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PROJECT
ON
TREASURY & FOREX MANAGEMENT
Submitted by,
Ms. Madhuri C. Kadam
Master of Management Studies (MMS)
JANKIDEVI BAJAJ INSTITUTE OF MANAGEMENT STUDIES
(JDBIMS)
Acknowledgement
I take immense pleasure in acknowledging the efforts that have gone behind making this project a successful & a learning experience for me.
I would like to express my sincere gratitude to Mr. M.G. Pendse (General Manager- Finance) & Mr. J.G. Nair (Chief Manager- Finance) for having given me an opportunity to work on the summer project in Mazagon Dock Limited. They have always encouraged me to strive for the better and their continuous support, suggestions and remarks have been invaluable to me during the course of this project
I would also like to thanks Mr. Ashok Mishra (Deputy Manager- Treasury Section), & all the officers as well as staff members of Mazagon Dock Limited that I worked, for their valuable help.
And last but not the least I would like to thank my family and friends for constant backing and support. The faith that they showed in me, enabled to prove myself mettle and strive for the best.
INDEX
|SR. NO. |PARTICULARS |PAGE NO. |
| | | |
|1. |Executive summary |4 |
| | | |
|2. |About Mazagon Dock Limited (MDL) |5-11 |
| | | |
|3. |Job Profile of Department in MDL |12-15 |
| | | |
|4. |Study of Systems |16-19 |
| |-Cash Module & Mode of payments | |
| | | |
|5. |Bank Guarantees |20-23 |
| | | |
|7. |Investments | |
| |- Short Term Deposit |24-35 |
| |- Provident Fund Investment | |
| | | |
|8. |Foreign Payments |36-48 |
| | | |
|9. |Conclusion |49 |
| | | |
|10. |Recommendations |50-51 |
| | | |
|11. |Bibliography |52 |
Executive Summary
The objective of this project is to study the activities in finance department. It mainly focuses on Treasury section as well as foreign payments.
An analysis was done on activities in Treasury section like…. ▪ Study made on cash inflow and outflow ▪ Modes of payments using by Mazagon Dock Limited ▪ Role of Bank Guarantee in contract while making payment ▪ Investment in Short term fixed deposit and Provident fund investment ▪ Foreign payments to foreign suppliers
For the purpose of this study, collected the relevant secondary data from the websites of the banks as well as Mazagon Dock Limited and also through discussion with officers.
Based on this secondary data, analysis has been done so as to find out proper management of finance department in Mazagon Dock Limited and also recommendations and suggestion made to Mazagon Dock Limited.
About Mazagon Dock Limited
Mazagon Dock Limited is India’s premier shipyard, constructing warships as well as offshore platforms.
The main activities of the company are shipbuilding, ship-repairs and fabrication of offshore structures with facilities situated at Mumbai and Nhava. It has the capability to build warships, submarines, merchant ships upto 30,000 DWT and fabrication of well head platforms, process and production platforms and jack up rigs. For outfitting work, the company has a large number of workshops with sophisticated equipment and machines specific to hull fabrication and ship construction work. Repair work is under taken using the available facilities.
SHIP BUILDING
MDL has constructed a variety of ships both for the defence and the commercial sector.
The first modern warship to be built by the company was the Leander Class frigate “INS NILGIRI". Its design was obtained from the British Admiralty and the frigate itself was built in collaboration with M/s. Vickers Ltd. and M/s. Yarrow (Shipbuilders) Ltd. of U.K. The NILGIRI was launched in October, 1968 and commissioned in 1972. During the next nine years Mazagon Dock built and delivered five more frigates in this class for the Indian Navy. Indian Naval Ships Nilgiri, Himgiri, Udaygiri, Dunagiri, Taragiri and Vindhyagiri formed the main thrust package of the Navy in the seventies and eighties.
MDL has developed a wide range of products for the commercial sector and has constructed a variety of ships ranging from Offshore Supply Vessels, and Harbour Utility Vessels/Crafts such as Tugs-15 nos., Dredgers-11 nos., 9000 Cu.M. Water Tankers-2 nos., Passenger cum Cargo Vessels-3 nos. and an assortment of Support Vessels, Trawlers and Barges besides a Virtual jetty and Floating cranes.
On the export front, Mazagon Dock has achieved another `first'. It is the only shipyard in India to have built a significant number of ships for foreign clients. Since 1974-75, the company has built and supplied vessels to Singapore, the Iranian Navy, U.K., the Gulf and Mozambique. Recently, "Commandant Mortenol" a 1600 Cu M sand dredger was built for a French Company operating from Guadeloupe, an Island territory of France in Eastern West Indies. Presently MDL is building a specialized dredger for the Dredging Corporation of India. The company against global competition won the order.
The shipyard has long standing experience in dealing with all international classification societies both for new construction and ship repairs. The management of MDL welcomes transnational collaborations for execution of technically challenging projects on turnkey basis and has experience in operating complex contracts involving many organizations and corporations in a time bound manner.
As the lead defence shipyard of India, MDL is committed to delivering Quality Ships, on time.
Mazagon Dock has come a long way from being a small repair yard in the late 18th century to the country’s leading Defence Shipyard capable of meeting the requirements of the Indian Navy towards its warship building programmes including submarines. The current order book position makes MDL, one of the most loaded shipyards in the world.
SHIP REPAIR
Mazagon Dock is fully geared to carry out major repairs to all type of vessels and handles a large portion of repairs carried out in the port of Mumbai. The Company's repair service is famous for the quality of its work and adherence to delivery schedules. Mazagon Dock is authorized to carry out repair in Mumbai Port Trust Premises (at dry docks, berths, outer quays and at - anchorage.) Voyage repair facilities have been developed at Nhava Yard near Jawaharlal Nehru Port Trust for quicker turn around of ship. Both deck and machinery repair work are undertaken. Underwater repair can be carried out on all types of vessels upto 300 meters long (45,000 T).
Scope of repair comprises of repairs to Hull, outfitting of living and service spaces, refurbishing and overhaul of main propulsion machinery and equipment, auxiliaries, stabilizer and steering gear, control systems, electric installation, fire fighting and life saving systems and equipment
The Company has also been implementing the concept of total ship care comprising 'maintenance-refit-repair' on offshore patrol vessels and offshore supply vessels of the Coast Guard and ONGCL. Major repairs and modernization of Naval Ships and SSK Submarines, and jack-up rigs are also being carried out.
