Pratap Chandra Raja

SUMMER TRAINING PROJECT REPORTON

“DLW EXPORT PROCEDURE TO NON RAILWAY CUSTOMER”

Submitted to

U.P.T.UIn partial fulfillment of requirement for degree of

MASTER OF BUSINESS ADMINISTRATION

SESSION 2011-12

CORPORATE GUIDENCE OF: SUBMITTED BY:

Mr. S.N. Sharma Pratap Chandra Raja

D.L.W. Varanasi. Roll No. 1064170017

MBA

ASHOKA INSTITUTE OF TECHNOLOGY AND MANAGEMENT

VARANASI

ACKNOWLEDGEMENT

This Project Report is a combined effort of many people who have

contributed in their own ways in making this report effective and

purposeful. In my report, I would like to take the opportunity of

thanking all those who have been instrumental in preparing this report.

Firstly I would like to thank God for bestowing upon me his kind

blessing although out. I am extremely grateful to our Incharge, Mr. Ram

Sagar Ram for providing us this opportunity to prove our skills in this

summer training project.

I also extended my heartiest gratitude to my mentor for this project

work, Mrs. Shweta Verma, who provided me every bit of relevant

information and guidance in making this project a success. It was a great

experience working under her supervision.

I specially wish to thank Mr. S.N. Sharma, S.E.E., D.L.W. Varanasi (Diesel

Locomotive Works, Varanasi) for his valuable suggestions & continuous

support.

Last but not the least; I thank all the faculty members who helped me

during the course of training.

Pratap Chandra Raja

MBA

PREFACE

It is great privilege for me to place this report before the reader.

The report is concern about ‘DLW Export Procedure to Non

Railway Customers.’ This report is presented in very simple &

understanding language on the basis of Primary and Secondary

data.

Pratap Chandra Raja

MBA

SECTION –ICOMPANY PROFILE

1. Company Profile2. Management team and Structure

3. Product & Markets4. Vision and mission

SECTION –IISUMMER TRAINING PROJECT

1. Topic of the Project.

2. Objective of Report

3. Marketing Department In DLW

4. Export Procedure in DLW About RITES Service provided by RITES RITES role in DLW Contract between RITES & DLW Details of Exported locomotives General procedure of export.

5. Research Methodology.

6. Data interpretation

7. Conclusion/results.

8. Suggestions.

9. Limitations.

10. Enclosure of questionnaire

11. Bibliography/ References.

COMPANY’S PROFILE

ABOUT COMPANY

“DIESEL LOCOMOTIVE WORK”Varanasi, one of the oldest populated cities in the world and has a

promising place in the international ground both as a hub of traditions and technology. One side the humming of divine and holy bells of the temples brings the city to life; on other side Diesel Locomotive Works (DLW) Varanasi is one of the largest industrial units in eastern part of the nation. DLW catch the attention of lot of foreign tourist students to observe on going amazing locomotive manufacturing process in Varanasi. Diesel Locomotive works Varanasi is located at the North end of the city and about 8 Km away from the Holy River Ganges Ghats.

DLW is an ISO 9002, ISO 14001 & OHS 18001 Certified Organization of diesel electric locomotive.

Diesel Locomotive Works, Varanasi (DLW) is one of the main manufacturing units run by the Indian Railways. This manufacturing unit came into existence in year 1961, as a “Green Field Project” in industrial association with ALCO, USA. This unit generates all the Diesel Electric Locomotives. In year 1964, the first locomotive was manufactured and it was devoted to the country. Diesel Locomotive Works, Varanasi produces only Electric Diesel locomotives and auxiliary parts of locomotives.

Though it is an Indian corporation but it has supplied locomotives to some foreign countries also, includes Angola, Bangladesh, Malaysia, Myanmar, Sri Lanka, Vietnam and Tanzania.

Diesel Locomotive manufacturing Works, Varanasi works in three main sections viz:-

1) Engine section, 2) Vehicle section and 3) Block section

1) Engine section manufactures more than 2000 machinery, which comprises of ALCO turbo superchargers, cylinder heads, connecting rods, camshafts, lubricating oil pumps, chrome plated cylinder liners and many different types of gears.

2) Vehicle section of DLW unit works on different fields that include Bogie Manufacturing, Component Fabrication, Locomotive Assembly, under frame Fabrication, and many more.

Currently, Diesel Locomotive Works, Varanasi manufactures locomotives , DG sets. In locomotives section, again it manufactures two

different types of products, one is EMD and an other is ALCO.

BRIEF HISTORY OF DLWWelcome to Diesel Locomotive Works, Varanasi

An ISO 9001, ISO 14001 & OHS 18001 Certified Organization.

August 1961 DLW set up as a green field project in technical collaboration with ALCO, USA for manufacture of Diesel Electric Locomotives

January 1964 First Broad Gauge Locomotive (WDM-2) released by (Late) Shri Lal Bahadur Shastri. First Locomotive rolled out and dedicated to the Nation

November 1968 First Meter Gauge Locomotive (WDM-4) released by (Late) Shri Morarji Desai.

February 1975 First Broad Gauge shunting Locomotive (WDS-6) turned out.

January 1976 First Locomotive rolled out and dedicated to the Nation. Locos Exported to Tanzania

December 1977 First Diesel Generating Set commissionedMay 1984 Locos Exported to VietnamAugust 1994 First 3100 HP WDM-2C Loco turned out.April 1995 First 2300 HP WDP-1 Passenger Loco turned

out.July 1995 First 3100 HP WDG-2 Freight Loco turned out.December 1995 Locos Exported to Sri Lanka.April 1996 Locos Exported to Bangladesh.February 1997 Awarded ISO-9002 Certification.October 1997 Locos Exported to M/s Puttalam Cement

Company, Sri Lanka.August 1998 First 3100 HP WDP-2C Passenger Loco turned

out.March 1999 Highest out turn of 161 locos (amounting to 230

units)March 1999 4000th Locomotive turned out.August 1999 First PKW WDG-4 Locomotive turned out.March 2001 Awarded ISO-14001 Certification.March 2002 First DLW Built 4000 HP WDG-4 Freight Loco

turned out.April 2002 First DLW Built 4000 HP WDG-4 Loco turned

out.June 2002 First DLW Built 3300 HP WDG-3C Freight Loco

turned out.December 2002 DLW certified for ISO: 9001: 14001.June 2005 2.4MW Diesel Generating set commissioned.September 2005 Certified by OHSAS- 18001: 1999.November 2006 First IGBT based WDG-4 Loco turned out.January 2007 5000th Locomotive turned out.November 2008 Locos Exported to Mozambique.March 2009 Highest out turn of 257 locomotive.November 2009 5690 locomotives up to 30th Nov'2009(including

348 EMD locos)

GENERAL INFORMATION

Workshop Land 219.997 acre

Township Area 520.6 acre

Covered Area in Shop 26.37 acre

Covered area of other service building 19.13 acre

Total No. of Staff Quarters 3666

Total No. of staff on roll (as on 01.04.2009) 5926

No. of beds in Hospital 105

Water consumption 223.82 Lakh

Litres/day

Electrical Power Requirement

Electrical Energy Consumption 262.07 Lakh Unit /

Year

Workshop 4200 KVA

Colony 2600 KW

Administrative Building 1500 KW

Stand by Power Generation Capacity 5625 KW

MANAGEMENT TEAM

General Manager- Shri K.K.Sexena

CEE- S.K.Arya

FA&CAO- N.P.Pandey

COS- Mahesh Chandra

CME- Neeraj Kumar

CPO- L.B.RAI

CMS- Dr.Padam Singh

CE- Shri M.S.Kutiyal

Secy. to GM/Dy GM- Shivendra Mohan

Management Structure

PRODUCTS AND MARKET

EDMWDG4 - 4000 HP GOODS LOCOMOTIVE

Broad Gauge freight traffic Co-Co diesel electric locomotive with 16 Cylinder 4000 HP engine, AC-AC transmission, microprocessor controlled propulsion and braking with high traction high speed cast steel trucks.

