Export-Import Procedure and

Documentation

Topic: Exporting Leather Products to

Germany

Presented By: Sumit Shukla

Roll No. 46

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 TABLE OF CONTENTS

Sr.No. Topic Page No.

1 History of leather 3
2 Indian Export and Import 4
3 Indian Leather Industry Scenario 5
4 Reasons for Selecting German Economy 8
5 SWOT Analysis of Indian Leather Industry 13
6 Product range 15
7 Price Structure 17
8 Selecting a Suitable Trading Partner 18
9 Doing Business in Germany 20
10 Registration with EPC / Council for Leather Exports 21
11 Method of Costing 23
12 Government Policies 24
13 Registration / IPEC No. 25
14 Statistics 26

15 Cost Accounting Table 28

16 Profit and lossA/c 29

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History of Leather:

The primitive man, even more than 7000 years ago, made and used leather goods.

He dried fresh skins in the sun, softened them by pounding in animal fats and

brains, and preserved them by salting and smoking. Of course, the products were

crude, made for protection than as fashion.

The Egyptians and Hebrews developed around 400 BC, the process of vegetable

tanning that involved simple drying and curing techniques

Under the Arabs during the middle Ages, the art of leather making became quite

sophisticated. Morocco and cordovan leathers were in great demand.

The ancient puppet theatre in the southern India used primarily leather dolls. The

tradition continues even today.

Product definition as per ITC HS code:

ITC HS code for products with outer surface of leather, of composition leather or

of patent leather is 42029190

42 stand for Chapter 42: Articles of leather; saddlery and harness; travel goods,

handbags and similar containers; articles of animal gut (other than silk-worm gut)

4202 stand for Trunks, suit-cases, vanity-cases, executive-cases, brief-cases,

school satchels, spectacle cases, binocular cases, camera cases, musical instrument

cases, gun cases, holsters and similar containers; travelling-bags, insulated food or

beverages bags.

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INDIAN Export & Import:
The export of leather and leather products in total during 2006-07 has reached

2849.61 millions U.S. $ as against 1558.60 millions U.S. $ in 1994-95 registering an

increase of 16.59%.In 2001-02 export has reach 1.93 billion U.S. $ and in year

2005-06, the Indian export of leather goods reached to 2648.14 million US $.

In 2006, estimated exports stood at US$112 billion and imports were around

US$187.9 billion. Textiles, leather products etc. are major export commodities.

India's most important trading partners are the United States, the European

Union, China, and the United Arab Emirates. More recently, India has capitalized on

its large pool of educated, English-speaking people to become an important

outsourcing destination for multinational corporations. India has also become a

major exporter of software as well as financial, research, and technological

services.

To give a brief idea of the Indian exports of leather products to the world, we have

prepared this table showing you the country wise exports of Indian leather

products on the basis of percentage, FOB value and units exported.

Country Quantity FOB Value % Share

(In pieces) (Rs. In Crores) (value wise)
Germany 1377428 327 19.35
U.S.A. 1565807 300 17.70
Italy 973888 260 15.39
Spain 1117471 253 14.97
U.K. 713954 136 8.09
France 531957 100 5.91
Netherlands 217110 40 2.34
Sweden 169183 33 1.96
Canada 117794 30 1.79
Denmark 162414 28 1.69
Portugal 99341 23 1.38
Greece 86390 22 1.32
Belgium 98851 18 1.10
Switzerland 65820 18 1.06

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 Source: Council of Leather Exports

At the current stage, in India leather industry is commanding a vast potential as a

valuable foreign exchange earner. Be it pricing or quality, delivery schedules or

frame work conditions, it is imperative for the Indian leather sector entrepreneur

to fully aware with the what the markets demand and how the competitions adapts

it self. The industry has also to pre-empt the global goings on end constantly

initiate proactive measures.

Special mentions of Germany need to be mentioned when we talk of export scenario

of the leather goods. Germany has been the principal market for the Indian leather

and leather products and continues to hold its position at the top commanding about

the 20% share of the total Indian leather and leather products. Largest market for

Indian leather industry is continuously nurtured and developed.

