Elecon project report

A
Project report of
Elecon Engineering limited
On
Expoer Procedure & Documentation
Submitted by: submitted to:
Sam symon Dr. Rupal R Patel
Roll no: 28 B.J.V.M
Exam seat no:
TY BBA
SARDAR PATEL UNIVERSITY
VALLABH VIDYANAGAR
388120

ELECON ENGINEERINGCOMPANYLTD
2
◙ Preface ◙
I am proud to introduce myself as a student of BJVM Commerce College, as a
BBA student. BJVM is the pioneer institute in management course. It’s my
privilege that I got a chance to prepare report on ‘ELECON ENGINEERING
COMPANY LIMITED’ as a part of curricular activity of BBA.
For the regular exporting form like Elecon as it is Government of India recognized
export house, export documentation as well as export procedureaspect are well
efficient and up to standardization to avoid discrepancies and secure the shift
passage of goods. Every exporter should pre-plan their suitable export procedure
and have a sound knowledge of export procedureand documentation.
This project report gives the complete details, importance and uses of each type of
document in export procedureand documentation.
During this project I got to know export procedureand documentation in making
export trade.

3
◙ Acknowledgement ◙
The ‘comprehensive project’ is one step ahead towards attaining BBA degree
successfully. Lots of people who have genuinely guided my efforts in right
direction and made it successfulendeavor. I would like to attend my heartfelt
gratitude to all those people who have helped me in presentation of this report,
guiding me towards the achievement its purpose.
First and foremost I would like to thank Dr. Rupal Patel my project guide with her
help I am able to complete this report on Elecon Company limited.
Also I would like to thank Principal R.M Patel sir of BJVM Commerce College for
his support.
Place: Vallabh Vidyanagar Sam Symon

4

5
◙ Index ◙
Sr
no
Particulars Page
no
1 Title page 1
2 Preface 2
3 Acknowledgement 3
4 Certificate 4
5 Index 5
6 Introduction of Elecon 6
7 Literature review 15
8 ResearchMethodology 30
9 Data collection 32
10 Data analysis 33
11 Conclusion 35
12 Bibliography 36

6
◙ Introduction ◙
Elecon Engineering Company limited is an Indian Company specialized in the
manufacturing of industrial equipment. Elecon is one of the largest Asian
manufacturer of material handling equipment, industrial gear and mining
equipment.
History
Elecon Engineering was established in 1951 in Gurgaon, Mumbai by Ishwarbhai B
Patel. The Company’s early focus was on Engineering, procurement and
construction project in india. It initially manufactured conveyor systems. The
company was registered as a private limited company on 11 January 1960. In May
1960 the company moved to its current location in Vallabh Vidyanagar, Gujarat
later the company was listed on the Bombay stockexchange and the national stock
exchange.
In 1976, the company established its gear system division, specialized in power
transmission system, in designs and manufactures wormdrives, helical gears, spiral
bevel gears as well as a range of couplings. Its products targeta range of
industries, including steel rolling mills, wind turbines, marine applications and
spaceapplications.
In 1995, Elecon established its Alternate Energy Division, for the design and
manufactureof wind turbines.
In October 2010, Elecon acquired the Benzlers-Radicon Group, the power
transmission division of UK-based David Brown Ltd.
In 2012, Elecon Engineering secured two prestigious orders: NTPCand Tecpro
Systems.

7
Company Profile
Type Private company
Traded as
BSE: 505700
NSE: ELECON
Industry Industrial equipment
Founded
1951
Founder
Bhanubhai B. Patel
Headquarters
Anand, Gujarat, India
Area served
Engineering industries
Key people Prayasvin Patel, Chairman & MD
Products
Material handling systems
Industrial gears
Mining equipment
Revenue ₹13.16 (20¢ US) (2010–11)
Operating income ₹1.836 (2.7¢ US) (2010–11)
Net income
₹5 (7.4¢ US) (2010–11)
Website elecon.com

