My Final Project Report

8/8/2019 My Final Project Report

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TITLE

EXPORT-Import Procedure And Documentation - theparticulars of freight forwarding business

at

Minerals And metals trading corporation (mmtc)


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Certificate of Approval

The following Summer Project Report titled EXPORT-IMPORT PROCEDURE ANDDOCUMENTATION- THE PARTTICULARS OF FREIGHT FORWARDING BSINESS" atMinerals And Metals Trading Corporation(MMTC Ltd) is hereby approved as a certified study inmanagement carried out and presented in a manner satisfactory to warrant its acceptance as a

prerequisite for the award of Post-Graduate Diploma in Business Management for which it hasbeen submitted. It is understood that by this approval the undersigned do not necessarily endorse orapprove any statement made, opinion expressed or conclusion drawn therein but approve the SummerProject Report only for the purpose it is submitted.

Summer Project Report Examination Committee for evaluation of Summer Project Report

Name Signature

1. Faculty Examiner Mrs. Sartaj Khera ___________________

2. PG Summer Project Co-coordinator Mr. U. E. Rao ______________


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Certificate from Summer Project Guides

This is to certify that Ms. TANJU ROY, a student of the Post-Graduate Diploma in Business

Management, has worked under our guidance and supervision. This Summer Project Report has the

requisite standard and to the best of our knowledge no part of it has been reproduced from any other

summer project, monograph, report or book.

Mrs. Sartaj khera Mr. Koushik Paul ,General Manager {Minerals)

Sri SIIM, Vasant Kunj Export of Minerals

New Delhi

Date

Mr. Abhishek Sanyal, Dy.Manager

Gold Division (Import)

Mrs. Nurzat Salam, Dy.Manager

Non Ferrous Metal(Import)


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Acknowledgement

Preservation, Inspiration and motivation have always played a key role in the success of any venture.In the present world of competition and success, training is like a bridge between theoretical andpractical working; willingly I prepared this particular Project.First of all I would like to thank the supreme power, the almighty God, who is the one who hasalways guided me to work on the right path of my life.I would like thank Mr Thiyagrajan,Chief General Manager(East Zone) &Mr. Subrata Paul,GeneralManager for their inspiration and believe on me.I would also like to thank my Mentors Mr.Koushik Paul,General Manager(Minerals); Mr. Abhishek

Sanyal, Deputy Manager(Gold Division);Mrs.Nurzat Salam,General Manager(NFM) and my Project

Guide Mr.U.E.Rao,Senior Manager(Personal and Law) who have been the greatest support in

completing this project. Without their constant feedback, this project would not have been a reality.

This project would not have seen the light of the day without the support of our faculty mentor Mrs

Sartaj Khera ,she has been of great help in guiding us through the various stages of our project.

Constructive criticism and feedback would be highly appreciated.

TANJU ROY20090158

Sri SIIM, Vasant kunj, New Delhi


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Table Of Contents

Table of contents Page No

Executive Summary 6-7

Objective to the Study 8

Scope of the Study 9

Introduction to the study 10-23

Company Profile 24-45

Introduction to Export Import 46-60

Import Procedure and Documentation 61-74

Export Procedure and Documentation 75-94

Research Methodology 95-103

Data Analysis and Representation 104-109

Findings 110

Limitations of the Project 111

Suggestions 112

Conclusion 113Bibliography 114


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EXECUTIVE SUMMARY

Todays rapidly changing business environment is creating intense competition among

corporations markets are changing faster now than in any other time in history. Product lifecycles are shortening and businesses must compete globally.

Documentation perform a key role in any trade. The freight forwarder is

the architect of the international transport and plays an important role in the growth of the

international trade in India by facilitating exporters, shippers, importers, customs/ports

authorities etc.

The export and import industry will continue to benefit from growth in

trade and certain structural advantages over carriers . Value is driven by financial

performance is driven strategic position. Strategic position must assessed in a disciplined

manner , which examines the discrete and interrelated activities within a forwarder value

chain to understand sources of synergy and options to increase value.

The Indian economy is one of the fastest growing in the world, but the boom is not

without its stops, starts, and bottlenecks, all of which also make themselves felt in the

countrys freight transport sector. In fact, according a recent study by the Confederation of

Indian Industry, the country needs US$330bn in infrastructure investment over the next five

years to sustain its economys growth at 8% annually. Inadequate port facilities, poor road

infrastructure and frequent power cuts prevent Indian industries from operating efficiently

and expanding sales. India needs to increase its spending on infrastructure projects to 8% of

the countrys gross domestic product from 4.6% now. In fact, despite these obstacles, its

India Freight Transport Report concludes the country will reach average annual freight traffic

growth of 10.2% in the 2007-2011 periods.

Strong economic and foreign trade growth is underpinning the

freight upturn. In the road freight sector, demand is boosted by door-to-door logistics, the

move to higher value/lower bulk shipments, the rising size of the vehicle fleet and the new

impetus to improve and extend the network, using private sector highway operators and

build-transfer-operate (BOT) schemes. Rail will experience steady but less spectacular

growth given the predominance of the state-controlled Indian Railways. All other transport

modes should experience faster growth, with international air cargo turnover performing

strongly as more private airlines join the market Sea transport through Indias major ports


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will also perform well. A major factor over the next few years driving change will be the

rising competitive pressures from cargo operators among Indias immediate neighbours and

main trading partners.

For the 2007-2011 forecast period we expect the transport and communications sector to

continue outpacing the economy as a whole. It will achieve average annual growth of 7.7%,

versus 7.4% for overall GDP. The total value of transport and communications GDP will rise

to US$91.8bn in nominal terms by 2011, representing 7.6% of Indias GDP.

India has an ability to improve the freight forwarding due to his better quality of

product. We improve the skill development in labour. To huge investment in research and

development .

We revise the market strategy for the expending for freight forwarding. Government of India

provides better facilities for its freight forwarder. Last few years this seek industry of India

we improve the technology for the production of better quality of product. I hope India

improve its freight forwarding for its policies.


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OBJECTIVE OF THE STUDY

To know the Export and Import industry very well

To analyze the market potential for providing the services

related with import export to the customers.

To know the requirement of the customers

To know the Export/Import Documentation. To analyze the present position of MMTC in the Global trade.

To set up brand image of MMTC in segmented market.

To know about market movement

To analyze the present services and their application


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SCOPE OF THE STUDY

The study gives me a wide exposure of areas like Industry awareness,

company, competitions, Market position, customer expectations and market

demands in Freight Forwarding.

What are the current trends and their application and also scope of improvement in

it?

It also gives me a deep understanding of the logistics industry about both domestic

as well as foreign market.


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INTRODUCTION TO THE STUDY

Today, business is acknowledged to be international and there is a general expectation that

this will continue for the foreseeable future. International business may be defined simply

as business transactions that take place across national borders. This broad definition

includes the very small firm that exports (or imports) a small quantity to only one country, as

well as the very large global firm with integrated operations and strategic alliances around the

world. Within this broad array, distinctions are often made among different types of

international firms, and these distinctions are helpful in understanding a firm's strategy,

organization and functional decisions (for example, its financial, administrative, marketing,

human resource, or operations decisions). One distinction that can be helpful is the

distinction between multi-domestic operations, with independent subsidiaries which act

essentially as domestic firms, and global operations, with integrated subsidiaries which are

closely related and interconnected. These may be thought of as the two ends of a continuum,

with many possibilities in between.

International business grew over the last half of the twentieth century partly because of

liberalization of both trade and investment, and partly because doing business internationally

had become easier. In terms of liberalization, the General Agreement on Tariffs and Trade

(GATT) negotiation rounds resulted in trade liberalization, and this was continued with the

formation of the World Trade Organization (WTO) in 1995. At the same time, worldwide

capital movements were liberalized by most governments, particularly with the advent of

electronic funds transfers. In addition, the introduction of a new European monetary unit, the

euro, into circulation in January 2002 has impacted international business economically. The

euro is the currency of the European Union, membership in March 2005 of 25 countries, and

the euro replaced each country's previous currency. As of early 2005, the United States dollarcontinues to struggle against the euro and the impacts are being felt across industries

worldwide.

In terms of ease of doing business internationally, two major forces are important:

1. Technological developments which make global communication and transportation relatively

quick and convenient; and

2. The disappearance of a substantial part of the communist world, opening many of the world's

economies to private business.


