For the fulfillment of course MBA program at the faculty of Asian University Of Bangladesh students have to go through an internship program to obtain knowledge about valuable aspects of management practice. In specific term the purposes of internship program are as follows:

How to handle Export Document Formalities for 100% Export Oriented Fabrics. Identifying the difference between theory and practice of Finance & Accounting  Co-ordination between theory and practices the students work closely with the organization and with the people or institutions that are closely associated with the organizations’ operation. At the end of the program, the internees are required to place the accomplishments and findings of the project through the writing of the internship report covering the relevant topics. During this program, two supervisors guide each student – one from the university and the other from the organization.

 In this respect we obtained ourselves with SIM Fabrics Ltd. have been assigned to do an internship program on Export Document Formalities for 100% Export Oriented Fabrics and Fabrics Finance & Accounting  of textile in SIM Fabrics Ltd. of companies.

Executive Summery

It is very much important to coincide the academic knowledge with the practical one. Kipping this view in mind, Department of MBA, Asian University of Bangladesh makes proper arrangements of practical orientation (Internship) in every semester for the students. This is because the academic knowledge is not sufficient to match with the real life situation. After completion of MBA program I was placed in the SIM Fabrics Ltd. for my internship program to make my academic knowledge fulfill and effective. I was placed there to have a practical working experience and have an understanding of the real life with a closer look. The prime objectives of Internship program are to introduce the learners with the practical organizational environment. So they can turn themselves for the jobs in future and can get an opportunity to reflect their theoretical learning with real life situation. In my Internship with SIM Fabrics Ltd. I worked with the activities of “Export Document Formalities for 100% Export Oriented Fabrics”.

Production of 100% Export Oriented Fabrics (RMG) has been one of the most important sectors of Bangladesh economy. Employing about 4 Thousand workers or one third of the industrial labor forces. Bangladesh is successful; in translating its comparative advantage of abundant cheap labor in the lower price for goods. And thanks to private sector entrepreneurship and financial incentives from government, the sector saw robust growth in recent years.

Bangladesh’s apparels sector has also, until now, substantially from the quota system under the Multi Fiber Agreement (MFA), which have shaped the global garments trade over the last three decades. They imposed limits offered protection to domestic industries in the importing countries; meanwhile, exporting countries were able create their own niche markets, since competitors were also restrained by quotas. This system allowed Bangladesh, along with a number of developing and least developed countries, to enjoy relatively secured market access in major apparels importing countries such as the US, the EU, and Canada. The favorable quota regime under the MFA enabled Bangladesh to gradually expand its export of apparels from US $320 million in 1990 to US $3.7 billion in 2004. In the US market, an expanding quota (quotas were increased yearly when countries succeeded in fulfilling them) allowed Bangladesh to enhance its market share.

All this is set to change after July1, 2004 as a consequence of the final MFA phase-out dictated by the Agreement on Woven and Clothing, an integral part of World Trade Organization (WTO) rules governing the industry. For countries like Bangladesh, whose apparels industries have only gradually attained a strong foothold in major developed country markets, the environment is set to under go drastic charges. The phase out means that entrepreneurs will also be unshackled from quota restraint, granting them potential to increase their exports in sectors where they have revealed competitive strength. Countries may also be able to enter into market segments where they had not previously been able to compete.

                                   

TABLE OF CONTENT

Chapter	Particulars	Page-No.
Chapter-1	OBJECTIVES OF INTERNSHIP PROGRAM      METHODOLOGY      LIMITATIONS	1-2
Chapter-2	ROLE OF BGMEA IN SOCIO-ECONOMIC       DEVELOPMENT OF BANGLADESH      BACKGROUND AND       ECONOMIC CONTRIBUTION OF RMG      WOVEN  SECTOR OF BANGLADESH OFFERS   BEST INVESTMENT OPPORTUNITITY IN SOUTH   ASIA	3-11
Chapter-3	HISTORY OF KAYANAT LIMITED      MISSION, VISION, FOCUS AND OBJECTIVES      OVERVIEW OF THE KAYANAT LIMITED      PERFORMANCEP OF THE KAYANAT LIMITED      UNITIES  OF KAYANAT LIMITED	12-23
Chapter-4	ICC UNIFORM CUSTOMS AND PRACTICRE FOR DOCUMENTAEY CREDITS (ICC PUBLICATION N5000)      EXPORT PROCEDURE ANDL/C PROCEDURE OF  RMG	23-52
	CONCLUSION      Bibliography	58

   OBJECTIVES OF INTERNSHIP PROGRAM

   METHODOLOGY

   LIMITATIONS

OBJECTIVES OF INTERNSHIP PROGRAM

The main objective of the internship program is to fulfill the academic requirement of the MBA in finance degree as well as to gather practical knowledge, which will help us to face challenges in our future business career. In addition to the principal objective, the following are some of the common but significant objectives of the internship program are as follows:

      To study the history of the, SIM Fabrics Ltd.

      To observe the work of Finance Department.

      To know about the work of Export Document Formalities for 100% Export Oriented Fabrics.

METHODOLOGY

In conducting the study and preparing this paper I gathered most of the information and views on shipping from persons who are working in this sector. I discussed and exchanged views with the Deputy General Manager department of Finance, SIM Fabrics Ltd.. I also met and discussed with some other entrepreneurs doing business in garments. I gathered most of the data, statistics and other information from the Finance and Commercial Department of, SIM Fabrics Ltd. and BGMEA also.  Besides these, I have tried to utilize the experience and knowledge during my completing internship program in, SIM Fabrics Ltd..

LIMITATIONS

My efforts enable me to make the report informative, analytical and comprehensive. To accomplish that program we faced such problems

The prime limitation to this study was that the respective personnel of the company are so much busy that having an interview with them was a tough matter. Also the personnel

Interviewed are unable to provide all the information needed of their administrative restriction.

                      

   ROLE OF BGMEA IN SOCIO-ECONOMIC

DEVELOPMENT OF BANGLADESH

   BACKGROUND AND

ECONOMIC CONTRIBUTION OF RMG

   WOVEN  SECTOR OF BANGLADESH

OFFERS

  BEST INVESTMENT OPPORTUNITITY IN SOUTH

  ASIA

  

ROLE OF BGMEA IN SOCIO-ECONOMIC DEVELOPMENT

OF BANGLADESH

Export earning:

The member organization of BGMEA contributes over 75 percent of total export earning of the country.

Employment:

The sector has directly employed over 1.8 million workers, 80% of them are women

Women empowerment:

The sector has been immediately helping empowerment of a vast section of the country’s less privileged women.

Big consumer market:

A huge local consumer market has emerged following increased of buying capacity of the work force employed by the RMG sector.

Development of allied sector:

To meet the requirement of the ever expanding garment sector, the country’s banking; insurance, packaging, allied industries like textile, accessories, thread,  transport and the port have been gifted with extra volume of business.    

Poverty reduction:

In fact, Bangladesh’s garment sector has been feeding an estimated eight million people including dependents of workers and employees with another 4 Thousand working in the allied sectors. Thus the RMG sector has been playing a crucial role in poverty reduction of the country by employing a huge manpower.

BACKGROUND AND ECONOMIC CONTRIBUTION OF RMG

The Fastest Growing Export Sector of the Country:

Starting in late seventies, the apparel industry of Bangladesh now accounts for over 64% of the country's total export earning. Country's apparel export rose to US$2628 million in 1996 from a mere US$6 million in 1981. To about 30 countries around the world, Bangladesh presently exports ready-made garments, with over 45% to USA, 50% to the countries in EU and 3% to Canada and rest to the other countries of the world. Country's apparel export has been growing on an average at the rate of 25% for last Several years. The country, last year ranked 6th largest apparel exporter to the USA the EU.

Bangladesh Garment Export

Figure-2.1

There are about 2500 export oriented ready-made garment industry in Bangladesh those are clustered over mainly Dhaka and Chittagong. Such distribution offers buyers advantage to choose the right manufacturers and exporters, throughout the year, with minimum effort.

Garment Factory in Bangladesh

The Ready Made Garment (RMG) sector is the backbone of the Bangladesh Economy. The RMG sector is now the single largest foreign exchange earner of the country, earning 76% of the foreign exchange earnings. In the last year only Bangladesh earned US$ 5.6 billion dollars in foreign currency through export of garments. The RMG industries have created direct employment opportunities for millions of women who would have otherwise remained unemployment.

One of the crucial developments in the global trade of apparel has been the removal of quotas in the U.S with effect from 31^st December 2011. The system of quotas which protected Bangladesh has come to an end. As a result, Bangladesh will now have to compete with other countries on price, quantity and delivery time on an equal footing. The effect has already been felt with the

Emergence of giant China, which at present meets more than 20% of the global demand of apparel. Next in queue is India. The question of the day is those big players going to push out countries like Bangladesh.

The scenario has been further complicated with the emergence of bilateral agreements between the U.S and individual countries. As a result, the removal of quotas, which was meant to create a level playing field of competition, is not proceeding consistently. This has added to the challenge faced by the Bangladeshi RMG sector. An immediate response to the post MFA condition is for Bangladesh to be at per with neighboring countries in meeting not only quality and labor standards but also in reducing lead-time and offering competitive prices. Thus Bangladesh garments sector has to overcome quite a few obstacles to be competitive in the open market economy. 