8
Product Profile
Couplings
Elevator Traction Machines

9
Helical Gear
High Speed Gear

10
Loose Gear
Marine Gear

11
Planetary Gear
Special Gear

12
Wind Farms
Wind Mill Gear

13
Wind turbines
Worm Gear Boxes

14
Elecon exporting countries
o Callao
o Bargen
o Manchester
o Colombo
o Chittagong
o Kathmandu
o Genoa
o Felixstowe
o Chicago
o Lilongwe

15
Export Procedure & Documentation
Objectives
„What are the important steps in export transaction
„Whatare the standardized and alignedpre-shipment documents
„Whatare the documents related to goods
„What are the certificates relatedto shipment
„What are the documents relatedto payment
„What are the documents relatedto inspection
„Whatare the documents related to excisable goods
„What are the documents relatedto exchange regulation

16
Introduction
India has a mission to capture 2% of the global share of trade by 2019, up from
the present level of less than 1%. Export is one of the lucrative business activities in India. The
government also provides various promotional schemes to the exporters for earning valuable
foreign exchange for the country and for meeting their requirements for importing modern
technology and essential inputs. Besides, the income from export business is also 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.
Exports can be of goods which can be moved physically from one country to
another or can be of service rendered. Detailed list of services are given in the Foreign Trade
Policy covering more than 160 items e.g. Insurance, Hospital, Postal and Telecommunication etc.
TWO CLASSES OF EXPORTS:
Physical Exports: If the goods physically go out of the country or services are
rendered outside the country then it is called asphysical export. Deemed Exports: Where the
goods do not go out of the country physically they can be termed as deemed exports. This will
be subject to certain conditions as prescribed by the DGFT. Under Deemed Exports, the goods
may be supplied to the manufacturer exporter who ultimately export a finished product of which
this supply forms a part and ultimately go out of the country. E.g. Supply of fabrics to the garment
exporter who exports the garments made out of the said fabric.
The government may announce from time to time the types of supplies that may
be considered as deemed export. The Foreign Trade Policy gives the list of supplies considered
under the Deemed Export Category. The policies and procedures are different for Physical
Exports and Deemed Exports as also the benefits available. In a nutshell, Deemed Exports do not
enjoy all the benefits that are available under Physical Export. The Foreign Trade defines exports
as taking out of India any goods by land, sea,air.Although the actdoes not term them as “Physical

17
Exports”, we have to put phrase to distinguish it from “Deemed Exports” which is sales in India
but considered as exports for limited purpose.
TYPES OF EXPORTERS Exporters can be basically classified into two groups
 Manufacturer Exporter: As the exporter has the facility to manufacturer the product he
intends to export and hence he exports the products manufactured by him.
 Merchant Exporter: An exporter who does not have the facility to manufacture an item.
But, he procures the same from other manufacturers or from the market and exports the
same.
An exporter can be both a manufacturer exporter as well as a merchant exporter,
he can export product manufactured by him or he can export items bought from the market.
Once it is decided to export, it is mandatory on your part to follow certain
procedures, rules and regulations as prescribed by various regulatory authorities such as DGFT,
RBI, and Customs. These procedures, rules and regulations are laid down in the Exim Policy
2004-09, Exchange Control Manual, Customs Act etc. Accordingly Export documents are
required to be prepared keeping in view of the requirement of the foreign buyers and our
regulatory authorities.

18
HOW TO SET UP AN EXPORT ORGANISATION
The proper selection of organization depends upon
 Ability to raise finance.
 Capacity to bear the risk.
 Desire to exercise control over the business.
 Nature of regulatory framework applicable to anyone
If the size of the business is small, it would be advantageous to form a sole
proprietary business organization. It can be set up easily without much expenses and legal
formalities. It is subjected to only few governmental regulations. However, the biggest
disadvantage of sole proprietorship business is limited ability to raise funds which restricts the
growth. Besides the owner has unlimited personal liabilities. In order to avoid this disadvantage,
it is advisable to form a partnership firm.
The partnership firm can also be set up with ease and economy. Business can take
benefit of the varied experiences and expertise of the partners. The liability of the partners
though joint and several, is practically distributed amongst the various partners, despite the fact
that the personal liability of the partner is unlimited. The major disadvantage of partnership firm
of business organization is that conflictamongst the partners is apotential threat to the business.
It will not be out of place to mention here that partnership firms are governed by the Indian
Partnership Act, 1932 and, therefore they should be formed within the parameters laid down by
the Act. Company is another form of business organization, which has the advantage of distinct
legal identity and limited liability to the share holders.
It can be a private limited company or a public limited company. A private limited
can be formed by just two persons subscribing to its share capital. However, the number of its
shareholders cannot exceed 50, public cannot be invited to subscribe to its capital and the
members right to transfer their share is restricted. On the other hand, a pubic limited company
has a minimum of seven members. There is no limit on the maximum number of its members. It