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1. DOMESTIC VS. INTERNATIONAL BUSINESS

Domestic and international enterprises, in both the public and private sectors, share the

business objectives of functioning successfully to continue operations. Private enterprises

seek to function profitably as well. Why, then, is international business different from

domestic? The answer lies in the differences across borders. Nation-states generally have

unique government systems, laws and regulations, currencies, taxes and duties, and so on, as

well as different cultures and practices. An individual traveling from his home country to a

foreign country needs to have the proper documents, to carry foreign currency, to be able to

communicate in the foreign country, to be dressed appropriately, and so on. Doing business

in a foreign country involves similar issues and is thus more complex than doing business at

home. The following sections will explore some of these issues. Specifically, comparative

advantage is introduced, the international business environment is explored, and forms of

international entry are outlined.

2. THEORIES OF INTERNATIONAL TRADE AND INVESTMENT

In order to understand international business, it is necessary to have a broad conceptualunderstanding of why trade and investment across national borders take place. Trade and

investment can be examined in terms of the comparative advantage of nations.

Comparative advantage suggests that each nation is relatively good at producing certain

products or services. This comparative advantage is based on the nation's abundant factors of

productionland, labor, and capitaland a country will export those products/services that

use its abundant factors of production intensively. Simply, consider only two factors of

production, labor and capital, and two countries, X and Y. If country X has a relative

abundance of labor and country Y a relative abundance of capital, country X should export

products/services that use labor intensively, country Y should export products/services that

use capital intensively.

This is a very simplistic explanation, of course. There are many more factors of production,

of varying qualities, and there are many additional influences on trade such as government

regulations. Nevertheless, it is a starting point for understanding what nations are likely to

export or import. The concept of comparative advantage can also help explain investment

flows. Generally, capital is the most mobile of the factors of production and can move


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relatively easily from one country to another. Other factors of production, such as land and

labor, either do not move or are less mobile. The result is that where capital is available in

one country it may be used to invest in other countries to take advantage of their abundant

land or labor. Firms may develop expertise and firm specific advantages based initially on

abundant resources at home, but as resource needs change, the stage of the product life cycle

matures, and home markets become saturated, these firms find it advantageous to invest

internationally.

3. THE INTERNATIONAL BUSINESS ENVIRONMENT

International business is different from domestic business because the environment changes

when a firm crosses international borders. Typically, a firm understands its domestic

environment quite well, but is less familiar with the environment in other countries and must

invest more time and resources into understanding the new environment. The following

considers some of the important aspects of the environment that change internationally.

The economic environment can be very different from one nation to another. Countries are

often divided into three main categories: the more developed or industrialized, the less

developed or third world, and the newly industrializing or emerging economies. Within eachcategory there are major variations, but overall the more developed countries are the rich

countries, the less developed the poor ones, and the newly industrializing (those moving from

poorer to richer). These distinctions are usually made on the basis of gross domestic product

per capita (GDP/capita). Better education, infrastructure, technology, health care, and so on

are also often associated with higher levels of economic development.

In addition to level of economic development, countries can be classified as free-market,

centrally planned, or mixed. Free-market economies are those where government intervenes

minimally in business activities, and market forces of supply and demand are allowed to

determine production and prices. Centrally planned economies are those where the

government determines production and prices based on forecasts of demand and desired

levels of supply. Mixed economies are those where some activities are left to market forces

and some, for national and individual welfare reasons, are government controlled. In the late

twentieth century there has been a substantial move to free-market economies, but the

People's Republic of China, the world's most populous country, along with a few others,


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remained largely centrally planned economies, and most countries maintain some

government control of business activities.

Clearly the level of economic activity combined with education, infrastructure, and so on, as

well as the degree of government control of the economy, affect virtually all facets of doing

business, and a firm needs to understand this environment if it is to operate successfully

internationally.

The political environment refers to the type of government, the government relationship with

business, and the political risk in a country. Doing business internationally thus implies

dealing with different types of governments, relationships, and levels of risk.

There are many different types of political systems, for example, multi-party democracies,

one-party states, constitutional monarchies, dictatorships (military and nonmilitary). Also,

governments change in different ways, for example, by regular elections, occasional

elections, death, coups, war. Government-business relationships also differ from country to

country. Business may be viewed positively as the engine of growth, it may be viewed

negatively as the exploiter of the workers, or somewhere in between as providing both

benefits and drawbacks. Specific government-business relationships can also vary from

positive to negative depending on the type of business operations involved and the

relationship between the people of the host country and the people of the home country. Tobe effective in a foreign location an international firm relies on the goodwill of the foreign

government and needs to have a good understanding of all of these aspects of the political

environment.

A particular concern of international firms is the degree of political risk in a foreign location.

Political risk refers to the likelihood of government activity that has unwanted consequences

for the firm. These consequences can be dramatic as in forced divestment, where a

government requires the firm give up its assets, or more moderate, as in unwelcome

regulations or interference in operations. In any case the risk occurs because of uncertainty

about the likelihood of government activity occurring. Generally, risk is associated with

instability and a country is thus seen as more risky if the government is likely to change

unexpectedly, if there is social unrest, if there are riots, revolutions, war, terrorism, and so on.

Firms naturally prefer countries that are stable and that present little political risk, but the

returns need to be weighed against the risks, and firms often do business in countries where

the risk is relatively high. In these situations, firms seek to manage the perceived risk through

insurance, ownership and management choices, supply and market control, financing


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arrangements, and so on. In addition, the degree of political risk is not solely a function of the

country, but depends on the company and its activities as wella risky country for one

company may be relatively safe for another.

The cultural environment is one of the critical components of the international business

environment and one of the most difficult to understand. This is because the cultural

environment is essentially unseen; it has been described as a shared, commonly held body of

general beliefs and values that determine what is right for one group, according to Kluckhohn

and Strodtbeck. National culture is described as the body of general beliefs and values that

are shared by a nation. Beliefs and values are generally seen as formed by factors such as

history, language, religion, geographic location, government, and education; thus firms begin

a cultural analysis by seeking to understand these factors.

Firms want to understand what beliefs and values they may find in countries where they do

business, and a number of models of cultural values have been proposed by scholars. The

most well-known is that developed by Hofstede in1980. This model proposes four

dimensions of cultural values including individualism, uncertainty avoidance, power distance

and masculinity. Individualism is the degree to which a nation values and encourages

individual action and decision making. Uncertainty avoidance is the degree to which a nation

is willing to accept and deal with uncertainty. Power distance is the degree to which anational accepts and sanctions differences in power. And masculinity is the degree to which a

nation accepts traditional male values or traditional female values. This model of cultural

values has been used extensively because it provides data for a wide array of countries. Many

academics and managers found this model helpful in exploring management approaches that

would be appropriate in different cultures. For example, in a nation that is high on

individualism one expects individual goals, individual tasks, and individual reward systems

to be effective, whereas the reverse would be the case in a nation that is low on

individualism. While this model is popular, there have been many attempts to develop more

complex and inclusive models of culture.

The competitive environment can also change from country to country. This is partly because

of the economic, political, and cultural environments; these environmental factors help

determine the type and degree of competition that exists in a given country. Competition can

come from a variety of sources. It can be public or private sector, come from large or small

organizations, be domestic or global, and stem from traditional or new competitors. For the

domestic firm the most likely sources of competition may be well understood. The same is


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not the case when one moves to compete in a new environment. For example, in the 1990s in

the United States most business was privately owned and competition was among private

sector companies, while in the People's Republic of China (PRC) businesses were owned by

the state. Thus, a U.S. company in the PRC could find itself competing with organizations

owned by state entities such as the PRC army. This could change the nature of competition

dramatically.

4. INTERNATIONAL ENTRY CHOICES

International firms may choose to do business in a variety of ways. Some of the most

common include exports, licenses, contracts and turnkey operations, franchises, joint

ventures, wholly owned subsidiaries, and strategic alliances.

Exporting is often the first international choice for firms, and many firms rely substantially

on exports throughout their history. Exports are seen as relatively simple because the firm is

relying on domestic production, can use a variety of intermediaries to assist in the process,

and expects its foreign customers to deal with the marketing and sales issues. Many firms

begin by exporting reactively; then become proactive when they realize the potential benefits

of addressing a market that is much larger than the domestic one. Effective exporting requires

attention to detail if the process is to be successful; for example, the exporter needs to decide

if and when to use different intermediaries, select an appropriate transportation method,preparing export documentation, prepare the product, arrange acceptable payment terms, and

so on. Most importantly, the exporter usually leaves marketing and sales to the foreign

customers, and these may not receive the same attention as if the firm itself under-took these

activities. Larger exporters often undertake their own marketing and establish sales

subsidiaries in important foreign markets.