First turned out in 1999 with transfer of technology from General Motor (USA), this locomotive has exceptional fuel efficiency and very low maintenance requirements. It is specifically designed for heavy haul freight traffic requirements of Indian Railways for the 21st Century. The heart of loco Traction Control Converter uses the GTO devices (obsolete technology). Now the IGBT devices, has been introduced from Oct 2006. It is the latest technology and will be cost effective and gives higher reliability.

The locomotive power has been upgraded to 4500 BCV and the

first Loco (Loco No 12114) was manufactured in May 07

General Characteristic Installed Power

Axle Load

Gauge

Wheel arrangement

Wheel diameter

Height

Width

Overall Length (Over

Buffer Beam)

Weight

Max tractive effort

Maximum speed

Fuel tank capacity

Locomotive Control

4000 HP

21 T

1676 mm

Co-Co

1092 mm

4201 mm

3127 mm

19964 mm

126 T

54 T

100 Kmph

6000 lts

EM 2000 with SIBAS-16

Traction Control

WDG4-4000 HP GOODS LOCOMOTIVE

TRACTIVE EFFORT & POWER CHART

ALCO2300 HP CAPE GAUGE LOCOMOTIVE

TECHNICAL INFORMATION

2300 HP Main Line Locomotive, having fabricated cape gauge Co-Co bogies. These are provided with two drivers cabs, one at each end.

These locomotives have been supplied to Angola and Sudan.

Wheel Arrangement Co-Co

Track Gauge 1067 mm Cape Gauge

Weight 102 t

Overall Length 17620 mm

Wheel Diameter 921 mm

Gear Ratio 18 : 93

Maximum Speed 100 Kmph

Diesel Engine Type: ALCO 251-B 12 Cyl. V-

Engine

HP 2300

Transmission Electrical AC/DC

Brake IRAB-1

Loco Air, Dynamic, parking

Train Air

Fuel Tank Capacity 3000 Liters

2300 HP METER GAUGE LOCOMOTIVE


2300 HP Main Line Locomotive, having fabricated meter gauge Co-Co bogies. These are provided with two drivers cabs, one at each end.

These locos have been supplied to Malaysia, Senegal and Mali.

Wheel Arrangement

Co-Co

Track Gauge 1000 mm Meter Gauge

Weight 102 t

Overall Length 17620 mm


Gear Ratio 18 : 93


Diesel Engine Type: ALCO 251-B 12 Cyl. V- Engine

HP 2300

Transmission Electrical AC/DC

Brake IRAB-1

Loco Air, Dynamic, parking

Train Air

Fuel Tank Capacity 3000 Liters

BROAD GAUGE MAIN LINE FREIGHT LOCOMOTIVEWDG 3A


Diesel Electric main line, heavy duty goods service locomotive, with 16 cylinder ALCO engine and AC/DC traction with micro processor

controls.

Wheel Arrangement Co-Co

Track Gauge 1676 mm

Weight 123 t

Length over Buffers 19132 mm


Gear Ratio 18 : 74

Min radius of Curvature

117 m


Diesel Engine Type : 251 B,16 Cyl.- V

HP 3100

Brake IRAB-1

Loco Air, Dynamic

Train Air

Fuel Tank Capacity 6000 liters

LOCOMOTIVE GENERAL INFORMATION

What does the designation such as “WDM-2” mean?

Locos, except for older stream ones have classification codes that identify them. This code is of the form [GAUGE] [POWER] [LOAD] [SERIES] [SUBTYPE] [SUFFIX].

In this the first item [GUAGE] is the single letter identifying the Gauge the loco runs on. :

W = Board Gauge Y = Meter Gauge Z = Narrow Gauge (2’6) N = Narrow Gauge (2’)

The second item [Power] is one or two letter identifying the power source. :

D = Diesel C = DC Traction A = AC Traction B = Dual- power AC/DC Traction B = Battery electric (Rare)

The third item [Load] is a single letter identifying the kind of load the loco is normally used for. :

B = Mixed Traffic P = Passenger G = Goods S = Shunting L = Light duty (Light Passenger) {No longer in

use} U = Multiple Unit [EDU/DEMU] R = Railear [See below]

The fourth item [Series] is a digit identifying the model of the row. Unit recently, this series no. was simply assigned chronologically as new model of locos were introduce.

The fifth item [Sub type] is an optional letter or no. or (two of them) that indicate some smaller variation in the basic model or series perhaps different motors, or different manufacture. With the new scheme for classifying Diesel locos. This item is a letter that further refines the horse power indication in 100 HP increment.

’A’ for 100 HP

‘B’ for 200 HP

‘C’ for 300 HP etc.

So in this scheme, a WDM-3A refers to a 3100 HP loco, while a WDM-3F would be a 3600 HP loco.

The last item [Suffix] is an optional indication that indicates something special about the loco such as different gearing ratio or brake system that usual.

So, a WCM-2 is a broad gauge (W) DC electric (C) mixed traffic (M) engine, model 2.likewise WDS/5 is broad gauge diesel shunting engine, model 5 and ZDM-5 is a narrow gauge diesel mixed traffic-model 5 loco

MARKETING

Marketing Division of DLW provides a single window service to our

non-Railway customers. It deals with:

■ Sale of locomotives and spares to Non Railway Customers

■ Supply / Sale of DG sets and spares to Railways and Non

Railway Customers

■ Single window services to customers

■ Export of locomotive through intermediaries like RITES and

IRCON

■ Availing of credit under MODVAT scheme.

Settlement of warranty claims and addressing

complaints

■ Analysis of failure reports of NRC and Export locomotives

and initiation of corrective and preventive actions

■ Payment of excise duty and CST /VAT on sale of excisable

goods and settlement of disputed cases

Details of Locomotives Exported during last 5 years

SN Period

No of

Export

Locos

HorsepowerGaugeCountry

12003-

200403 2600 HP BG Bangladesh

22005-

200603 1350 HP

Cape

GaugeSudan

32005-

200611 1350 HP MG Myanmar

4 2006-

2007

01

02

1350 HP

2300 HP

Cape

Gauge

Angola

Angola

05 2300 HP Sudan

52007-

2008

03

01

2300 HP

2300 HPMG

Mali

Senegal

6 2008-09 01 3000 HPCape

GaugeMozambique

Vision & Mission

Our Vision -”To be a world class manufacturer of Diesel -

electric locomotives."

Our Mission - "We shall achieve our vision through

Continuous Improvement in the areas of Product Quality,

Research and Development, Supplier Partnership, Human

Resource Development and Team Work with emphasis on Core

Competence leading to Customer Satisfaction and Business

Excellence."

TOPIC OF THE PROJECT

Project report

on

“DLW Export Procedure to

Non Railway Customer”

INTRODUCTION

Diesel electric locomotives were introduced on Indian Railways in

1950's to exploit their versatility, better hauling capabilities, low

maintenance requirements and overall cost advantage as compared

to steam locomotives. Diesel Locomotive Works (DLW) was

established in 1961 in collaboration with M/s ALCO, USA in the

ancient City of Varanasi to undertake indigenous manufacture of

diesel electric locomotives for meeting increasing transportation

needs of Indian Railways.