19
can invite the public to subscribe to its capital and permit the transfer of share. A public limited
company offers enormous potential for growth because of access to substantial funds. The
liquidity of investment is high because of easiness of transfer of shares. However its formation
can be recommended only when the size of the business is large. For small business, a sole
proprietary concern or a partnership firm will be the most suitableform of business organization.
In case it is decided to incorporate a private limited company, the same is to be registered with
the Registrar of Companies.
CHOOSING APPROPRIATE MODE OF OPERATIONS:
You can choose any of the following modes of operations
 Merchant Exporter i.e. buying the goods from the market or from the manufacturer and
then selling it to foreign buyers.
 Manufacturer Exporter i.e. manufacturing the goods yourself for export.
 Sales Agent / Commission Agent / Indenting Agent i.e. acting on behalf of the seller and
charging the Commission.
 Buying Agent i.e. acting on behalf of the buyer and charging Commission.
 Service provider i.e. providing service from India to another country.
NAMING THE BUSINESS
Whatever form of business organization has been finally decided, naming the
business is an essential task for every exporter. The name and style should be soft, attractive,
short and meaningful. Open a current account in the name of the organisation in whose name
you intend to export. It is advisable to open the account with a bank which is authorised to deal
in Foreign Exchange.

20
STRUCTURE OF AN EXPORT ORGANISATION
 marketing manager for generating sales
 Commercial manager for looking activities of the execution of the orders.
 staff personnel for carrying out the day-to-day activities namely
o Preparation of pre - shipment documents.
o Co-ordinating with clearing agents on the progress of the shipment to be made.
o Co-ordinating with the ware houseC. excise department regarding packing and
clearance of the goods for export.
o Preparation of post shipment documents foe banks.
o Follow-up with the bank on dispatch of documents, receipt of payment, availment
of bank loans etc.
 To look into the requirement of licenses, claiming of export benefits fiiling of documents
with the Government Authorities in Discharge of Export Obligations, if any, filing of
returns to the various Government Agencies which are mandatory, prepare and keep an
information bank of various transaction of the company, their domestic as well as
international competitors.
 An office boy for doing leg work.
 A clearing and forwarding agent to handle the documents and the goods in the customs
premises in the ports of lading.
Depending upon the size of the business the numbers of personnel under each
category may increase. For example if a company is transacting substantial volume of business in
more than one product. Then it is necessary to have marketing manager for each product so that
the person can concentrate on a particular trade to enhance the business.

21
Export procedure and documentation
PreliminariesSteps
„IEC number the IEC numbers are normally allotted by the regional licensing authorities.
„Membership cum registration: membership of certain bodies will help the exporters in a
number of ways
„Inquiry and offer: An inquiry is a request from a prospective importer to be informed of the
terms and conditions of sale.
„Confirmation of order : Once the negotiation are completed and conditions are acceptable to
the buyer and seller, the buyer may place and order with the exporter.
„Export license : the exports of some items are banned and of some items controlled by means
of licenses, though many items are permitted to be exported freely.
„Finance :If the exporter require preshipment financial assistance, he should take the necessary
steps to obtain it.
„Production/procurement of goods : Once the order is confirmed, the exporter should take
necessary steps to ensure the timely availability of the goods of the specifications required and
execute the export order promptly.
„Shipping space : As soon as the export order is confirmed, the exporter should contract the
shipping companies which have sailings for the port to which goods have to be sent and book
the required shipping space.
„Packing and marketing : once the goods are ready, they are packed and marked properly.
„Quality control and pre-shipment inspection : Needless to say, goods should be exported only
after ensuring that they are of proper quality.
„Excise clearance : As a matter of policy, the government has granted excise duty exemption
for export products.