SUBMARINE
Equipped with modern technology and manned by specially trained personnel, submarines are being constructed and refitted in the East Yard of Mazagon Dock Ltd., a unit set up with advanced state-of-the art machinery, required to achieve the exacting and stringent quality standards in submarine construction.
A welding training school has been established to develop and maintain welding techniques and procedures at high standards and continuous updating of techniques.
The East Yard boasts of facilities like a fully computerized drawing office and excellent quality control laboratories. Special purpose machines have been installed for pressure hull fabrication, stern tube boring, machining of penetrations and hatch covers, installation of precision high technology equipment like radars, sonars, periscopes, hoistable masts, Submarine Fire Control System (SFCS) and other command and control equipment including weapon launch systems.
SUBMARINE REPAIR & MODERNISATION
Mazagon Dock has also undertaken the task of refitting and modernizing of SSK Class submarines of the Indian Navy, thus meeting a critical need of the country, indigenously. The covered dry dock of the submarine yard provides an ideal environment for repair of submarines. Mazagon Dock completed the first ever indigenous medium refit of the Type 209 submarine, Shishumar in the scheduled period of two years. The first medium refit-cum-modernization project of another submarine of the same class, Shankush was also successfully completed in 2005.
Mazagon Dock has also proved its expertise in carrying out repairs of submarines of Russian origin by successfully completing the short refit of Sindhurakshak.
The Scorpene
The Scorpene Submarine has been jointly developed by DCN of France and Navantia Spain and incorporates the very latest Naval technology. At the heart of the submarine is the SUBTICS integrated combat system, a highly computerized central management system, which oversees all of the submarine’s sensors and its seapons. Each Scorpene will have a total complement of just 31.
Submarines are, in fact, the ultimate stealth weapons. Despite advances in sonar technology over the decades, detecting, tracking and targeting submarines remains extremely difficult, particularly in the Indian Ocean where the salinity of the seas and the presence of thermal zones of variable water temperature, make submarine detection extremely difficult. Submarines like the Scorpene make this game of detection and counter-detection even tougher. Designed to be extremely silent, the Scorpene can loiter under water for days, scouring the seas through long-range passive sonar signals, which detect the presence of other submarines and warships in the vicinity
The workforce is well trained various disciplines. Regular training programmes keep the men technologically abreast of the latest techniques of their profession.
Mazagon Dock Limited, Mumbai, is an ISO 9001: 2000 Company and is one of the leading shipbuilding and offshore fabrication yards in India. The Yard was established in the 18th century, and over the 200 odd eventful years, has earned a reputation for quality work and established a tradition of skilled and resourceful service to the shipping world in general and the Indian Navy, Coast Guard & ONGC in particular. In its varied history, MDL passed through various ownerships like the P&O lines and the British India Steam Navigation Company. It was incorporated as a Public Limited Company in 1934.
After its takeover by the Government in 1960, Mazagon Dock grew rapidly to become the premier war-shipbuilding yard in India, producing sophisticated warships for the Navy and offshore structures for the ONGC. It has grown from a single unit, small ship-repair company, into a multi-unit and multi-product company, with significant rise in production, use of modern technology and sophistication of products. The company’s current portfolio of designs spans a wide range of products for both domestic and overseas clients.
Finance Department
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GGM – Group General Manager
GM – General Manager
AGM – Additional General Manager
CM - Chief Manager
DM – Deputy Manager
F – Finance
F & A – Finance & Accounting
C & B – Costing & Budgeting
F.P – Finance Projects
P & I – Project & Investment
TR. – Treasury Section
JOB PROFILES OF EACH DEPARTMENT IN BRIEF
I) MANAGEMENT INFORMATION SYSTEM (MIS)
o Corporate Accounts o Managing Reports o Budgeting o Income tax o Property & Insurance o Billing & receipts o Investments
MIS–CORPORATE ACCOUNTS, MANAGEMENT REPORTS AND BUDGETING JOB PROFILE • Coordination and compilation of annual accounts • Monitoring journal operations • Loans, grants and aid in investments • Coordination with banks/financial institutions for fund based and non fund based limits(long term, working capital, leasing finance) • Preparation of capital budget • Preparation of revenue budget and budgetary control • Fixation of standard rates of labour, general overheads and OPU etc. • Reports to ministry and others in relation to accounts and financial data. • Financial data for memorandum of understanding.
MIS – INCOME TAX JOB PROFILE • Payment of advance tax • Obtaining tax audit reports • Filing of returns • Personal hearing during assessment • Follow up for refunds • Clearance for committee on disputes • Filing appeals • Income tax clearance certificate • Income tax exemption certificate for nil/lower rate of tax deduction at source from contract recipients if required
MIS – PROPERTY AND INSURANCE JOB PROFILE • Maintaining records of all fixed assets excluding land • Additions and deletions of assets during the year • Capital work in progress • Depreciation • Gross and net block of assets • Obtaining insurance covers as required • Payment of premium • Claims and refunds
MIS - BILLING AND RECEIPTS JOB PROFILE • Billing and receipts of non naval construction projects, ship repair projects and other works and maintaining accounts therefore • Accounting for sale of scrap/stores • Management of indirect taxation(sales tax, service tax, excise duty, works contract tax) like filing returns, assessments, appeals, litigation for classification or demand raised other than assessments.
MIS - INVESTMENTS JOB PROFILE • Investment of surplus money of MDL • Investment is done through competitive quotes from nationalized banks and private banks as per board’s directive
(II) PROJECT ACCOUNTS o Vendor payments (indigenous and imports of direct materials consultancy and technicians, sub contracts and facility hire.) o Raising claims with customers(for cost plus projects on the basis of actual payments made and on fixed price contracts on the basis of stage payment agreed in the contract) o Maintaining accounts of liaison office Moscow o Projecting funds for projects o Managing Russian loan o Taxation pertaining to foreign technicians o Scrutinizing purchase proposals of material/ sub contract departments
(III) PAYROLL
o Compilation of prompt and error free payroll o Payment of salary and allowances o Payment of statutory deductions to the authorities o Preparation of form 16 as per IT act o Regulation of leave encashment LTA, medical reimbursement retirement benefits etc.