Licenses are granted from a licensor to a licensee for the rights to some intangible property

(e.g. patents, processes, copyrights, trademarks) for agreed on compensation (a royalty

payment). Many companies feel that production in a foreign country is desirable but they do

not want to undertake this production themselves. In this situation the firm can grant a license

to a foreign firm to undertake the production. The licensing agreement gives access to foreign

markets through foreign production without the necessity of investing in the foreign location.

This is particularly attractive for a company that does not have the financial or managerial

capacity to invest and undertake foreign production. The major disadvantage to a licensing

agreement is the dependence on the foreign producer for quality, efficiency, and promotion

of the productif the licensee is not effective this reflects on the licensor. In addition, the


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there can be two partners or more, partners can share equally or have varying stakes, partners

can come from the private sector or the public, partners can be silent or active, partners can

be local or international.

The decisions on what to share, how much to share, with whom to share, and how long to

share are all important to the success of a joint venture. Joint ventures have been likened to

marriages, with the suggestion that the choice of partner is critically important. Many joint

ventures fail because partners have not agreed on their objectives and find it difficult to work

out conflicts. Joint ventures provide an effective international entry when partners are

complementary, but firms need to be thorough in their preparation for a joint venture.

Wholly-owned subsidiaries involve the establishment of businesses in foreign locations

which are owned entirely by the investing firm. This entry choice puts the investor parent in

full control of operations but also requires the ability to provide the needed capital and

management, and to take on all of the risk. Where control is important and the firm is capable

of the investment, it is often the preferred choice. Other firms feel the need for local input

from local partners, or specialized input from international partners, and opt for joint ventures

or strategic alliances, even where they are financially capable of 100 percent ownership.

Strategic alliances are arrangements among companies to cooperate for strategic purposes.Licenses and joint ventures are forms of strategic alliances, but are often differentiated from

them. Strategic alliances can involve no joint ownership or specific license agreement, but

rather two companies working together to develop a synergy. Joint advertising programs are

a form of strategic alliance, as are joint research and development programs. Strategic

alliances seem to make some firms vulnerable to loss of competitive advantage, especially

where small firms ally with larger firms. In spite of this, many smaller firms find strategic

alliances allow them to enter the international arena when they could not do so alone.

International business grew substantially in the second half of the twentieth century, and this

growth is likely to continue. The international environment is complex and it is very

important for firms to understand this environment and make effective choices in this

complex environment. The previous discussion introduced the concept of comparative

advantage, explored some of the important aspects of the international business environment,

and outlined the major international entry choices available to firms. The topic of

international business is itself complex, and this short discussion serves only to introduce a

few ideas on international business issues.


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a) Reasons for international businessfor corporate and country

The current scenario for 'International Business in India' is more than heartening. With

stupendous growth of more than 7% annually, improvement and stabilization of relations

with neighboring countries and record setting rise of its stock indexes, India continues to grab

international attention. It is destination of opportunity with its high-potential workforce and

burgeoning middle class and as an increasingly dynamic competitor.

India being a multi-cultural, multi-lingual and multi-religion state, it is not advisable to

formulate a uniform business strategy. The eastern part of the country is known as the 'land

of the intellectuals' and is regarded as the cultural hub of the country. The southern part is

known for its technology acumen and western part is the commercial-capital of the country.

The north is where the political power sits and operates the country. ' International Business

Opportunity in India ' exists in ares like -

Information Technology and Electronics Hardware.

Telecommunication.

Pharmaceuticals and Biotechnology.

R&D.

Banking, Financial Institutions and Insurance & Pensions.

Capital Market.Chemicals and Hydrocarbons.

Infrastructure.

Agriculture and Food Processing.

Retailing.

Logistics.

Manufacturing.

Power and Non-conventional Energy.

Sectors like Health, Education, Housing, Resource Conservation & Management Group,

Water Resources, Environment, Rural Development, Small and Medium Enterprises (SME)

and Urban Development are untapped and offers huge scope. With highest numbers of

technical, medical, business management graduates and highest numbers of PhDs coupled

with an energetic English speaking mass India offers 'services' with 50-70% less cost from

their western counterparts.

For 'International Business in India' bodies like CII, FICCI and different Chambers of

Commerce provides a variety of business facilitation services by -


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Closely working with Government and business promotion organizations in India and the

respective partner countries.

Also hosts high-level Government dignitaries and help build close working relationships

between Governments and business organizations.

It also exchanges business delegations, joint task forces and identify bilateral business co-

operation potential and make suitable policy recommendations to Governments.

With opportunities galore for ' International Business in India' the trend is mind boggling. '

India International Business' community along with Indian Domestic Business community

is steadily emerging as the Knowledge Capital of the world. The World Bank and different

rating organizations have forecast that at 7-8% of Economic growth, she will be worlds

second largest economy by 2050.

5. Why Should The World Community Believe In India Now?

It is undeniably true that for many years India's role in international affairs was marginal. Its

image was poor; the economy was plodding along at the "Hindu growth rate" of 3.5 percent

for much of the time after the country gained its independence in 1947. Matters reached a

crisis point in mid-1991, when for the first time ever India seemed on the verge of defaulting

on its international loans. The credit rating agencies had drastically lowered the country's

ratings. The Gulf War had reduced foreign exchange remittances to a trickle. Profligatespending during the 1980s resulted in huge budget deficits and runaway inflation.

On the political front, the nation was rocked by sectarian violence, witnessed the collapse of

two unstable coalition governments, and was traumatized by the tragic assassination of the

former prime minister, Rajiv Gandhi. By this time India was at a crossroads. She either could

be blind to economic realities and face disaster in the long run, or act swiftly to put her house

in order. Fortunately India chose the second option, even though it entailed pain in the short

term. The outlook of the Indian establishment underwent a sea change. The socialist

shibboleths of the failed past were discarded; capitalism, profits, privatization, and

consumption were no longer considered dirty words. The disintegration of the Soviet Union

meant that India could no longer rely on subsidized handouts from its former ally; socialism

as an ideology was in serious disrepute. It finally dawned on Indian politicians that in a

rapidly globalizing world economy, India would lag far behind other developing countries

unless it took drastic steps. To quote Landau (1994), "India only needed to look at its

neighbor, China, to realize that its isolationist policies were misguided."


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After decades of disappointment, frustration, and disturbed conditions, India is beginning to

turn the comer. Under the government of P.V. Narasimha Rao, which took over in June 1991,

the technocrat finance minister Dr. Manmohan Singh began the onerous task of reforming an

economy emasculated by decades of socialism, state planning, red tape, and protectionism. It

now appears that India is serious about this task. Despite efforts by vested interests to scuttle

them, the Indian government has largely pressed on with its reforms. And despite defeats

suffered by his Congress party in state elections that were blamed in part on hardships caused

by the reforms, the then Indian Prime Minister insisted that the program would continue.

PEST factor and impact on international business

PEST analysis stands for "Political, Economic, Social, and Technological analysis" and

describes a framework of macroenvironmental factors used in environmental scanning. It is

also referred to as the STEP, STEEP or PESTLE analysis (Political, Economic, Socio-

cultural, Technological, Legal, and Environmental). Recently it was even further extended to

STEEPLED, including ethics and demographics.

It is a part of the external analysis when doing market research and gives a certain overview

of the different macroenvironmental factors that the company has to take into consideration.

Political factors include areas such as tax policy, employment laws, environmental

regulations, trade restrictions and tariffs and political stability. The economic factors are the

economic growth, interast rates, exchange rates and inflation rate. Social factors often look at

the cultural aspects and include health consciousness, population growth rate, age

distribution, career attitudes and emphasis on safety. The technological factors also include

ecological and environmental aspects and can determine the bassiers to entry, minimum

efficient production level and influence outsourcing decisions. It looks at elements such as

R&D activity, automation, technology incentives and the rate of technological change.

The PEST factors combined with external microenvironmental factors can be classified as

opportunities and threats in a SWOT analysis


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a) Risk analysis

b) Decision to overcome or managing risksa live current case

3. Investment management in International business.

a) Foreign Direct Investment

b) Offshore Banking

c) Foreign exchange dealings and numerical in businessd) Resource mobilization through portfolio / GDR / ADR

Globalization

In today's era of Globalization, companies have to face many challenges along with the

benefits of globalization. Following are the main challenges of globalization for the

companies doing international business.

Productivity: Productivity is improved by producing in countries where production is most

efficient. However, this often means workers in one country lose jobs as their work moves to

more efficient locations.

Consumers: Consumers benefit from a wider array of competitively priced goods. However,

they have less control over supplies coming from abroad than over goods produced

domestically.