The RMG sector of Bangladesh has been functioning in a difficult environment with bureaucratic and political obstacles often coming in between the country’s perspective and the clients demand. Lengthy bureaucratic process, political strikes and unfavorable protectionism poses a challenge to the sector. Dilemma of government policy often weakens the competitive edge of the sector. For instance, to protect local textile manufacturers embargos have been imposed on the import of fabric across land forcing the sector to procure fabric either locally at higher prices or import fabric through air and seaports at higher cost for freight, both of which increases the overall price of the garments manufactured. The demand for the central bonded warehouse for the RMG sector to achieve the global lead-time standard is yet to be conceded by the Government. Without the support of the Government to address these issues, entrepreneurs are finding it difficult to achieve further efficiency in lead-time and price, which is crucial for competing in the free market economy. Bangladesh has a proven track record of being dependable as far as quality is concerned. Hence it has potential to grow in the post MFA regime so long as it can remain competitive. Failure to maintain competitiveness may result in a decline in exports with the loss of millions of jobs of garments worker. Immediately after phasing out of MFA Bangladesh faced a decline in export in January 2005 through this has risen again in February 2005. It is anticipated that Bangladesh will not face any difficulties in the current fiscal year. However, whether Bangladesh is continue to maintain orders in the coming years would depends on the price they can offer and the time within which they can deliver. By establishing backward linkage in appropriate terms GSP facilities can be tapped at the optimum. How the Bangladesh RMG sector responds to the emerging challenges would depend on the following:

1. complying with national labor laws and ILO standards;
2. Ensuring good working conditions and establishing social dialogue to increase productivity;
3. Removing the present inefficiencies such as lengthy lead-time;
4. Relentless efforts to offer competitive price while not negotiating with the quality and labor standards; and
5. Identifying the post MFA implications and taking measures to handle it.

In achieving the above the Bangladeshi RMG entrepreneurs need to work in many fronts. The entrepreneurs independently and through the Bangladesh employer’s organization are already making efforts in dialoguing with the Government to reduce and remove the bureaucratic and political obstacle that increase lead-time and to reduce the effect of protectionism emanated from the policy measures of the Government towards certain sub-sectors. This report intends to present the condition of the RMG factories in terms of workers wages, benefits, capital investment and other parameters.

This report focuses on how far ILO’s decent work standards are being followed. The present level of social dialogue undertaken in the factories, the strategies and designs adopted by factories to face the impact of MFA phase out, and the role of the employers organizations in facing the challenge after 2011. In addition a short review of the future of the RMG sector will be presented here.     

List of table of economic contribution are as follows-

Textiles Sector of Bangladesh Offers Best Investment Opportunity in South Asia:

After Liberation when country's traditional items of export could not yield expected result, in late 70s the government and a section of entrepreneurs - young, educated and dynamic, began to emphasize on development of non-traditional items of export. By the year 1983, Ready-Made-Garment (RMG) emerged to be a non-traditional export oriented sector most promising in the socioeconomic context of the country. By that time, those entrepreneurs felt a necessity of sector wise trade body, non-government in nature, free from traditional bureaucracy, to help the RMG sector and to boost up the foreign exchange earnings of the country urgently needed at that time. Responding to that necessity, 19 (Nineteen) RMG manufacturers and exporters joined together and by their untiring efforts got Bangladesh Garment Manufacturers and Exporters Association (BGMEA) incorporated on February 20, 1983, Today 2400 small and medium scale privately owned garment factories, registered with BGMEA, spread in cluster over the EPZ and urban areas of Dhaka, Chittagong and Khulna, are manufacturing ready-made garments of varied specifications as per size and designs stipulated by the overseas buyers. Starting with a few items, the entrepreneurs in the RMG sector have widely diversified the product base ranging from ordinary shirt, T-shirt, trousers, shorts, pajama, ladies wear and children's wear to sophisticated high value items like quality suits, branded jeans items, jackets-both cotton and leather, Woven, embroidered wear etc.

Fetching only US $ 6.4 million in 1981, garment sector of the country has now become an over 2.5-billion-dollar-foreign-exchange-earner, enjoying the status of 5th largest garment exporter and largest shirt and T-shirt exporter to the EU and 6th largest apparel exporter to USA. Bangladesh now exports ready-made garments to as many as 30 countries of the world with EU as the major importer, followed by USA, the largest importing country.

Besides accounting for 66% of Bangladesh's total export earning in 1995, this sector is employing about 1.2 million people of whom 90% are women. Ancillary industries producing cartons, poly-bags, woven labels, buttons, sewing thread, strapping band, gum tape etc. have emerged in large number with the growth of the sector. The RMG industry has helped the growth of the sectors like banking, insurance, shipping, hotel, tourism, road, transportation and railway container services etc. The sector in which the RMG has helped created the maximum prospect in the country in the textile sector - supply source of mother raw-material of RMG sector.

During the industry's early days in late 70s, RMG producers and exporters had to import all fabrics and accessories. Through the passage of about one and a half decade, today the situation has changed a lot. In 1995, RMG industry of the country used local accessories around 70% of the total accessory requirement of the industry. Presently, around 80% of required accessories like elastic, collar band, price ticket, metal clip, zipper, plastic clip, cellophane tape, carton, hangers etc. are being supplied from local sources. Local supply of other accessories is also increasing regularly. It can also be noted that we never can look forward to having supplies of all trimming materials from within the country because sometimes the producers have to import some accessories, according to buyers' preference, from some specific foreign suppliers. Dishonoring such conditions may cause losing valuable buyers. Considering this point, a size of local accessory industry capable to meet around 90% of the total demand is good enough to support smooth development of the RMG industry. That means, in accessory industry, we are not long way off. Both foreign and local capitals are invested in the accessory industry.

But, though the CMT (Cutting, Making and Trimming) basis apparel sector has created an export oriented captive market for over 2.5 billion yards of fabrics per year which is increasing by not less than 20% each year, textile sector, rather capital intensive one, requires foreign capital to flourish to successfully match the fabric requirement of the export oriented RMG sector of the country.

If classified into knit and woven categories only, the story of knit fabric is far better than of the other. In 1995, the industry imported 86% of its total required fabrics from countries like China, India, Hong Kong, Singapore, Thailand, Korea, Indonesia, Taiwan, etc. Out of the total fabric requirement of the industry, usually around 16% is constituted by the knit fabrics. Presently around 96% of the total requirement of woven fabrics and around 35% of the total requirement of knit fabrics are imported by the export oriented RMG industry.

It is not that fabrics are not produced in the country enough for the industry rather the quantity of locally produced fabrics, conforming to the choice of the buyers in the global market, is very negligible. In 1995, out of the local fabrics used in the industry, 4 million meters of Grameen Check (GC), a recently developed locally produced handloom fabric, were used. Statistics show that presently the textile industry of the country is developing in a way that earth two-year around 230 million yards of fabrics are being produced as additional.

With WTO already installed and MFA in transition to be completely phased out by 2011, the manufacturers and exporters of RMG in Bangladesh are awaiting to compete in a greater context in the global apparel market. Country's talented entrepreneurs in the RMG industry have achieved the highest growth rate during last several years, compared to other industrial sectors, though almost 96% of woven and 35% of knit fabrics are presently being imported from abroad. Countries, where production cost, if properly engineered, is far below its competitors' for their natural endowment in supply of easily trainable huge work force, will offer maximum benefits to the customers. Moreover, if those countries enjoy sound local textile supply sources, they will do far better.

An extensive programmed of incentives, to expedite investment in the country, are row in place covering " No Ceiling for investment" Tax holiday up to 10 years "Tax-exemption and duty-free importation of capital machinery and spare parts for 100% export oriented industries" Residency permits for foreign nationals including citizenship "Easy capital profit and dividend repatriation facilities" Double taxation avoidance "Tax-exemption on the interest payable on foreign loans" Taka convertible on current account etc.

The country enjoys Most Favored Nation status and has signed bilateral trade and investment treaties with 16 countries in North America, Asia and Europe. Investors can also take advantage of the generalized-system of preference (GSP) which allows duty-free access to the European Markets. Since 1990, the Government has embarked on a highly successful macroeconomic, stabilization programme with balance of payments much improved, foreign exchange reserves and export earnings increased. Transparent investment protection law is perhaps in the country's best attraction for investors in its open-door investment policy. The country has a very liberal investment climate. For instance, it takes just three days for a foreign investment registration and there is no discrimination between foreign and local private investors. Hundred percent foreign investment as well as joint ventures with local partners is allowed. Especially for the textile sector, as additional to the said facilities, policy for 25% export incentives has been introduced to encourage the use of local fabrics in the export oriented garment industry. With the possibility of further reduction in future, duty on cotton yarn has been reduced from 15% to 7.5%, on Woven spares from 30% to 15% and on dyes from 60% to 30%. Raw cotton import is now duty-free. Foreign investment is particularly welcome in our export-oriented textile industry.