(IV) PROVIDENT FUND
o Managing PF trusts o Investments of PF accumulations as per government guidelines o Maintain individual PF accounts o Disburse PF loans and advances o Finalization of PF accounts and audit thereof o Organizing trust meetings
(V) CASH
o Managing bank accounts in SBI, Canara, Deutsche Bank etc. o Managing company’s cash flow and fund flow and reporting to management. o Depositing cheques / cash in banks o Custodian of cash o Petty cash and EMD receipts and payments o ECS and cheque payments to suppliers o Reconciliation of bank accounts
(VI) BILL PASSING SECTION
o Payments to suppliers / contractors for non-naval projects o Management of bank guarantee, security deposit, other deposits and retention money. o Payments for the overheads of the company. o Payment for capital items and revenue expenditure of the company. o Payment for stock purchase items. o Reconciliation of ledger balances
(VII) PROJECT EXECUTIVE FINANCE
o Cost management, budgeting and budgetary control o Participating and advising the price negotiation committee o Scrutinizing purchase proposals and exercising financial powers o Follow up of realization of outstanding receivables o Funds planning and updating the projections o Maintaining imprest accounts
Cash Module & Mode of Payments
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This procedure is also follow by Project A/C Department (they make the payment of big amount), East Yard & Offshore Yard, like Commercial department verifies bills and sends to respective department i.e. Project A/C dept & East yard.
ECS (Electronic clearing system):
In ECS, a series of electronic payment instructions are generated to replace paper instruments.
What is ECS credit?
ECS Credit, the system works on the basis of one single debit transaction triggering a large number of credit entries. These credits or electronic payment instructions which possess details of the beneficiary's account number, amount and bank branch, are then communicated to the bank branches through their respective service branches for crediting the accounts of the beneficiaries either through magnetic media duly encrypted or through hard copy.
The minimum number of transactions per user institution is 2,500, with upper limit in value of any single item being restricted to Rs.1,00,000/-.
What is ECS debit?
ECS - Debit, is a scheme which facilitates payment of charges to utility services such as electricity, telephone companies, payment of insurance premium and loan installments etc. by customers.
ECS Debit envisages a large number of debits resulting in a single credit simultaneously. ECS Debit works on the principle of pre-authorized debit system under which the account holders' account is debited on the appointed date and the amounts are passed on to the utility companies.
Advantages of ECS: ▪ faster collection of bills by companies ▪ better cash flow management ▪ eliminates the need to go to collection centres /designated banks by the customers
Because of this advantages, nowadays companies using this mode of payment system i.e. ECS.
Bank Guarantee
Bank guarantees are commonly used financial instruments in the Mazagon Dock limited. Though a bank guarantee is a fairly
simple financial instrument, it has a wide range of potential uses, and it is also open to possible fraud.
What is Bank Guarantee?
A guarantee from a lending institution ensuring that the liabilities of a debtor will be met. In other words, if the debtor fails to settle a debt, the bank will cover it.
A bank guarantee is a written obligation, or guarantee, from an issuing bank promising to pay a set sum of money to a beneficiary who is doing business with a client of the bank’s, in the event that the bank’s client defaults on the payment contractually promised to the beneficiary.
Why Bank Guarantee is required?
A bank guarantee enables the customer (debtor) to acquire goods, buy equipment, or draw down loans, and thereby expand business activity.
Elements Of A Bank Guarantee
Beneficiary
The beneficiary is the person who has authority to draw on the bank guarantee in the event that the bank’s client fails to make payment. The beneficiary is named specifically on the bank guarantee, and can claim the full value of the bank guarantee at such time as he or she makes proper claim that they have not received payment for the provision of goods or services.
Issuing Bank
The issuing bank is the bank which is providing the guarantee to the beneficiary, on behalf of their client. The issuing bank is legally required to make full payment on the bank guarantee if the conditions laid out in the bank guarantee are met.
Under this: Types of Guarantee
Payment Guarantee
A payment guarantee is simply an assurance provided by the buyer to the seller that payment will be made upon shipping of goods. This is the most common form of bank guarantee and buyers can expect most sellers to request a bank guarantee for the purpose of securing payment in the case of the buyer defaulting on the contract.
Performance Bond Guarantee
A performance bond guarantee is a bank guarantee which is issued by the seller and given to the buyer. If the seller fails to meet the terms of the contract, then the buyer is entitled to claim payment on the bank guarantee, which is normally around ten percent of the total value stipulated on the contract. It is standard practice for the seller to issue the buyer a performance bond guarantee.
Advance Payment Guarantee
If the seller has requested an advance payment, then the buyer can request a bank guarantee to cover the advance payment in the event that the seller fails to fulfill its obligations as stipulated in the contract. This is rarely needed in sugar trading, as payment is usually made by a letter of credit, under which payment is only made to the seller in the event that the conditions of the contract are fulfilled.
Documents required for the bank guarantee:
• Request letter from the concerned department
• Management approval for obtaining Bank Guarantee.
• Customer’s intimation for revised value, if any, at the time of extension.
• Draft format for Bank Guarantee.
• Bank Advice for commission
• Copy of Bank Guarantee
• A.P.A./R.A
• Register - bank wise for Bank Guarantee
(a) S.B.I.
(b) Canara Bank
(c) Deutcshe Bank
• Term Deposits Receipt (TDR) as margin money against Bank Guarantee.
PROCEDURE FOR OBTAINING BANK GUARANTEES:
1) On receipt of requisition for Bank Guarantee and draft Bank Guarantee alongwith management approval, Billing & Receipt Section approaches the Bankers (Canara Bank, State Bank, Deutsche Bank) for the approval of Bank Guarantee draft.
2) On receipt of approved draft from the Bank, the same is prepared on the stamp paper of Rs.100/- (for this purpose/ blank stamp paper should be purchased either in the name of beneficiary or in the name of the Banker)
3) The original Bank Guarantee alongwith three copies are submitted to the concerned Bank accompanied with request letter duly signed by authorised officer.
4) Original Bank Guarantee and the second copy of Bank Guarantee duly endorsed by the Bank alongwith certificate of authority issued by the Bank confirming the authority of the signatory is obtained and distributed as under :
o Original copy alongwith authorisation certificate to the indenting department for onward submission to the customer.
o Second copy of the Bank Guarantee is retained in the respective office file (Bankwise).
5) In case of foreign Bank Guarantee, Bank Guarantee is issued to the customer directly to their foreign office through the foreign branch office of our bankers and a confirmation of having delivered to the party is obtained from the Bank.
PROCEDURE FOR EXTENSION OF BANK GUARANTEE:
On receipt of request letter from concerned section alongwith management approval, Billing & Receipt section obtains the extension of Bank Guarantee as per procedure stated in above.