The Indian Leather Industry Scenario:

Leather Industry in India, occupies a place of prominence in the Indian economy, in

view of its massive potential for employment, growth and exports.

There are a large number and variety of leather products available and sold in

India. First and foremost this includes footwear, which constitutes the majority of

the leather market. There after there is leather furniture, garments, fashion

jewellery, Men and Women Leather Accessories etc

Features of Leather Sector in India:

• Employs nearly 2.5 million persons.

• A large part (nearly 60-65%) of the production is in the Small/Cottage

Sector.

• Annual export value is about to touch about 2 billion US dollars.

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 • Amongst top 8 export earners for India.

• Endowed with 10% of the world raw material and export constitutes about

2% of the world trade.

• Has enormous potential for future growth.

There are also numerous types of leather available in India. But the ones most

commonly used and preferred in Indian climate are Dry Mill, Cow Softy, Sheep Napa

and Buff Calf.

The process of making leather is as follows. The raw animal hide is sent to the

tanneries, where it is cleaned, processed, dyed, dried and polished, after which it is

available and ready for further use. Various Leather product companies buy leather

in bulk from these tanneries and then use them in their respective products.

Leather wear in India is basically for export though a very small quantity is

available in the local market mainly in the north where the weather is conducive to

leather wear and also in five star hotels where the tourists from all over the world

buy leather garments. Most of the garments sold are designed as per international

standards and the buyers are mainly foreigners who find the locally made garments

very fashionable. The main leather garment centres for manufacture are Bombay,

Kanpur, and Madras.

The Indian Export Trade Corporation (IETC)-one of the leading manufacturers of

very high fashion leather garments for men’s and women’s wear started its leather

business in 1970 with snake skin items. They moved into women’s garments in 1985

and then to men’s wear in 1989. Their turnover of 100 pieces per month of women’s

wear and 1500 pieces per month of men’s wear in leather gave them a turnover of

Rs. 52,66,000 in 1989/90 to countries like USA. Germany, UAE, Switzerland and in

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India. “Stylewise, Indians can compete with the rest of the world in design and

detailing. WE have the best machines, accessories and leather and our production

techniques too are very modern,” informs Pawan Sabharwal of IETC.

The Indian Leather Industry has captured world attention by way of its unique

performance in the international arena. There has been an increasing emphasis on

its planned development, aimed at optimum utilization of available raw materials for

maximizing returns, particularly from exports. There has been a remarkable growth

in exports from US $746.34 million during 1986-87 to US $ 1.93 Billion in 2001-02.

India’s inherent strength lies in its strong raw material base, technical manpower,

and proven quality control measures. India ranks first among the major livestock

holding countries in the world, having 57% of buffalo, 16% of cattle, 20% of goat

and 4% of sheep population. It is no denying fact that the legendary quality of

India’s traditional leather craft, combined with modern production facilities and

trained personnel, has put India on the world map for sophisticated leatherwear.

The liberalized economic and developmental trade policies adopted by the

government of India since 1991 and simplification of procedures have been

instrumental to the growth of this industry. With an enviable reputation in

international leather circles, and an ever-increasing global demand, Indian leather

today ranks among the top export earners in the country. Indian leather products

are exported to as many as 120 countries.

The Indian leather industry is well set for rapid growth in coming years. The

industry has undergone tremendous changes in the past two decades and the policy

measures adopted by the government have started paying rich dividends. To add to

this, thanks to cheap labour and raw material.

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 Reasons for Selecting German Market for the export
of Leather:
Germany is one of the world's most advanced market economies. It is the world's

third largest economy in USD exchange-rate terms, the fifth largest by purchasing

power parity and the largest economy in Europe.

Competition and free enterprise are promoted as a matter of government policy.

However, the state intervenes in the economy through the provision of subsidies to

selected sectors and the partial ownership of enterprises in sectors of strategic

importance. Although Germany, unlike countries such as France or Italy, is not a

classical fashion country, fashion play a large role and its significance is growing.