22
Customs Formalities
„Goods may be shipped out of India only after Customs clearance has been obtained.
„Following documents to the customs authorities,
1.Shipping bill
2.Declaration regarding truth or statement made in the shipping bill
3.Invoice
4.GR form
5.Export licence
6.Quality control inspection certificate
7.Original contract, wherever available or correspondence leading to contract
8.Contract registration certificate
9.Letter of credit
10.Packing list
11.AR-4 form
12.Any other documents

23
Exchange Control Formalities
„An exporter, who has sent goods outside the country, has the obligation to satisfy the Reserve
Bank of India that he has received payment from his overseas buyer.
„Make a declaration on the prescribed form to the Collector of Customs that foreign exchange,
representing the full export value of goods, has been or will be disposed of in the manner and
within the period specified by the RBI
„Negotiate all shipping documents, including those relating to sales on consignment basis,
through authorized dealers.
„Receive payment by an approved method
„Surrender the foreign exchange received from exports to the exchange control authority
through authorized dealers.

24
Shipping The Goods
„Goods may be exported to foreign by sea, air, post, land or river.
1.Shipping by sea : To obtain the permission of the port authorities for the movement of goods
into the port, it is necessary to present the cart ticket to the gate warden/inspector/keeper at
the port gate.
2.Shipping By Air : Shipping by air has become popular for such products as commodities which
are perishable and seasonal or high in cost but low in bulk.
3.Shipping By Post : Shipping of goods may be effected by post, subject to the foreign trade
and foreign exchange regulations of the country.
4.Shipping By Land : The procedure for the export of excisable goods by land to countries like
Afghanistan is, by and large, similar to the one laid down for export by sea.
Negotiation Of Documents
„After shipping the goods, the exporter should arrange to obtain payment for the exports by
negotiating the relevant documents through the bank.
Export Incentives
„If the exporter is entitled to any export incentives, he should take the necessary steps to
realize it (them).

25
Principal Export Documents
1.Commercial invoice
Document required by customs to determine true value of the imported goods, for assessment of
duties and taxes. A commercial invoice (in addition to other information), must identify the
buyer and seller, and clearly indicate the (1) date and terms of sale, (2) quantity, weight and/or
volume of the shipment, (3) type of packaging, (4) complete description of goods, (5) unit value
and total value, and (6) insurance, shipping and other charges (as applicable).
2.Packing list
A packing listis a documentthatincludesdetailsaboutthe contentsof a package.The packing listis
intendedtolettransportagencies,governmentauthorities,andcustomersknow the contentsof the
package.These detailshelpeachof these partieshandle the package accordingly.
3.Bill of lading
a detailedlistof aship'scargo inthe formof a receiptgivenbythe masterof the shipto the person
consigningthe goods.
4.Combined transport document
Combinedtransport is a formof intermodal transport,whichisthe movementof goodsinone andthe
same loadingunitorroad vehicle,usingsuccessivelytwoormore modesof transport withouthandling
the goodsthemselvesinchangingmodes.
5.Certificate of inspection/quality control
A documentcertifyingthatmerchandise (suchasperishablegoods) wasingoodconditionatthe time of
inspection,usuallyimmediatelypriortoshipment....Whenusedasa requireddocumentunderletterof
creditterms, the detailsandidentityof the partyprovidingthe inspectionshouldbe mentioned.
6.Insurance certificate/policy
A certificate of insurance isa documentissuedbyan insurance company/brokerthatisusedtoverify
the existence of insurance coverage underspecificconditionsgrantedtolistedindividuals.
7.Certificate of origin
A Certificate ofOrigin (CO) isan importantinternational trade documentconfirmingthatthe goodsina
particularshipmenthave beenwhollyobtained,produced,manufacturedorprocessedinaparticular
country.
8.Bills of exchange and shipment