PROCEDURE FOR CANCELLATION OF BANK GUARANTEE ON EXPIRY OF BANK GUARANTEE:
• On the expiry of Bank Guarantee, Officer in Charge B&R Section intimates the concerned section/department for obtaining original Bank Guarantee from the beneficiary.
• On receipt of original Bank Guarantee from beneficiary duly discharged through concerned Section submits the same alongwith a request letter to the respective Banker for cancellation as well as reduction of the liability.
Necessary entries are made in the Bank Guarantee register maintained in B&R Section.
PROCEDURE TO BE FOLLOWED ON ENCASHMENT OF BANK GUARANTEE:
On receipt of intimation from beneficiary for encashment of Bank Guarantee, Officer in Charge, B&R Section forwards the same to the respective Section.
After getting the management approval for confirming the encashment from concerned Department, Officer in Charge B&R Section passes APPA by debiting GL Code No.4699 (Misc. Expenses) in respective Division, as soon as the Bank debits MDL's account.
Investment…………….
Investment is defined as any use of resources intended to increase future production output or income. The basic meaning of the term being an asset held to have some recurring or capital gains. It is an asset that is expected to give returns without any work on the asset per se.
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Mazagon Dock Limited invests their profits in different areas which give them more returns like…..
✓ Short term fixed deposit ✓ Provident Fund Investment
Short term fixed deposit:
In the course of its operations, the company accumulates cash balances which will fluctuate in size during the fiscal year. Although the funds are committed for specific purposes, the use of the committed funds is not always immediate and thus significant cash balances can accumulate. It is desirable that the company both protect and optimize the value of these funds, and therefore the excess funds not immediately required for operations should be invested at the maximum yield available within appropriate security, liquidity and diversification constraints. Because the expenditure of the company’s operating funds do not occur concurrently with the receipt of such funds, it is prudent for the company to not only assure the safekeeping of the resulting idle cash, but to also make full use of idle cash through an effective short-term investment program that will yield maximum returns.
The primary and most important objective of management of surplus is the effective management of the company’s cash balances. Regular cash flow and cash balance forecasts are generated by the Cash Department to determine the weekly, monthly and yearly cash requirements of the company. This forecast will serve as a guide in determining the levels and time period of excess cash balances. The excess cash balances will be invested to enhance yield within the constraints while ensuring sufficient cash resources are maintained to meet upcoming obligations.
Short term deposits are normally made to facilitate the optimum utilization of cash surplus. The decision to invest in short term deposits is taken by a committee of Directors. A review of investments is done from time to time by the Director (Finance)/HOD (Finance) considering the guidelines issued by the Department of Public Enterprises (DPE) regarding investment of surplus funds.
Short term deposits are made for a period of 7 days to one year. Investments are made in areas that are profitable or of strategic importance to the company. Investments are made with proper control and according to the DPE guidelines and Companies Act.
The funds available for making the investments are worked out by the MIS department based on the cash flow statement prepared by the Cash Department. The investments which would give the best returns are identified. They are internally discussed and an investment plan is drawn. After the plan is drawn it is submitted to the Board of Directors.
Even the decision to sell the investment is made by the Board of Directors (BoD). MIS receives a copy of the extract of the minutes of the meeting in which such approval was accorded. The MIS in accordance with the decision of the BoD sells the investments and necessary entries are made in the investment register.
The company considers the following factors while investing:
RISK
The investment of cash surplus is not of a speculative nature — that is, high risk. The cash surplus is only a temporary surplus of cash inflows over the cash outflows. Any permanent losses resulting from a high risk investment could be devastating. The level of risk ultimately determines the yield of the investment. A higher level of risk will generally provide the company with a higher yield. On the other hand, a low level of risk will result in a lower yield on the investment. But, a conservative approach to the level of risk is followed when investing the company’s cash surplus.
MATURITY
Maturity is the term used to describe the length or the duration of the investments. Many investments are made to be held over a certain period of time. An investment that is held for its full duration is said to have been held to maturity. When an investment has reached its maturity, the original investment and any gains or losses earned by the investment are returned to the company.
The maturities of the company’s investments should occur so that the surplus cash is available when the business needs it. Preparing a cash flow budget is the way the company determines the appropriate maturities for its investments in light of the cash inflows and outflows of various departments. As a rule, maturities of the investments should be staggered so that investments mature periodically. Investments that mature at a time when the business does not require the surplus cash is always reinvested.
The maturity of investments has a direct impact on the yield of the investment. A longer maturity will generally provide the company with a higher yield. On the other hand, an investment with a shorter maturity or no maturity at all will result in a lower yield on the investment.
LIQUIDITY
Liquidity describes how easily MDL can access the cash it puts into an investment. Some investments are more liquid than others. For example, investing the cash surplus in a money market account is very liquid. The company can pull cash from a money market account when it needs without incurring any penalties for withdrawing the funds. Other investments offer less liquidity and have penalties for withdrawing early. A CD (certificate of deposit) is an example of an investment that has this type of penalty if the CD is not held for its full term.
When investing the cash surplus, the company makes sure to consider the investment's liquidity. If the amount and duration of the cash surplus are uncertain, then only those investments are considered that offer a high level of liquidity. On the other hand, if the amount of cash surplus and the duration of the surplus are fairly certain, then less liquid investments can considered. Preparing a cash flow budget helps MDL determine the amount and the duration of its cash surplus.
The liquidity of the investments also affects the yield of the investment. An investment that is highly liquid, such as a checking money market account, will generally result in a lower yield on the investment. On the other hand, an investment with a low level of liquidity, such as a CD, will generally provide the company with a higher yield.
YIELD
Yield is the last factor to consider when making the cash surplus investment decisions. For most investments, the yield is determined by three other factors: risk, maturity, and liquidity. Once the acceptable level of risk is determined, maturity, and liquidity, the type of investment and the yield of the investment is pretty much determined for and the options are narrowed down.
The Department of Public enterprises (DPE) issues guidelines from time to time through Office Memorandum. The summary of the guidelines is as follows: 1) Investments should be made only in instruments with maximum safety.
2) There should be a proper commercial appreciation before any investment decision is taken. The surplus availability may be worked out for the purpose of investment.
3) Funds should not be invested by the public sector enterprise at a particular rate of interest for a particular period of time while the company is resorting to borrowing of at an equal or higher rate of interest for its requirements for the same period of time.