The 51 million work force of the country is easily trainable. The price of labor is competitive compared to our neighboring countries, countries in South-East Asia and Eastern Europe. The work force in one of the main advantages that Bangladesh is enjoying and will continue to enjoy over a considerable span of time in the context of international trade. Werner International has the comparative hourly wage rate in textile for 1993 that shows that average rate for Bangladesh is most cost-effective among India, Pakistan, Sri Lanka, Indonesia. The Philippines, Singapore, Thailand, China, Hong Kong, Japan, Korea and Taiwan. So, Bangladesh enjoys and advantage in this respect.

A new generator of entrepreneurs has emerged in the country, especially with the development of RMG, who are competent enough to shoulder the burden for mid and upper-mid level management and are experienced in textile industry. Now, in Bangladesh, organizations are recruiting more people with technical and professional education than ever before. Therefore, scope of professional education has expanded. Over 0.2 million students of Bangladesh are studying abroad with majority in USA. Local universities and other private institutions are also offering different professional and technical courses. These students, studying at home and abroad make up the pool of prospective technical and professional talent who will drive the economic growth of the country.

I profoundly believe that the present rate of development in the overall textile sector in the country will continue and the country will cross US dollar 4 billion before 2011 in exporting RMG. If greater foreign investment takes place in the export oriented textile industry, situation will be far better no doubt. As the formation of local capital is very negligible as compared to the requirement in the Export oriented textile sector, foreign investors are most welcome to come up and weigh the prospects awaiting for them in our textile sector.

  

   HISTORY OF SHOAIB APPARELS LIMITED

   MISSION, VISION, FOCUS AND OBJECTIVES

   OVERVIEW OF THE SHOAIB APPARELS LIMITED

   PERFORMANCEP OF THE  SHOAIB APPARELS LIMITED

   UNITIES  OF SHOAIB APPARELS LIMITED

 

History of SIM Fabrics Ltd.

Mr. Shoaib Apparels Ltd. formed Capital Garments Ltd., a 100% export oriented garments industry. He became a rising entrepreneur by virtue of his dynamic foresight.
Md. Muktar Hossen SHOAIB APPARELS LTD. started his business at the age of thirty (30).In the early stages, established ten more projects within a decade. By the start of the 2005s he had became one of the leading manufacturer and exporter of readymade garments. The companies within his control became today's Shoaib Apparels Ltd. Industries Limited. With a view to develop garment's backward linkage industries, Mr. SHOAIB APPARELS LTD. invested heavily in polar fleece fabric knit composite, group success, its total manpower including headquarter management personnel stands around 8000.Neverthless, as Shoaib Apparels Ltd. Industries Limited’s strength and reputation grew, Mr. SHOAIB APPARELS LTD. became a Director of Bangladesh Garments Manufacturers and Exporter’s Association (BGMEA).The Government of People's Republic of Bangladesh accorded him CIP (Commercially Important Person) status.

In 2005, Mr.SHOAIB APPARELS LTD. established  and thereby entered in the field of manufacturing various types of Shirt, Pants. Trouser, jacket

Mission, Vision, Focus and Objectives

Mission:                                                                                                                    

Each of our mission activities must benefit and add value to the common wealth of our society. We firmly believe that in the final analysis we are accountable to each of the constituents with whom we interact; namely our employees, our customers, our business associates, our fellow citizens and our shareholders.

Vision:

 Building a true Finance & Accounting  led enterprise with motivated work force, innovative vision, and strong revenue based product portfolio, customer satisfaction and understanding of global market.

Characteristics: Countless hour of effort on the part of our employee & associates, late nights and a determination to get it right is the main characteristics of ShoaibApparels Limited.

Focus:

Shoaib Apparels Ltd focuses on relationship with interacting segments.

Objectives:

Plan for long – term perspective and design our policy for clarity, responsibility and accountability.

Overview of the SIM Fabrics Ltd.

SIM Fabrics Ltd as a group is playing the key role in developing the economy of Bangladesh. It is serving in almost all the sectors of Bangladesh. SIM Fabrics Ltd is one of the major contributors in building the group’s reputation. Besides it has several Ltds to build the country’s economy.

Performance of the SIM Fabrics Ltd.

SIM Fabrics Ltd. is the most diversified and one of the private owned business conglomerates in Bangladesh. Today a distinct image has been established in the eyes of common people of the country about the SIM Fabrics regional presence. By entering into different industrial and trading sectors it has been emerged as one of the most diversified group in the country. Its policy of responsible investments, acquisition and application of the latest and best technology is aimed at producing world class products. Therefore it takes the challenging path of diversifying into export oriented and imports substitution industries in different sectors. Most of the companies of this group also expanded the capacity of production and services with the increasing demand and business potentiality.

The collective efforts and business commitment of the employees of the organization towards organization goals and objectives made possible to achieve the present prestigious and remarkable status. The mission of the group states the desire of benefit and adds value to the common wealth of the nation. Its primary aim is to meet the demand of employees, customers, business associates, shareholders and fellow citizens. The growth of the group indicates the effectiveness of the deliberate strategies to achieve the goals.

                              SIM Fabrics Ltd.                                          ISO 9001:2000 & Oeko-Tex Standard 100 CERTIFIED COMPANY

 PRODUCTS

Category	Product Details
Textile	Polar Fleece Micro Fleece C.V.C. Fleece Bonded Fleece Taffeta (Nylon, Polyester) Polyester Microfibre
Garments	Jacket Jog Suit Cargo Shorts Cargo Long Plant W/Breaker Long Pant Swimming Trunk

SIM Fabrics Ltd.

SIM Fabrics Ltd.  has been started in 2001 with a single unit SIM Fabrics Ltd. After the completion of successful is decade, in June 1995 BGD has started their second unit Shoaib Apparels Ltd, .  After shorter duration 3^rd & 4^th S.S Textile, Authentic Color Ltd. are established.

Bangladesh have come a long way since its independence. It has improved key social indicators and the well being of its people. The SIM Fabrics Ltd. of companies has  an integral part of this progress. SIM Fabrics Ltd. philosophy is simple: In identifying opportunities, it has targeted those industries, which the country needs most in order to progress and to improve living standards. SIM Fabrics Ltd. is also focused on those industries, which make the most of Bangladesh's competitive advantages in the international market.

As a result of this philosophy, the SIM Fabrics Ltd. is today Bangladesh's largest private sector industrial conglomerate. In the course of its growth, it has created industrial and management capabilities that will serve the country for generations to come. SIM Fabrics Ltd. industrial businesses include Woven, Woven, Shoaib Apparels Ltd and also Authentic Color Ltd.

SIM Fabrics Ltd. has invested in modern machinery and coupled this with superior technical expertise to ensure excellent quality in each of the 25,000 dress and casual shirts, 15,000 knit tops and 12,000 jeans and woven bottoms produced daily.

The SIM Fabrics Ltd.   formula for success is to maximize the inexpensive skilled labour with management from high tech perspective. Industrial engineering and work study play an important role with software such as GSD & FMS used for data driven production management to maximize efficiency. The organization is managed by a group of top their professionals specifically hired for their expertise in the various aspects of garment production process. Regular training updates and technical inputs from visiting professionals and consultants equip all SIM Fabrics Ltd.  employees to excel in their areas and ensure top-notch product quality; value and service are received by business partners.

SHOAIB APPARELS LTD WOVEN

Following robust growths of 2005, world textile & apparel trade slumped in 2006, due to economic slowdown in USA and EU from the beginning of the year. The situation aggravated in the latter part of the year due to September 11 terrorist attacks on USA. Apparel export from Bangladesh to these very important markets was hurt badly. During the January-December period of 2006, Export of RMG and Knitwear of Bangladesh was USD 1,162 million and USD 1,033 million respectively while the target for the period was USD 3500 million and USD 1590 respectively. This means the combined export of apparel fell 2.7% short from the target. During the same period of the previous year, export of RMG and WOVEN was USD 1375 million and USD 949 million respectively. In other words apparel export in 2006 was 2.75% smaller than the export of 2006.  Apart from the sluggish demand the fall is attributable to the ‘U.S Trade and Development Act of 2010”. This has had the effect of diverting US buyers away from Bangladesh in favor of suppliers in SSA (Sub-Saharan Africa) and CBI (Caribbean Basin Initiative) countries. In Europe some orders, which had previously gone to Bangladesh, was diverted to Pakistan, after Pakistan had been granted duly free access. In addition to removing all tariffs on clothing, EU increased Quotas for Pakistani Woven & clothing by 15%.

Demand for export quality yarn reminded depressed since the beginning of the year and the situation got worse sub-sequent to September 11. In addition, Bangladeshi yarn lost its appeal somewhat to its customers, i.e. the export oriented weavers and Knitters, as disbursement of cash assistance by the Government was suspended for a prolonged time period. Faced with cash flow problems, our customers opted more and more for imported yarns especially of Indian spinners was further enhanced when the RESERVE BANK OF INDIA slashed interest rates for export credit by half a percentage point to 1% across the board. One should note that these rates had been highly competitive internationally even before this latest cut in September 2006.

To retain market share, local spinners including Niagara Woven had to give price concessions to the customers. As a result, Profitability of your company was affected despite higher production and sales. Profitability also suffered due to the fact that cost of raw-material particularly cotton was higher in 2006.

.