26
advicea writtenordertoa personrequiringthemtomake aspecifiedpaymenttothe signatoryorto a
namedpayee;apromissorynote.
Auxiliary Documents
1.Performa invoice
2.Intimation for inspection
3.Shipping instructions
4.Insurance declaration
5.Shipping order
6.Mate receipt
7.Application for certificate of origin
8.Letter to the bank for collection/negotiation of documents.
Regulatory Documents
1.Gate pass-1/gate pass-2 –prescribed by Central Excise Authorities
2.AR4/AR4A form -prescribed by Central Excise Authorities
3.Shipping Bill/Bill of Export -prescribed by Central Excise Authorities
4.Export Application/Dock Challan – Prescribed by Port Trust.
5.Receipt for payment of Port Charges
6.Vehicle Ticket
7.Exchange Control Declaration – Prescribed by RBI GR/PP Forms
8.Freight Payment Certificate
9.Insurance Premium Payment Certificate

27
Documents Related To Goods
1.Invoice : An invoice is the seller’s bill for merchandise and contains particulars of goods, such
as the price per unit at a particular location, quantity, total value, packing etc.
2.Packing Note and List : Difference between a packing note and a packing list is that the
packing note refers to the particulars of the contents of an individual pack, while the packing
list is a consolidated statement of the contents of a number of cases or packs.
3.Certificate of origin : A certificate of origin, as the name indicates, is a certificate which
specifies the country of the production of the goods.
Certificates Related To Shipment
1.Mate receipt : A mate receipt is a receipt issued by the Commanding Office of the ship when
the cargo is loaded on the ship, and containts information about the name of the vessel, berth,
date of shipment, description of packages, marks and numbers, conditions of the cargo at the
time of receipt on board the ship etc.
2.Shipping Bill : The shipping bill is the main document on the basis of which the
Customs’permission for export is given.
3.Cart Ticket : A cart ticket, also known as a cart chit, vehicle and gate pass, is prepared by the
exporter and includes details of the export cargo in terms of the shipper’s name, the number of
packages, the shipping bill number, the port of destination and the number of the vehicle
carrying the cargo.
4.Certificate of Measurement
A certificate whichsignifiescompetencyinthe areaof evaluatingthe investmentperformanceof
investmentfirms.The Certificate inInvestmentPerformance Measurementisissuedbythe Chartered
Financial AnalystInstitute andrequires certificate holdersto:... - Obtainmembershipinthe CIPM
Association.
5.Bill of Lading
a detailedlistof aship'scargo inthe formof a receiptgivenbythe masterof the shipto the person
consigningthe goods.
6.Airway Bill

28
Documents Related To Payment
a)Letter of credit
a letterissuedbyabank to anotherbank(especiallyone inadifferentcountry) toserve asa guarantee
for payments made toa specifiedpersonunderspecifiedconditions.
b)Bill of exchange
a letterissuedbyabank to anotherbank(especiallyone inadifferentcountry) toserve asa guarantee
for paymentsmade toa specifiedpersonunderspecifiedconditions.
c)Trust receipt
Trust Receipt(TR) isa type of short-termimportloantoprovide the buyerwithfinancingtosettle goods
importedunderLetterof Creditwhere titleof goodsisheldbythe bank.
d)Letter of hypothecation
Enablesanacceptingbankto sell the shipmentif the buyerdoesnotacceptor pay the bill of exchange.
A bankor lenderisauthorizedtoseize andsell the documenteditemif defaultoccurs.Ininternational
trade, a letterof hypothecation isawritten confirmation.
e)Bank certificate of payment
A certificate of deposit(CD) isatime deposit,afinancial productcommonlysoldinthe UnitedStates
and elsewhere by banks, thriftinstitutions,andcreditunions.CDsare similartosavingsaccountsinthat
theyare insured"moneyinthe bank"andthusvirtuallyriskfree.