Business

EconomicEnvironment

PoliticalEnvironment

TechnologicalEnvironment

Social


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Employment: Employment may increase as economic growth and specialization take hold.

However, domestic employment fluctuates according to foreign conditions (such as

economic crises elsewhere that reduce demand for domestically produced goods).

The Environment: As global consumption increases due to globalization, more natural

resources deplete. Differing environmental standards across countries create opportunities for

businesses to exploit resources in countries with the least amount of environmental protection

regulation.

Monetary and Fiscal Conditions: As money moves more freely, it is better able to seek out

the best investment opportunities on a global scale. However, governments have less control

over the inflow and outflow of funds. Furthermore, capital seems to be flowing more freely

to countries with lower tax rates and less regulatory restrictions, putting additional pressures

on national fiscal and monetary policies.

Sovereignty: Globalization may undermine national sovereignty in two ways: First, contact

with other countries creates more cultural borrowing and may dilute a country's cultural

uniqueness. Second, countries are concerned that important decisions may be made abroad by

foreign owners of domestically located firms.

a) Concept and Practices

b) Role of global organization and global managers

c) Stages of building Global and competitiveness

d) Global competitive advantages of Indiasector and industriesCase study

International organization and their role in international business

WTO

WORLD TRADE ORGANISATION (WTO)

The WTO was established on January 1, 1995. It is the embodiment of the Uruguay Round

results and the successor to GATT. 76 Governments became members of WTO on its first

day. It has now 146 members, India being one of the founder members. It has a legal status

and enjoys privileges and immunities on the same footing as the IMF and the World Bank. It

is composed of the Ministerial Conference and the General Council. The Ministerial

Conference (MC) is the highest body It is composed of the representatives of all the


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Members. The Ministerial Conference is the executive of the WTO and responsible for

carrying out the functions of the WTO. The MC meets at least once every two years.

The General Council (GC) is an executive forum composed of representatives of all the

Members. The GC discharges the functions of MC during the intervals between meetings of

MC. The GC has three functional councils working under its guidance and supervision

namely:

a) Council for Trade in Goods.

b) Council for Trade in Services.

c) Council for Trade Related Aspects of Intellectual Property Rights (TRIPs).

Director-General heads the secretariat of WTO. He is responsible for preparing budgets and

financial statements of the WTO. WTO has now become the third pillar of United Nations

Organization (UNO) after World Bank and International Monetary Fund.

Objectives Of WTO

In its preamble, the Agreement establishing the WTO lays down the following objectives of

the WTO.

1. Its relation in the field of trade and economic endeavor shall be conducted with a view to

raising standards of living, ensuring full employment and large and steadily growing volume

of real income and effective demand, and expanding the production and trade in goods andservices.

2. To allow for the optimal use of the worlds resources in accordance with the objective of

sustainable development, seeking both (a) to protect and preserve the environment, and (b) to

enhance the means for doing so in a manner consistent with respective needs and concerns at

different levels of economic development.

3. To make positive efforts designed to ensure that developing countries especially the least

developed among them, secure a share in the growth in international trade commensurate

with the needs of their economic development.

4. To achieve these objectives by entering into reciprocal and mutually advantageous

arrangements directed towards substantial reduction of tariffs and other barriers to trade and

the elimination of discriminatory treatment in international trade relations.

5. To develop an integrated, more viable and durable multilateral trading system

encompassing the GATT, the results of past trade liberalization efforts, and all the results of

the Uruguay Round of multilateral trade negotiations.


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COMPANY PROFILE

BACKGROUND

Minerals and Metals Trading Corporation, was set up in 1963 as a canalizing agency forexport of minerals & ores and import of metals. Over the years, import and export of variousother items like fertiliser raw material and finished fertilisers, steel, agro products, diamond,bullion, coal and hydrocarbon etc. were progressively added to its portfolio. In 1993, MMTCbecame a public limited company and changed its name to MMTC Ltd. Government of India(GoI) holds majority shareholding (99.33%) in MMTC. Since the early 1990s, on account ofliberalization policies adopted by GoI most of the items of import and export canalised fortrade through MMTC, were decanalized and placed under open general license. From about18 items canalized in 1991 currently only two items remain canalized ie exports of iron ore of64% and above iron content (exclusively through MMTC) and imports of urea (along withother canalizing agencies.) MMTC has been awarded the Premier Trading House status and

stands as a leading International trading house in India. It has consistently won variousprestigious awards for export performance. MMTC has got a comprehensive infrastructurefor bulk cargo handling, well developed arrangements for rail and road transportation,warehousing, port and shipping operations, giving it complete control over trade logistics.MMTC has an extensive domestic and international network of offices and other centers. Thecompanys countrywide domestic network is spread over 85 regional, sub-regional, port andfield offices, warehouses and procurement centers. MMTC is a board managed company.The board is headed by full time Chairman and Managing Director Shri Sanjiv Batra andassisted by five full time directors. There are two part time ex officio directors from thedepartment of commerce and industries, GoI. The Board in turn is supported by a team of

executives who have varied long experience in the industry. As on January 1, 2008 the totalemployee strength stoodat 1976.

MMTC has a wholly owned subsidiary MMTC Transnational Pte Ltd (MTPL) based inSingapore. Its principal activities are trading in minerals, metals, fertilizers, agriculturalproducts, coal and hydrocarbons, jewellery etc.

OPERATIONS OF THE COMPANY

MMTCs trading portfolio mainly comprises metals and industrial raw material, precious

metals, gems & jewellery, agro products, fertilizers/fertilizer raw material, coal & hydro-carbons. It imports and distributes nonferrous metals, fertilizers, diamonds, gold andemeralds and exports minerals and ores. MMTCs business operations span across six majordivisions viz. Minerals, Metals, Precious Metals, Agro Products, Fertilisers andHydrocarbons. MMTC is the countrys largest exporter of minerals with product portfoliomainly comprising iron ore, chrome ore andmanganese ore. These products are mainly exported to traditional markets like Japan, Chinaand South Korea against competition from Brazilian and Australian suppliers. MMTC iscountrys single largest trader of metals. The metal export includes pig iron produced byNINL. Healthy industrial growth over the last two years has resulted in increased demand forbase metals and

industrial raw material in the country. MMTC is one of the largest importers of finishedfertilizers and fertilizer raw material in India. Import of urea continues to remain canalised


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through MMTC along with other agencies. Agro-business comprises export and import ofagrocommodities such as rice, wheat, wheat flour, soyameal, pulses, sugar, processed foods andplantation products like tea, coffee, jute etc. Hydrocarbon group primarily deals in import of

coking coal, low ash metallurgical (LAM) coke and superior kerosene oil (SKO). MMTC iscountrys leading importerof LAM coke in India for its clientele comprising cement,fertilizer, steel companies and thermal power plants. MMTC was the first nominated agenciesfor import ofbullion and precious metals. Precious metal, gems & jewellery recorded the highest turnoverduring 2006-07.

INDIA'S LARGEST TRADING GIANT

Established in 1963, MMTC, one of the two highest foreign exchange earner for India, is a

leading international trading company with a turnover of over US$ 7 billion.

It is the largest international trading company of India and the first Public Sector Enterprise to beaccorded the status of "FIVE STAR EXPORT HOUSE" by Govt Of India for long standingcontribution to exports.

MMTC is the largest non-oil importer in India.

MMTC's diverse trade activities encompass Third Country Trade, Joint Ventures, Link Deals - allmodern day tools of international trading.

Its vast international trade network, which includes a wholly owned international subsidiary inSingapore, spans almost in all countries in Asia, Europe, Africa, Oceania and Americas, givingMMTC a global market coverage.


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INDIA'S LEADING EXPORTER OF

MINERALS

MMTC is major global player in the minerals trade and is the single largest exporter of mineralsfrom India. With its comprehensive infrastructural expertise to handle minerals, the companyprovides full logistic support from procurement, quality control to guaranteed timely deliveries ofminerals from different ports, through a wide network of regional and port offices in India, as wellas international subsidiary.

MMTC has won the top export award from Chemicals and Allied Products Export PromotionCouncil (CAPEXIL) as the largest exporter of minerals from India for the eighteenth year in arow.