Over the years, DLW's production has progressively increased

and it produced 257 locomotives, in the year 2008-09 as against 4

locomotives in the first year of its production in 1963-64. The

locomotive out turn of 2008-09 has not only surpassed all past

records but was 15.7% higher than 2007-08.

ALCO locomotives are now almost fully indigenous. Through in

house development efforts, the original imported design has been

made 7% more fuel-efficient and has also been successfully uprated

to deliver about 30% more power, increasing it from 2600 HP to

3300 HP.

DLW is an ISO 9001:2008, ISO 14001:2004 and OHSAS 18001:2007

Certified Organization covering Quality, Environment, Health&

Safety Management Systems.

Integrated Quality, Environment, Health and Safety Policy

Diesel Locomotive Works is a

Production Unit of Indian Railways,

manufacturing Diesel Electric

Locomotives, Diesel Generating

sets and their spares for Indian

Railways, Non – Railway customers

and exports.

We are committed to achieve excellence by:

Continual improvement of Quality, Environment, Health and

Safety performance at work place

Preventing pollution by all means including minimizing

resource consumption and waste generation using cleaner

technologies, material substitution and process changes

Preventing all injuries and loss of property including

environmental performance through continuous safety

inspections

Striving for compliance with all applicable Environmental and

Health & Safety legislations

Striving for " Right first time" and safe working practices

through systems improvement and training

Enhancing Customer Satisfaction through improvement in

reliability and performance of products

Preventing all employees from occupational diseases and

health hazards

We shall:

Set objectives and targets, and periodically monitor their

progress through internal audit and management review

Communicate Quality, Environment and Health & Safety policy

to the employees and to make it available to the public on

demand.

Periodically review our Quality, Environment and Health &

Safety policy and management systems for continuing

suitability, adequacy and effectiveness.

Environment:

Sewage Treatment Plant (STP) :

In-house STP treats domestic and industrial sewage of DLW

township and workshop. The treated water is used for irrigation

purpose in DLW township and nearby village farms. The digested

sludge is sent to sludge drying beds, which is later used as manure.

Methane gas mainly produced from the digester is collected in the

gas holder and supplied to the canteen.

Industrial Effluent Treatment Plant (IETP):

IETP does the job of treatment of

industrial effluent which mainly

contains oil and grease. The treated

water is sent to nearby villages for

farming and kitchen gardening at DLW.

Chromium Treatment Plant (CTP):

CTP treats industrial effluent from

Chrome Plating Shop. This has varying

concentration of hexavalent chromium.

This hexavalent chromium is converted

into trivalent chromium in acidic

condition and is precipitated for safe disposal.

Safety:

Safety of working personnel and of equipment is given prime

importance in DLW. In compliance to statutory requirements all

safety aspects are subjected to intensive periodic inspections. Four

full time safety officers are engaged in the entire safety

management of DLW including the function of overseeing

compliance to all safety regulations by Workshop personnel.

Safety Features in DLW Include :

Fire fighting arrangements with suitably trained personnel

and regular checks of fire hydrants and static tanks etc.

System of checking/periodic inspection of wire ropes and

lifting tackles

System of inspecting pressure vessels/air reservoirs

Provision of safety Guards on machines and over travel

protection of material handling equipments

Protection of equipments from short-circuiting

Safety awareness training programme for supervisors and

workers

Periodic maintenance of machinery and plant

Mock drills of emergencies for checking of emergency

preparedness

Residential Facilities

A total of 3641 staff quarters are provided in a well-maintained

township that provides maintained and green, providing excellent

and pollution free environment.

Educational Facilities

There are 04 schools for Primary and Secondary Education, run by

DLW administration where more than 2600 students are being

taught. 01 Post Graduate Girl's College also exists in DLW premises.

Besides 02 Central Schools, 01 Sr. Secondary School (Private) and

01 Bal-Niketan (run by DLW Women's Welfare Orgainisation) are

also running in DLW campus.

Medical Facilities

105 bedded well-equipped

Railway Hospital, a Health Unit

and a First-Aid post in workshop

are functioning, taking

comprehensive health care of around 20,000 employees and their

family members. A Homeopathic and an Ayurvedic dispensary have

also been provided.

Institute/Community Centre etc.

For various social needs of the staff Community Hall, Institutes,

Barat Ghars, Kalyan Kendra, Rangshala and Officer's Club are

functioning in DLW township.

Cinema Club

For recreation of the staff a Cinema Hall of around 700 capacity is

functioning in DLW Township since 1967.

Games and Sports

Facilities for various games like Cricket,

Hockey, Basketball, Badminton, Volley-

ball, Football, Table tennis, Gymnastics,

Athletics, Swimming, Golf, and Rifle Shooting have been provided

for the staff. World class Swimming-Pool and well-developed Golf

course are unique features. Inter Railway Tournaments are being

regularly arranged in DLW premises.

ORGANISATION OF RAILWAYS

DEFINITION OF RAILWAY

“Railway” means a railway or any portion of a railway for the public carriage of passenger, animals or goods and includes.

(a) All land within the fences or other boundary marks indicating the limits of the land appurtenant to a railway;

(b) All lines or rails, siding or branches worked over for the purpose of, or in connection with a railway;

(c) All stations, office, warehouse, wharves, workshop, manufactures, fixed plant and machinery and other works constructed for the purpose of or in connection with a railway;

(d) All ferries, ships, boats and rafts which are used on inland waters for the purpose of the traffic of a railway and belong to or are hired or worked by authority administering the railway.

GROWTH OF RAILWAYS IN INDIA

IN 1849, the first contract was given to EAST INDIAN RAILWAY COMPANY for the construction of a railway line for Calcutta towards Mirzapur. In the same year, another contract was made with the Great Indian Peninsula Company for the construction of another Railway line from Bombay to Kalyan.

In pursuance of the contracts mentioned above, the first section from Bombay to Thane consisting of about 32 kms. Was opened on 16th of April, 1853 and the other section from Howrah to Hooghly consisting of 35kms. Was opened on 22nd August, 1854. The construction of Railway line, since then, continued and by the end of 1868, the Railway Kilometrage had increased to about 6043 kms.

The great famine of 1878 stressed the need for further and rapid development of Railways, but due to paucity of funds, the

Government had to resort to the company construction. The Indian States were also asked to undertake the construction of Railways in their own territories and these States constructed about 7500 kms. Of Railways.

The railway lines were constructed at a faster pace after the advent of twentieth century and the railway kilometrage increased from about 37130kms. In 1900 to about 51900kms. In 1913-1914 and now it exceeds 60200 kms.

In pursuance of recommendations by Railway Enquiry Committee of 1921, the management of Railways was taken over by the Government and now all the Railways in India (except a couple of small branch line sections) are owned and managed by the State.