4) Investment decision should be based on sound commercial judgment. The availability should be worked out based on the cash flow estimates taking into account working capital requirements, replacement of assets and other foreseeable demands.
5) Term deposits with any scheduled commercial bank can be kept which has a paid up capital of at least 100 crores, and which fulfills the capital adequacy norm as prescribed by the RBI from time to time.
6) Investments can be made in instruments which have been rated by an established credit rating agency and have been accorded the highest credit rating signifying highest safety, Certificates of deposits, deposit schemes or similar instruments issued by scheduled commercial banks/ term lending institutions including their subsidiaries as well as commercial papers of corporates.
7) Inter-Corporate loans are permissible to be lent only to Central PSEs, which have obtained highest credit rating awarded by one of the established credit rating agencies.
8) Any debt instrument which has obtained highest credit rating from an established credit rating agency.
9) Decisions on investment of surplus funds shall be taken by the PSU board. However decisions involving investing short-term surplus funds up to a maximum of one year maturity may be delegated to the prescribed limits of investment, to a designated group of directors which should invariably include CMD and Director (Finance)/Heads of Finance internally. Where such delegation is made, the delegation order should spell out the levels of approval and the powers of each official which should be strictly observed. Where such delegation is exercised there should be a proper system of automatic internal reporting to the board at its next meeting.
10) On account of volatility of call money market instrument, there has been a general policy shift toward making the call money market a purely inter- bank market with the gradual phasing out of non bank participation. Therefore it has now been decided not to allow PSEs to invest their surplus funds in call money market.
The company on the other hand has an investment policy. It limits its investment in a single company at Rs. 600 crore or 5% of the net worth of the bank/company whichever is less. Investment Objectives of the company is that the investment of excess cash balances must satisfy the following investment objectives:
1. Maturity terms are selected which ensure that sufficient cash resource are available to meet obligations as they become due. 2. Security of the invested funds must be a prime consideration in any investment and must be assured by reasonable tests. In addition, protection of the invested principal will be achieved with a diversified portfolio. 3. A high level of liquidity must be maintained in the portfolio of investments to enable the sourcing of funds at minimal risk level of capital loss, or to provide the ability to adjust the portfolio in changing market conditions. This will be achieved by limiting investments to readily marketable securities 4. Investment yield, while an important factor will be subordinate to security and liquidity considerations. 5. Securities will not normally be actively traded - this will occur only when unexpected cash requirements arise, or opportunities arise to enhance credit at the same yield or enhance yield at the same credit without loss of principal.
The surplus available for the company to invest in different securities for different time period is determined through budgeted cash flow of the company.
Provident Fund Investment
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Mazagon Dock Limited takes the provident fund of each employee and invest it in government bonds and securities, as per government regulation. This investment is compulsory for each employee.
Objectives:
• To obtain the contribution of employer/employee from MDL for remitting to the respective Trusts before due date.
• To obtain pension fund contribution from the company for remitting the same to P.F. authorities before the due date.
• To disburse loans and advances as per the provisions of Trust Deeds.
• To invest the P.F. accumulations on monthly basis as per the R.P.F.C. guidelines and collect interest thereon.
• To maintain individual P.F. Accounts.
• Finalisation of P.F. accounts and audit thereof.
• To carry out amendments to Trust Deeds in line with provisions of EPF Act.
• To settle the P.F. Accounts of employees ceasing to be in the service of the company for any reason.
• To file EDLI claims of deceased employees.
• To remit statutory charges to R.P.F.C. Office.
• To file regular returns to R.P.F.C. as per due dates.
• Comply with the provisions of P.F. and Misc. Provisions Act, I.T. Act, etc. in connection with the administration of the Trust.
• To conduct P.F. Trust meetings and maintain records thereof.
Responsibility and system overview
For this investment, undermentioned P.F. Trust Accounts are maintained by the P.F. Section:
1. Mazagon Dock Ltd. Operative Provident Fund Trust
2. Mazagon Dock Ltd. Clerical & Subordinate Staff Provident Fund.
3. Mazagon Dock Ltd. Junior Supervisory Staff Provident Fund. The Officers, whose basic pay plus DA is upto Rs.5000/- are the members.
4. Mazagon Dock Ltd. Staff Provident Fund Trust. The Officers, whose basic is above Rs.5000/- are the members.
5. Mazagon Dock Ltd. Superannuation Fund.
a) The company's contribution in respect of Operatives, Clerical and Subordinate Staff and Officers is claimed at the rate of 12% of basic pay + DA subject to a maximum of Rs.5000/-. In respect of Officers who are the members of Staff Provident Fund, the company's contribution is claimed at 12% on basic pay with no ceiling. The cheques for the claim on account of P.F. member contribution are to be forwarded by the respective Pay Roll Sections after the disbursement of salary. This Section monitors the timely receipt of above amount and depositing of the same in the respective Bank Accounts for various P.F. Trusts before the due date
b) A report in Appendix A (format enclosed) is forwarded on 25th of every month to the Regional Provident Fund Commissioner, Maharashtra and Goa region, Bandra, Mumbai.
c) A manual JE is prepared for the company's contribution received in respect of Operatives , Clerical and Subordinate Staff and Officers on the basis of cost centrewise P.F. report.
d) After submission of claim and follow up, cheques on account of following charges are remitted to RPFC Account.
1) Pension contribution @ 8.33% of wages of Rs.5000/- maximum.
2) EDLI charges @ 0.50% of wages subject to maximum wages of Rs.5000/.
3) Administrative charges on EDLI @ 0.017% of gross wages.
4) Inspection charges @ 0.18% of actual wages.
The above mentioned charges are paid by the Company for the employees.
These charges are recovered from the Sub-contractor's bills at the rates mentioned above by the Bill Passing Sections and the cheques are forwarded to P.F. Section for remittance. All the cheques are to be remitted to the Banks latest by 15th of every month.
e) The loan applications received from the Operatives, Clerical & Subordinate Staff and Officers are processed in the following manner.
1) Fund position as on the date of application is indicated on the loan application form and the application is sent to the Administrative Authority i.e. concerned Divisional Personnel Department for sanction of the loan. The sanctioning of loan in respect of Officers is processed by the P.F. Section.
2) The Cheques are prepared on the basis of amount sanctioned by the concerned Divisional Personnel Department.
3) The applications together with the cheques so prepared are sent to the Trustees for their approval and signature.