29
Documents Relating To Inspection
„Certificate Of Inspection : It is a certificate issued by the Export Inspection Agency, certifying
that the consignment has been inspected as required under the Export (Quality Control and
Inspection) Act, 1963.
Documents Related To Excisable Goods
a)G. P. Forms
b)Form C
c)Forms A.R.-4/A.R.-4A
Summary
„Some important steps and documents in export transaction are : preliminaries, inquiry and
offer, confirmation of order, export license, finance, procurement of goods, shipping space,
packing and marking, quality control and pre-shipment inspection, excise clearance, customs
formalities, exchange control formalities, insurance, shipping goods, negotiation of documents
and export incentives.
„There are two dozen commercial and regulatory documents involved in preshipment stage of
an export transaction.
„The different commercial and regulatory documents may be classified into documents related
to goods, documents related to shipment, documents related to payment, documents related
to inspection etc.

30
Research methodology
Definition: The process used to collect information and data for the purpose of making decision.
The methodology may include publication research , interview, surveys and other research
techniques and could include both present and historical information.
There are two types of data primary and secondary …
 Primary: Raw or primary data is a term for data collection at source. This type of
information is obtained directly from first hand source by means of survey, observation
and experimentation.
 Secondary: It refers to the data collected by someone other than the user that is the data
is already available and analyzed by someone else.
Primary data is collected by:
1. Observationmethod: it is commonly used in studies relating to behavioral
science, under this method observation becomes a science tool to collect
data.
2. Interviewmethod: this method of collecting data involves presentation of
oral verbal stimuli and reply in terms of oral-verbal responses.
3. Questionnaire: in this method a questionnaire is sent to the concerned
respondents who are expected to read, understand and reply on their own
and return the questionnaire filled by due information asked.
Schedules: this method of data collection is similar to questionnaire method
with the difference that schedules are being filled by enumerations specially

31
appointed for the purpose.Enumeratorsshould bewelltrained to performtheir
job, he/she should be honest, hardworking and patient.
Secondary data can be collected by:
1. Publications of government
2. Technical and trade journal
3. Reports of various business banks
4. Public records
5. Statistical or historical documents

32
Data collection

33
Data analysis
Year Sales turnover(mn)
2014-15 13,289
2013-14 12,929
2012-13 15,268
2011-12 16,132
2010-11 11,739
0
2000
4000
6000
8000
10000
12000
14000
16000
18000
2010-11 2011-12 2012-13 2013-14 2014-15
Series 1
Series 1

34
For the year ended on March 31, 2015, the Company
has achieved a Turnover of 50,319.24 Lacs as against
`
50,123.19 Lacs in the previous year, representing a
marginal increase in Turnover by 0.40%.
For the year ended on March 31, 2015, the Company has achieved Earnings Before
Interest (Finance Cost),
Depreciation & Amortization and Tax (EBIDTA) of
`
10,650.35 Lacs as against the EBIDTA of
`
10,006.97
Lacs during the previous year, representing increase in
EBIDTA by 6.43%. The increase was driven by reduction
in operational and finance cost during the year.
The Company holds total unexecuted orders worth
`
23,387 Lacs as on March 31, 2015. This will help us to
continue to have sustainable growth in coming years.
The reason for growth of elecon in the current year is because of the need for
technical instruments like mining tools in the world wide economy, that is why the
demand in the market has raised in the recent years.

35
Conclusion
Every business has to follow a systematic documentation for the
systematic import and export of goods flowing out of country.
The complexity of documents can be eliminated when prepared by
experienced staff. The document required differs from country to
country, product to product. A proper planning will lead to less loss or
wastage of products.
Most of the company have a well-trained personal to fill in such
documents to avoid complexities later while sending copies of certain
document the original is however retained for further verification on a
later date. Tough it is complex process in playing a major role in
international trade.

36
Bibliography
 www.google.com
 www.wikipedia.com
 www.shareinfo.com
 www.eleconengineering.com
Books
a guide to international trade and export management
By: C.A VIRENDRA K PAMECHA
Anti-dumping law & procedure
By; R.K Gupta

Elecon project report

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