RAILWAY ZONES

Following are the different Zone of Indian Railways and their Headquarters:

NAME OF THE ZONE HEADQUARTERS

1. CENTRAL MUMBAI

2. EASTERN CALCUTTA

3. NORTHERN NEW DELHI

4. NORTH-EASTERN GORAKHPUR

5. NORTH-EAST FRONTIER MALIGAON

6. SOUTHREN CHENNAI

7. SOUTH-EASTERN CALCUTTA

8. WESTERN MUMBAI

9. SOUTHERN CENTRAL SECUNDERABAD

Recently, six additional zones have been created by regrouping the existing nine zones:

10. NORTH CENTRAL ALLAHABAD

11. SOUTH WESTERN BANGALORE

12. EAST CENTRAL HAJIPUR

13. EAST COAST BHUBANESHWAR

14. WEST CENTRAL JABALPUR

15. NORTH WESTERN JAIPUR

16.SOUTH WEST CENTRAL RAILWAY BILASPUR

Organizational Set Up:

DLW has a design and development office responsible for all engineering functions related to diesel locomotives. Equipped with extensive designing tools, this office provides service support to Zonal Railways / Diesel Locomotive Maintenance Sheds and Locomotive Overhauling Workshops. This office is also responsible for product development, vendor development and vendor approval. It also performs technical advisory functions and coordination with RDSO/Railway Board on technical matters.

Chief Design Engineer heads this office and is assisted by a team of technical experts.

Functional Responsibilities:

The functional responsibilities of Design and Development Office are:

Design development of new locomotives, Import substitution /indigenous development of loco component, multi-sourcing, day-to-day design matters raised by diesel sheds and workshops, liaison with Research Design and Standards Organisation of Indian Railways, liaison with supply chain partners in respect of technical matters. Technical matters connected with Loco Standards Committee, Diesel Maintenance Group etc., providing technical clarifications in respect of design/specifications & important tenders. Failure investigations into major assemblies/critical components.

All design issues for Electrics and Bogie of EMD locomotives.

Moreover, design upgradation of EMD locomotives like power upgradation to 4500 BCV, incorporation of IGBT based technology, Distributed power; Hotel Load, Development of twin cab WDG4 and

development of 12 cylinder 3000 HP EMD locomotives with AC-DC traction are being dealt with by Design Office.

Liaison with CQAM and RITES in respect of inspection and quality control standards.

Details of Locomotive Exported (up to Dec'2009)

DLW has exported 102 locomotives to 10 countries. Details are as under:

S.No. Country Types of

locomotives

Qty.

1. Tanzania YDM4, MG 15

2. Vietnam YDM4, MG 25

3. Bangladesh

YDM4, MG

WDM2,BG

10

13

4. SriLanka

WDM2, BG

12 Cyl., BG

08

02

5. PCCL, SriLanka WDM6, BG 01

6. Malaysia 2300 HP, MG 01

7. Sudan VDM4, 1350 HP, CG

2300 HP, CG

03

05

8. Angola VDM4, 1350 HP,CG

2300 HP, CG

01

02

9. Myanmar YDM4 1350 HP 11

10. Senegal / Mali 2300 HP, MG 04

S.No. Country Types of

locomotives

Qty.

11. Mozambique 3100 HP, Cape

Gauge

01

Tot

al=

102

Details of Locomotive supplied to Non Railway Customers (up to

Dec'2009)

DLW has supplied 395 locomotives to Indian NRCs up to December'2009. Major Non-Railway

Customers and locomotives supplied to them are as under:

S.No. Customer's Name Types of

locomotive

s

Qty. Total

1. SAIL WDS6

WDG3A

180

01

181

2. VSP WDS6 33 33

3. NTPC WDS6

WDM2

WDG3A

15

42

31

88

4. Port Trusts WDS6

WDG3A

29

07

36

5. State Electricity

Boards

WDM2

WDS6

11

10

21

6. Others WDS6

WDG3A

YDM4

30

05

01

36

Total

=

395

OBJECTIVE

To know who is our Non railway customer .

To know what is the procedure of export.

To know what is the document need.

To know what is the annual turnover.

To know How far dlw is from their competitors.

MARKETING DEPARTMENT

IN DLWMarketing Division was set up at DLW in August 1987 for sales and after sales service of locomotives to Non-Railway Customers. With the setting of this organization it has been possible to provide single window service to Non-Railway Customer for all activity connected with sale of locomotives, DG Sets and Spares.

The marketing Division maintains close liaison with different Non-Railway Customers. The formation of Marketing Division has greatly helped Non-Railway Customer in improving availability of spares & maintenance of locomotives.

Marketing Division is also responsible for submitting offers & following up cases of sales of locomotive & spares to NRCs and Export of locomotive & spares through agencies like

RITES and IRCON. It is also the nodal department at DLW for DG sets.

DLW is registered with Engineering Export Promotion Council & can thus participate in Deemed Export orders directly and claim export benefits. For export order the demand is met through RITES/IRCON depending on the country of export.

Supply of Locomotive & Spares to Non-Railway Customer & Export

During the year 2008-09 DLW supplied 19 locomotives to Non-Railway Customers in India & 1 cape gauge 3000 HP, locomotive to Mozambique through RITES. Thus, total 20 locomotives (19 for NRC + 01 for export) were supplied during the year worth Rs. 122.55 crore.

DLW has so far supplied 374 locomotives to different Non-Railway Customers in India and 102 Locomotives exported to Countries like TANZANIYA, SRI LANKA, BANGLADESH, VIETNAM, MALAYSIA, MYANMAR, ANGOLA, SENEGAL, MALI, SUDAN, & MOZAMBIQUE.

SPARES

During the year 2008-09 spares parts worth Rs. 10.61 crore were supplied to Non-Railway Custo mer in India as well as Export.

EXPORT PROCEDURE

IN DLW

ABOUT RITES

RITES Ltd., a Government of India Enterprise was established in 1974, under the aegis of Indian Railways. RITES are incorporated in India as a

Public Limited Company under the Companies Act, 1956 and are governed by a Board of Directors which includes persons of eminence from various sectors of engineering and management. RITES Ltd., an ISO 9001-2000 company, is a multi-disciplinary consultancy organization in the fields of transport, infrastructure and related technologies. It provides a comprehensive array of services under a single roof and believes n transfer of technology to client organizations. In overseas projects, RITES actively pursues and develops cooperative links with local consultants / firms, as means of maximum utilization of local resources and as an effective instrument of sharing its expertise.

RITES are internationally recognized as a leading consultant with operational experience of 62 countries in Africa, South East Asia, Middle East and Latin America. Most of RITES foreign assignments are for National Governments and other apex organizations.

SERVICES BY RITES

Facilities Planning for Rolling Stock Maintenance Technical Assistance for Workshop Modernization Supply & Commissioning of Workshop Machinery and

Plant Supply, Commissioning and Maintenance of Locomotives

& Rolling Stock Leasing of Locomotives and Passenger Coaches Supply of Spares Supply of Signaling Equipment Rehabilitation of Locomotives and Wagons Rehabilitation of Traction Machines & Railway Bridges

RITES ROLE IN DLW

In DLW, RITES is the representative of Export Division in Marketing Department. Through RITES all the loco are Exported.

DLW is only the manufacture of loco, but the procedure of sending loco from DLW to another country is done by RITES Ltd. The conclusion is that all the Procedure of Export is done by RITES Ltd. On the behalf of DLW.

DLW provides free service to NRC and export locomotives up to warranty period and thereafter supplies spare parts and technical support on payment basis.

For Indian customers DLW directly deals with through marketing wing.

And For export locomotives, DLW deals through RITES ltd.

CONTRACT BETWEEN RITES & DLW

As we know that DLW has done export through RITES ltd. For maintaining this relationship, time to time as per requirement a contract made, name as BACK TO BACK CONTRACT between both the organizations.