ONE OF THE WORLD'S LARGEST BUYER OFFERTILIZERS

As a leading player in fertilizers and fertilizer rawmaterial, MMTC has become a major fertilizer marketingcompany in India, through planned forward integration ofits import activities with the direct marketing of Urea,DAP, MOP, Sulphur, Rock Phosphate, SSP and otherfarming and agricultural inputs.
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THE SINGLE LARGEST BULLION TRADER IN THE INDIAN

SUBCONTINENT

MMTC is the largest importer of gold and silver in the Indian

sub continent, handling about 146 MT of gold and 1250 MT of

silver during 2008-09. MMTC supplies gold on loan and

outright basis basis to the exporter, bullion dealers

and jewellery manufacturers on all India basis. MMTC

has retail jewellery & its own branded Sterling Silverware

(Sanchi) showrooms in all the major metro cities of India.

MMTC also supplies branded hallmarked gold and studded

ewellery. Assay and hallmarking units have been set up at New Delhi, Ahmedabad & Kolkata for testing

the purity of gold and gold articles duly accredited with Bureau of Indian Standards .

Besides organizing major jewellery exhibitions in India & abroad, MMTC also has a medallionmanufacturing unit for minting of Gold/SIlver medallions. MMTC has its online retail websitewww.mmtcretail.com.

THE BIGGEST IMPORTER OF NON FERROUS METALS & INDUSTRIAL

RAW MATERIAL TO INDIA

MMTC is India's largest seller of imported non-ferrousmetals viz. copper, aluminium, zinc, lead, tin and nickel. Italso sells imported minor metals like magnesium,antimony, silicon and mercury, as also industrial rawmaterials like asbestos and also steel and its products.

MMTC imports quality products conforming tointernational specifications like ASTM or BSS or LMEapproved brands.

Major institutional customers of MMTC in India areaccredited with ISO-9002 status. MMTC sources itsmetals from empanelled suppliers including producers and traders throughout the world.

MMTC is a proud winner of gold trophy for exports of Engineering and Metallurgial product innon-SSI Sector and also awarded the All India Trophy for highest export in the category of primemetal by EEPC.
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GROWING INTEREST IN AGRO PRODUCTS WORLDWIDE

MMTC is amongst the leading Indian exporters and

importers of agro products. The company's bulk exportsinclude commodities such as rice, wheat, wheat flour,soyameal, pulses, sugar, processed foods and plantationproducts like tea, coffee, jute etc.

MMTC also undertakes extensive operations in oilseedextraction, from the procurement of seeds to theproduction of de-oiled cakes for export, as well as theproduction of edible oil for domestic consumption. It alsoimports edible oils. MMTC has won the gold trophy from

FIEO for highest exports in agritulcture & plantation product in non-SSI Sector.

GENERAL TRADING

MMTC also handles items like textiles, Mulberry raw silk, building materials, marine products,chemicals, drugs and pharmaceuticals, processed foods, hydro carbons, coal and coke.

Information on above can be supplied on request. MMTC also exports engineering products.

N INTEGRATED GLOBAL TRADER WITH BULK HANDLINGCAPABILITIES

Its comprehensive infrastructure for bulk cargo handling,with well developed arrangements for rail and roadtransportation, warehousing, port and shipping, operations,gives MMTC complete control over trade logistics, bothfor exports and imports.

The company's countrywide domestic network is spread

over 75 regional, sub-regional, port and field offices,warehouses and procurement centres.


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BROADBASED ACTIVITIES BEYOND TRADING

MMTC's progress in the recent past has taken it from

monopoly status to a competitive open market playermaking a strong thrust towards broad basing its sphere ofactivities, while consolidating its core areas of business.

To create synergy between its manufacturing, trading andtechnology partners and to bring optimum efficiency andexpertise to its operations worldwide, MMTC haspromoted along with government of Orissa, a milliontonnes capacity Iron & Steel plant and a 0.8 million tonnecapacity Coke Oven battery with by product recoveryplant and a captive power plant of 55 MW capacity.

SUPPORT SERVICES

MMTC lays emphasis on human resources development and

related activities. Several training programmes are conducted

to upgrade managerial skills in the latest developments in

trade management, export marketing, general management.

COMPUTERIZATION

MMTC has a Systems & ERP Division comprising a highly professional team to cope with the highly

competitive environment. MMTC's operational offices are all equipped with modern computing tools.

ERP has been implemented. A user friendly intranet based Knowledge Management Solution has been

made available to officials.


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SOCIAL AND WELFARE ACTIVITIES

MMTC's social and welfare activities promote welfare of

the employees through various schemes like sportsactivities, liberal loan facilities like house buildingadvance, conveyance loan, house hold loan, marriageadvance, etc. MMTC also provides subsidized canteenfacilities, medical treatment, residential accommodation insome of the major cities for its employees. MMTC alsotakes care of employees' families through meritscholarship, tuition fee reimbursement, etc.

MMTC is committed towards environmental upkeepmentthrough aforestation in the mining areas, development of tribal areas and infrastructure

development through rail links, port facilities, etc.

NETWORK OF OFFICES

Its vast international trade network, includes.

One wholly owned international subsidiary in Singapore- MMTC Transnational Pte. Ltd. (MTPL)

13 Regional offices

East Zone : Kolkata, Bhubaneshwar

West Zone : Mumbai, Goa, Ahmedabad

North Zone : Delhi, Jhandewalan (Delhi), Jaipur

South Zone : Bangalore, Bellary, Chennai, Hyderabad, Vizag

Sitemap

CORPORATE MISSION

As the largest trading company of India and a major trading company of Asia, MMTC aims atimproving its position further by achieving sustainable and viable growth rate through excellencein all its activities, generating optimum profits through total satisfaction of shareholders,customers, suppliers, employees and society.

CORPORATE VISION

Responsibilities beyond trading contributing to the welfare of communities in which it operates in

a natural element of MMTC activities.
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CORPORATE OBJECTIVES

1. To be a leading International Trading House in India operating in the competitive globaltrading environment, with focus on "bulk" as core competency and to improve returns on

capital employed.2. To retain the position of single largest trader in the country for product lines like minerals,

metals and precious metals.3. To promote development of trade-related infrastructure.4. To provide support services to the medium and small scale sectors.5. To render high quality of service to all categories of customers with professionalism and

efficiency.6. To streamline system within the company for settlement of commercial disputes.

7. To upgrade employee skills for achieving higher productivity.

Metal and Mineral Trading Corporation deals in the following products.

Minerals:

Among minerals MMTC deals in the following items such as iron ore, magnesium ore,chrome ore, mud, chemicals, bauxite, talc gypsum, silica sand etc. MMTCS mineral saleshare only on FOB sales only.

MMTC continues to be the largest supplier of Iron Ore, handling about 15% of Indias total

exports. It exports iron ore to Japan, China, South Korea, and Middle East etc.

MMTC Limited, Indias first Super Star Trading House, continues to be the country's

leader in mineral exports for four decades now. During the last decade, MMTC couldwithstand the stiff competition in the world market by its continuous and persistent effortsin diversifying its markets, enlarging its product range, expanding extensively itsinfrastructure facilities and expertise in mineral operations, and by attaching utmost care andimportance to its trade commitments as also the quality of service and products.

MMTC has been consistently striving to enhance its competitiveness in the area of value

addition. It has set up a crushing and screening plant at Banehatti in Bellary Hospet Sector notonly to source higher value realization in the international market but also to compete with theinternational suppliers like Australia and Brazil in the markets like Japan and South Korea hasprovided further fillip to value addition to minerals. The 1.1 million ton Steel Plant consumesabout 2 million tons of various types of minerals annually being supplied by MMTC. Thecompany has also taken an initiative to link import of capital equipments required formodernizing mining activities in the country to promote export of minerals. The import of theearthmoving equipments was linked to export of Iron Ore under EPCG scheme.


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MMTC'S UNIQUE POSITION

Four Decades of Global Excellence

MMTC continues to lead India's foray in mineral

exports with global success for four decades by

redefining standards of global excellence by

customer satisfaction worldwide. It continues to

be the largest supplier of Iron Ore, handling about

15% ofIndias total exports.

MMTC has managed with commendable elan the

bulk operations spread across far - flung areas in the mineral rich states of the country and by

exporting minerals from all the major ports of India, thus utilizing the extensive network of

infrastructure facilities.

MMTC's drive for excellence is reinforced by its marketing thrust in traditional markets likeJapan and S. Korea and Pakistan. MMTC is the catalyst in developing the Chinese marketfor Indian Iron Ore.

MMTC, India's largest foreign trade enterprise, reiterates its commitment to augment India'sshare in the global market for minerals and ores. For our consistent and sustained performance inthe global arena, we deeply thank our valued patrons, associates and partners who have helped usreach the pinnacle of global standards.

MMTC -THE MINERALS SUCCESS STORY

COMMITMENTS WITH THE BUYER

MEETING INTERNATIONAL STANDARDS

MMTCs role in the Nations mineral export does not stop with increasing the volume.