Germany, which is the single largest buyer of Indian leather items, with a 14.3 per

cent share, increased its imports by 7.2 per cent, buying more of footwear —

leather and non-leather — as well as saddlery and harness. Exporters of other

leather items such as garments, leather goods, footwear components and leather,

also increased over a period of time.

Leather goods and garments are big business all over the world. These are being

manufactured and exported by India and the Indian leather industry is poised to

take the international markets by storm.

Total market size:

The German market for luggage and (leather) accessories was worth € 1,953 million

in 2006. This represented a volume of approximately 119 thousand tonnes. Over the

review period between 2002 and 2006, the market has increased by an equivalent

1.7% per annum in value, compared with the EU average of 3.2%.

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Germany was the largest luggage and (leather) accessories market in the EU in

value. It was also close in value to the next three markets of Italy, France and the

UK, although Italian and UK volumes were higher. On a per capita basis, it was also

similar to Spain. Per capita consumption of € 23.7 was higher than the EU27

average of € 20.3. This suggests that Germans purchased more high quality items

on average than elsewhere, or purchased more items generally.

Despite the fact that German consumers are generally not as brand conscious as

consumers in some of EU countries, handbags and other personal accessories such

as belts have continued to experience sales increases, underpinned largely by

increasing interest in fashion. This has been stimulated by major media coverage

and close inspection of the accessories worn and used by celebrities. There are,

however, some signs that the major focus on handbags is starting to become less

intense, and greater interest is now being shown on footwear, both by consumers

and by the media. The other major growth area has been in holders and carrying

cases for electronic gadgets.

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Consumption of luggage and (leather) accessories in

Germany,2002-2006:

2002 2004 2006 Population (in Consumption

million) 2006 Per Capita

(€), 2006
Value/ volume Value/ volume Value/ volume
1823 / 105 1789 / 110 1953 / 119 82.2 23.7

German consumers are practical and usually feel there should be a clear reason for

replacing luggage. They regard function, quality, comfort and a competitive price as

most important, but fashion is becoming more of an issue when buying luggage.

However, in handbags, belts, cross over bags and sports bags, design, fashion and

brand awareness are still the most important, especially among women.

Euro monitor have estimated the market to grow by 2.6% in 2007, and then by 3.2%

and 5.2% in the subsequent two years. This market growth will be mainly driven by:

a) More stimulation of fashion-based purchases by a celebrity-driven mass

media.

b) The continued interest in lower-priced fast fashion items that try to copy

luxury brands and consumers who are no longer ashamed to buy or admit to

owning such products.

c) New markets for men and teens. For example, pouches for men, instead of

briefcases, have become more popular. More variety in girls’ purses in

different fabrics is expected.

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 d) Fast changes in the technology sector will boost the small accessories

segment, as consumers buy new mobile phones, portable audio systems,

personal GPS systems, with or without holders.

German luggage and (leather) accessories consumption by

product, % value 2006

Market trends:

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Environmental concerns continue to grow. Consumers are increasingly demanding to

know how these products are produced.

Bags for men have shown a great increase in interest by affluent working males of

all ages, but particularly younger businessmen. They want small bags with much

internal space, made of soft leather and with a number of different pockets.

For women, designer bags are less popular. The latest trends are for individually

styled bags with a high gloss finish, and more decorated bags with rivets, buckles,

embroidery and chains, a move away from the simpler, more subdued styles.

There are more women in business, which means that there is an increasing demand

for briefcases. These briefcases are lighter and have more compartments

nowadays. Designs are more female oriented, which not only applies to briefcases,

but also to suitcases and small accessories. Restrictions generally on the size of

hand luggage for air travellers is also stimulating more demand for lighter weight

models.

More money is being spent on accessories and all sorts of bags, and parents are also

spending more on bags for their children. Part of this is due to greater influence

from advertising.