This contract updates the relationship between RITES & DLW legally. It’s also include the related information about loco and export procedure for further process

DETAILED OF EXPORTED LOCO IN DLW

DLW built Locomotives have been successfully exported to all this

country as mention above with their no. & HP.:

SN PERIOD NO. OF EXPORT

HORSEPOWER COUNTRY

1 2002-03 10 1350 HP Vietnam2 2003-04 03 2600 HP Bangladesh3 2004-05 03 1350 HP Sudan4 2005-06 11 1350 HP Myanmar5 2006-07 01

021350 HP2300 HP

AngolaAngola

05 2300 HP Sudan6 2007-08 03

012300 HP2300 HP

MaliSenegal

7 2008-09 01 3000 HP Mozambique

At INTERNATIONAL LEVEL the main competitors of DLW (Asia Largest manufacturing of Locomotive) are CHINA, JAPAN,

GENERAL PROCODURE

OF

EXPORT

NOTE: In DLW, all the activity of EXPORT is done by the RITES LTD.

GENERAL PROCEDURE OF EXPORT TRADE

Usually in any Export House following steps are followed to export

The goods. These steps are:-

Receipt of Enquiry and sending Quotation.

Receipt of order or indent

Assessing Importer’s credit worthiness and securing a

guarantee

Obtaining Export License

Obtaining Pre-finance License

Production or Procurement of goods

Pre Shipment Inspection

Excise Clearance

Obtaining Certificate of Origin

Reservation of shipping space

Preparation of Invoice

Packing and Forwarding

Insurance of Goods

Custom Clearance

Obtaining Mate’s receipt

Payment of Freight & Insurance of Bill of Lading

Securing Payment

EXPORT PROCEDURE IN SEVERAL STEPS

STAGE 1: Customer Search and Receiving of Order

This work is assigned to the marketing persons of the company (RITES) they

Establish the relationship with customer. Usually the company gets

The order in three ways:-

Through Personal Visit:

Through International Trade Fair & Exhibition

Through Internet

Through Global Tender

STAGE 2: ORDER IMPLEMENTED

Once the order has been received, the export order is scrutinized with

reference to the terms and condition of the export contract. This is the most

crucial stage of any export process. All subsequent action and reaction will

depend on the terms and condition of the export contract. It is ensured that

contract has been entered into in accordance with the prevalent export

policies of the country and foreign exchange regulations like FERA, FEMA.

The export order must specify the mode of payments such as:

Letter of Credit [L/C]

Documents on Payment [D/P]

Documents against Acceptance [D/A]

In this stage, the Company prepares all the necessary documents including

Sales Contract required by the buyer and submits to the negotiating bank in

exact specified format and manner. The most important documents

demanded by the importer are:-

Bill of exchange

Commercial Invoice

Packing List

Marine Insurance Policy

Certificate of Origin

Then Buyer Company sends the Sales Contract which is the declaration by them that all the terms and conditions of order are accepted to them.

STAGE 3: PERFORMANCE OF MARKETING DEPT.

As soon as the order has been confirmed the Buyer Company sends the Sales Contract putting their own seal which is the declaration by them that all the terms and conditions of order are accepted to them.

After the contract, the marketing dept. places the Manufacturing Order on the Production Manager & advice the Material Procurement. Department for insuring the availibity of purchase item required for the purchase of Goods.

This note contains the description of the goods as has been given in export order along with the instructions given by importer.The date by which the goods must be ready is clearly indicated in Manufacturing Order.

On the basis of work order Manufacture start. After receiving MO Production of the goods are started.

STAGE 4: PACKING & SENDING OPTION

Then as per the instructions given by importer goods are packed in Packing Department. Now these packed goods are sent to shipping agent through transporters or through Courier.

STAGE 5: FINAL INSPECTION

After the stage of inspection, it is carried out by the Quality assurance dept. of DLW & the final inspection is done by DLW, RITES & IMPORTER (If importer so desire)

WORKING OF COMMERCIAL DEPARTMENT

i.e. EXPORT DOCUMENTATION

Documentation Department is usually called as ‘Commercial Section’

AT DLW the export is done by the Marketing Dept. up to the stage of Manufacturing & Turning out from DLW then after the other export formalities are carried out by the RITES.

Commercial Section can be shown by following figure:-

COMMERCIAL SECTION

COMMERCIAL MANAGER

DEPUTY MANAGER

ASSISTANT MANAGER

CLERICAL STAFF & WORKERS

The main function of the commercial section is to prepare and maintain the documents of each and every activity involved in the Export procedure. Documentation is mainly done to give justification before Reserve Bank of India of foreign exchange transaction which is carried out in Export Process. Thus, the Export Documents represents the total Export Procedures.

Mainly the Export Documents Can be divided into two types:-

(A) COMMERCIAL DOCUMENTS:-

These documents are used by ‘Custom of Trade’ in International Commerce by exporters and importers in discharge of their respective legal and other incidental formalities under

Sales contract. Commercial Documents can be further divided into two types of documents which are as follows:-

PRINCIPAL DOCUMENTS AUXILLARY DOCUMENTS

1. PRINCIPAL DOCUMENTS:-

These documents are required for effective physical transfer of goods and title thereto from exporter to importer. Following documents come under this category:-

Realization of Export Sale Proceeds Commercial Invoice and Invoice prescribed by Importing

Country

Packing List Certificate of Inspection Certificate of Insurance/Insurance Policy Bill of Lading or Combined Transport Documents Certificate of Origin Bill of exchange Shipping Advice

2. AUXILIARY DOCUMENTS:-

These documents are required in connection with preparation or procurement of Principal Export documents. Following documents are Auxiliary documents:-

Proforma Invoice Shipping Instruction Insurance Declaration Intimation for Inspection Shipping Order Mate’s Receipt Application for Certificate of Origin Letter to Bank for negotiation or collection of documents

(B) REGULATORY DOCUMENTS:-

These documents are prescribed by different Government Department/Bodies for compliance of formalities under relevant laws, rules and regulations governing export trade viz. FERA ,Import & Export (control) Act, Central Excise Rules,

Export (Quality Control &Inspection) Act, Customs Act and Major Port Trusts Act etc. Following documents are of Regulatory nature:

Exchange Control Declaration-GR Forms Freight Payment Certificate Insurance Premium Payment Certificate Gate Pass-I/II

ARE-1/ CT-1 Forms Shipping Bill/Bill of Export Port Trust Copy of Shipping Bill/ Export Application/ Dock

Challan Receipt for Payment of Port Charges Vehicle Ticket

Broadly we can classify the total working of Commercial Section in the three stages. They are:-

1) Pre Shipment Documentation2) Shipment Documentation3) Post Shipment Documentation

1. PRE-SHIPMENT DOCUMENTATION :

Pre shipment procedure starts from the very beginning i.e. receiving the order and it ends with handling over the goods to the transporters. In the case of Advance payment following documents come under Pre shipment documents:-

After receiving the export order, Sales Contract is sent to buyer his is resent by buyer after putting their seal along with the 30% of total Invoice value (in the case of advance payment) then after packing of goods, Packing Slip is sent from the Packing Department, with that Slip ,Packing list is prepared in Commercial section.

After checking Packing List thoroughly, Invoice is prepared and then both Packing List as well as Invoice is sent to buyer to get the remaining 70% of the payment. When they make total payment goods are sent to them.

In this procedure, first of all goods are handled over to the transporter. Then transporter gives whole goods to Clearing Agent.

2. SHIPMENT DOCUMENTATION :

After taking over the whole goods by Clearing Agent, Shipment Procedure is started. If Consignment is going to be exported by Sea, goods are sent from the company to Mumbai. If goods are to be shipped by Air then goods are transported to Delhi Airport. Shipping Instruction (3 Copies) is sent to Clearing Agent which contains the information about consignment. For e.g. Dimension of Cartons i.e. No. and Size of Cases, Detail of items, Name of Transporter etc.

