF

POSOTIONING

HINDUSTAN ZINC LIMITED

------------------------------------------------------ SEGMENTATION This is key part for any industry where we define and analysis the segments on which we have to concentrate more .

Geographic :- we have to cover whole country as an

our target areas. For location specification we have to concentrate more on industrial rich states (domestic) and country (international) .we have to focus on developing nations more. Density of our sites will be urban and semi urban

Demographic :- our targeted customers

Income will be more than 10 laces other than that none of demographic factor can affect our market

 Psychographic :- this is factor which hardly affect the metal / commodity market so we dont consider it as a core point for segmentation

Behavioral :Occasions= Regular Benets = Quality,economy,speed User status =ex-user,regular user Usage rate= medium user,heavy user Loyalty status = None,medium,strong Readiness stage =aware,informed,intending to buy Attitude toward product = positive,indifferent

Our targeted customers have DISSONANCE REDUCING BUYING BEHAVIOR Because Pre purchase research is high Few different among brands Price and quantity sensitive market High involvement

POSITIONING

Basically it tells us where we sustain in mind of our customers and then design the strategy to find out space our their Over positioning in domestic market Concentrate more on threats like (a) import substitution (b) Binani zinc expansion plan (c ) traders mentality and approaches For international market we have to adopt:

User positioning:

It is a positioning in which we

concerned on the users demand

Competitor positioning:

In it we concerned on competitors product and prices according to that we positioning our product.

Product category positioning

According to the demand of the product we positioned and divide into the category.

Using Market Segmentation

Customer preference For domestic we have Homogeneous preference For international cluster preference

A Report on inland container

depot(ICD) and container freight station(CFS)in India

1.

DEFINITION OF ICD/CFS

An Inland Container Depot / Container Freight Station may be defined as:-

 A common user facility with public authority status equipped with fixed installations and offering services for handling and temporary storage of import/export laden and empty containers carried under customs control and with Customs and other agencies competent to clear goods for home use, warehousing, temporary admissions, re-export, temporary storage for onward transit and outright export. Transshipment of cargo can also take place from such stations.

2.

DISTINCTION BETWEEN AN ICD & A

CFS
Functionally there is no distinction between an ICD/CFS as both are transit facilities, which offer services for containerization of break bulk cargo and vice-versa. These could be served by rail and/ or road transport. An ICD is generally located in the interiors (outside the port towns) of the country away from the servicing ports. CFS, on the other hand, is an off dock facility located near the servicing ports which helps in decongesting the port by shifting cargo and Customs related activities outside the port area. CFSs are largely expected to deal with break-bulk cargo originating/terminating in the immediate hinterland of a port any may also deal with rail borne traffic to and from inland locations. Keeping in view the requirements of Customs Act, and need to introduce clarity in nomenclature, all containers terminal facilities in the hinterland would be designated as ICDs".

3.

Functions OF ICDs/CFSs

The primary functions of ICD/CFS may be summed up as under: Receipt and dispatch/delivery of cargo. Stuffing and stripping of containers. Transit operations by rail/road to and from serving ports. Customs clearance. Consolidation and desegregation of LCL cargo. Temporary storage of cargo and containers. Reworking of containers.

Maintenance and repair of container units.

4.

The operations of the ICDs/CFSs revolve

around the following centers of activity: i.) Rail Siding (in case of a rail based

terminal)
The place where container trains are received dispatched and handled in a terminal. Similarly, the containers are loaded on and unloaded from rail wagons at the siding through overhead cranes and / or other lifting equipments.

ii)

Container Yard

Container yard occupies the largest area in the ICD.CFS. It is stacking area were the export containers are aggregated prior to dispatch to port; import containers are stored till Customs clearance and where empties await onward movement. Likewise, some stacking areas are earmarked for keeping special containers such as refrigerated, hazardous, overweight/over-length, etc.

iii)

Warehouse

A covered space/shed where export cargo is received and import cargo stored/delivered; containers are stuffed/stripped or reworked; LCL exports are consolidated and import LCLs are unpacked; and cargo is physically examined by Customs. Export and import consignments are generally handled either at separate areas in a warehouse or in different nominated warehouses/sheds.

iv)

Gate Complex

The gate complex regulates the entry and exists of road vehicles carrying cargo and containers through the terminal. It is place where documentation, security and container inspection procedures are undertaken.

5.