On-site employee housing, subsidized meals, free transportation, onsite sports and recreational facilities ensure comfort, easy access to work and a happy and productive workforce.

      Supervisors and foreign technicians live on site to provide 24-hour coverage.

      SIM Fabrics Ltd. contributes generously to the UN and other local agencies to rehabilitate child workers.

      SIM Fabrics Ltd. invests in the intellectual capital through scholarships for Bangladeshi students at universities in Europe and Asia.

Establishment and development of BGD:

          The Establishment and development of BGD can be shown in the following flow chart

BGD

 

                             BAL                                                   BFSL

                                                                                      ( Shirt)

                                                                                       

Bal-1,2  ( Shirt)     Bal- 3(woven)           Bal4(Bottom)

Expansion:

The Niagara Fashions Limited has been established in June 1995. The day by day expansion of BFSL can easily be accessible by the following graph.

TABLE

Year	Turn Over (million in Tk)
2006	15.31
2007	35.36
2008	49.54
2009	65.30
2010	102.00
2011		175.15

Profile of SIM Fabrics Ltd.tile  Limited:

Textile is the most integrated and emerging Ltd among all the Ltds of SIM Fabrics Ltd. The economical and plentiful labor allows Bangladesh to enjoy comparative advantage in labor intensive sector like textile. SIM Fabrics  has taken this positive aspect of Bangladesh and employed highest technology to produce quality textile and garments product. SIM Fabrics Ltd. policy of responsible investments and acquisition, and application of the latest and best technology is aimed at producing world class products.

Overview of SIM Fabrics Ltd. Limited.

SIM Fabrics Ltd.  is the Woven   Ltd’s flagship company. Established through a technology partnership with Total Project Management, a wholly owned subsidiary of Coats Viyella plc, it is one of the most modern and technologically advanced mills in all of South East Asia.

This mill uses only state-of-the-art, brand new equipment from the world’s leading suppliers to create its fabrics, and has coupled that with the highest caliber of technological support—expatriate staff to operate the machines alongside local staff trained at suppliers’ plants.

The unit is equipped to produce medium and fine quality shirting, including yarn dyads and dobbins, plus light twills and drills in cotton and blends. Current capacity is 80,000 meters a day of weaving and in excess of 100,000 meters per day of processing.

SIM Fabrics Ltd.    changing the perception of working with Bangladesh:

One of the major hindrances in working with the foreign investor or client is the problem regarding the infrastructure facility of Bangladesh. SIM Fabrics Ltd.   has managed to remove this obstacle with its performance regarding the infrastructure facility.

The Shoaib Apparels ltd factory is operational 350 days a year—the company has gone to vast lengths to ensure its smooth running by investing in its own in-house power supply, infrastructure and an in-house telecommunications link to the rest of the world.

Nothing has been overlooked:

      It has in-house power generation capacity is 09 megawatts.

      Roads leading to the complex have been built by and are maintained by

SIM Fabrics Ltd.

      Tube wells ensure an abundant flow of water.

      On-site employee housing provides comfort and easy access to work, and

            Promotes better work performance.

      Supervisors and foreign technicians live on-site to provide 24 hour coverage.

      On-site sports and recreational facilities are provided.

Private telecommunications system is linked overseas buyers to corporate headquarters in Dhaka and the SIM Fabrics Woven industrial complex via a satellite link through Singapore.

      Totally integrated manufacturing software is being installed to give customers on-line access, through the V-SAT link, to every stage of production planning and processing.

SIM Fabrics Ltd. has also changed the perception of fabric and apparel manufacturing in Bangladesh. Shoaib Apparels Ltd initially comprised a garment factory established in 2005 to produce men and women’s light outerwear for export. Spinning mill producing cotton, synthetic and blended yarns was added in 1999, as was a polyester filament yarn plant two years later.

Recent years have seen large investment in Niagara Fashions Ltd, culminating in the development of the largest, most advanced composite weaving, knitting, dyeing, finishing and processing plants in the country.

Situated 40 miles outside the capital city of Dhaka in a green, river-fed area called Saver is a beautifully landscaped area spread over 40 acres, some 35 of which house the Shoaib Apparels Ltd, including SIM Fabrics Ltd.tiles Ltd. (an integrated spinning mill), S.S.Textile., Authentic Color Ltd. An apparel-manufacturing unit for  woven bottoms,  is located only minutes away at the Rupgong, Narayangong.

Nothing has been left to chance... state-of-the-art machinery; staff trained abroad by the machine manufacturers; specialized technicians from Europe. Asia and the Americas to supervise production;, one of the best technology consultants in the business as technology transfer partner.

Background of BFL

BFL is currently the largest and technically most advanced textile manufacturer of the country producing minimum and high quality fabrics for 100% export-oriented ready-made garments industry of Bangladesh and also outside the country. It is the highest investment project in textile Ltd and third highest among all the subsidiary companies of the group. To adjust with the ever-expanding demand of raw materials of garments sector, textile Ltd is concentrating on expansion of the existing projects.

Every year Bangladesh lose huge amount of foreign currency through importing fabrics, accessories etc. from abroad for garments sector. The amount is almost 70% to 75 % of total income from this sector, which means only 25 % or less (as cutting and making charges) of total export of garment sector contributes to national income. Until recent years the aggregate demand of fabrics for export oriented garments industry would be fulfilled by importing from abroad. One of the reasons is that the local textile manufacturer could not meet the required quality and

Specifications given by the end buyer. The textile complex of SIM Fabrics Ltd. has been established as a part of backward linkage feeding the burgeoning RMG sector of the country. The RMG sector, through 1980’s and 1990’s has emerged to be the largest foreign currency earning industry. But its part of value addition to the exported apparel is not significant. To increase the value addition to the exported apparel and thus earn a larger share of the world apparel market, a backward linkage industry is necessary. BFSL was primarily established as an import substitute company to meet the demand for the medium and high quality fabrics of highly successful garments industry of Bangladesh.

BFSL is the new flagship of textile  Ltd, a state-of-the-art weaving, dyeing and finishing mill with a capacity of 1,00,000 yards per day and a weaving capacity of 40000 yards per day. The company was incorporated on March 2002 and started commercial operation in mid ’95. The shareholders of the company are Shoaib ApparelsLimited, foreign investors namely CDC, DEG, AFIC and public (including ICB unit mutual fund) with equity perception of 50%, 15%, 10%, 4.55% and 20.45% respectively. Foreign participation in equity is 29.55%.

SWOT Analysis of SIM Fabrics Ltd. Limited.

Strength

1. Efficient workforce to implement the task where there is a combination of experienced people
2. The reputation off the parent company
3. Strong Liquidity and financial condition of the parent company.
4. Financial and other support when needed from the parent company.
5. A good number of fixed buyers
6. Efficient and dynamic Finance & Accounting  department.
7. Enjoying highest facilities in every respect that is possible in Bangladesh
8. Branch offices in main exporting countries results good flow of order all the time.
9. Most of the Raw Material comes from their different sectors of the parent company.

Weakness                                                      

1. Working Process of various department of the same task are not always the same.
2. Lack of speedy coordination among Finance & Accounting  Department, Sourcing Department And Finance & Accounting Department
3. Sometimes no consistency is not found in the information.
4. Absence of proper job description indicating specific responsibilities.

Opportunity

1. BTL will enjoy flow of export order in the posterior of MFA  Facilities
2. Enjoys various facilities as it is one of the biggest Garments factories in the country and contribute much for the export of 100% Export Oriented Fabrics.
3. BTL has enjoyed the credit facilities from the Nationalized and Foreign Banks.

Threats

1.      Global economic situation may hamper the financial growth of BTL.

2.      Nonpayment of loan of the financial institutions may effect the goodwill of the company.

   ICC UNIFORM CUSTOMS AND PRACTICRE

FOR DOCUMENTAEY CREDITS (ICC

PUBLICATION N5000)

   EXPORT PROCEDURE ANDL/C PROCEDURE OF  RMG

ICC UNIFORM CUSTOMS AND PRACTICRE FOR DOCUMENTAEY CREDITS (ICC Publication N5000)

There are some articles of ICC Uniform Custom and practice for Documentary Credit which is necessary for Export Document formalities for 100% Export Oriented Fabrics. These articles are as follows-

A. General Provision and Definitions

Article -1

Application of UCP

The Uniform customs and Practice for Documentary Credits 1993 Revision. ICC Publication N500 shall apply to all Documentary Credits (including to the extent to which they may be applicable. Standby letter of credits) where they are incorporated into the text of the credit. They are bindings on all parties thereto unless otherwise expressly stipulated in the credit.

Article -2

Meaning of Credit

For the purposes of these articles the expressions “Documentary Credit(s)” and “Standby Letter(s)of Credit (here after referred to as “Credit(s)”)mean any arrangement however named described whereby a bank(the issuing bank) acting at the request and on the interactions of a customers (the “applicant”) or on its behalf

1. is to make a payment to or to the order of a third party (“the Beneficiary”). Or is to accept and pay bill of exchange (Draft(s) drawn by the Beneficiary. Or
2. authorizes another bank to effects such payment or to accept and pay such bill of exchange (Draft(s)) or
3. authorizes another bank to negotiate

against stipulated document(s) provided that the terms and conditions of the Credit are complied with.