Image is also more prevalent in luggage (suitcases and briefcases), as its design or

brand says something about the status or lifestyle of the owner. In the luggage and

accessories business, marketing will be increasingly focussed on particular consumer

target groups.

For all luggage and (leather) accessories, there is more variety in non-leather

material, e.g. made of nylon, fibre, PVC coated, textile or combinations of materials.

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 SWOT Analysis

Strength of Indian leather industry

 India has 10% of world’s total animal population so strong raw material base.

 For better technology, Central Leather Institutes produces qualified leather

technocrat.

 Growing market.

 Purchasing power increases world wide.

 Increased consciousness about usage of leather products specifically among

women (matching chappal, matching belt, matching clothes and hand bag,

etc).

 Support of the government duty draw back increased from 11% to 16%.

 Indian leather industry has provided employment to 2.5 million people.

 Annual export value poised to touch about 2 billion US dollars.

 Amongst top 8 export earners for India.

 Has enormous potential for future growth.

Weakness of Indian leather industry

 No quality specifications, poor quality accessories

 Competition from low price markets like Pakistan, Ethopia, Indonesia and

Kenya.

 Did not project position of products, positioning is wrong not match to

Italian target is just to match Pakistan.

 No brand name.

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  Unorganized sectors.

Opportunities and threats:

Germany is a very large market and the large population can provide a range of

opportunities for exporters from developing countries. There is more demand for

cross over bags, fashionable handbags, light and compact luggage and computer

cases.

In the middle-higher segments, German consumers are prepared to pay high prices

for well-known brands and items made in France or in Italy. As an exporter from a

developing country, we may therefore find more opportunities in the low-medium

segments and approach the German market with less fashion-sensitive lines such as

travel bags or small leather accessories.

The growing market for fashionable handbags provides opportunities for exporters

if they can produce at the prices demanded. However there is a danger in becoming

too reliant on this sector of the market. If you are not able to supply quickly and

change production at the short-term whim of the fashion market, we could find

yourself exposed to the dangers of overtrading.

The ageing of the German population offers opportunities for suitcases with

ergonomic elements, especially with regard to comfort - easy to carry, easy to

store - which is important for older people.

Outsourcing also provides opportunities. German manufacturers have had to adapt

their systems to remain competitive. They have forged partnerships with domestic

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and overseas suppliers. They will particularly appreciate input from suppliers who

can demonstrate design flair and innovation. Try to avoid competition on price, but

offer something different that is unique to your country in terms of design,

material or craftsmanship.

Product range:
We are marketing a range of exquisite Leather accessories for men. To start with

this range would include premium quality leather belts, leather wallets, Portfolios

(Men’s Office Bags) and leather key chains. Finer details of our product range are

explained in the following pages.

Our product range would include:

a} Leather Belts

b} Leather Wallets

c} Leather Portfolios

d} Leather Key Chains

e} Handbags / Business Cases

f} Travel Bags

The highest selling products in the men’s accessories range in the descending order

are leather belts, wallets, portfolios and key chains etc. There are many players in

the men’s leather accessories in the market and there is stiff competition among

them. Following is a summary of major players in each product segment along with

their price range.

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We chose these products out of the entire leather accessories range because they

are the highest selling products in the order. Although, the ladies purse segment

also makes very high sales, if we were to survive in this segment, we would have to

keep a very large variety and mix of designs, which is not possible for us as a new

entrant in the market. Hence we have kept limited variations and designs to start

with.

Before giving the variations, we shall explain the features of most commonly used

leathers.

The things which we will be taking care to select the range for our products are as

follows:

a} It should be distinctive and easily remembered.

b} It should not offend any particular section of the society.

c} It should depict the features of the product.

Leather products that people use, is usually their fashion statement. It symbolizes

their sense of style, their class. We were looking for a brand name which would

appeal to our target costumers and satisfy their styling ego. Our products are truly

a class apart and each of our product is a classic.