BENEFITS OF ICDs/CFSs

The benefits as envisaged from an ICD/CFS are as follows: The main benefits from ICDs/CFSs i) Concentration points for long distance cargoes and its unitization. ii) Service as a transit facility. iii) Customs clearance facility available near the centers of production and consumption iv) Reduced level of demurrage and pilferage. v) No Customs required at gateway ports. vi) Issuance of through bill of lading by shipping lines, hereby resuming full liability of shipments. vii) Reduced overall level of empty container movement. xi) Competitive transport cost. ix) Reduced inventory cost. x) Increased trade flows

1.

PRIOR SURVEY A MUST

For the ICD/CFS to be successful, reduction in total transport cost is a prime criterion, as there is a possibility of marginal increase in total handling cost per box on origin to destination basis. This underlines the need for sound economic justification for setting up ICD/CFS through a carefully evaluated traffic likely to be handled at the proposed facility. A survey/feasibility study must precede the setting up of all ICDs/CFSs and copy of the report should invariably accompany the application for setting up such a facility. Data for carrying out analysis could be from secondary sources and field observations, structured over time and space. The latter is more realistic and truthful. Prior discussions must be held with exporters, shipping lines, freight forwarders, port authorities, concerned Commissioners of Customs/Excise etc., and their point of view fully reflected in the report. 2. The traffic flows between Inland centers of production and ports need to be analyzed with reference to: --- Commodities

 --- Directional-split (Imports/Exports) --- Proportions of less-than-container load (LCL) & fullcontainer-load (FCL) --- Forecast of future growth. --- Modes of transport available. --- Possible reduction in tone per kilometer or --- Box per kilometer costs. 3. the facility has to be economically viable for the management and attractive to users, to the railways for full train load movements; to other transport operators; seaports; shipping lines; freight forwarders etc. must have certain minimum amount of traffic. The prospective entrepreneurs are, therefore, strongly advised to study very carefully the viability of the project from the TEU traffic availability point of view. In the background of growing international trade, the infrastructure facility may have to proceed the actual generation of demand. This is particularly important as such facilities have a long gestation period for being fully operationalised. Though it is not proposed to lay down any minimum TEU figures as part of the criteria for approval of ICDs/CFSs, following are suggested indicative norms: For ICD 6,000 TEUs per year (Two ways) For CFS 1,000 TEUs per year (Two ways)

4. LAND REQUIREMENTS

The minimum area requirement for a CFS would be One Hectare and for ICD Four Hectare. However, a proposal could also be considered having less area on consideration of technological up gradation and other peculiar features justifying such a deviation.

5. DESIGN AND LAY-OUT OF ICD/CFS

 The design and layout should be the most modern stateof-art equipped with mechanical/electrical facilities of international standards. Key to a good lay-out is the smooth flow of containers, cargo and vehicles through the ICD/CFS. The design and lay out should take into account initial volume of business, estimated volume in 10 years horizon and the type of facilities exporters would require. The initial lay out should be capable of adaptation to changing circumstances. The design broadly should encompass features like (rail) siding, container yard, gate house and security features, boundary wall (fencing), roads, pavements, office building and public amenities. The track length and number of tracks should be adequate to handle rakes and for stabling trains where relevant. The perimeter fencing and lighting must meet the standards required by Customs authorities. The gate being the focal point of site security should be properly planned. The administration building is the focal point of production and processing of all documentation relating to handling of cargo and containers and its size will be determined by the needs of potential occupants. Fixed provisions should be made for sanitation facilities and possibly a food service facility. A good communication system and computerization and EDI connectivity is essential. Following Infrastructure should be available at the ICDs/CFSs Provision of standard pavement for heavy duty equipment for use in the operational and stacking area of the terminal. In cases where only chassis operation is to be performed, the pavement standard could be limited to that of a highway. Office building for ICD, Customs office and a separate block for user agencies equipped with basic facilities. Warehousing facility, separately for exports and imports and long term storage of bonded cargo. Gate Complex with separate entry and exit. Adequate parking space for vehicles awaiting entry to the terminal. Boundary wall according to standards specified by Customs. Internal roads for service and circulating areas. Electronic weighbridge.

 Computerized processing of documents with capability of being linked to EDI.