4) A recovery statement is prepared and forwarded in respect of refundable loans to EDP Section/Pay Roll every month.
f) The surplus money is invested as per the RPFC guidelines as under :
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The investment pattern as envisaged above may be achieved by the end of a financial year.
The Trust, subject to their assessment of the risk return prospect, may invest upto 10% of others above in private Sector Bonds/Securities which have an investment grade rating from at least two credit rating agencies.
g) The Pension claims, Employees Deposit Linked Insurance claims in respect of Employee who retired, expired (EDLI claims also) etc. are submitted to RPFC Bandra in the prescribed Pension Application Form No.10 D (Pension) together with enclosure Form No.7(PS).
h) The P.F. Accounts in respect of retiring employees, death cases and dismissal/discharge cases/resignation cases are settled by updating their individual accounts and calculating interest thereof.
i) P.F. slips are distributed to all employees on yearly basis.
j) A meeting of all Management Trustees and Member Trustees arranged once in three months.
k) P.F. Accounts of all Trusts are finalised and submitted to R.P.F.C. Bandra, duly audited on or before 30th Sept. every year.
l) An annual compliance report is prepared in the Format furnished by RPFC Office and the same is forwarded to RPFC Office. The Inspection Team comprising of Asst. Provident Fund Commissioner and two P.F. Inspectors then visit our establishment in the month of November/December every year for verification and inspection of various transactions in line with the compliance report and Appendix submitted every month. The rectification report and compliance of various queries raised by the Inspection Team is also required to be submitted to RPFC after visit.
m) A Pension Fund viz., "Mazagon Dock Ltd. Superannuation Fund" was created for pre-takeover Ex-Officers of the Company. A LIC Master Policy was taken on 9.2.1962 on payment of one time premium. Monthly pension is being paid to the pensioner/widow/minor children from the monthly receipt of annuity from LIC against the Master Policy.
Current Scenario of MDL foreign payments………..
Mazagon Dock Limited currently constructing 6 submarines & repair work of 2 submarines is going on with foreign collaborators. Currently there is only one foreign collaborator i.e. from France (Almaris). For this MDL wants material, so they buy from foreign collaborators.
Procedures for making the foreign payments: • First of all, there is contract make between MDL and suppliers. • In this contract mode of payment, delivery of goods, due date, etc. is agreed between two parties like MDL & suppliers. • Conditions are also agreed between the two parties. • After this, mode of payment is decided like payment is made through either Letter of Credit (LC) or direct remittance. • Delivery of goods is happens on FOB (Free on board). Free on Board (FOB): A trade term requiring the seller to deliver goods on board a vessel designated by the buyer. The seller fulfills its obligations to deliver when the goods have passed over the ship's rail. When used in trade terms, the word "free" means the seller has an obligation to deliver goods to a named place for transfer to a carrier. Contracts involving international transportation often contain abbreviated trade terms that describe matters such as the time and place of delivery and payment, when the risk of loss shifts from the seller to the buyer, as well as who pays the costs of freight and insurance. • After this Bill of entry given by exporter to importer. Bill of Entry: Declaration (on a prescribed form) by an importer or exporter of the exact nature, precise quantity and value of goods that have landed (entered inwards) or are being shipped out (entered outwards). Prepared by a qualified customs clerk or broker, it is examined by customs authorities for its accuracy and conformity with the tariff and regulations. This bill of entry has to submit by importer to their respective bank. After this, bank will pass bill of entry to RBI and transaction becomes confirmed. (Notice: Bill of entry should be submitted by MDL within 6months in the banks.)
IMPORTANT ISSUES ➢ Country of Origin – Only Iraq prohibited ➢ Import Licence ➢ Credit Report of the Supplier – Reputed credit agencies like DON & BRAD STREET. ➢ Insurance is a must ➢ 7 Days Air / 21 Days for Shipped Cargo for negotiation. ➢ Bill of Lading & clean Bill of Lading ➢ Payment within seven days by Opening Banker. ➢ Discrepancies ➢ High Sea Sales
Mode of payments
There are two types of payments in MDL 1. Letter of Credit payment: Payment made through Letter of Credit is against of delivery of goods. This does not require any approval from RBI.
2. Direct Remittance: Direct remittance can be made for materials as well as services offered by the suppliers. But this is not made through letter of credit. Under this sometimes advance payment or one time payment is also done. But payment above Rs.100000 to suppliers requires approval from RBI. And also there is no question of bill of entry.
Let’s see what is Letter of Credit?????????
A letter of credit is the most commonly used form of secure payment. ❖ It is a document issued by a financial institution at the buyer's request and instructions. ❖ It spells out the terms under which the seller will be paid. ▪ Pay the seller a certain amount when it produces documents according to the instructions.
A letter of credit is the preferred method of payment in trade with areas outside of Western Europe, Canada, and the United States.
❖ Because it offers independent assurance to the both exporter and buyer.
A letter of credit is a critical document, so it is imperative that the seller issue clear guidelines to the buyer on how to open a letter of credit.
Parties to a Letter Of Credit
• Depending on the circumstances, various names used in a letter of credit may refer to the same party.
• The Applicant opens the letter of credit. o The buyer, or customer, is the Applicant. o Sometimes the Applicant is called the account party.
• The Opening Bank issues the letter of credit. o The Opening Bank's credit replaces the buyer's credit.
• The Advising Bank is an agent of the Opening Bank. o Verifies the authenticity of the Opening Bank.
• The Confirming Bank is usually the Advising Bank, but it confirms that the credit exists. o It can negotiate the documents, and can accept the letter of credit the Opening Bank will not pay.
• The Paying Bank is also called the drawing bank. o The Paying Bank may act also the Advising Bank, or the Confirming Bank, or the Opening Bank.
• The Beneficiary is often the seller. o It is party to whom the credit is issued
Types of Letter of Credit:
There are several types of letters of credit. Some of them are……..
▪ Revocable versus Irrevocable ✓ Once an irrevocable letter of credit is open it cannot be changed without the written consent of all parties including the beneficiary. ✓ A revocable letter of credit can be change or withdrawn without notifying the beneficiary.
▪ Confirmed versus Advised ✓ Confirmed is preferred, as the Confirming Bank promises to pay. ✓ Advised does not guarantee the creditworthiness of the Opening Bank.
▪ Straight versus Negotiation ✓ A negotiation letter of credit can be presented to any bank. ✓ A straight letter of credit can only be paid in the country of the Paying Bank.