For the purpose of the articles branches of bank in different countries are considered another bank.  

Article -3

Credits v. Contracts

 a. Credit by their nature are separate transactions from the sales or other contract(s) on which they may be bound and bank are in no way concerned with or bound by such contract(s) even if any reference whatever to such  contract(s) is included in the credit consequently the  undertaking of a bank to pay accept and pay draft(s)or Negotiate and/or fulfill any other obligation under the Credit is not subject to claim or defences by the applicant Resulting from his relationships with the issuing bank or The Beneficiary.      

b. A Beneficiary can in no case avail himself of the Contractual relationships existing between the banks or between the applicant and the issuing bank.

Article-4 

Documents v. Goods/Service/Performances

In Credit operations all parties concerned deal with documents and not with goods, service and/or other performances to which the document may relate.

           

Article-5

a. Instructions for the issuance of a Credit the Credit itself Instructions for an amendment thereto and the amendment itself must be complete and precise In order to guard Against confusion and miss-understanding bank should Discourage any attempt.

1.     To include exclusive detail in the Credit or in any Amendment thereto

2.         To give instructions to issue advise or conform a credit by reference to a Credit previously issued (similar Credit) where such previous Credit has been subjected to accepted amendment(s) and/or unaccepted amendment(s).

b.    All instruction for the issuances of a credit and the credit itself and where applicable, all instructions for an Amendment thereto and the amendment itself must state precisely the document(s) against which payment Acceptance or negotiation is to be made.

B. Form and Notification of Credits

Article-6

Revocable v. Irrevocable Credits

a. A Credit it may be either

1. Revocable

        or

 2.  Irrevocable

b. The Credit therefore should clearly indicate whether it is Revocable or irrevocable.

c. In the absence of such indication the Credit should be Deemed to be irrevocable.

Article-7

Advising Banks Liabilities

a. A Credit may be advised to a Beneficiary through another Bank (the “Advising Bank”) without engagement on the part of the Advising bank, but that bank if it elects to advise the Credit, shall take reasonable care to check the apparent Authenticity of the Credit which it advises. If the bank elect Not to advise the Credit it must so inform the Issuing Bank Without delay.  

b.   If the Advising bank can not establish such apparent Authenticity it must inform without delay the bank from which the instruction to have been received that it has been unable to establish the authenticity of the Credit and if it elects nonetheless to advice the Credit it must Inform the Beneficiary that it has not been able to establish the authenticity of the Credit.

Article -8

Revocation of a Credit

a. A revocable Credit may be amended or cancelled by the Issuing bank at any moment and without any prior notice to the Beneficiary.

B. However the Issuing Bank must

    1. Reimburse another bank which a revocable Credit has been made available for sight payment, acceptance or negotiation for any payment, acceptance or negotiation made by such bank –prior to receipt by it of notice of amendment or cancellation, against documents which appear on their face to be in compliance with the terms and conditions of the credit.

     2. Reimburse another bank with which a revocable Credit has been made available fort deferred payment, if such bank has prior to receipt by it of notice of amendment or cancellation taken up documents which appear on their face to be incompliance with the terms and condition of the Credit.

Article-9

Liability of Issuing and Conforming banks

A.     an irrevocable Credit constitute a definite undertaking of the issuing bank , provided that the stipulated documents are present to the Nominated Bank or to the Issuing Bank and that the terms and conditions of the Credit is complied with.

1. If the Credit provided for sight payment –to pay at sight.
2. if the Credit provided for deferred payment to pay on the maturity date(s)determinable in accordance with the stipulation of the Credit
3. if the Credit provides for acceptance:

A. by the issuing bank –to accept Draft(s)drawn by the Beneficiary on the Issuing Bank and pay them at maturity.

         B. by another drawee bank –to accept and pay at Maturity Draft(s) drawn by the Beneficiary on the Issuing Bank in the event the drawee bank stipulated In the Credit does not accept Draft(s) drawn on it or  To pay Draft(s) accepted but nit paid by such drawee Bank at maturity.

4. If the Credit provide for negotiation –to pay without Recourse to drawers and or bona fide holders. Draft(s) drawn by the Beneficiary and or document(s) presented

Under the Credit. A Credit should not be issued available by Draft9s) on the Applicant, bank will consider such Draft(s) as an additional document(s).

A.    A conformation of an irrevocable Credit by another bank(the “Conforming bank”)upon the authorization or  request of the Issuing bank, constitutes a definite undertaking of the conforming bank, in addition to that of the Issuing Bank, provided that the stipulated documents are presented to the Conforming bank or to any other Nominated Bank and that the terms and conditions of the Credits are complied with:

1. If the Credit provided for sight payment –to pay at sight.

2. If the Credit provided for deferred payment to pay on the maturity date(s) determinable in accordance with the stipulation of the Credit

    3. If the Credit provides for acceptance:

A. by the issuing bank –to accept Draft(s)drawn by the Beneficiary on the Issuing Bank and pay them at  maturity.

         B.by another drawee bank –to accept and pay at Maturity Draft(s)drawn by the Beneficiary on the Issuing Bank in the event the drawee bank stipulated in the Credit does not accept Draft(s) drawn on it or to pay Draft(s) accepted but nit paid by such drawee

Bank at maturity.

     4.  If the Credit provide for negotiation –to pay without recourse to drawers and or bona fide holders. Draft(s) drawn by the Beneficiary and or document(s) presented under the Credit. A Credit should not be issued available by Draft9s) on the Applicant, bank will consider such Draft(s) as an additional document(s).

c. 1. If another bank is authorized or requested by the Issuing Bank to add its conformation to a credit but is not prepared to do so, it must so inform the Issuing Bank

Without delay

    2. Unless the Issuing Bank specifies otherwise in its authorization or request to add conformation, the Advising Bank may advise the Credit to the Beneficiary without adding its conformation.

4. 1. Except as otherwise provided by article 48 an irrevocable    Credit can neither be amended nor cancelled without the agreement of the Issuing Bank ,the Conforming Bank if any and the Beneficiary.

      

       2. The Issuing Bank shall be irrevocably bounded by an amended(s)issued by it from the time of the issuance of such amendment(s). A Conforming Bank may extend its conformation to an amendment and shall be irrevocably bound as of the time of its advise of the amendment. A Conforming Bank may however choose to advise an amendment to the Beneficiary without extending its conformation and if so, must inform the Issuing Bank and the Beneficiary without delay.

 

       3.The terms of the original credit (or a Credit incorporating previously accepted amendment(s) will remain in force for the Beneficiary until the Beneficiary communicates his acceptance of the amended to the Bank that advise such amendment. The Beneficiary should give notification of acceptance or rejection of amendment(s). If the Beneficiary fails to give such notification, the tender of documents to the Nominated Bank or Issuing Bank that conform to the Credit and to not yet accepted document(s) will be deemed to be notification of acceptance by the Beneficiary of such amendment(s) and as of that moment the credit will be amended.

 4. Partial acceptance of amendments contained in one and the same advice of amendment is not allowed and consequently will not be given any effect.

Article -10

Type of Credit

a. All Credit must clearly indicate whether they are available by sight payment, by deferred payment by acceptance or by negotiation

b. 1. Unless the Credit stipulates that it is available only with the Issuing Bank, all Credit must nominate the bank (the “Nominated Bank”) which is authorize to pay, to incur a deferred payment undertaking, to accept draft(s) or to negotiate. In a freely negotiable Credit any bank is a Nominated bank. Presentation of document must be made to the Issuing Bank or the Commercial Bank, if any or any other Nominated Bank.

    

     2. Negotiation means the giving of value for Draft(s) and/or document(s) by the bank authorize to negotiate Mere examination of the document(s) without giving of value does not constitute a negotiation.   

                                                                                                

 c. Unless the Nominated Bank is the Commercial Bank, nomination by the Issuing Bank does not constitute any undertaking by the Nominated Bank to pay, to incur a deferred payment undertaking to accept Draft(s) or to negotiate. Except where expressly agreed to by the Nominated Bank and so communicated to the Beneficiary, the Nominated banks receipt of and/or examination and/or forwarding of the documents does not make that bank liable to pay, to incur a deferred payment undertaking to accept Draft(s) or to negotiate. 

d. By nominating another bank or by allowing for negotiation by any bank or by authorizing or requesting another bank to add its conformation, the Issuing Bank authorizes such Bank to Pay accept Draft(s) or negotiate as the case may be against document which appear on their face to be in compliance with the terms and conditions of the Credit and Undertakes to reimburse such bank in accordance with the provision of these Articles.

Article-11

Teletransmitted and Pre -Advised Credits

a. 1. When an Issuing Bank instructs an Advising Bank by an authenticated teletransmition to advise a Credit or an amendment to a Credit, the teletransmission will be deemed to be the operative credit instrument or the operative amendment ,and no mail conformation should be send. Should a mail conformation nevertheless be sent, it will have no effect and the advising bank will have no obligation to check such mail conformation against the operative Credit instrument or the operative Credit amendment received by teletransmission.