6. EQUIPPING THE ICD/CFS

The ICD/CFS would select most modern handling equipment for loading, unloading of containers from rail flats, chassis, their stacking, movement, cargo handling, stuffing/destuffing, etc. Following minimum equipment should be made available at ICDs/CFSs (Reach stacker may not be mandatory: Dedicated equipment such as lift truck (front end loader, side loader or reach-stacker), straddle carrier, rail mounted yard gantry crane, rubber tyred yard gantry crane, etc. of reputed make and in good working condition (not more than 5 to 8 years old) and equipped with a telescopic spreader for handling the 20 ft and 40 ft boxes. The equipment must have a minimum residual life of 8 years duly certified by the manufacturer or a recognized inspection agency. An additional unit of equipment should be provided when the throughput exceeds 8000 TEUs per annum or its multiples for lift truck based operations. Terminals resorting to purely chassis-based operations do not require dedicated box handling equipment. However, chassis-based operations should be restricted to CFSs proposed to be set up near ports. Small capacity (2 to 5 tones) forklifts must be provided for cargo handling operations in all terminals.

7. RAIL HEAD ICDs

The parties will be required to provide at their own cost all infrastructure facilities including land, track, handling equipment for containers, maintenance of assets including track, rolling stock, etc. as per extant railway rules applicable to private sidings. The cost of the railway staff would be borne by the party as per the prevailing Government policy.

8. TARIFF

 Tariff structure and costing should be worked out along with the feasibility study and information provided with the application.

9. GENERAL

The main function of an ICD/CFS being receipt, dispatch and clearance of containerized cargo, the need for an up-todate inventory control and tracking system to locate containers / cargo is paramount. Each functional unit of the facility (e.g. siding, container yard gate, stuffing/destuffing area, etc.) should have up-to-date and where possible on-line, real time information about all the containers, etc., to meet the requirements of customers, administration, railways etc. As far as possible, these operations shall be through electronic mode. PROCEDURE FOR APPROVAL OF ICD/CFS AND ITS IMPLEMENTATION 1. Proposals for setting up ICD/CFS will be considered and cleared, on merits, by an Inter Ministerial Committee for ICDs/CFSs, which consists of officials of the Ministries of Commerce, Finance (Department of Revenue), Railways and Shipping. Views of the State Governments as necessary would be obtained. 2. Application 10 copies in enclosed form should be submitted to the Infrastructure Division in the Ministry of Commerce, Udyog Bhavan, New Delhi. Application must be accompanied by 10 copies of feasibility reports mentioned in the guidelines. 3. The applicant should also send a separate copy of the application to the jurisdictional Commissioner of Customs. The Commissioner of Customs will send his comments to the Ministry of Commerce and the Central Board of Excise & Customs (CBEC) within 30 days. In case, the project is planned in a port town, a copy of the proposal should also be sent to the concerned Port Authority who would furnish their comments within 30 days to the Ministry of Surface Transport and the Ministry of Commerce.

 4. The applicants are also requested to familiarize with the statutory Custom requirements in relation to Bonding, Transit Bond, Security Insurance and other necessary procedural requirements and cost recovery charges payable before filing the application. 5. On receipt of the proposal, the Ministry of Commerce would take action to obtain the comments from the jurisdictional Commissioner of Customs and other concerned agencies within 30 days. Wherever necessary, a copy of the proposal should also be sent to Zonal Railway Manager, under intimation to the Ministry of Railways One copy of the proposal would also be made available to the IMC Members for advance action. The decision of the IMC would be taken within six weeks of the receipt of the proposal under normal circumstances. 6. On acceptance of a proposal, a Letter of Intent will be issued to the applicant, which will enable it to initiate steps to create infrastructure. 7. The applicant would be required to set up the infrastructure within one year from the date of approval. The Ministry of Commerce may grant an extension of six months keeping in view the justification given by the party. Thereafter, a report would be submitted to IMC to consider extension for a further (final) period of six months. The IMC may consider extension or May submitted to IMC to withdraw the approval granted. 8. The applicant, after receipt of approval, shall send quarterly progress report to Ministry of Commerce. Three formats (given as annexure I to III) for sending the quarterly/ annual report shall have to be submitted to Department of Commerce through electronic mode as well as through hard copy. 9. After the applicant has put up the required infrastructure, met the security standards of the jurisdictional Commissioner of Customs and provided a bond backed by bank guarantee to the Customs, final clearance and Customs notification will be issued. 10. The approval will be subject to cancellation in the event of any abuse or violation of the conditions of approval.

 11. The working of the ICD/CFS will be open to review by the Inter Ministerial Committee.