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Price structure:

Luggage and (leather) accessories’ margins have been falling in Germany in recent

years, particularly at the bottom end of the market, as a result of intense

competition in the supply end and more competition between retailers. There are

now signs that margins are stabilising and prices are slowly starting to increase

again. Although there are some national differences, margins tend to be similar in

most markets. There are also differences in margin levels between different

product types, with higher retail margins for more fashion-related products, and

lower margins for more functional or lower quality products.

In each trade channel different margins and prices apply, with a total mark-up

(including VAT) of 3 up to 4 of the export (CIF) price. The margin figures quoted in

Table 2.2 are calculated as a percentage of the price purchased from whom they

buy in the chain, not as a percentage of the CIF price.

These margins also vary depending on which market segment is being approached.

The higher the market segment, the higher the margins that can be commanded.

Department stores or clothing and variety chains ask for large-volume discounts,

which are then passed on to their affiliated stores.

Overview of margins in luggage and accessories

Low High
Importers/

wholesalers' margins 30% 50%

Agents' margins 6% 12%
Retailers' margins 95% 120%
Mark-up Export (CIF)

price - Consumer price 3.0 4.0

Selecting a suitable trading partner:

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This is a very important part of the export process. The relationship we can

establish between yourself and your partner is as important as finding a contact

that is suitable for you in terms of the range of products that we can supply. The

essential element of any trading relationship is trust.

The best way to find a trading partner is usually to contact the main trade sources.

The German Leather Goods and Luggage Association and the German Leather

Industry Association are important contacts (see Chapter 6 for contact details).

The best place to meet potential trading partners is at a trade fair, such as the

International Leather Goods Fair in Offenbach:

Participating in trade fairs can be expensive, so it would be better to first visit an

exhibition a few times before making a commitment. During a visit you can

extensively look around at the stands of the main players and get a better idea of

the latest fashions. At trade shows we have an opportunity to talk to potential

partners on a face-to-face basis and better judge whether we would like to work

with them. We could also identify potential partners from the exhibition website

beforehand or from a catalogue. When selecting them (e.g. importer or wholesaler),

we will try to find out:

a) What type of luggage or accessories they sell (focussed on comfort,

material or fashion).

b) To which target groups they sell.

c) In which areas they are well represented in their country. If they are

exporting, to which other EU countries they sell.

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 d) To whom they sell e.g. small or large retailers, department stores, buying
groups etc..

We could also find this out by looking at their website or try to find a company

profile through other hosted sites e.g. of a local Business Support Organisations or

trading platform, or by finding their company brochure.

Although we may initiate a communication by post or email, it is recommended that

there is some personal communication before a trading partner is selected. Personal

communication is still the most important form of communication. This

communication can include sending samples, inviting them to see the production

facilities, and other meaningful ways of gaining and maintaining their interest.

Market access requirements:

As a manufacturer in a developing country preparing to access Germany, we should

be aware of the market access requirements of your trading partners and the

German government. Requirements are demanded through legislation and through

labels, codes and management systems. These requirements are based on

environmental, consumer health and safety and social concerns. We need to comply

with EU legislation and have to be aware of the additional non-legislative

requirements that your trading partners in the EU might request.

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Doing business in Germany:
German fashion companies are notorious for their attention to detail and

subsequent enforcement of trading terms. If you can make a success of a trading

relationship in Germany, you are likely to succeed in most other EU countries.

Developing a relationship:
The most important ways to develop a business relationship are to either exhibit at

one of the main luggage and accessories fairs, or to make a direct approach to

wholesalers or major retailers. In Germany, many business people still prefer a

formal style of communication, both in the way a presentation is put together, and

in the way contact is made. A very aggressive price driven approach will not be

effective, although price is very important in the German market. It is also

important to appreciate from the outset the importance of holding on to your

customers. Many buyers are not always loyal and it is much easier to lose a

customer than to find a new one.

Trade Fairs:
The main trade fair for the luggage and (leather) accessories industry in Germany

is called the International Leather Goods Fair and takes place in Offenbach each

year in March and September. The Leather and More Fair, each April and October,

could also be of interest. The GDS Fair in Dusseldorf is an International Event for

Shoes and Accessories, also twice a year in March and September.