MMTC has been making certain strategic plans which would facilitate in not only sustaining

the present sevel of exports but, also equip the country to meet the challenges of larger volume

of exports in future.

One of the bottlenecks in increasing the Indian Iron Ore exports is the deficiency in port

facilities especially in the East-Coast where the operations are free from the vagaries of

weather like, closing of port operations during the monsoon period in Goa, Mangalore,


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Bellikari etc. In this direction, MMTC has been successful in obtaining an exclusive right to

develop a temporary Iron Ore Terminal at Ennore near Chennai. This facililty has

become operational from July04. MMTC had already made shipments of over 0.5 million tons

from Ennore Port despite various teething problems. MMTC is also in constant dialogue with

the various Ministries , Railways, Ports and exporters to assess the development potential for a

comprehensive infrastructure requirements for larger volume of exports. MMTC will continue

to play a vital role in these directions.

ITEMS OF TRADE

IRON ORE

MANGANESE ORE

CHROME ORE

OTHERS

(Mud Chemicals, Barytes, Bentonite, Bauxite, Talc, Gypsum, Feldspar, Quartz/Silica Sand,

Garnet Sand, Kaolin (China Clay), Vermiculite)

LOGISTIC SUPPORT

At all the loading ports, MMTC ensures proper receipt, stacking, quality control and deliveryof the cargo into the vessels for shipment. The entire arrangement guarantees delivery ofminerals & ores contracted in continuous manner all around the year.

All ports are equipped with mechanical loading facilities.

MECHANICAL BERTH AND HANDLING FACILITIES

Vizag Outer

Harbour

Chennai Outer

Harbour

Marmagao

Berth (9)**Paradip

OUTER CHANNELM - Meters

Length 1400 M 5900 M 4500 M 2020 M

Width 250 M 244 M 250 M 190 M
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Depth 19 M 19.2 M 13.7 M 15 M

INNER/ENTRANCE

Length 1250 M 780 M - 1100 M

Width 250 M 220 M - 160 M

Depth 19 M 18.6 M 13.1 M 12.8 M

TURNING BASIN

Diameter 610 M 549 M 480 M 520 M

Depth 18 M 17.4 M 11.3 M 12.8 M

BERTH

Length 263 M 222 M 222 M 155 M

Depth 17.5 M 17.4 M 11.3 M 13.2 M

LOADER

Travelling Distance 225 M 200 M200 M

(by 2 loaders)138.7 M

Outreach 27 M 21.9 M 21.5 M 27.1 M

Clear Height 21 M 20.55 M 20.3 M 18.9 M

Loading Rate 4000 MT/Hr4000

MT/Hr x 2

4000

MT/Hr x 2

2500

MT/Hr

LOA 270 M 274 M 335 M 260 M

Beam 48 M 47.8 M 50 M 40 M

Sailing Draft 16.5 M 16.2 M 13 M #

12.8 M

(12 M during

Mar-Nov)


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1.# in conjunction with tide.

2.** Remains closed for shipment of fines during 15th May to end September (Monsoon) onlywashed lump shipments can be effected. Sailing drafted limits to 11 mt. during monsoon. Nonight navigation also during monsoon.

3.Vessels of less than 35,000 DWT loaded in midstream, either by Transfer vessel or byships/grabs or manually, for which facilities exist.

DESTINATION OF EXPORTS

MMTC exports Iron ore to Japan, South Korea, China, Middle East etc. The export is both on thebasis of long term and annual spot contracts.

LEADER IN MINERAL EXPORTS

MMTC's performance in mineral trade has been acknowledged by the CAPEXIL (Chemicalsand Allied Products Export Promotion Council) by conferring the nation's highest award forexcellence in mineral exports 13th time in succession.

MODE OF SALES

MMTC's mineral sales are on FOB basis only.

Minerals

Precious Metals

Fertilizers

Metals

Agro Products

Coal & Hydrocarbon

General Trading

MTPL

NINL

Precious metals

MMTC is Indias premier bullion trader. MMTC precious metals division is on to a range ofactivities such as imports, exports, and domestic retail trade. It is an authorized agency ofGovernment of India for import of gold, silver, platinum, palladium, rough diamond,


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emeralds, rubies and other precious stones and supplies these items to the jewellers in Indiafor domestic sales and exports. It is one of the custodians of the Diamond Plaza CustomsClearance Center in Mumbai.

The company also operates an in-house assaying and hallmarking unit at New Delhi fortesting purity of gold.

MMTC has received Bureau of Indian Standards (BIS) certification for its assaying andhallmarking unit at Jhandewala Bagh, New Delhi. MMTC also has a unit in New Delhi formanufacturing its own brand of gold and silver medallions since the year 1996 MMTC isIndia's Single Largest Trader of metals. It's metals division imports and exports Non-Ferrous metals, Industrial raw materials, Steel items, Pig Iron, Non Ferrous metals scrapand Iron and Steel scrap etc. MMTC's share of import in India's import of refined basenon-ferrous metals in terms of value is about 20%.

MMTC import items such as Copper, Aluminium, Zinc, Lead, Tin, Nickel, Antimony,Silicon, Magnesium, Mercury, Industrial Raw Materials, Noble metals and Ferro alloys, PigIron, Slag, Steel scrap, HR Coils, CRGO and Steel item.

MMTC is the largest importer of gold and silver in the Indian sub continent, handling about 146MT of gold and 1250 MT of silver during 2008-09. MMTC supplies gold on loan and outrightbasis basis to the exporter, bullion dealers and jewellery manufacturers on all India basis. MMTChas retail jewellery & its own branded Sterling Silverware (Sanchi) showrooms in all the majormetro cities of India. MMTC also supplies branded hallmarked gold and studded jewellery.

Assay and hallmarking units have been set up at New Delhi, Ahmedabad & Kolkata for testing

the purity of gold and gold articles duly accredited with Bureau of Indian Standards .

Besides organizing major jewellery exhibitions in India & abroad, MMTC also has a medallionmanufacturing unit for minting of Gold/SIlver medallions.

FERTILIZERS

MMTC Limited is one of the largest importers of Fertilizers in India. It imports finishedfertilizers, fertilizer intermediaries and fertilizer raw materials.

AGRO PRODUCTS

MMTC Limited is a global player in the Agro trade, with its comprehensive infrastructuralexpertise to handle agro products. MMTC Limited provides full logistic support fromprocurement, quality control to guaranteed timely deliveries of agro products from differentparts of India through a wide network of regional and port offices in India and its contactsabroad. It trades in the items such as wheat, rice, maize, soya bean, sugar, edible oil andpulsesMMTC

COAL AND HYDROCARBON PRODUCTS

Coal and Hydrocarbon is identified as one of the core areas of business for MMTC andSteam coal is identified as a thrust product for import. Coal and Hydrocarbon is identified


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as one of the core areas of business for MMTC and Steam coal is identified as a thrustproduct for import.

PRICING POLICYWhile price (per unit) of primary commodities such as, agricultural products and minerals

is observed to be determined by the market forces of demand and supply, the price ofmanufactures is determined /administered by firms based on teh average /marginal cost to

accommodate profits. The margin of mark-up in turn, depends on the degree of monopolyis thus able to charge a higher margin of mark-up compared to a competitive firm.

If a public sector has a monopoly in supply ,it may fix its price at the level that willmaximize the markup as well as the gross profits .that may not ,however ,happen since thegovernment may intervene to moderate the price in the interest of consumers or the userindustries .In general ,the governments fix/administer the price in the interest the price of

goods (and services) being produced by public sector entities based on(a) The true costs of goods and services,(b) Cross subsidization between one group and another or between one sector and another,(c) Below the costs if that can stimulate demand under conditions of excess/ unutilized

capacity,(d) Differential prices norm for peak and off-peak demand and(e) Different prices /multi-tariffs to include discounts for purchase of larger volumes or forvarious other incentives.

The public sector enterprises in India have had to work under the price regime, for goodsand services produced by them, administered by the Government. Paradoxically, while these

central public sector enterprises had to avail the government approval for fixing theirprices, they have been price takers for the inputs they utilised for their respective outputs.As such, if the output prices were not raised and the inputs cost went up, this led to losses tothese enterprises. Better capacity utilisation meant larger losses to the enterprises. Thissituation was reviewed in the wake of post- 1991 economic liberalisation. With thedismantling of administered price mechanism there after the price of products and servicesof these central public sector enterprises are now determined on economic grounds and bythe market forces. The paragraph will briefly discuss the policies of LAM COKE by thepublic sector enterprises.