3.      If the teletransmission states “full details to follow” (or

4.       word of similar effect ) or state that the mail  conformation is to be the operative credit instrument or the operative amendment ,then the teletransmission  will not be deemed to be the operative Credit instrument or the operative amendment to such advising Bank without delay .

b. If a bank uses the service of an advising Bank to have the Credit advised to the Beneficiary, it must also use the services of the same bank for advising an amendment(s)

c. A preliminary advice of the Issuance or amendment of an irrevocable Credit (pre- advice), shall only be given by an Issuing bank if such Bank is prepared to issue the operative Credit instrument or the operative Credit amendment thereto. Unless otherwise stated in such  preliminary advise by the Issuing bank, n issuing Bank  having given such pre advise shall be irrevocably committed to issue or amend the Credit instruments not  inconsistent with the pre-advise without delay.

Article-12

Incomplete or Unclear Instruction

If incomplete or unclear instructions are received to advice, conform or amend a Credit, the bank requested to act on such instructions may give preliminary notification to the Beneficiary for information only and without responsibility. This preliminary notification should state clearly that the notification is provided for information only and without the responsibility of the advising Bank .In any event the Advising Bank must inform the Issuing Bank to the action taken and request it to provide the necessary information.

The Issuing Bank must provide the necessary information without delay. The credit will be advised, conformed or amended, only when complete and clear instruction have been received and if the Advising bank is then prepared to act on the instruction.

Article-13

Standard for Examination of Documents

 a. Bank must examine all documents stipulated in the credit with reasonable care, to ascertain whether or not they appear, on their face to be incompliance with the terms and condition of the Credit. Compliance of the stipulated document on their face with the terms and conditions of the credit shall be determined by international standard Banking practice as reflected in these Articles. Documents which appear on their face to be inconsistent with one another will be considered as not appearing on their face to be incompliance with the terms and conditions of the Credit.                                                 Document not stipulated in the Credit will not be examined by banks. If they receive such documents, they   shall return them to the presenter or pass them on without responsibility.                                                                                                   

 b. The Issuing Bank, the Conforming Bank, if any or a nominated Bank acting on their behalf, shall each have a reasonable time, not to extend seven banking days following the day receipt of the documents, to examine the documents and determine whether to take up or refuse the documents and to inform the party from which it received the documents accordingly. 

c. If the Credit contains conditions without staying the document(s)to be presented in compliance therewith, bank  will deem such conditions as not stated and will disregard  them.  

Article-14

Discrepant Documents and Notice

 a. When the Issuing Bank authorizes another bank to pay incur a deferred payment undertaking, accept Draft(s) or  negotiate against documents which appear on their face to be incompliance with the terms and conditions of the Credit, the Issuing Bank and the Conforming Bank, if any are bound              

    1. To reimburse the Nominated Bank which has paid,   incurred a deferred payment undertaking, accept Draft(s), or negotiated. 

 2. To take up the document

b. Upon receipt of the documents the Issuing Bank and or the Conforming Bank, if any or a nominated Bank acting on their behalf, must determine on the basis of the document alone whether or not they appear on their face to be in compliance with the terms and conditions of the Credit. If the document appear on their on their face not to be incompliance with the terms and conditions of the Credit,

 Such bank may refuse to take up the documents.   

c. If the Issuing Bank determines that the documents appear on their face not to be incompliance with the terms and conditions of the Credit, it may in its sole judgment

Approach the applicant for a weaver of the discrepancy (ies). This does not, however, extend the period mentioned in

d. 1. If the issuing bank and /or Conforming Bank, if any or a Nominated Bank acting on their Behalf, decided to refuse the documents, it must give notice to that effect   by telecommunication or if that is not possible, by other expeditious means without delay but no letter than the close of the seven banking day following the day of receipt of the documents. Such notice shall be given to   the bank from which it received the documents to the Beneficiary, if it received the documents directly from him.

    2. Such notice must state all discrepancies in respect of which the bank refuse the documents and must also state whether it is holding the documents at the disposal  of or is returning them to the presenter

2.      The Issuing Bank and/or Conforming Bank, if any shall then be entitled to claim from the remitting bank refund with interest of any reimbursement which has been made to that bank.

e. If the Issuing Bank and/or Conforming Bank, if any fails to act in accordance with the provision of this Article and/or fails to hold the documents at the disposal of or return them to presenter, the Issuing Bank and/or Conforming Bank, if any, shall be precluded from claiming that the document are not in complains with the terms and   conditions of the Credit.  

f. If the remitting bank draws the attention of the Issuing Bank and/or Conforming Bank ,if any, to any discrepancy  (ies) in the document(s) or advises such bank that it has paid, incurred a deferred payment undertaking accepted  Draft(s) or negotiated under reserve or against indemnity in  respect of such discrepancy(ies), the Issuing Bank and/or

Conforming Bank, if any shall not be thereby received from any of their obligations under any provision of this Article. Such reserve or indemnity concerns only the relations between the remitting bank and the party towards whom

the reserve was made or from whom or on whose behalf, the  indemnity was obtained.   

Article-15

Disclaimer on Effectiveness of Documents

Bank assume no liability or responsibility for the form, sufficiency accuracy, genuineness, falsification, or legal effect or any document(s), or for the general and/or particular condition stipulated in the document(s) or superimposed thereon , nor do they assume any liability or responsibility for the description, quantity weight quality condition, packing, delivery value or existence of the goods represented by any document(s) or for the good faith or act and/or omissions, solvency ,performance or standing of the consigners the carriers, the forwarders, the consignees or the insurers of the goods or any other person whomsoever.    

Article-16

Disclaimer on the transmission of Message

Bank assume no liability or responsibility for the consequences arising out of delay and /or loss in transit of message(s), letters or documents or for delay , mutilation or other error(s) arising in the transmission of any telecommunication. Bank assume no liability or responsibility for errors in translation and/or interpretation of technical terms and reserve the right to transmit Credit terms without translating them .

Artice-17

Force Majeure

Bank assume no liability or responsibility for the  consequences arising out of the interruption of their business by act of God, riots, civil commotions insurrections, wear or any other causes beyond their control or by any strikes or lockouts. Unless specifically authorized, bank will not open resumption of their business, pay, incur a deferred payment undertaking accept Draft(s) or negotiate under Credits which expired during such interruption of their business.  

Article-18

Disclaimer for Act of an Instructed Party

a. Bank utilizing the service of another bank or other banks for the purpose of giving effect to the instruction of the applicant do so for the account and at the risk of such

 Applicant.

b. Bank assume no liability or responsibility should the   instructions they they transmit not be carried out, even if  they have themselves taken the initiative in the choice of  such other bank(s).

c. 1. A party instructing another party to perform services is liable for any charges, including commissions, fees, costs or expenses incurred by the instructed partying connection with its instructions.

    2.  Where a credit stipulates that such charges are for the    account of a party other than the instructing party and charges can not be collected, the instructing party remains ultimately liable for the payment thereof. 

d. The applicant shall be bound by and liable to indemnify the bank against all obligations and responsibilities imposed   by foreign laws and uses.

Article-19

Bank to Bank Reimbursement Arrangements

a. If an Issuing Bank intends that the reimbursement to  which a paying accepting or negotiating bank is entitled,  shall be obtained by such bank (the “Claiming Bank),   claiming on another party (the “reimbursing Bank”), its   shall provide such Reimbursing Bank in good time with the   proper instructions or authorization to honors such   reimbursement claims. 

b. Issuing bank shall not require a claiming bank to supply a certificate of complains with the terms and conditions of the Credit to the Reimbursing Bank.

c. An Issuing Bank shall not be relieved from any of its obligations to provide reimbursement if and when reimbursement is not received by the Claiming Bank from the reimbursing Bank.

d. Thy Issuing Bank shall be responsible to the Claiming Bank for any loss of interest if reimbursement is not provided by the Reimbursing Bank on first demand or as otherwise specified in the credit or mutually agreed, as the case may be.

e. The Reimbursing Bank’s charges should be for the account of the Issuing Bank. However, in cases where the charges are for the account of another party, it is the

Responsibility of the Issuing Bank to so indicate in the original Credit and in the reimbursement authorization. In cases where the Reimbursing Bank’s charges are for the account of another party they shall be collected from the Claiming Bank when   the Credit is drawn under. In cases where the Credit is not drawn under, the Reimbursing Bank’s charges remain the obligation of the Issuing Bank.

D. Documents                                                                                   

Article-20

Ambiguity as to the Issuers of Documents

a. The terms such as “first class”, “well known”, “qualified”, “independent”, “official”, “competent”, “local” and the like, shall not be used to describe the issuers of any document(s) to be presented under a Credit. If such terms are incorporated in the credit, bank will accept the relevant   documents as presented, provided that it appears on its face to be in compliance with the terms and conditions of the Credit and not to have been issued by the beneficiary.  

b. Unless otherwise stipulated in the Credit, bank will accept  as an original document(s), a document(s) produced or  appearing to have been produced

 

1. by reprographic, automated or computerized systems
2. as carbon copies  provided that it is marked as original and where   necessary, appears to be signed.

A document may be signed by handwriting, by facsimile signature, by perforated signature, by stamp, by symbol or by any other mechanical or electronic method of authentication.

 c.   1. Unless otherwise stipulated in the Credit, bank will accept as a copy(ies), a document(s) either labeled copy or not marked as an original-a copy(ies) need not be signed.