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Promotion:
Advertising in trade magazines can sometimes be an effective means of reaching a

small target group. The main trade publication for the leather industry is the

monthly Leder & Häute Another important publisher is Sternefeld, who issue a

leatherwear report and publish the magazine STEP, which includes coverage of

accessories, as well as footwear. TM Fashion Trendmagazin provides information on

trends and developments in the fashion industry.

Having a website:
Being online is fundamental, especially when taking into account that trust and

credibility are major challenges for DC exporters, a good website can overcome

this issue. A website offering well-defined products, competitive advantages (e.g.

USP, quality, cost reduction and delivery reliability) and a list of other customers

helps create a trusting environment.

Useful contacts:
There is information on the luggage and (leather) accessories industry in Germany

at the website of the German Leather Industry Association and the Leather Goods

and Luggage Association. Some manufacturers featured may be looking to develop

relationships with developing country exporters. Other useful contacts include:

• The Association of Leather Goods Retailer.

• The Association of Textile Retailers.

• The Leather Training, Testing and Research Centre.

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Registration with export promotional council:
In order to enable us to obtain benefits / concessions under the prevailing foreign

trade policy, we have registered ourselves with the Council of Leather Exports.

This organization is the export promotion council for all leather articles to be

exported. Though, registration to this organization is not mandatory, we opted for

this in order to benefit from it. It helps in finding customers, conducting

exhibitions and many other things.

Council for Leather Exports

The council for Leather Exports was set up in July 1984.A non-profit company

registered under the Indian Companies Act, 1956, the Council functions under the

Ministry of Commerce, Government of India. The council is entrusted with export

promotion activities and overall development of the Indian leather industry. The

Council’s activities also include promoting Foreign Direct Investment and Joint

Ventures in the Indian Leather industry. The CLE serves as a bridge between

Indian leather exporters and buyers all over the world.

Council’s services to the Indian Leather Industry:

 Collecting, Collating and disseminating world market intelligence.

 Updating the information on global trends in fashion and design, product

development.

 Dissemination of information of commercial and technological nature through

seminars and magazines.

 Organizing participation of Indian exporters in international fairs and buyer-

seller meets.

 Sponsoring sales-cum-study teams and trade delegations.

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  Inviting foreign experts for providing technological inputs to Indian leather

exporters.

 Organizing international leather fairs in India.

Council’s services to overseas buyers include:

 Serving as a focal point for disseminating information on Indian

manufacturers and exporters.

 Organizing visits of buyers’ delegations dealing with trade information.

 Liaising with various international organizations dealing with trade

information.

 Providing trade and commercial information on Indian leather industry

Method of Costing:
Pricing methods are usually related to pricing objectives and prices fixed. There

are different methods of calculating prices such as cost plus pricing, marginal cost

pricing etc. For exporting leather goods, we will opt for cost plus pricing method

which is described as follows:-

 Cost Plus Pricing :

It is simple and popular method of pricing, under this method average cost of

production and marketing is calculated first. Such cost includes the cost of raw

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materials, cost of manufacturing, cost of packing, cost of distribution, selling cost,

taxes and so on. In addition , certain percentage of profit is added to this cost and

price per unit is fixed.

Selling price per unit: Total unit cost + Expected margin of profit per unit.

Apart from this, there are several costs that are related to when products are

exported. These costs are as follows

 Expenses incurred on product modification.

 Packing and marking of export products.
 Loading at factory for onward journey.
 Transportation to dock for ocean journey.
 Cost of preparing shipping documents.
 Handling charges and fees at the port.

Government Policies:
Sometimes, the government offers export incentives and special concession to

exporters for export promotion. The purpose of such incentives is to raise the

competitive capacity of domestic manufacturers and exporters. Due to such

incentives and concession, an exporter can change less price in the foreign markets.