The central Government was empowered under the CCO (colliery control order), 1945 readwith the Essential Commodities Act, 1955 to fix the grade wise and colliery wise prices ofcoal. The pricing of coal has been completely deregulated after the Colliery Control Order,2001 notified w.e.f 1st January 2000 rescinding the Colliery Control Order, 1945. Under theColliery Control Order, 2000, the Central Government has no power to fix the prices of coaland coal companies themselves are competent to fix gradewise prices of coal produce bythem based on economic grounds. The extant pricing policy in regard to coal supply topower and other sectors is under examination of the Government. In respect to coking coaland LAM COKE imported from abroad,Importers are free to determine their selling prices in the domestic market without anyrestrictions.


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BUSINESS REVIEW FOR 2006-07

MINERALS

Despite the pressure of availability of ores for export, and constraint of infrastructure andlogistics, MMTC maintained its leadership position in export of minerals through aggressivemarketing efforts, enhanced customer focus tapping of emerging opportunities, especially inChina.During the year 2006-07, South Korea, China and Japan were the key markets whereMMTC exported minerals.Minerals group of the company contributed a turnover of Rs.27661.1 million during theyear reaching the highest ever registered by the company in this segment. The saidperformance of the minerals group of the year 2006-07 includes exports of Rs.27384.91million and domestic trade of Rs.276.19 million. In quantitative terms, the exportsmade by the group include 81.29 lakh tones of Iron Ore valued at Rs. 19012.19 million,1.72

lakh MT. of Manganese Ore valued at Rs. 408.81 million, 6.48 MT. of Chrome concentratesvalued at Rs. 5050.81 million and 4.03 lakh MT. of Chrome Ore valued at Rs. 2913.10million.MMTC

Metals and Industrial Raw Material

With robust growth witnessed in industrial & infrastructure sector leading to increasedsurge in demand for base metals and industrial raw material during the year 2006-07, themetals group of the company contributed Rs.18873.60 million to MMTCs turnover during

2006-07 posting a noteworthy growth of about 22% over the previous fiscal. The

contribution of the group comprised of export of Pig Iron and Slag produced by NINL-aMMTC promoted Iron & Steel plant worth Rs.5446.84 millions, import of Non-FerrousMetals and Industrial Raw Materials worth Rs.8479.23 million and domestic trade ofRs.4973.53 millions including sales of Pig Iron produced at NINL worth Rs. 2779.86millions.

With projections of Industrial and infrastructure sector to continue being on upward trend,the prospects of MMTC,s growth seems to be optimistic. To avail of the emergingopportunities, the group has been realigning its strategies/business model for further consolidation and tapping of new products/markets, focussing onits core products/markets, entering into its strategic alliances with producers of NFMbesides improving further on customer relationship management , unrelenting focus onInstitutional clientele and deeper market access.MTC


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The highlights of the performance during 2006-07 as summarized below .

20062007 2005 2006

(Rs. Inmillions)

Exports 34131 29254Imports 186074 117858Other trade earnings 445 16512

Net sales / Trading earnings 233461 163934Trading Profit 2497 2218Profit Before Taxes 1893 1679Profit After Taxes 1268 1083Dividend

(i) In trim Dividend on Equity Shares 125 125(ii) Proposed Dividend 125 125(iii) Dividend Tax 39 35

Reserves and Surplus 8321 78333

ORPORATE OBJECTIVESNEELACHAL ISPAT NIGAM LIMITED (NINL)Neelanchal Ispat Nigam Limited (NINL),a company promoted by MMTC Limited ,a

US$1.5 Billion Golden Super Star Trading House of India, Industrial Promotion andinvestment Corporation of Orissa Limited (IPICOL) and MECON Limited is setting upan Iron and Steel Plant, with manufacturing capacity of 4,92,000 tonnes of Pig Iron,2,76,000 tonnes of Billets and 3,00,000 tonnes of Wire Rods at Kalinga Nagar IndustrialComplex ,village Duburi ,District Jajpur, Orissa.To meet the Coke and Power requirements of Neelanchal Ispat Nigam Limited, MMTChas promoted another Joint Venture Company namely Konark Met Coke Limited incollaboration with IPICOL and Orissa Mining Corporation (OMC), to produce5,75,000 tonnes of Coke for Neelanchal Ispat Nigam Limited and 2,36,000 tonnes ofCoke for sale in domestic and overseas markets. The capacity of Power Plant is 62.50MW.

Over the years MMTC has become the acknowledged market leader in facilitatingexport of Indian Iron Ore. Today, MMTC Limited is Indias largest exporter of

minerals and ores, handling about one third of Indias total exports of around 15million tonnes per annum. Neelanchal Ispat Nigam Limited (NINL) & Konark MetCoke Limited (KMCL) form part of MMTCs strategic initiative of creating synergy

between its minerals and metal trading activities.Neelanchal Ispat Nigam Limited represents a major investment by MMTC to developcaptive supply sources of minerals and metal for enhancing exports and increasingdomestic trading activities and at the same time realising greater value addition forOrissas vast mineral wealth. Besides, MMTC will, as the exclusive marketing agent,use its strength and presence in global markets to market all of NINLs products in

India and abroad.


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MMTCs contribution as the main promoter starts with procurement of raw materialslike iron ore and coal, to closely monitor the eventual manufacture and supply offinished products that meet the diverse requirements of end users for quality products .It will be our endeavor to work in tandem with consumer industries to provide them

with a market savvy, innovative and flexible product mix and be in virtual control ofthe entire value addition chain.

KONARK MET COKE LIMITED (KMCL)Konark Met Coke Limited (KMCL) is setting up coke Oven Battery, By-Product Plantand Captive Power plant adjacent to NINL. Low Ash Metallurgical (LAM) Cokeproduced by KMCL will be sold to NINL for production of Iron & Steel and surplusCoke will be sold in domestic and overseas markets.

Industry overview

Global demand for LAM coke grew at an average annual rate of 6.4%, during 2000-06,as against global supply at a rate of 6% (avg. annual industry capacity utilisation being85%) during the same period. 91% of the global demand was from markets situated inAsia, Europe and CIS during the said period. China is the Worlds largest producer ofLAM coke, but with rising domestic demand from steel industries, it has largely cutdown its exports thereby resulting in acute shortage of coke availability. On the otherhand, India features as the net importer of Met coke due to increasing economic activityand substantial thrust on infrastructure spending. Majority of Indian steel industries do

not possess captive coke manufacturing facility and thus rely on imported coke to meettheir requirement. World over, the demand supply gap is significantly growing,attracting more players to enter this segment to reap the benefits. However, playersowning large technically-compliant manufacturing capacities, possessing stronglinkages for raw material sourcing and adopting prudent financial policies can alonewithstand the competition and grow consistently in the coke manufacturing segment.Power:- As per the Ministry of Power (MoP), GOI, the total installed capacity ofelectric power generating stations was 1,35, 006.63 MW as on Jul. 31, 2007 in India.This total capacity consisted of 33775.76 MW (24.8%) hydro power based capacity,86,935.84 MW (64.5%) thermal power-based capacity, 4120 MW (3.1%) nuclear powerbased capacity and 10175.03 MW (7.6%) from other sources (including wind). India isan energy deficit country. During July 2007, India December 2007 faced an energyshortage of approximately 7.9% of total energy requirements and 13.4% of peakdemand requirements. The peak demand during 2006-07 was around 272 MW which isexpected to be 320 MW in FY08, as per industry sources.

Prospects

Future growth prospects of the company mainly depend on the successful completion ofthe IPO. The widening gap in demand supply of coke coupled with few players in thissegment is likely to provide huge opportunities to the company. Additionally, backward

integration in the form of coal mine acquisitions through group support is likely toextend synergy to its operations.


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**The coal and hydrocarbons business of MMTC mainly comprises Lam coke, cokingcoal and steam coal. MMTC is one of the largest importers of LAM COKE in India.LAM COKE is imported by MMTC for various customers like NINL, SAIL, RINL,KIOCL, and IDCOL and also for some private companies.

RISK MANAGEMENT

MMTC has its comprehensive risk management policy in place specifying procedures toidentify and minimize various risks associated with its operations. The policy is approved byBoard of directors and regularly monitored by committee of senior officials.