      2. Credit that required multiple document(s)such as   “duplicate”, “two fold”, “two copies”, and the like will be    satisfied by the presentation of one original and the   remaining number in copies except where the document  itself indicate otherwise.

d. Unless otherwise stipulated in the Credit, a condition  under a Credit calling for a document to be authenticated  validated, legalized, visaed, certified, or indicating a similar   requirement, will be satisfied by any signature, mark,  stamp or label on such document that on its face appear to satisfy the above condition.

Article -21

Unspecified Issuers or Contents of Documents

When documents other than transport documents, insurance documents and commercial invoices are called for the Credit should stipulated by whom such document are to be issued and their wording or data content. If the Credit does not so stipulate bank will accept such documents as presented provided that their data content is not inconsistent with any other stipulated document presented.

Article-22

Issuance Date of Documents v. Credit Date

Unless otherwise stipulated in the Credit Bank will accept a document bearing a date of issuance prior to that of the Credit, subject to such document being presented within the time limits set out in the Credit and in these Articles.

Article -23

Marin/Ocean Bill of Lading

a. If a Credit calls for a bill of lading covering a port to port shipment bank will unless otherwise stipulated in the Credit accept a document however named which

 1. Appear on its face to indicate the name of the carrier and to have been signed or otherwise authenticated by:

v  the carrier or named agent for or on behalf of the carrier, or

v  The master or a name agent for or on behalf of the master any signature or authentication of the carrier or master   must be identified as carrier or master as the case may be. An agent signing  or authenticating  for the carrier or muster must also

v  Indicate the name and the capacity of the   party, i.e. carrier or master on whose behalf that agent is acting.  And

2. Indicate that the good have been loaded on board or shift on a named vessel.  loading on board or shipment on a named vessel may be indicated by pre-printed wording on the bill of loading that   the good have been loaded on board a named vessel or   shipped on a named vessel, in which case the date of issuance of the bill of loading will be deemed to be the date of loading on board and the date of shipment.

    In all other cases loading on board a named vessel must be evidenced by a notation on the bill of lading which gives the date on which the good have been loaded on board, in  which case the date of the on board notation will be deemed to be the date of shipment.  If the bill of loading contains the indication “intended vessel” or similar qualification in relation to the vessel, loading on board a named vessel must be evidenced by an on board notation on the bill of lading which, in addition to the date on which the good have been loaded on board,   also includes the name of the vessel on which the good have been loaded, even if they have been loaded on the vessel named as the “intended vessel”.

If the bill of loading indicates a place of receipt or taking in charge different from the port of loading the on board notation must also include the port of loading stipulated in the Credit and the name of the vessel on which the good have been loaded, even if they have been loaded on the vessel named in the bill of lading. This provision also applies whenever loading on board the vessel is indicated by pre-printed wording on the bill of lading. 

3. Indicate the port of loading and the port of discharge   stipulated in the Credit notwithstanding that it

  A. Indicates a place of taking in charged different from the port of loading and or a place of final destination different from the port of discharge.

          and/or

                 B. contains the indication “intended” or similar qualification in relation to the port of loading and/or port of discharge as long as the document also states

  The ports of loading and/or discharge stipulated in the Credit and

4.  Consist of a sole original bill of lading or if issued in more than one original, the full set as so issued and

5.      Happear to contain all of the terms and condition of carries, or some of such term and conditions by reference to a source or document other than the bill of   lading (short form/blank back bill of lading ); banks will not examine the contents of some terms and conditions.  and

6.      contains no indication that it is subject to a charter party and/or no indication that the carrying vessel is propelled by sail only

     And

7.  In all other respects meets the stipulations of the credit.

b.      For the purpose of this article transshipment means unloading and reloading from one vessel to another vessel during the course of ocean carriage from the port of loading to the port of discharge stipulated in the Credit. 

c.       Unless transshipment is prohibited by the terms of the Credit, bank will accept a bill of lading which indicate that the goods will be transshipped, provided that the enter ocean carries is covered bygone and the same bill of lading.

d.    Even if the Credit prohibits transshipment bank will accept a bill of lading     which:

1.      Indicates that will take place as long as the relevant cargo is shift in Container (s). Trailer(s) and/or “LASH” barge(s)as evidenced by the bill of lading, provided that the enter ocean carriage is covered by one and the same bill of lading.

        And/or

2.      incorporates clauses stating that the carrier reserves the right to transship

Article-24

Non-Negotiable Sea Waybill

a.         If a Credit calls for a non-negotiable sea waybill covering a port to port shipment, bank will unless otherwise stipulated in the Credit, accept a document however named which :

1.      appears on its face to indicate the name of the carrier and to have been signed or otherwise authenticated by :

v  the carrier or named agent for or on behalf of the carrier, or

v  The master or named agent for or on behalf of the master.

 

 Any signature or authentication of the carrier or master must be   indicated as carrier or master, as the case may be. An agent signing or authenticating for the    carrier or master must also indicate the name and the capacity of the party, i.e. carrier or master, on whose behalf the agents acting. And

2.       indicates that the goods have been loaded on board or shipped on a named   vessel Loading on board or shipment on a named vessel may be indicated by pre-printed wording on the non-negotiable sea waybill that the goods have been loaded on board a named vessel or  shipped on a named vessel , in which case the date of issuance of the non negotiable sea waybill  will be deemed to be the date of loading on board and

3.      The date of shipment.

 If the non-negotiable sea waybill contains the indication “Intendedvessel”orsimiler qualification in relation to the to the vessel    Loading on board a named vessel must be evidenced by an on board   Notation on the non-negotiable sea waybill which, in addition to he date on which the goods have been loaded on board, includes the name of the   Vessel on which the good have been loaded even if they have been loaded on   The vessel named as the “intended vessel”.

If the non-negotiable sea waybill indicates a place of receipt or taking in charge different from the port of loading, the on board notation must also include the port of loading stipulated in the Credit and the name of the vessel on which the goods have been loaded even if they have been loaded on the vessel named in he non-negotiable sea waybill. This provision also applies whenever loading on board the vessel is indicated by pre-printed wording on the non-negotiable sea waybill and

4.      indicate the port of loading and the port of discharge stipulated in the Credit notwithstanding that it

a.         indicates a place of taking in charge different from the port of loading and /or place of final  destination different from the port of discharge

      And /or 

b.       contains the indication “intended” or similar qualification in relation to the port of loading and/or port of discharge as long as the document also states the port of loading and/or discharge stipulated in the Credit.

  And

5.      Consist of a sole original non-negotiable sea waybill, if issued in more than one original the full set as so issued.

6.      appears to contain all of the terms and conditions of carriage or some of such terms and conditions by reference to a source or document other than the non-negotiable sea waybill (short form/ blank back non-negotiable sea waybill) bank will not examine the contents of  such terms and conditions.

And

7.      contains no indications that it is subject to a charter party and/or no indication that the carrying vessel is propelled by sail only,

        And

7.     In all other respects meets the stipulations of the Credit.

b.      For the purpose of this Article, transshipment means unloading and re-loading from one vessel to another vessel during the course of ocean carriage from the port of loading to the port of discharge stipulated in the Credit.

c.       Unless transshipment is prohibited by the terms of the Credit, bank will accept a non-negotiable sea waybill which indicate that the good will be transshipped, provided that the enter ocean carriage is covered by one and the same non-negotiable sea waybill.

d.      Even if the Credit prohibits transshipment, bank will accept non-negotiable sea waybill which:

1.      indicate that transshipment will take place as long as the relevant cargo is stipulated in the Container(s).Trailers and/or “LASH” barge(s) as evidence by the non- negotiable sea waybill , provided that the entire ocean carriage is covered by one and the same non-negotiable sea waybill

and/or

2.      incorporates clauses stating that the carrier reserves the right to transship 

Article-25

Charter Party bill of Lading

a.       If a credit calls for or permits a charter party bill of lading, bank will unless otherwise stipulated in the     Credit, accept a document, however named, which:

1. contains any indication that it is subject to a charter party,

   And

   2.appears on its face to have been signed or otherwise authenticated by

v  the master or named agent for or on behalf of the master or

 

v  The owner or a named agent for or on behalf of the owner.

Any signature or authentication of the master or owner must be identified as master or owner as the case may be. An agent signing or authenticating for the master or owner must also indicate the name and the capacity of the party .i.e master or owner on whose behalf that agent is acting

         And

3.      Does or does not indicate the name of the carrier

And

     4.  Indicates that the goods have been loaded   on board or shipped on a named vessel Loading on board or shipment on a named vessel may be  indicated by pre-printed wording on the   bill of lading that the goods have been loaded on board  a named vessel or shipped on a  named  vessel, in which case the date of issuance of the bill of lading will be   deemed to be the date  of loading on board and the date of shipment In all other cases loading on board a named vessel must be evidenced by a  notation on the bill of lading  which gives the date on which the  goods  have been loaded on board  , in which case the date of the on  board  notation will be deemed to  be the date of shipment.