▪ Sight versus Usance ✓ At sight means the Beneficiary is paid as soon as the Paying Bank has determined that all necessary documents are in order. ✓ Usance time can be between 30 and 180 days after the bill of lading date. • This is a form of delayed payment, and should be avoided.
▪ Standby Letter of Credit Businesses use Standby letters not for the movement of goods but as a guarantee that certain terms in a contract will be met. If the terms outlined in the Standby L/C are violated, then the beneficiary can produce the called upon documentation, and receive the funds specified in the L/C
Process of receiving delivery of goods and making payments
1)
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After a contract is concluded between buyer and seller, buyer's bank supplies a letter of credit to seller.
2)
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Seller consigns the goods to a carrier in exchange for a bill of lading.
3)
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Seller provides bill of lading to bank in exchange for payment. Seller's bank exchanges bill of lading for payment from buyer's bank. Buyer's bank exchanges bill of lading for payment from buyer.
4)
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Buyer provides bill of lading to carrier and takes delivery of goods
Types of currency:
MDL trade in different currencies as per their suppliers from different country while making the payment.
• Dollar • Euro • Pound •
Foreign exchange market
The foreign exchange (currency or forex or FX) market exists wherever one currency is traded for another. It is the largest financial market in the world, and includes trading between large banks, central banks, currency speculators, multinational corporations, governments, and other financial markets and institutions.
Foreign exchange
Exchanging money in one currency for another, traded on foreign exchange markets
Foreign exchange rate
Foreign exchange rate, forex rate or FX rate, represents the number of units of one currency that exchanges for a unit of another. There are two ways to express an exchange rate between two currencies (e.g. the $ and £ [pound]). One can either write $/£ or £/$. These are reciprocals of each other. Thus if E is the $/£ exchange rate and V is the £/$ exchange rate then E = 1/V.
It is important to note that the value of a currency is always given in terms of another currency. Thus the value of a US dollar in terms of British pounds is the £/$ exchange rate. The value of the Japanese yen in terms of dollar is the $/¥ exchange rate.
Currency appreciation - a currency appreciates with respect to another when its value rises in terms of the other. The dollar appreciates with respect to the yen if the ¥/$ exchange rate rises.
Currency depreciation - a currency depreciates with respect to another when its value falls in terms of the other. The dollar depreciates with respect to the yen if the ¥/$ exchange rate falls.
The rate of appreciation (or depreciation) is the percentage change in the value of a currency over some period of time.
Contracts of sale between importers, exporters and local traders for the supply of goods or services, should always specify the currency in which the payment is to be made.
Banks quote prices at which they will buy and sell foreign currency. These prices are based on prices that are quoted in the major wholesale foreign exchange markets and can change constantly throughout the day, depending on market forces.
An importer/buyer who is required to make payment to an exporter in foreign currency (In terms of their contract of sale, and the agreed upon method of payment), will need to purchase foreign currency for the payment of goods or services. The importer/buyer may purchase the foreign currency from a bank, and as the bank is selling the importer/buyer foreign currency, the selling rate of exchange will apply.
Rates of exchange generally quoted, show the amount of units of foreign currency which is the equivalent of to one unit of Indian currency.
Rates of exchange applicable to transactions fall into two categories: • Spot buying rates and spot selling rates of exchange and • Forward buying rates and forward selling rates of exchange
Mazagon Dock Limited is concerned with the selling rates of exchange because they import the materials from foreign suppliers.
Selling rates of exchange
Selling rates of exchange are the prices at which banks will sell foreign currency to its customers to meet their obligations to pay foreign currency to an overseas beneficiary.
When an Indian bank sells foreign currency to a customer, it receives Indian currency immediately in payment, therefore at no time is the bank out of pocket.
Consequently only one selling rate of exchange exists, and it is the telegraphic transfer sell rate.
Determining what type of exchange require
If we are receiving foreign currency, one of the two buying rates of exchange will apply and if you are paying foreign currency, the selling rate of exchange will apply.
How calculation is done
Dividing the foreign currency amount by the exchange rate quoted to arrive at the Indian Rupee equivalent. If we know the Indian Rupee amount and have to convert to foreign currency, multiply an Indian Rupee amount by the exchange rate quoted to arrive at the foreign currency amount.
Example:
▪ Foreign currency divided by rate of exchange = Indian Rupee equivalent ▪ Indian Rupees multiplied by rate of exchange = Foreign currency equivalent Rs.100000 * 0.0174 = 1,741.250244 Euro (Exchange Rate: 1 INR = 0.0174 Euro)
Spot Exchange Rate - the spot exchange rate refers to the exchange rate that prevails on the spot, that is, for trades to take place immediately.
Forward Exchange Rate - the forward exchange rate refers to the rate which appears on a contract to exchange currencies 30, 60, 90 or 180 days in the future.
For example:
MDL might sign a contract with a bank to buy certain materials for rupees 60 days from now at predetermined rate is called the 60-day forward rate. Forward contracts can be used to reduce exchange rate risk.
Forward exchange contracts
A forward foreign exchange contract is an agreement between an Indian bank and customer. The bank agrees to buy from or sell to the customer, a fixed amount in foreign currency on a fixed future date, or during a period expiring on a fixed future date, at the rate of exchange quoted in the agreement.
This agreement may cover exchange risk between a foreign currency and Indian Rupees or between two foreign currencies.
For example suppose an importer of BMWs is expecting a shipment in 60 days. Suppose that upon arrival the importer must pay €1,000,000. The current spot ER is 1.20 $/€ thus if the payment were made today it would cost $1,200,000. Suppose further that the importer is fearful of a $ depreciation. He doesn't currently have the $1,200,000 but expects to earn more than enough in sales over the next two months. If the $ falls in value to, say, 1.3 $/€ in 60 days time, how much would cost the importer in dollars to purchase the BMW shipment?
A. The shipment would still cost €1,000,000. To find out how much this is in dollars multiply €1,000,000 by 1.3 $/€ = $1,300,000.
Note this is $100.000 more for the cars simply because the $ value changed.
One way the importer could protect himself against this potential loss is to purchase a forward contract to buy € for $ in 60 days. The ER on the forward contract will likely be different from the current spot ER. In part its value will reflect market expectations about the degree to which currency values will change in the next two months. Suppose the current 60-day forward ER is 1.25 $/€ reflecting the expectation that the $ value will fall. If the importer purchases a 60-day contract to buy €1,000,000 it will cost him (1,000,000 x 1.25) = $1,250,000. Although this is higher than what it would cost if the exchange were made today, the importer does not have the cash available to make the trade today, and the forward contract would protect the importer from even an even greater $-depreciation.