The possible loss due to prices will be covered out of the benefit available through

the incentives. Thus, export prices are influenced by export incentives offered by

the government. In India, duty drawback is an important export incentives offered

to exporters. They make Indian goods competitive in foreign markets. Sometimes,

the government may dictate the margin by the producers or distributors. This

affects export pricing. In addition, custom duties fixed by the government and

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trade agreement made by the government policies including incentives, subsidies,

regulation of margins custom duties and international agreement.

Registration:
To obtain the benefits available to the registered export s under the import policy,

an exporter should get himself registered by making an application on the

prescribed form with an Export Promotion Council related to his main product line

export. If there is no EPC, registration may be done with the Regional Licensing

Authority concerrned.some of the important registering authority are export

promotion council, commodity boards, The Marine product and proceeds Food

Product Export Development Authorities, Jute Commissioner, Khadi and Village

Industries Commission, State Directors of Industries, Development Commissioner

for Foreign Trade Zone/Export Processing Zone, and the federation of Indian

export organization.

Importer-Exporter Code Number:

Every person or exporting goods is required to obtain an Importer Code Number

from the Regional licensing Authority Concerned. Customs authorities shall not allow

clearance of goods to an importer or exporter who does not process a valid

Importer-Exporter Code Number. Application for allotment of Importer-Exporter

Code Number should be made duplicate, in the prescribed form to the regional

import trade control licensing authority concerned. Code number allotted to a

person is valid import/export of any commodity by that person. It is compulsory

For the importer/exporter to quote his code number in the relevant bill of entry

/shipping bill.

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 STATISTICS:

EXPORT OF LEATHER AND LEATHER PRODUCTS FROM

INDIA DURING APR-MAR- 2006-07 VIS-A-VIS APR-MAR-
2007-08
(Value in Million Rs)
CATEGORY APR-MAR APR-MAR % VARIATION
2006-07 2007-08
FINISHED
32760.69 30877.20 -5.75%
LEATHER
LEATHER
44087.76 46856.08 6.28%
FOOTWEAR
FOOTWEAR
9947.84 10713.89 7.70%
COMPONENTS
LEATHER
14023.29 13849.39 -1.24%
GARMENTS
LEATHER GOODS 31958.86 31602.54 -1.11%
SADDLERY AND
3725.32 4260.16 14.36%
HARNESS
NON-LEATHER
1934.08 1848.07 -4.45%
FOOTWEAR
TOTAL 138437.84 140007.33 1.13%
Source : DGCI &S

(Value in Million US$)

CATEGORY APR-MAR APR-MAR % VARIATION
2006-07 2007-08
FINISHED
724.00 766.93 5.93%
LEATHER

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LEATHER
974.33 1163.82 19.45%
FOOTWEAR
FOOTWEAR
219.84 266.11 21.05%
COMPONENTS
LEATHER
309.91 343.99 11.00%
GARMENTS
LEATHER GOODS 706.28 784.95 11.14%
SADDLERY AND
82.33 105.81 28.53%
HARNESS
NON-LEATHER
42.74 45.90 7.39%
FOOTWEAR
TOTAL 3059.43 3477.52 13.67%

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 Cost Of leather Wallet
In Rs.

Particulars Amount Amount

Cost Of Raw Materials (Leather) 55
Labour Cost 5.0
Other Overhead 3.0
Local Transport 2.0
Factory Cost 60
Packaging 5.0
Custom charges 0.5
Free On Board Price 65.5
Insurance 0.5
Freight 2.0
Cost Of Product 68.0
Less: Duty Drawback (10.20)
Net Cost Of product 57.8

Profit 7.2
Selling Price 65.0

Exchange Rate: 1$= Rs.45

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 Profit and loss A/c for the year ended on March 31,2010
Particulars Amount Amount
Sales (65*10,577900) 687563500
Less:
Cost Of goods sold (611402620)

Gross Profit: 76160880

Depreciation 750000
Interest on loan 180000
Salaries 1500000
Agent Charges 100000
Loss on Sale of asset 250000

Add: Returns from assets let out 150000

Dividend received 250000

Net Profit 74280880

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