           And

5.      Indicates the port of loading and the port of discharge stipulated in the Credit.

And

6.      consist of a sole original bill of lading or if issued in more than one original the full set as so issued

And

7.      contains no indication that the carrying vessel is propelled by sail only

And

     8.  In all other respects meet the stipulation of the Credit.

b.      Even if the Credit requires the presentation of a charter party contract in connection with a

Charter party bill of lading, bank will not examine such charter party contract, but will pass it on without responsibility on their part.

Article-26

Multimodal Transport Document

a.       If a credit calls for a transport document covering at least two different mode of transport (multimodal transport ), bank will unless otherwise stipulated in the credit , accept a   document, however  Named which:

1.      Appears on its face to indicate the name of the name of the carrier or multimodal transport operator and to have been signed or otherwise authenticated by .

v       the carrier or multimodal transport operator or a named agent for or on 

          Behalf of the carrier or multimodal transport operator,

          Or

v       The master or a named agent for or on behalf of the master.

Any signature or authentication of the carrier multimodal transport

Operator or muster must be identified as carrier, multimodal transport operator or master, as the case may be. An agent signing or authenticating for the carrier, multimodal transport operator or muster must also indicate the name .And the capacity of the party, i.e. carrier, multimodal transport operator or master on whose behalf that agent is acting.            And

    

2.      indicates that the goods have been dispatched, taken in charge or loaded

     On board.

Dispatch, taking in charge or loading on board may be indicated by wording to that effect on he multimodal transport document and the date of issuance will be deemed to be the date of dispatch, taking in charge or loading on board and the date of shipment however if the document indicates, by stamp or otherwise a date of dispatch, taking in charge or loading on board, such date will be deemed to be the date of shipment.

3        a. Indicates the place of taking in charge stipulated in the Credit  which may be different from  the port , airport or place of loading , and the place  of final destination stipulated in the Credit which may be different from  the port , air port or place of discharge,

   and/or

     B. contains the indication “intended” or similar qualification in relation to 

         The vessel and/or port of loading and/or port of discharge.

    And

 

         4. Consist of a sole original multimodal transport document or if issued in 

    More than one original the full set as so issued.

    And

5.      Appears to contain all of the terms and conditions of carries or some of such terms and   conditions by reference to a source or document  other than the multimodal transport document   (short form / blank back multimodal transport document ) bank will not examine the contents of   such terms and conditions

And

6.      Contains no indication that it is subject to a charter party and/or no indication that the carrying    vessel is propelled by sail only.

Article-27

Air Transport Document

a.      If the Credit calls for an air transport document, bank will unless otherwise stipulated in the Credit , accept a document however named which

1.      appear on its face to indicate the name of the carrier and to have been signed or otherwise

       Authenticated by:

v  The carrier

v  A named agent for or on behalf of the carrier.

        

        Any signature or authentication of the carrier must be identified as carrier . An agent signing 

        Or authenticating for the carrier must also indicate the name and the capacity of the party. i.e.  Carrier on whose behalf that agent is acting.

        And

2.      indicates that the goods have been accepted for carriage

3.      Where the Credit calls for an actual date of dispatch indicates a specific notation of such date the date of dispatch so indicated on the air transport document to be deemed to be the date of shipment.

For the purpose of this article the information appearing in the board on the air transport document (marked “For Carrier Use Only” or similar expression )relative to the light number and date will nit be considered as a specific notation of such date of dispatch .

In all other cases the date of issuance of the air transport document will be deemed to be the date of shipment

       And

4.      Indicates the airport of departure and the airport of destination stipulated in the Credit

And

5.      appears to be the original for consignor /shipper even if the Credit stipulates a full set of originals or similar expressions

And

6.      appears to  contain all of the terms and conditions of carriage or some of such terms and conditions by reference to a source or document other than the air transport document , bank will not examine the contents of such terms and conditions

     And

7.      In all other respects meets the stipulations of the Credit.

b.      For the purpose of this article, trainmen means unloading and re-loading from one aircraft to another aircraft during the course of carriage from the airport of departure to the airport of destination stipulated in the Credit.

Even if the Credit prohibit transshipment bank will accept an air transport document which indicates that transshipment will or may take place provided that the enter carriage is covered by one and the sane air transport documents.  

Article-28

Road, Rail, or Inland Waterway Transport Documents

a.      If a Credit calls for a road, rail or inland waterway transport document, bank will unless otherwise stipulated in the Credit , accept a document of the type called for however named which:

1.       appear on its face to be indicate the name of the carrier and to have been signed or otherwise authenticated by the carrier or a named agent for or on behalf of the carrier and/or to bear a reception stamp or other indication of receipt by the carrier or named agent for or on behalf of the carrier .

Any signature, authentication, reception stamp or other indication of receipt of the carrier, must be identified on its face as that of the carrier. An agent signing or authenticating for the carrier, must also indicate the name and the capacity of the party, i.e.  carrier, on whose behalf that agent is acting .

And

2.       Indicates that the goods have been received for shipment, dispatch or carriage or wording to this effect . The date of issuance will be deemed to be the date of shipment unless the transport document contains a reception stamp  will be deemed to be the date of shipment ,

And

3.       indicate the place of shipment and the place of destination stipulated in the Credit

And

4.     In all other respects meets the stipulations of the Credit

In the absence of any indication on the transport document as to the number issued , bank will accept the transport document(s) presented as cons5tituying a full set , bank will accept as original(s) the transport document (s) whether marked as original(s) or not .

a.      For the purpose of this Article transshipment means unloading and re loading from one means of convenience to another means of convenience, in different mode of transport, during the course of carriage from the place of shipment to the place of destination stipulated in the Credit.

c.       Even if the Credit prohibits transshipment bank will accept a roar, rail or inland waterway  transport document which indicate that transshipment will or may take place provided that the enter carriage is covered by one and the same  transport document and within the same mode of transport.  

Article-29

Courier and Post Receipt

a.      if a Credit calls for a post receipt or certificate of posting ,bank will unless otherwise stipulated in the Credit accept a post receipt or certificate of posting which :

1.       appear on its face to have been stamped or otherwise authenticated or dated in the place from which the Credit stipulates the goods are to be shipped or dispatched and such date will be deemed to be the date of shipment or dispatch

And

2.       In all other respects meets the stipulations of the Credit.

b.      If a Credit calls for a document issued by a courier or expedited delivery service evidencing receipt of the goods for delivery, bank will unless otherwise stipulated in the Credit , accept a document however named which :

1.      Appears on its face to indicate the name of the courier/service and to have been stamped signed or otherwise authenticated by such named carrier/service (unless the Credit specially calls for the document issued by a named Courier/ Service, bank will accept a document issued by any Courier/Service.

And

2.      Indicates a date of pick-up or of receipt or wording to this effect, such date being deemed to be the date of shipment or dispatch.

And

3.       In all other respects meets the stipulations of the Credit.

  

Article –30

Transport Documents Issued by Freight Forwarders

Unless otherwise authorized in the Credit, bank will only accept a transport document issued by a freight forwarder, if it appears on its face to indicate

Export procedure and L/C procedure of RMG:

L/C is the operative instrument or main instrument of export. To open a L/c must have to follow some steps which is very essential for L/c and which is necessary for exporting. Exporting is not easy work, it is very difficult. To make an export we have to go under some rules and regulations.

  The Export and L/C procedure are as follows:

Buyer

                Contract

Seller

                                                                                                                                                                                                                          

                                                  Conformation                                                     

Bank

Bank(Issuing)

                                               Master L/C     

Export Proceed Release

      Back to Back L/C                       

75% of total order. Suppose, Total order is $1,50,000.00 1, 00,000.00 for fabric, 12500 for Accessories to supplier.

                                                                      

                                                                                   

Start Production for 50,000 pieces

Nominated Forwarder

Customs Document

C&F Agent

Shipping Company or Carrier

 

Feeder Vessel

Final Document

Buyer

Mother Vessel

Destination

                                                                                                                                              

                     

                                                Fig: Export Procedure of RMG

L/C Applicant      (Importer)

L/C Beneficiary            (Exporter)

 1. Contract: Buyer-Seller

  5. Goods Shipped

 

    6.Documents

    Presented                                                                                            2.L/C

                                                                                                  Application

  4. L/C                               8a)                                                            6b)       

 Advised                           Reinstated                                          Documents

                 7b)                 Amount                  

                Payment           Advised                            7.Payment

                Effected                                                      Effected

Issuing      Bank

Advising       Bank

         3. L/C Issued

6.a)Documents Presented and Reimbursement Claimed

7a). Payment Effected

8.Reinstate Amount Drawn

                                Fig: L/C Procedure of RMG

Conclusion

SIM Fabrics Ltd.  has been started in 2001, with a single unit Shoaib Apparels Ltd. After the completion of a successful is decade, in June 2005 BGD has started their second unit Shoaib Apparels Ltd. After a short duration, its 3^rd as S.S Textile Ltd. Authentic Colour Ltd had established for producing and Finance & Accounting  the quality Garments product. Now it is emerging and moving into a good prospect of future. From the analysis and discussion, I may conclude that Shoaib Apparels Ltd. being a grown up industry so financial performance is quite satisfactory during the period of my study although they have a very little problem. Hence an endless effort for improving the condition is obviously expected from the owner point of view. The management should always remember this.