FINANCIAL ANALYSIS

During FY07 MMTC recorded highest ever turnover when y-o-y growth rate was 42%. Thegrowth was mainly achieved due to 73% jump in precious metal turnover. During FY07, thefixed assets have increased mainly due to addition of plant and machinery (Rs.70 cr) for theWind mill at Karnataka and five railway wagon rake (Rs.55 cr). Profitability marginsdeclined over the years as the product portfolio has shifted towards precious metals which aretypically lower margin compared to other products in the portfolio. MMTC continues toremain zero long-term debt.company in FY07. It has extended a corporate guarantee ofRs.830 cr (as on Mar.31, 2007) for NINL to various banks and financial institutions forsecuring principal and interest in respect of loans to NINL. The working capital loans haveincreased in line with increased scale of operations resulting in increase in overall gearing ason Mar.31, 2007.

9MFY08 performance:

MMTC recorded PAT of Rs.116 cr on total income of Rs.16,984 cr during 9MFY08. ThePAT margin during the period has improved to 0.68% compared to 0.47% during the sameperiod previous year mainly due to increased turnover of commodities with better margins i.eminerals and hydrocarbons.


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INTRODUCTION TO EXPORT AND IMPORT

General Provisions

Goods are imported in India or exported from India through sea, air or land. Goods can comethrough post parcel or as baggage with passengers. Procedures naturally vary depending onmode of import or export. Procedures discussed in this Chapter are applicable for imports bysea, air or land, but not as baggage or postal despatch.

ENTRYEntry in relation to goods means an entry made in a Bill of Entry, Shipping Billor Bill of Export. It includes (a) label or declaration accompanying the goods which containsdescription, quantity and value of the goods, in case of postal articles u/s 82 (b) Entry to bemade in case of goods to be exported (c) Entry in respect of goods imported which are notaccompanied by label or declaration made as per provisions of section 84. [section 2(16)].

AMENDMENT TO DOCUMENTS - Importer, exporter or 'Person In charge' have to submitvarious documents to customs authorities like Bill of Entry, Import Manifest, ExportManifest etc. Some times, it may become necessary to amend the document due to variousreasons like change in classification, clerical mistake in document, change in unloading /loading plan of vessel etc. In such case, permission to amend these documents have to beobtained from customs authorities. [section 149]. Such permission can be given if there areno fraudulent intentions.

In case of bill of entry, shipping bill or bill of export, it can be amended after clearance onlyon the basis of documentary evidence which was in existence at the time the goods were

cleared, warehoused or exported, and not on basis of any subsequent document. [proviso tosection 149].

Customs Station - Imported goods are permitted to be unloaded only at specified places.Similarly, goods can be exported only from specified area. In view of this, definitions ofCustoms Station is important.

Customs area means all area of Customs Station and includes any area where imported goodsor export goods are ordinarily kept pending clearance by Customs authorities. Thus,Customs Area could include some area even outside the Customs Station. Customs

Station means (a) customs port (b) inland container depot (c) customs airport and (d) landcustoms station.

Section 7 of Customs Act empowers CBEC (Board) to appoint * Customs ports * Customsairports * Places for inland container depots * Coastal ports. These are appointed by issuing anotification. Section 8 authorises Commissioner of Customs to approve proper places in anycustoms port, customs airport or costal port for unloading and loading of goods or for anyclass of goods and specify the limits of customs area. Thus, the place (city / town / villageetc.) is approved by CBEC, while exact location within that city / town / village is approvedby Commissioner of Customs.


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Revision

Approved

EXIM PROCESS

Approach Client for Exim

Inquiry raised by Client for

Import/Export (Sea/Air)

Make Entry in Inquiry Register

Request for quote (RFQ) to

Suppliers

Supplier to quote at best rates

with negotiations

Prepare Comparison Statement

for Quotations received from

Select the supplier on the basis

of Statement

Prepare Quote for Client and

Submit to the Client

Negotiations

Approval of Quote from Client

Forward the Customer

Confirmation to Operation


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Received Customer Confirmation from AGM

Get Shippers Contact Details with Order Confirmation / PO from Client and

inform the same to supplier and get overseas agent details

Give our overseas agents details to Shipper as well as client

Get Scan Document from Client / Shipper

Get Shipment Pickup Confirmation from Supplier/ Suppliers agent and

inform it to client

Get Booking status of shipment from Supplier and forward it to client

Get Pre-Alert from Supplier and submit it to Client

Get suppliers Bill along with CAN (ensure AILSPL name appears) and

submit CAN with AISPL Invoice to Client

Collect Octroi amount from the client (if applicable) and follows up with the

supplier for confirmation of delivery.

Get set of Bill of Entry/ documents from supplier and forward it to client.

Follows up with the supplier for customs clearance and delivery.

Ensure Supplier files B/E and sends the checklist. Forward it to client for

approval. Collect the delivery address details from client & gives to supplier.

Upon checklist approval, AILSPL submits the DD details to the client collect

the DD and hand it over to supplier.


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Basic Knowledge for Freight forwarding

INCOTERMS

Inco terms are ICC's standard definitions of trade terms and are internationally recognized as

indispensable evidence of the buyer's and seller's responsibilities for delivery under a sales

contract.

TABLE 1

EXW FCA FAS FOB CFR CIF CPT

SERVICESEx Works

Free

Carrier

Free

Alongside

Ship

Free

Onboard

Vessel

Cost &

Freight

Cost

Insurance

& Freight

Carriage

Paid To

Warehouse Storage Seller Seller Seller Seller Seller Seller Seller

Warehouse Labor Seller Seller Seller Seller Seller Seller Seller

Export Packing Seller Seller Seller Seller Seller Seller Seller

Loading Charges Buyer Seller Seller Seller Seller Seller Seller

Inland Freight BuyerBuyer/

Seller*1Seller Seller Seller Seller Seller

Terminal Charges Buyer Buyer Seller Seller Seller Seller Seller

Forwarders Fees Buyer Buyer Buyer Buyer Seller Seller Seller

Loading On Vessel Buyer Buyer Buyer Seller Seller Seller Seller

Ocean/Air Freight Buyer Buyer Buyer Buyer Seller Seller Seller

Charges On Arrival At

DestinationBuyer Buyer Buyer Buyer Buyer Buyer Seller

Duty, Taxes & Customs

ClearanceBuyer Buyer Buyer Buyer Buyer Buyer Buyer
http://www.e-sailings.com/base/en/incoterms.asp#EXW#EXWhttp://www.e-sailings.com/base/en/incoterms.asp#EXW#EXWhttp://www.e-sailings.com/base/en/incoterms.asp#FCA#FCAhttp://www.e-sailings.com/base/en/incoterms.asp#FCA#FCAhttp://www.e-sailings.com/base/en/incoterms.asp#FAS#FAShttp://www.e-sailings.com/base/en/incoterms.asp#FAS#FAShttp://www.e-sailings.com/base/en/incoterms.asp#FOB#FOBhttp://www.e-sailings.com/base/en/incoterms.asp#FOB#FOBhttp://www.e-sailings.com/base/en/incoterms.asp#CFR#CFRhttp://www.e-sailings.com/base/en/incoterms.asp#CFR#CFRhttp://www.e-sailings.com/base/en/incoterms.asp#CIF#CIFhttp://www.e-sailings.com/base/en/incoterms.asp#CIF#CIFhttp://www.e-sailings.com/base/en/incoterms.asp#CPT%20-#CPT%20-http://www.e-sailings.com/base/en/incoterms.asp#CPT%20-#CPT%20-http://www.e-sailings.com/base/en/incoterms.asp#CPT%20-#CPT%20-http://www.e-sailings.com/base/en/incoterms.asp#CIF#CIFhttp://www.e-sailings.com/base/en/incoterms.asp#CFR#CFRhttp://www.e-sailings.com/base/en/incoterms.asp#FOB#FOBhttp://www.e-sailings.com/base/en/incoterms.asp#FAS#FAShttp://www.e-sailings.com/base/en/incoterms.asp#FCA#FCAhttp://www.e-sailings.com/base/en/incoterms.asp#EXW#EXW


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Delivery To Destination Buyer Buyer Buyer Buyer Buyer Buyer Buyer

*1. There are actually two FCA terms:

FCA Seller's Premises where the seller is responsible only for loading the goods and not

responsible for inland freight; and

FCA Named Place (International Carrier) where the seller is responsible for inland

freight.

TABLE 2

CIP DAF DES DEQ DDU DDP

SERVICES

Carriage

Insurance

Paid To

Delivered

At

Frontier

Delivered

Ex Ship

Delivered

Ex Quay

Duty

Unpaid

Delivered

Duty

Unpaid

Delivered

Duty Paid

Warehouse Storage Seller Seller Seller Seller Seller Seller

Warehouse Labor Seller Seller Seller Seller Seller Seller

Export Packing Seller Seller Seller Seller Seller Seller

Documents

My Final Project Report