When the forward ER is such that a forward trade costs more than a spot trade today costs, there is said to be a forward premium. If the reverse were true, such that the forward trade were cheaper than a spot trade then there is a forward discount.
Foreign currency options
Foreign currency options can allow us to take advantage of favourable exchange rate movements while protecting us from the effects of adverse movements.
A foreign currency option enables to buy or sell an amount of foreign currency at an agreed rate for a certain delivery date. They are only available for amounts equal to or in excess of the equivalent of Indian Rupee. If rates move favourably, there is no need to exercise the option. Exchange rate risk can be reduced, or eliminated, for a known upfront cost.
The fee, or 'premium' charged for a currency option varies according to factors such as the strike price, the term, and the volatility of the market.
Fluctuations in exchange rates
A market based exchange rate will change whenever the values of either of the two component currencies change. A currency will tend to become more valuable whenever demand for it is greater than the available supply. It will become less valuable whenever demand is less than available supply (this does not mean people no longer want money, it just means they prefer holding their wealth in some other form, possibly another currency).
Increased demand for a currency is due to either an increased transaction demand for money, or an increased speculative demand for money. The transaction demand for money is highly correlated to the country's level of business activity, gross domestic product (GDP), and employment levels. The more people there are unemployed, the less the public as a whole will spend on goods and services. Central banks typically have little difficulty adjusting the available money supply to accommodate changes in the demand for money due to business transactions.
The speculative demand for money is much harder for a central bank to accommodate but they try to do this by adjusting interest rates. An investor may choose to buy a currency if the return (that is the interest rate) is high enough. The higher a countries interest rates, the greater the demand for that currency. It has been argued that currency speculation can undermine real economic growth, in particular since large currency speculators may deliberately create downward pressure on a currency in order to force that central bank to sell their currency to keep it stable (once this happens, the speculator can buy the currency back from the bank at a lower price, close out their position, and thereby take a profit).
Conclusion
From this analysis concluded that, MDL managing finance properly.
• Treasury section using nice mode of payment like ECS which is easily transfer the money to specific account.
• They also invest more money in short term fixed deposit. This gives them more returns as compared to any other. MDL is earning currently 9% average rate of interest, which is good and also this company is exempt from Income tax.
Recommendations
After analyzing all this, following are the recommendations made to Mazagon Dock Limited: ✓ For making payments, MDL can use RTGS i.e. Real Time Gross Settlement system as well as NEFT i.e. National Electronics Funds Transfer System which is faster than ECS. So this will beneficial to them.
Difference between RTGS & NEFT as follows:
| |RTGS |NEFT |
| | | |
|1. |In RTGS, the transaction is settled on one to one basis |NEFT are electronic fund transfer modes that operate on a |
| |without bunching with any other transaction |deferred net settlement (DNS) basis which settles |
| | |transactions in batches. |
| | | |
|2. |Settlement in “real time” means payment transaction is not|In DNS, the settlement takes place at a particular point of |
| |subjected to any waiting period. |time. |
| | | |
|3. |In RTGS, transactions are processed continuously |NEFT settlement takes place 6 times a day during the week |
| |throughout the RTGS |days. (9.30 am, 10.30 am, 12.00 noon. 1.00 pm, 3.00 pm and |
| |business hours. |4.00 pm) and 3 times during Saturdays (9.30 am, 10.30 am and |
| | |12.00 noon) |
| |The RTGS service window for customer's transactions is | |
| |available from 9.00 hours to 15.00 hours on week days and | |
| |from 9.00 hours to 12.00 noon on Saturdays. | |
| | | |
|4. |The RTGS system is primarily for large value transactions.|No minimum or maximum stipulation has been fixed for NEFT |
| | |transactions. Here MDL also pay amount less than 1 lakh |
| |The minimum amount to be remitted through RTGS is Rs.1 |through this system |
| |lakh. & Maximum is no limit. | |
From this, MDL can use both systems according to amount they have to pay.
✓ MDL can invest some part of money in Mutual Funds, Call money markets, and Treasury Bills.
✓ MDL making payments to foreign suppliers as per spot exchange rate. They can do in Forward exchange rate also.
Bibliography
o www.google.com o www.wikipedia.com o www.mdlindia.com o A book on options, Futures and other Derivatives by John C. Hull (Fifth Edition) o www.investopedia.com
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CM (F),
DM (F)
DM (F)
DGM (F.P BILLS)
CM (F)
DM (PAY ROLL)
DM (TR.)
AGM (F.P)
CM (F)
CM (F)
CM (TR.)
DM (F)
CM (PAY ROLL)
CM (F)
CORD
DM (P&I)
GGM (F)
GM (F.P)
AGM (C&B)
GM (F&A)
DIRECTOR FINANCE
COMMERCIAL DEPARTMENT
Bill comes from outside party
This dept verifies the bill
BILL PASSING SECTION (BPS)
Verifies the bills (small amount of bills)
TREASURY SECTION
Verify by the cash officer
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Makes the payment (through Cash, Cheque, & ECS) i.e. Mode of payment
CASH
CHEQUE
ECS
MODE OF PAYMENT
Contd..
CASH
Treasury section receives the petty cash voucher duly signed & authorized.
Officer will record the entries in the system.
Cashier makes the cash payment
(Cash payment limit as per MDL is upto Rs. 20000)
CHEQUE MDL has total 11 bank accounts. Payments made depending upon amount or nature of transaction as per various banks
Eg.
If MDL wants to make payment of Rs.10 lakhs through SBI account, MDL system automatically print the code of specific bank based on the value of the cheque.
ECS Bill passing section( BPS) records all the information in system as per filled by vendors in form
(Treasury section cannot alter this information)
The banks are provided with a list of parties, account numbers and amount to be credited to their accounts by the concerned department
MDL gives intimation to Bank (SBI or HDFC bank) to make payment through ECS to respective bank.
(All ECS payments made after 3.30 p.m)
Seller’s Bank
Buyer’s Bank
Seller
Buyer
Carrier
Seller’s Bank
Buyer’s Bank
Seller
Buyer
Carrier
Seller’s Bank
Buyer’s Bank
Seller
Buyer
Carrier
Seller’s Bank
Buyer’s Bank
Seller
Buyer
Carrier 