When goods are loaded on to the Ship/Aero plane Challan is provided by the owner of Ship/Plane. Challan, Bill of Clearing agent (in the case of FoB), Invoice and ARE (Application for Removable of Excisable goods) are sent to Buyer.

Terms of Delivery means in delivering the goods to the Buyer which cost will be included whether it will include only cost of production or it will also include transportation costs. Mainly there are three terms of Delivery:

FOB (Free on Board):- It is also called as Freight on to-pay Basis that means freight charges will be paid by Buyer.

C.I.F. (Cost including Insurance & Freight):- It is also called as Freight on Pre-Paid Basis that means Freight charges will be paid by Exporter and Goods will be insured.

C&F (Cost including Freight):- It means only Freight charges will be paid by exporter and Insurances charges will be covered by buyer itself.

3) POST SHIPMENT DOCUMENTATION:-

Post shipment Documentation start when goods are reached at their destination then to clear the goods from the customs in the Importer Country some documents are needed. Which are as follows:-

Shipping Advice: - It is sent as covering letter. it contains details of Consignment and clearing agent .

Invoice (2 copies) Packing List (3 copies) Bill of Lading (1 original & 1 Xerox) Airway Bill (1 Xerox & 1 original copy)

Shipping Bill (Original):- Shipping Bill is provided by Customs of India to the Clearing Agent of the Company after checking of goods. Without Clearance of Customs no export can take place. It has all the details of Export Order like details of items, Invoice value of total consignment, Foreign Currency involved, Exchange Rate, Draw back details, Date of Export etc. This shipping Bill is needed at the customs of Importer’s Country as well as Bank of Exporters to get the Payment. It is divided in the two sections:

1. Exchange Control Copy : - First two Pages of Shipping Bill in which Exchange Rates and Freight charges, Insurance Charges (if applicable) are indicated, are called exchange control copy.

2. Export Promotion Copy : - Govt. give export incentive on certain items so, in Shipping Bill all details are given regard in Drawback like their rates and amounts.

DOCUMENTS SENT TO BANK:-

Invoice (2 Copies) Packing List (original) Exchange Control Copy of Shipping Bill (original) Bill of Lading (2 Copies) Copy of Original FIRC (Foreign Inward Remittance

Certificate)

When all the documents are sent to bank, whole transaction is justified and then Bank sends Reference No. with that Ref. No. Bank Realizations Certificate is made in the Company which is again sent to Bank after 6-8 months Bank sends that Certificate to the Company by putting their own seal. This is the last document in any Export Order.

DOCUMENT USED IN PRE-SHIPMENT

SALES CONTRACT

PROFORMA INVOICE

COMMERCIAL INVOICE

MARINE INSURANCE POLICY

SALES CONTRACT

It is a legal contract of exchange of goods, services or property to be exchanged from seller to buyer (in case of export: from exporter to importer) for a pre-decided value in money or money equivalent paid or promised to pay same. It is a specific type of legal contract in which all details regarding trade which is going to take place between any two countries. It contains:-

Contract No. Invoice of Delivery Period Date Port of Loading Port of Destination Mode of Payment Exchange Rate Invoice Packing Description Freight Charges Insurance Charges Name of Seller’s Bank Description of Goods

PROFORMA INVOICE

A proforma invoice is a very common international document; despite its name, it is not an invoice at all but a quote. An international transaction includes so many variables that it is sometimes difficult for importer to have a good grasp of final cost of goods. For e.g. the cost of goods is increased by the cost of shipping, insurance and so forth. In order to determine these costs the import may request for a proforma invoice which helps in determining the accurate and precise preview of actual invoice which is usually prepared when a transaction is going to take place. In those cases when exporter requests payment on a ‘letter of credit basis, the information contained in proforma invoice is used by issuing bank to open the letter of credit. It contains:-

Name & Address of the Seller Name & Address of the buyer Date Delivery Time Terms & Conditions Port of Loading Port of Discharge Terms of Trade Freight to be covered by Insurance to be covered by Banker’s Name Mode of Transport Currency used Description of Goods Signature

COMMERCIAL INVOICE

Commercial invoice is the basic document in any trade. It is also called ‘document of contents’ because it generally contains all the information required for preparation of all other documents.

A commercial invoice is the seller’s bill of merchandise. There is no standard format for commercial invoice but usually it contains the following:-

Exporter’s Name & Address Invoice No. Date Buyer order No. Consignee Name Buyer Name and Address Country of origin of goods Country of final destination Terms of Delivery & Payment Pre Carriage by Vessel/Flight No. Port of Loading Port of Discharge Final Destination of Goods Marks & Nos. Number of Packages Description of Goods Container No. Quantity Rate Amount Declaration Signature of Authority

MARINE INSURANCE POLICY

It provides cover against perils of sea and other connected risks to which goods are exposed to. It is same as any other insurance and usually done to minimize the risk related to shipment of goods. It contains:-

Certificate No. Open Cover No. Open Cover Date Assured Name Address of the Assured Receipt Date Effective From Issued at Net Premium Name of the Issuing Company Total Sum insured Sum Insured in Foreign Currency Basis of Valuation Country of Destination Mode of Transport Packaging Description Commodity Description Terms of Insurance

DOCUMENT USED IN SHIPMENT

PACKING LIST

CERTIFICATE OF ORIGIN

CERTIFICATE OF INSPECTION

MATE’S RECEIPT

BILL OF LADING

PACKING LIST

It is a document which shows nature and the number of goods etc.put in each package/container with distinctive number of marks. This is generally needed by the importer when he is importing different types or sizes of merchandise so that he may identify the nature of goods in each package. It is also used by custom for checking the goods on random basis or otherwise.

Thus, packing list is mainly used to facilitate easy identification of goods in each package/container by the importer or custom. It generally contains:-

Exporter’s Name & Address Invoice No. Date Buyer order No. Consignee Name Buyer Name and Address Country of origin of good Country of final destination Terms of Delivery & Payment Pre Carriage by Vessel/Flight No. Port of Loading Port of Discharge Final Destination of Good Marks & Nos. Container No. No. & Kind of Packages Description of Goods Quantity of Goods Remarks, if any

CERTIFICATE OF ORIGIN

This is a document which is mostly required by Common wealth Countries. It is a certificate of declaration by the shipper regarding origin of goods. The certificate is generally attested or certified by the Chamber of Commerce for industry or other agency designated for this purpose. The main aim of this certificate is to enable the importer to get concessional tariffs.

It contains:-

Exporter’s business Name, Address & country Consignee’s Name, Address & country Means of Transport & Route Item No. Marks & Nos. of Packages No. & Kind of Packages, description of goods Origin of country Gross Weight & other quantity No. & Date of Invoices Certification & Signature by Chamber of Commerce Declaration & Signature by Exporter

CERTIFICATE OF INSPECTION

For ensuring the quality government has made it compulsory for certain products that these should be inspected by some authorized agency. EXPORT INSPECTION COUNCIL OF INDIA (EICI) is one such agency which carries out such inspections and issues the certificate that the consignment has been inspected as required under the Export Quality Control and Inspection Act, 1963 and satisfies the conditions relating to quality control and inspections as applicable to it and is export worthy. Some countries have made it mandatory for the goods being imported to their countries

It contains:-

Beneficiary Name & Address Applicant Description of the Goods Bill of Lading quantity For Transportation to Remarks Item wise/Size wise Break up of Quantity

MATE’S RECEIPT

It is issued by the chief of vessel after cargo is loaded and it is duly signed and stamped by Chief Officer or Master of vessel. The shipping company does not issue the bill of lading unless it receives the Mate’s receipt.

It contains:-

Mate Receipt No. Shipping Bill No. Date Voyage Exporter’s Name CHA Name Marks Quantity of Goods Description of Goods Cargo Weight Consignee Name Terminal or Chief Officer signature

BILL OF LADING

The Bill of Lading is a document issued by the shipping company or the agent acknowledging the receipt mentioned in the bill for shipment on board of vessel and undertaking to deliver the goods as per the order and condition as received by the consignee or according to his order. The Bill of Lading is issued in standardized aligned document format.

It contains:-

Shipper’s Name Consignee Notifying Party Pre Carriage by Place of Receipt by Pre Carrier Ocean Vessel Port of Loading Port of Discharge Marks & Nos. No. of Packages or Units Kind of Packages, description of Goods Weight of Goods

POST SHIPMENT DOCUMENT

SHIPPING BILL

BILL OF EXCHANGE

CONSULAR INVOICE

BANK CERTIFICATE OF EXPORT & REALISATION

SHIPPING BILL

The shipping bill is the main document on the basis of which customs office grants the permission for export. After loading the goods on ship it is prepared by clearing agent but it is mainly needed to justify the goods going to be exported.

It contains:-

CHA Name Date State of Origin Exporter’s Details Consignee Port of Loading Port of Discharge Gross Weight Total Packages Net Weight Country of Destination Nature of Cargo Marks & Nos. Foreign Exchange Bank A/C No. RBI Waiver No. Invoice Details Exchange Rate Insurance Charges Freight Charges Discount Commission Packing Charges Draw Back Description Nature of Payment Buyer Name & Address

BILL OF EXCHANGE

It is a written instrument whereby the person issuing it directs the other party to pay a specified amount to a certain person or to bearer of the instrument i.e. bill of exchange.

In the context of an export-import transaction, bill of exchange is drawn by the exporter. According to which importer are to pay a certain amount to a certain person or to the bearer of bill of exchange. Export consignment is passed on to the importer only when the importer’s order contains bill of exchange.

It contains:-

Amount of bill Place Name & Address of the Bank in which amount is to be paid Order by exporter Invoice No. Name & Address of the import Exporter’s Signature

BANK CERTIFICATE OF EXPORT & REALISATION

This certificate contains the information of export consignment and as to be submitted to the bank for each and every consignment.

The information required for making bank certificate is obtained by various shipment documents named as Invoice, Shipping Bill, Bill of Lading, Airway bill, Insurance bill, Freight Memo etc Three copies of ‘bank certificate’ addressed to the “JOINT

DIRECTOR OF FOREIGN TRADE” is prepared and submitted to bank. Copies of Export Invoice, custom attested EP (Export Promotion) copy of Shipping Bill and other relevant documents are also submitted along with the Bank Certificate

The Bank Certificate is declaration by the exporter that they have forwarded the documentary export bill to its bank for the collection or negotiation or purchase as per particular given in Bank Certificate. The bank verifies the information given by the exporter and certifies the same. The bank passes the original copy with the relevant copy of attested documents to the exporter and duplicate copy to the Licensing Authority. Bank retains the triplicate copy for its record.

It contains:-

Invoice No. Export Promotion Copy of Shipping Bill duly-authenticated by

custom Description of Goods as given in Custom Authenticated-Shipping Bill Bill of Lading No. Destination of Goods Bill Amount Foreign Exchange used Freight Amount as per Bill of Lading Insurance amount as per Bill receipt Date of Realization of export proceeds SDF (Sales Declaration Form) Form No. & Signature of Exporter

MODES OF PAYMENT

There is a no. of different payment methods that can be used when importer deals with exporter. Mostly three of them are used. Which are as follows?

DOCUMENTS AGAINST PAYMENT LETTER OF CREDIT

DOCUMENTS AGAINST PAYMENT

The exporter makes the shipment and sends the shipping documents to the exporter’s bank for collection. The bank then sends the shipping documents along with a collection letter to the importer’s bank, which then sends a collection notice to the importer. The importer makes payment upon receiving the notice, and only after payment the importer receive the original shipping documents with which they take the physical possession of the goods.

The major advantage of the use of DP is the low cost as compared to use a Letter of Credit. But this is offset by the risk that the importers sometimes reject the documents for some reasons (or when they are not in order).Since the cargo has already been loaded (to generate the documents) exporters have little recourse against the importer in case of non-payment. So a document against payment (DP) arrangement involves a high level of trust between the exporters and importers.

LETTER OF CREDIT

A Letter of credit is very common and familiar document in setting payment between buyer and seller. It is a signed instrument embodying an undertaking by the bank of the buyer to pay the seller a certain sum of money on presentation of documents evidencing shipment of specified goods and subject to compliance with stipulated terms and conditions. The International Chamber of Commerce (ICC) has a published a set of universal recognized guidelines governing the issue of a Letter of Credit in Uniform Custom and Practice of Documentary Credit (UCPDC).

Following parties are involved in issuing a letter of credit:-

1. APPLICANT : - The firm asking for a Letter of Credit is applicant. Usually the applicant is importer who is going to import goods but it is not in position to pay for the goods currently.

2. BENEFICIARY : - The firm named in a letter of credit as the firm to whom the bank is insuring payment if the importer does not pay. Usually, the beneficiary of a letter of credit is the exporter.

3. ISSUING BANK : - It is that bank which provides the letter of credit to the importer. It has the contractual obligation to pay the beneficiary (exporter) on the presentation of necessary documents by them when importer is unable to pay.

4. ADVISING BANK : - In a Letter of Credit transaction, the bank that determines whether the issuing bank is a legitimate bank and the terms of the Letter of Credit offered by the issuing bank on behalf of the importer are appropriate. Generally, the advising bank is the exporter’s regular bank. But in some cases the exporter’s bank will delegate this role to another bank which is more experienced.

LETTER OF CREDIT

(PAYMENT PROCEDURE)

The Letter of Credit (L/C) payment procedure is usually as follows:-

The Importer applies to open the L/C to exporter through

A bank that can open the L/C in their country.

The opening Bank will inform the exporter that L/C has been established.

Exporter checks all the terms and conditions listed in theL/C. If all the terms and conditions are acceptable the will arrange the shipment within the time specified in the Letter of Credit.

After the goods are loaded onto the ship without anydamage, the captain of the ship will issue clean Bill of Lading to the exporter. With clean Bill of Lading only they can claim the ownership of goods.

Clean Bill of Lading and other relevant documents will be submitted to their bank to gather the irrevocable Letter of Credit. It is an often used payment method. This is a formal payment method that offers a lot of protection to the parties. In simple words, a Letter of Credit is a letter written by the importer’s bank to the exporter. It verifies that the payment will be guaranteed when bank is presented with concrete documents (Bill of Lading, Freight documents etc.). Mostly Letters Of Credit are irrevocable once the importer has sent them.

A Letter of Credit usually includes applicant (the importer), beneficiary (I/E agent), opening bank, negotiating bank, specification and quantity of the goods, amount of money, loading port and destination port,

shipment date, the validity date of the L/C, terms and conditions agreed by both the importer and exporter and details of the documents required by the importers (Bill of Exchange, Commercial Invoice, Packing List, Insurance Certificate etc.)

The exporter’s bank will send the clean Bill of Lading and relevant documents to opening bank.

Opening bank will inform them that all documents are received.

Then importer will go to the bank to make the payment to get the clear Bill of Lading and relevant documents.

With all of these documents, they can clear the import customs and pick up the goods after the goods have arrived on the destination sea port.

L/C is used for the larger quantity order shipped by the sea.

The typical L/C scenario takes 14-21 days to complete.

STEPS IN PROCESSING OF A LETTER OF CREDIT

The main steps in the processing of a Letter of Credit are as follows:-

Issuance of a Letter of Credit

Shipment under a Letter of Credit Payment under a Letter of Credit

1. ISSUANCE OF A LETTER OF CREDIT:-

We can understand the first and foremost step of processing of a Letter of Credit with the help of following diagram:-

a. First of all the exporter and the importer agree on a sale under “Letter Of Credit” terms. The exporter sends a proforma invoice to importer.

b. Then importer takes the proforma invoice to its bank and requests for a Letter of Credit.

c. The importer’s bank issues a Letter of Credit and sends it to the exporter’s bank.

d. The exporter’s bank receives and revises the Letter of Credit. Then it notifies the exporter that it is ready to ship the merchandise to the importer.

2. SHIPMENT UNDER A LETTER OF CREDIT :-

EXPORTER’S BANK IMPORTER’S BANK

EXPORTER IMPORTER

EXPORTER’S BANK IMPORTER’S BANK

a. The exporter sends the merchandise to the importer but gathers all the documents and sends them to the exporter’s bank.

b. The exporter’s bank checks that whether the documents fulfill the requirement of Letter of Credit or not and then sends them to the importer’s bank.

c. The importer’s bank also verifies the documents that they match with the requirement of Letter of Credit and notifies the importer that everything is in order.

3. PAYMENT UNDER A LETTER OF CREDIT :

EXPORTER IMPORTER

EXPORTER’S BANK IMPORETR’S BANK

a. The importer pays the importer’s bank in order to collect the documents that will be needed to collect the merchandise and clear the customs.

b. The importer’s bank sends the importer’s payment to exporter’s bank.

c. The exporter’s bank notifies the exporter that they have been paid by importer.

Research Methodology

EXPORTER IMPORTER

Sampaling Plan;

There is no sampling plan as such as the study involved in under standing the various processes and analyzing them. The study involved in the detail analysis of secondary data gather from various sources and there for no sample size and plan has been considered.

Research design:

This project is based on two researches-

1) Exploratory research design

2) Conclusive research design

Sources of data: Data has been collected through literature survey and expert opinion. The part of data is collected from various primary sources and secondary sources.

PRIMARY SOURCES:

Information gathered through interview and discussing with departmental members.

DATA INTERPRETATIONLOCOMOTIVE PRODUCTION

Varieties of management interventions, active co-operation of

employees, and their high level of motivation enabled DLW to

increase its output significantly in the current decade. This is

depicted below:

Locomotive Out Turn

99

92

92 106

126

147

163

177

39

59

22

15

24

203

80

0

50

100

150

200

250

300

2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09

Year

No

. of

loc

om

oti

ve

EMD

ALCO

In current year, DLW has produced 200 locomotives (including 88

high horse power EMD locomotives) till 31.12.2009.

102 112 116 121148

186222

257

TYPE WISE LOCOMOTIVE OUT-TURN

2005-06 2006-07 2007-08 2008-09

Type

of

Loco

Targe

ts

Actu

al

Targe

ts

Actu

al

Targe

ts

Actu

al

Targe

ts

Actu

al

ALCO 106 109 114 126 138 139 148 157

GM 20 22 44 39 62 59 80 80

EXPOR

T14 14 08 08 04 04 0 1

NRC 03 03 16 13 16 20 22 19

Total 143 148 182 186 220 222 250 257

TURNOVER

Year Rs. in crores

2001- 02 558.00

2002 – 03 855.88

2003 – 04 934.65

2004 – 05 872.05

2005 – 06 984.65

2006 – 07 1297.54

2007-08 1560.28

2008-09 2404.38

CONCLUSION

After completing my project I familiarize with DLW, and I get that

diesel locomotive works is a famous technological temple, which

came in existence, in 1964 by Late Shri Lal Bahadur Shastri. DLW

export to the following countries, Sri Lanka, Bangladesh, Tanzania,

Vietnam, etc.

There are many facilities for the employees as hospital, health club,

sports club, school and college, sewing center, technical training

center etc. In short we can say that all the facility which the

ordinary employee needed is provided by welfare department and

the entire employee are very well aware with welfare programmes.

They take advantage with programme in any form. Very few

improvement but important improvement, which mentioned above,

is needed in welfare programmes, which make the employees more

satisfied.

SUGGESTION

As I work n my project report. I feel that DLW is very prosperous and the facilities provided to their employees here are very much satisfactory. But some suggestions.

Which in want to give are as follows?

1) The standard of hospital should he tried to improve.

2) Medical store facility should he provided in the campus of the hospital with large stock of medicine.

3) If lunch provided in DLW canteen it will also motives employees.

4) The crèche should also be provided by DLW welfare Department.

5) Welfare department should motivate the employees in such a manner that employee’s female member most participate in women welfare programme.

6) The number of member of sports club and health club is very low so it can increase by the efforts of welfare officers of DLW.

7) Always there should be good communication between welfare.

8) Department and employees.

9) All employees should be motivated to part in cultural programmes.

LIMITATION

There is the possibility of ambiguous replies from the respondents which can give untrue or misleading result.

Few people did not have the time to fill up or answer the Questionnaire.

The responses are quite objective in nature.

There was low rate of return of the dully filled in questionnaire due to the biasness of the respondents.

Few people were not responding as expected from them and they were considering survey a useless activity.

Questionnaire

Dear Sir/Madam:

We are conducting a survey on Marketing division of diesel locomotive works in Varanasi city by government organization. We hope for your kind co-ordination in filling the questionnaire.

Name: _________________________________ Gender:________

Contact No._________________ Email id:________________________________

1: Age:

a) 18-25 b) 26-35 c) 36-45

d) Above 45

2: What is your annual income?

a) Below 3 Lakh b) 3-6 Lakh c) 6-9 Lakha) 9-12 Lakh e) More than 12 Lakh

3: Qualification

a)High school b)Intermediate c)Graduation

D)Post Graduate

4: how many years you work in d.l.w.?

a)0-5 b)5-10 c)10-20

d)more than 20

5: What is your department name?

---------------------------------------------------

7:What is the basic work of your department?

a)manufacturing b) buying raw materials c)selling locos

d)financial analysis e) auditing

6: Does dlw loco be insured?

a)Yes b)No

7. Which part is insured?

a) Engine b) body c) Dg-set d) all

8: How many locos were manufacturing in last year 2009-2010?

a) Less than 10 b)10-25 c) 25-40

b) More than 40

9: What is the target of this year of manufacturing locos?

a) Less than 10 b)10-25 c) 25-40b) More than 40

10: Which year the highest locos supplied?

a) 2006-07 b)2007-08 c) 2008-09

d) 2009-10

11:What is the basic work of dlw?

a) Provide loco to nrc b)provide loco to rc c)government usaged) all of the above

12: What is the future of dlw?

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BIBLIOGRAPHY

Books-

C.K.Kothari - Research Methodology

DLW Year Book

Websites-

www.d.l.w.vns.com

www.google.com

http://www.d.l.w.vns.com/

{THANK YOU}